Center Tp. School Dist. by Rollins v. Oakland Independent School Dist.

CourtUnited States State Supreme Court of Iowa
Citation253 Iowa 391,112 N.W.2d 665
Docket NumberNo. 50451,50451
PartiesCENTER TOWNSHIP SCHOOL DISTRICT by Frank ROLLINS, President, Appellee, v. OAKLAND INDEPENDENT SCHOOL DISTRICT of Oakland, lowa, by Victor Allen, President, and County Board of Education of Pottawattamie County by Clifford Heyne, President, Henry Rossman, Frank Bell, Dudley Stupefell and Henry Petersen, Board Members, Appellants.
Decision Date09 January 1962

Hogzett & Burgett, Oakland, for Oakland Independent School Dist. of Oakland, and Ross F. Caniglia, Council Bluffs, for Bd. of Education of Pottawattamie County, appellants.

Richard C. Turner, Council Bluffs, for appellee.

SNELL, Justice.

This is an action to determine the method of computing school tuition costs charged by a receiving district against the sending district. The problem is one of statutory construction and involves the propriety of including among the expenditures of the receiving district an item of principal on bonded indebtedness paid from the schoolhouse fund. The case, under the same name but involving questions of procedure, has been before us previously. See Center Township School District v. Oakland Independent School District, 251 Iowa 1113, 104 N.W.2d 454.

Because of the trend toward school reorganizations, this problem of school tuition will become of diminishing statewide importance. Because of the complexities of the problem, this is fortunate.

Center Township School District, plaintiff herein, is a rural school township in Pottawattamie County east of and contiguous to the Independent School District of Oakland, Iowa.

Oakland Independent School District, principal defendant herein, is an independent school district functioning under the laws of Iowa and operating an elementary and high school.

Approximately 100 elementary and high school students residing in Center Township, plaintiff district, attended school at Oakland Independent School District during the school year 1958 and 1959. The schedule of school costs was prepared by defendant district for the purpose of fixing tuition rates for the school year 1959-1960. These costs and the computation of tuition charges based thereon were approved by the County Board of Education named, one of the defendants herein.

Plaintiff claims that the rates were fixed in an excessive amount because of defendants' failure to properly construe and apply the provisions of sections 279.18 and 282.20 of the Code, I.C.A. Plaintiff seeks a declaratory judgment construing these statutes.

The Department of Public Instruction of the State of Iowa was granted leave to appear and has filed brief amicus curiae.

Included in the expenditures by defendant district in computing the cost upon which tuition charges were based was an item of $5000 paid from the schoolhouse fund for retirement of bonded indebtedness. Plaintiff objects to this item of principal payment. There is no objection to the inclusion of interest paid on bonded indebtedness.

It is defendants' position that the sum of $5000 paid on the principal indebtedness is properly includable in determining tuition rates and is in accord with sections 279.18 and 282.20 of the Code, I.C.A.

The appraised value of the buildings of defendant district used for depreciation purposes was the sum of $401,776.46 with outstanding bonded indebtedness of $100,000. The bonded indebtedness had been reduced to this amount by reductions in prior years including the $5000 paid in 1958 and 1959.

The item of principal payments for reduction of bonded indebtedness has been included in each schedule of tuition costs since the bonded indebtedness was incurred in 1954.

The methods employed by defendant district in the computation of costs are consistent with the methods employed by other high school districts in the state and are in accord with methods approved by the State Department of Public Instruction and the State Superintendent of Public Instruction of the State of Iowa.

It is the contention of plaintiff that the payment of principal on bonds from the schoolhouse fund is not properly includable in the computation of tuition costs under the statute.

Section 279.18 of the Code, I.C.A. sets forth the method to be followed in computing tuition costs for elementary students. Section 282.20 of the Code, I.C.A. sets forth the method of computing tuition costs for high school students. The controversial provisions are identical and need not be separately set forth.

Section 282.20 provides as follows:

'282.20 Tuition fees--payment. The school corporation in which such student resides shall pay from the general fund to the secretary of the corporation in which he shall be permitted to enter a tuition fee sufficient to cover the average cost per high school child (including both resident and tuition students) in average daily attendance in the tuition-receiving district in the preceding year. Such tuition rates shall include expenditures from the general fund for general control, instruction, auxiliary agencies except transportation costs, coordinate activities, operation of plant, maintenance of plant, fixed charges including insurance on buildings and contents, capital, interest paid for debt service from the general fund, interest paid for debt service and retirement of bonds from the schoolhouse fund. A pro rata charge for depreciation on buildings shall be made at the rate of two per cent per annum on the appraised value, less bonded indebtedness thereon, of all buildings owned by the school corporation and used for high school purposes, but not exceeding the maximum tuition rate as determined by the state superintendent of public instruction as prescribed in section 282.24. No depreciation charge shall be made for the portion of the initial cost of buildings and equipment purchased with federal grants. * * *' (Emphasis supplied.)

The controversial issue is the interpretation of the words emphasized above.

The able trial court, in a careful analysis of the problem and from which we will quote, held for plaintiff.

The foundation facts were established by stipulation of the parties. In addition thereto, the president of plaintiff district testified as to payments and protests as to the method of computation.

The testimony of defendants consisted of testimony of Dr. Paul C. Rodgers, Jr., a professor of English with bachelor, master, and doctorate degrees in his field. The doctor analyzed the sentence in controversy, its grammatical structure and weakness, and gave his opinion that the item of interest and the item of principal were to be construed as independent elements, but he also said, '* * * that this sentence cannot be construed by applying to it only the normal concepts of sentence structure, the normal meanings of words which we normally use. You are going to have to give your author some help in order to read this sentence at all. I can point out other aspects of the sentence which indicate it is not competently written.'

Mr. Paul F. Johnston, Assistant State Superintendent of Public Instruction and a member of the State Department of Public Instruction for over 15 years, testified as to the recommendations of the department relative to the inclusion of principal payments in the computation of tuition costs. He testified that he worked with the legislature that enacted the statutory provisions involved and at that time made available to the legislative committees the information upon which the present administrative procedures are based. These administrative procedures are now set forth in a book entitled 'Uniform Financial Accounting for Iowa School Districts,' issued by the Department of Public Instruction. On page 49 of this publication there appears an instruction for the computation of tuition cost per pupil, including 'amount of payments for principal and interest on bonds and 2% depreciation of the appraised value of buildings.'

I. From the trial court's opinion we quote: 'In imposing liability under the statute in question the legislature's policy there declared is that the sending district shall pay the 'average cost * * * pupil'. Furthermore the 'average cost' must also be computed to include 'both resident and tuition students.' In other words the statute contemplates no inequality based on residence between these classes. Whatever factors are taken into consideration, the 'cost' must fall equally and proportionally on all. In construing and applying the statute these declared policies must control.

'Whatever disagreement in details may exist among experts as to factors to be considered in determining 'costs', in any business operation it is quite generally supposed that either depreciation or installment payments on debt incurred to create or improve the physical plant is a proper factor to be included, but not both. These factors are always regarded as alternative. Obviously the legislature can adopt any method it chooses in prescribing accounting factors to be considered in determining costs, but where terms are used expressing concepts which are peculiar to a special discipline it is proper to say that the meaning attributed to such words or terms is that which is generally understood in that field. This is the same as saying that the words are to be used in their ordinary sense as commonly understood.'

Extensive and technical analysis and discussion of the sentence involved leads to no satisfactory conclusion. In the previous appeal of this case, supra, we said: 'The statute does not seem as clear as it might be upon this point and it is not surprising the present controversy has arisen.' [251 Iowa 1113, 104 N.W.2d 456.]

Dr. Rodgers, the eminent grammarian, testifying for the defendants, concluded his testimony by saying, 'You are going to have to give your author some help in order to read this sentence at all,' and that the sentence cannot be construed by normal concepts of sentence structure.

The trial court in his decree commented: 'Whatever...

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