Gaddis v. Sch. Dist. of City of Lincoln

• Decision Date: 24 December 1912
• Docket Number: No. 17,828.,17,828.
• Citation: 92 Neb. 701,139 N.W. 280
• Parties: GADDIS v. SCHOOL DIST. OF CITY OF LINCOLN ET AL. (WESTOVER, INTERVENER).
• Court: Nebraska Supreme Court

92 Neb. 701

139 N.W. 280

GADDIS

v.SCHOOL DIST. OF CITY OF LINCOLN ET AL. (WESTOVER, INTERVENER).

No. 17,828.

Supreme Court of Nebraska.

Dec. 24, 1912.

Syllabus by the Court.

By the school laws of Nebraska (Comp. St. 1911, c. 79) two distinct forms of school district government are provided for. That of school districts in incorporated cities having more than 1,500 inhabitants being by boards of education, and representative in form; while that of the ordinary district in the country and in smaller cities and villages is democratic in form.

The ultimate control of the rural school district resides in the electors, and is exercised at annual or special school meetings; and the directions of the voters as to school buildings and sites must be carried out by the directors strictly within the limits of the powers conferred upon them at the school meeting.

In city districts which are governed by boards of education the powers of the district reside in the board of education, and there are no more limitations upon the authority of the board to select school sites and erect school buildings than are placed, in a rural district, upon the electors present at the school meeting.

Since the repeal of the proviso to section 23, subd. 14, c. 79, Comp. St. 1911, there is no requirement that the question of the selection of school sites or the erection of school buildings be submitted to the electors of a city district, in order to authorize the board of education to purchase sites and erect buildings.

Except as limited by the statutes restricting the amount of taxes that may be levied and the provisions regulating the borrowing of money by the issuance of bonds, the board of education has full power to administer the affairs of the school district as to school sites and buildings.

There is no prohibition in the statute against a board of education of a city district, such as the city of Lincoln, from adding money derived from taxation to money obtained from issuing bonds voted for building purposes, in order to pay for the erection of school buildings, if, in the discretion of the board, it deems it for the best interest of the district so to do.

The direction in section 23, subd. 14, c. 79, Comp. St. 1911, is that the board of education shall estimate the amount of money necessary for the support of schools, the purchase of school sites, the erection of school buildings, the payment of interest, and the creation of a sinking fund, and report the same to the county commissioners for levy. There is no distinction made between the collection of money for the support of schools and money for sites or buildings derived from the estimate and levy. The tax is levied in gross for the whole amount of money required, as shown by the estimate. The amount levied is equally subject to anticipatory use for all purposes named in the estimate. School District v. Stough, 4 Neb. 357,State v. Sabin, 39 Neb. 570, 58 N. W. 178,Andrews v. School District, 49 Neb. 420, 68 N. W. 631,Pomerene v. School District, 56 Neb. 126, 76 N. W. 414, distinguished.

Where the amount of money required in a contract made by the school district of the city of Lincoln for the erection of certain school buildings does not exceed the amount of money on hand derived from the sale of bonds issued for building purposes together with the amount of an estimate for building purposes made by the board of education, and a levy of taxes for that purpose made by the county commissioners for the current fiscal year, the contract will not be enjoined at the suit of a taxpayer as being ultra vires and void, because all the money is not in the treasury when the contract was made.

Where, at the time a contract for the erection of school buildings was entered into, it was in excess of the powers of the board of education to make, and where, by mutual agreement, the contract was subsequently modified so as to bring it within the authority of the board of education, the modified contract will not be enjoined upon the ground that it is ultra vires. But, since the modification was made after the action was begun, the costs in the district court are taxable to the defendant.

Appeal from District Court, Lancaster County; Cosgrave, Judge.

Action by Robert J. Gaddis against the School District of the City of Lincoln and others, in which John Westover intervened. Decree for complainant, and defendants and intervener appeal. Reversed.

C. S. Allen, of Lincoln, Mahoney & Kennedy, of Omaha, and Tibbets & Anderson, of Lincoln, for appellants.

Burr, Greene & Greene, of Lincoln, for appellee.

LETTON, J.

This is an action by a taxpayer to enjoin the board of education of the city of Lincoln from carrying out a contract with the defendant F. P. Gould & Son for the erection of certain schoolhouses and from paying the contractor any sum upon the contract, for the reason that the contract price exceeds the amount authorized for building purposes, and is in excess of the money and funds on hand at the time of the execution of the contract, that the construction of the Vine street school building contracted for was not authorized by a vote of the electors, and that the contract does not provide for the completion and furnishing of the buildings as voted by the electors, and therefore is unauthorized, ultra vires, and void. The contract as originally made provided for the erection of a high school building and two grade school buildings. The price for each was separately fixed. The total amount payable in any event was $546,973, and provision was made so that the absolute liability, if certain options as to material were exercised by the board of education, would not exceed the sum of $493,683. By mutual consent the contract was afterwards modified by eliminating the provisions concerning one of the grade school buildings, so that at the time of the hearing the utmost liability of the district thereunder was $451,837, with optional reductions as stated. The district court found that the contract was void, and granted an injunction as prayed in the petition. Defendants have appealed.

The stipulation of facts agreed upon shows that at the election which was held to authorize the issuance of bonds a choice of locations as to the site of the high school building was submitted to the voters, and that as to the bonds the ballot permitted the voters to express themselves for or against “the $350,000 bonds and taxes (1) for erecting, constructing, finishing, furnishing and completing a high school building or buildings to be located on the place and upon the site to be selected by the electors at said election; (2) for erecting, constructing, finishing, furnishing and completing one grade school building [omitting description of location]; (3) for erecting, constructing, finishing, furnishing, and completing an annex to the Saratoga school, located on block 2, Cottage Grove addition to the city of Lincoln.” Before the contract was let, the bonds had been sold, and $362,860.61 had been paid into the treasury from the proceeds thereof, out of which sum $300,000 had been paid before letting of the contract. In June, 1912, the board of education submitted to the county commissioners its annual estimate, and included therein the sum of $100,000 for the purchase of real estate and new buildings. The county commissioners levied a tax of 32 mills for maintenance of schools, purchase of sites, and construction of buildings, which, according to the valuation of property in the district, would produce the sum of $13,306 in excess of the amount estimated. There were $41,045 on hand from the gross revenues of the preceding year. No contract for heating, plumbing, and furnishing has been let; nor will such contracts be entered into until the present contract is completed. The estimated cost of plumbing, heating, and furnishing for the three buildings is $195,000. The annex to the Saratoga school has been constructed and paid for out of funds derived from 1911 taxes. The contract provides that the time limit for the completion of the Bancroft school shall be the 10th of August, 1913, and for the high school building, February 10, 1914. The architect testifies that if the work on the high school building is prosecuted with such diligence as would complete it on the date fixed in the contract, taking into account the reserved estimates, only about $200,000 would become payable on the contract on or before July 1, 1913, and if the Bancroft building is completed by the date fixed (August 10, 1913) the amount that would be due and payable would be $75,000. These seem to be the essential and determining facts in the case.

It is the contention of plaintiff that no authority is conferred upon the board of education to purchase school sites and erect buildings, unless authorized to do so by a vote of the electors of the district; that if by such vote the board has been authorized to issue bonds for the purpose of erecting, finishing, and furnishing certain school buildings it is beyond its power to enter into a contract to pay for the same more than the amount of money realized from the sale of the bonds on hand at the time the contract is entered into. In support of this contention he cites the case of School District v. Stough, 4 Neb. 357, which was an action by the assignee of certain school orders. The facts in this case were that the district was an ordinary country district, and that no authority or direction was given to the school board by the electors of the district to build a schoolhouse, or let a contract therefor. At the previous school meeting a tax of five mills on the dollar had been levied for the purpose of building a schoolhouse. The board assumed that this gave it authority to act. It made a contract for the erection of a school building, issued orders upon the treasurer for the whole amount of the contract price, and delivered the same to the contractors in advance of any work, taking back a bond...