Consolidated School Dist. No. 6 v. Shawhan

• Citation: 273 S.W. 182
• Decision Date: 15 June 1925
• Docket Number: No. 15380.,15380.
• Parties: CONSOLIDATED SCHOOL NO. 6 OF JACKSON COUNTY v. SHAWHAN et al.
• Court: Court of Appeal of Missouri (US)

273 S.W. 182

CONSOLIDATED SCHOOL NO. 6 OF JACKSON COUNTY v. SHAWHAN et al.

No. 15380.

Kansas City Court of Appeals, Missouri.

June 15, 1925.

Appeal from Circuit Court, Jackson County; Thad B. Landon, Judge.

"Not to be officially published."

Action by Consolidated School District No. 6 of Jackson County against D. Lee Shawhan and others. Judgment for plaintiff, and defendants appeal. Affirmed.

L. T. Dryden, of Independence, and W. H. Carr, of Lees Summit, for appellants.

Burns Strader, of Independence, for respondent.

ARNOLD, J.

This is an action by the consolidated school district No. 6 of Jackson county, Mo., against the board of six directors of said district, to recover the sum of $802.36 belonging to a definite fund for payment of teachers' salaries, and which, it is alleged, was diverted from said fund and expended for other purposes for which the district was obligated.

The facts disclosed are, that at the school election in the spring of 1920, defendants D. Lee Shawhan, George Hoke, John D. Shawban, J. O. Bynum, John Gibson, and Noah Hunt were elected directors of said district for 1920-21. Following said election the board submitted to the county clerk of Jackson county the statutory estimate setting out the amount of money needed for the ensuing year for teachers' salaries, incidental and building purposes, and the rate of taxation necessary to produce the sum total of the three items mentioned.

There was collected by the county collector upon the rates submitted the sum of $6,851.59, which was duly remitted to the treasurer of the district at monthly intervals throughout the school year. Of this amount the incidental fund of the district for that year amounted to $913.54, and a like sum constituted the building fund, and the remainder received by the collector constituted the amount available for the payment of teachers' salaries during the year. There was a further sum from the public money received by the board through the county treasurer, of which $1,025.65 was restricted to the payment of teachers' salaries, under the provisions of section 11159. R. S. 1919.

There was a further sum of $118.15 received through the county treasurer from foreign insurance companies which, under the statute, was to be applied to the purchase of text-books for free use in the district. This sum, however, is not involved in this controversy, it being shown that more than this amount was expended for that purpose during the year, and it is mentioned only to show that it is not to be confused with the other funds involved.

The funds mentioned herein were received by the district and deposited in the Bank of Lone Jack in one commingled fund, which was expended throughout the year for divers purposes. Of this fund there was available for the two items of incidentals and building purposes the sum of $1,827.08, together with a small balance remaining from the previous year. The amount expended for incidentals and building purposes for the year 1920-21 was $4,960.72, being in excess of the amount available therefor. The record further shows that the amount available for teachers' salaries was much in excess of $6,000, and that the amount needed for the purpose was $5,680, the school being an eight months' term, and the monthly pay roll for teachers $710.

The evidence shows that the defendant directors borrowed on their personal credit the sum of $500 in order to pay the teachers for the seventh month of the term, and that this amount was duly credited to defendants in the final estimate of the shortage in the teachers' fund, and that the teachers had not been paid for the eighth and last month of the term, the treasury being depleted. After the borrowing of the $500 by the directors, there were no other funds received by the bank excepting the sum of $145.17 from the county collector on April 15, 1921.

The petition sets forth the facts as above detailed, and does not seek to charge defendants with malicious wrong, but alleges misapplication of the teachers' fund by defendants is actionable against them personally in the sum of $802.36.

The answer is a general denial. Upon the pleadings thus made the cause went to trial to a jury. There was a directed verdict in favor of Clara J. Hoke, who had been appointed administratrix of the estate of defendant George Hoke, on whose death she was made a party defendant. The verdict was in favor of plaintiff for $802.36 against the other defendants. Motions for new trial and in arrest were of no avail, and judgment was entered in accordance with the verdict. Defendants appeal.

Plaintiff attacks the sufficiency of the abstract of the record before us on the ground that neither the affidavit and application nor the substance thereof are set out hi the record proper, and that therefore this court is without jurisdiction to hear and determine this appeal. Our rule 26, adopted January 6, 1913, fully covers this situation, and is against plaintiff's contention. That part of the rule pertinent to the issue raised by plaintiff is as follows:

"Hereafter an appellant, filing here a certified copy of the order granting an appeal, need not abstract the record entries showing the steps taken below to perfect such appeal. If the abstract state the appeal was duly taken, then, absent a record showing to the contrary, by respondent, it will be presumed the proper steps were taken at the proper time and term."

The record proper before us states as follows:

"On the 1st day of February, 1923, a * * * appellants filed their affidavit and application for an appeal which is printed in full in the bill of exceptions, printed herein, and reference is hereby made to same as if same was printed in full at this place, and an appeal was duly granted to this court."

Respondent attempts no showing to the contrary, and we must hold there has been a substantial compliance with our rule 26, and that this court has jurisdiction to hear and determine this appeal. Plaintiff's citations in support of its position all antedate the adoption of our rule 26.

In support of their appeal, defendants assert, first, that the petition does not state facts sufficient to constitute a cause of action; and, second, that their demurrer to the evidence should have been sustained. These assignments, being in relation to the same point, will be construed together.

It is not disputed that defendants, as directors of plaintiff district, did divert the funds for the payment of teachers' salaries to the payment of other obligations. The question then is as to whether defendants are personally liable to plaintiff therefor.

Under our state law the government of a school district, as well as the handling of the finances thereof, is vested in a board of directors duly elected by vote. Their powers and duties are prescribed by statute. A . trust is reposed in them, the execution of which is frequently attended with difficulty and embarrassment. By accepting such trust each director obligates himself to perform the duties as the law directs, and if there is a misapplication of the funds, or any part thereof, the question for determination is as to whether or not the directors are personally liable and may legally be required to respond in damages therefor.

Plaintiff district is a corporation created by statute; its board of directors is what the statute makes it, having only such powers and functions as are expressly delegated to it. Armstrong v. School District, 28 Mo. App. 169. It is conceded that plaintiff is an incorporated school district under the law, and that defendants were the legally elected directors thereof. It was held in Bent v. Priest, 86 Mo. 475, 482:

"The directors of a corporation occupy a fiduciary position. They are trustees and agents of the corporation and...