Farned v. Bolding, 8 Div. 191.

• Citation: 128 So. 435,221 Ala. 217
• Decision Date: 15 May 1930
• Docket Number: 8 Div. 191.
• Parties: FARNED v. BOLDING, SUPERINTENDENT OF EDUCATION, ET AL.
• Court: Alabama Supreme Court

128 So. 435

221 Ala. 217

FARNED v. BOLDING, SUPERINTENDENT OF EDUCATION, ET AL.

8 Div. 191.

Supreme Court of Alabama

May 15, 1930

Appeal from Law and Equity Court, Franklin County; B. H. Sargent Judge.

Bill by T. E. Farned, a taxpayer, against E. T. Bolding, as Superintendent of Education of Franklin County, and others composing the County Board of Education of said county, to enjoin the issuance and sale of interest-bearing warrants. From a decree dismissing the bill, complainant appeals.

Reversed and remanded.

James L. Orman, of Russellville, for appellant.

J. Foy Guin, of Russellvill, for appellees.

BOULDIN J.

This is a taxpayer's bill to enjoin the county board of education of Franklin county from borrowing money to pay salaries of teachers and other current expenses, by the issuance of time warrants running one to seven years, and pledging the proceeds of the county three-mill tax levied under article 19 of the Constitution.

The cause was heard on agreed statement of facts appearing in the bill and answer.

It appears that an accumulating indebtedness has accrued for seven or eight years, resulting from deficits in the school funds available to pay teachers and other current expenses. Last year this indebtedness reached $20,000, which will be increased by July 1, 1930, to $21,000.

This indebtedness has been carried by short-term loans. The lender declined to renew, demanded payment, and same has been paid from current funds. This depletes the school fund so that contracts with teachers for a seven-month term of public schools cannot be met, and, in the opinion of the board of education, terms must be shortened unless money is borrowed on a pledge of the three-mill tax to run for the life of the levy, seven years.

The board, by resolution, reciting the situation, ordered that interest-bearing warrants to the face value of $21,000 be issued and sold, and proceeds placed in the current school fund. The interest on the warrants is to be paid semiannually, and $3,000 of the principal to be paid each year, retiring the whole at the end of seven years, all secured by a pledge of the county three-mill tax voted for "public school purposes." Essentially the plan is one to fund and amortize the outstanding indebtedness.

To thus borrow money for the immediate purpose of paying current demands for teachers' salaries, etc., is sought to be accomplished under authority of section 130 of the School Code of 1927, as construed in Heustess v. Hearin, 213 Ala. 106, 104 So. 273.

In that case we upheld the authority of the county board of education to pledge the revenues of the current year, and the three-mill tax of the succeeding year to secure a loan of this character. This because of an express exception in the statute, withdrawing such loan from the requirement that it be repaid from the funds accruing for the current year. Now we are asked to extend such rule so as to pledge the revenues for the full life of the three-mill levy, drawing on the income of the remote future to maintain our present schools.

The exception permitting the pledge of the three-mill tax fund of the future, standing alone, is quite indefinite. So we must look to this and related statutes disclosing the general scheme for the maintenance of our public school system.

The general tenor of Code, § 130, is an authorization to borrow money...