Garrett v. Colbert County Bd. of Educ.

• Decision Date: 14 December 1950
• Docket Number: 8 Div. 587
• Parties: GARRETT v. COLBERT COUNTY BOARD OF EDUCATION et al.
• Court: Alabama Supreme Court

Page 275

50 So.2d 275

255 Ala. 86

GARRETT v. COLBERT COUNTY BOARD OF EDUCATION et al.

8 Div. 587.

Supreme Court of Alabama.

Dec. 14, 1950.

Rehearing Denied Jan. 25, 1951.

Arthur L. Shaw, of Tuscumbia, for appellant.

Douglas Arant and A. S. Lacy, of Birmingham, W. H. Shaw, of Tuscumbia, and W. A. Rose, Ellene Winn and White, Bradley, Arant & All, all of Birmingham, for appellees.

Lawrence K. Andrews, of Union Springs, Gen. Counsel for Ala. League of Municipalities, amicus curiae.

FOSTER, Justice.

The question involved on this appeal has relation to a special tax levied by a local law No. 485, approved August 30, 1949, Acts 1949, page 704, and also Act No. 601, approved September 19, 1949, Acts 1949, page 935, which has a bearing upon the former act.

Act No. 485, supra, levies a sales and use tax for the county of Colbert equal to one-half of the State sales and use tax and on terms parallel with the State tax law. Sections 8 and 9 of said Act are as follows:

'Seventy-five per cent of the revenue arising from said taxes under this act shall be allocated and paid over to the County Board of Education of Colbert County.

'The remaining twenty-five per cent of said revenue shall be divided between the Board of Education of the City of Tuscumbia and the Board of Education of the City of Sheffield as follows:

'The Board of Education of the City of Tuscumbia shall receive such portion and percentage thereof as the population of the City of Tuscumbia bears to the combined population on the said cities computed according to the last or any subsequent Federal census.

'The Board of Education of the City of Sheffield shall receive such portion and percentage thereof as the population of the City of Sheffield bears to the combined population of the said cities computed according to the last or any subsequent Federal census.'

(Section 9.) 'All such revenue arising from the levy herein made and distributed to the Board of Education of the City of Tuscumbia shall be used exclusively for public school purposes in said City and solely for the maintenance and operation of public schools and the construction and improvement of public school buildings in said City.

'All such revenue arising from the levy herein made and distributed to the Board of Education of the City of Sheffield shall be used exclusively for public school purposes in said City and solely for the maintenance and operation of public schools and the construction and improvement of public school buildings in said City of Sheffield.

'All such revenue arising from the levy herein made and distributed to the County Board of Education of Colbert County shall be used exclusively for public school purposes in the County outside of the Cities of Tuscumbia and Sheffield and solely for the maintenance and operation of public schools and the construction and improvement of public school buildings in the County outside of the Cities of Tuscumbia and Sheffield.'

Act No. 601, supra, is a general act and has application to any county in which a special sales tax is levied by a local act of the legislature for public school purposes, and authorizes the county board of education of the county or city board of education of a city in any county in which such local tax is levied by a local law to 'issue and sell interest bearing warrants with principal and interest to be paid from the revenue arising from said special tax levy and allocated to the Board of Education issuing and selling the warrants and securing a loan, and such board shall have the full authority and power to pledge all or any part of the revenue allocated to such Board of Education under and by virtue of the local act of the Legislature levying the tax. * * * The proceeds of said loan and of said warrants shall be expended by the issuing board for the purposes for which said special taxes are levied and allocated by said local act of the Legislature.'

The bill sought an injunction against the custodian of public school funds of Colbert County from collecting the taxes levied by said Act No. 485 and, in the alternative, in the event the court should find that the tax is authorized by law, an injunction against the Board of Education of Colbert County from receiving seventy-five per cent of the revenue derived from said taxes or any other portion thereof and from issuing and selling the warrants authorized by Act No. 601, and from pledging any portion of the revenue derived from said taxes for the payment of said warrants.

There was no issue of fact made by the answer. But there was a cross bill seeking a declaratory judgment as to the right of the board of education under those acts. The court entered a decree denying relief prayed for in the bill; but upon the cross bill decreed that the Board of Education of Colbert County is authorized by Act 601 to sell and issue such warrants as are described in the bill, and that Act No. 485 is not invalid for any reason set forth in the bill, and that the apportionment of the revenue to be derived from the taxes authorized by said Act is valid, legal and proper, and that the county board of education is authorized to pledge so much of said revenues received or to be received by it from said taxes as may be necessary to pay said warrants and make it a primary charge on said tax fund.

It is proposed to borrow $800,000 to be presently used in the construction and improvement of public school buildings in Colbert County outside the cities of Tuscumbia and Sheffield, and to pledge so much of the revenue to be derived under Act No. 485 and allocated by section 8 to the county board of education as may be necessary for that purpose. It does not appear how long the pledge is to continue. It is to be a first charge on said fund and all of it may be used in paying the warrants until all the warrants are paid.

The question is whether Act No. 601 serves to authorize the Board of Education of Colbert County to borrow money and issue warrants to raise funds to be used as directed by section 9 of the Act No. 485. We have shown what proportionate amounts of such fund are allocated to the board of education by section 8 and what use must be made of such fund by it, and again we observe this is to be 'solely for the maintenance and operation of public schools and the construction and improvement of public school buildings in the County outside of the Cities of Tuscumbia and Sheffield.' We note particularly that the board of education has the right under those acts, in its discretion, to use the proceeds of said tax allocated to it and also the amounts of the proceeds of the loans or warrants sold under Act No. 601, either for the maintenance and operation of public schools or for the construction and improvement of public school buildings in the county, so that it is available to the board of education to exercise its discretion within those limits as to the use of said fund, and all of it, for either or both purpose.

The situation divides itself into two legal aspects, one resulting from the right to use the fund in the present maintenance and operation of public schools, in which the taxpayers in future years would not be benefited, and the other in the right to the present construction of permanent school buildings, whose life and usefulness may extend throughout the period covered by a pledge of the taxes involved. Those two legal aspects have a very different constitutional standing an applied to the present situation. Our cases have been careful to make that distinction.

In the case of Farned v. Bolding, 221 Ala. 217, 128 So. 435, 436, this Court dealt with that subject and was considering the right of the Board of Education of Franklin County to borrow money to pay current operating expenses by the issuance of warrants to run seven years and pledging the proceeds of the county's three mill tax. This Court observed:

'Still, a stronger and more imperative policy of justice demands that he who pays the tax shall have the benefit of same.

'To pay a tax which has been anticipated and used in the education of children seven years in the past and increased by a carrying charge by way of interest is not in keeping with such policy.

'The law contemplates a budget confining expenditures to the funds reasonably in prospect.'

The Farned case, supra, has been referred to in later opinions of ours for the purpose of distinguishing that situation from one where the funds presently received from the sale of such warrants so pledged were used in some permanent structure whose useful life would likely extend throughout the period covered by the pledged taxes. On that subject we cite the following cases: Harris v. Cope, 236 Ala. 415, 183 So. 407; Harman v. Alabama College, 235 Ala. 148, 177 So. 747.

We have other cases which uphold the transaction where the funds were used in permanent structures, but without particularly referring to the difference between that situation and the one which was applied in Farned v. Bolding, supra. Some of those cases may be cited as follows: Kimmons v. Jefferson County Board of Education, 204 Ala. 384, 85 So. 774; In re. Opinion of the Justices, 231 Ala. 152(6), 164 So. 572; Johnson v. City of Sheffield, 236 Ala. 411, 183 So. 265; White v. Mayor & Council Decatur, 119 Ala. 476, 23 So. 999; City of Anniston v. Hurt, 140 Ala. 394, 37 So. 220; Isbell v. Shelby County, 235 Ala. 571, 180 So. 567; Davis v. City of Tuscumbia, 236 Ala. 552, 554, 183 So. 657; Cochran v. Marshall County, 242 Ala. 314, 6 So.2d 489; Smith v. Cullman County Board of Education, 236 Ala. 649, 184 So. 475; Shelby County Board of Revenue v. Farson, 197 Ala. 375, 72 So. 613; Opinion of the Justices, 220 Ala. 539, 126 So. 161; Herbert v. Perry, 235 Ala. 71, 177 So. 561; Opinion of the Justices, 230 Ala. 673, 163 So. 105.

We have extended the principle of the case of Farned v. Bolding, supra, to other situations, although not here directly in point. The principle of them...