Green v. Mail

• Citation: 200 N.E. 604,362 Ill. 518
• Decision Date: 14 February 1936
• Docket Number: No. 23173.,23173.
• Parties: GREEN et al. v. MAIL, County Treasurer, et al.
• Court: Illinois Supreme Court

362 Ill. 518

200 N.E. 604

GREEN et al.

v.MAIL, County Treasurer, et al.

No. 23173.

Supreme Court of Illinois.

Feb. 14, 1936.

Bill by Allen Green and others against Ralph H. Mail, County Treasurer, and others, in which the Merchants National Bank of Terre Haute, Indiana, intervened. From an adverse decree, the Marchants National Bank of Terre Haute, Indiana, appeals.

Affirmed.

HERRICK, J., dissenting.

Appeal from Circuit Court, Crawford County; Blaine Huffman, judge.

Cooper, Royse, Gambill & Crawford, of Terre Haute, Ind., and Gillespie, Burke & Gillespie, of Springfield (S. D. Royse, of Terre Haute, Ind., and George B. Gillespie, Edmund Burke, and Louis F. Gillespie, all of Springfield, of counsel), for appellant.

P. J. Kolb and Walter F. Kolb, both of Mt. Carmel (H. N. Quigley and S. W. Baxter, both of Cincinnati, Ohio, of counsel), for appellees.

WILSON, Justice.

This casue was previously reviewed by this court upon a writ of error, sued out by the appellees herein. Green v. Hutsonville Township High School District, 356 Ill. 216, 190 N.E. 267. A bill was filed by certain taxpayers against Hutsonville Township High School District No. 201 in Crawford County, the members of the board of education thereof, the county clerk, and county treasurer of Crawford county, to restrain the extension and collection of taxes for the payment of bonds and interest purporting to be obligations of the township high school district. General and separate special demurrers were interposed by the parties named as defendants. The complainants elected to abide by their bill. The chancellor sustained the demurrers and entered a decree dismissing the bill. This court reversed the decree and remanded the cause with directions to overrule the demurrers and for further proceedings in consonance with the opinion. Upon remandment of the cause, a joint and several answer of the school district and the former president and members of the board of education, the separate answer of the county clerk, one by the county treasurer and one by the Merchants National Bank were filed, and replications were filed to the answers. Evidence was heard and a decree entered finding that the bonds in question were void and the extension and collection of taxes for the purpose of paying the bonds and the interest thereon was enjoined. From that decree this appeal was prosecuted.

As stated in the opinion on the previous review by this court, the citizens of the high school district decided to build a schoolhouse at a cost of not to exceed $40,000. The voters approved a proposition to borrow $29,700, which was the limit of indebtedness which the district might incur, based upon the assessed value of the taxable property within the district, as provided by section 12 of article 9 of the Consititution. Without other authority than the vote of the legal voters to build the schoolhouse and the authorization by the voters to borrow to the legal limit for the district, the board of education entered into contracts for the construction of a school building at a total cost in excess of $74,000. After the contracts were awarded it became possible, by virtue of an amendment of the law relative to assessed valuations of property, to borrow an additional $15,000 within the constitutional limitation of 5 per cent. of the assessed value of the taxable property in the district. At another election $15,000 additional in bonds was authorized by the voters of the district and a total of $44,700 in bonds was issued. Out of this sum $3,000 was paid for a school site and $1,000 was paid for attorney's fees. The total indebtedness of the district so incurred was $77,347.50, or $32,647.50 in excess of the amount realized from the sale of bonds, and approximately the same amount in excess of the constitutional limitation of the district's right to become indebted.

After the school building was completed, certain persons and firms who had supplied material and labor in the construction thereof filed suits and obtained judgments in 1921 to an aggregate amount of $19,741.85; the school district consenting that such judgments should be entered. The origianl bond issue of $44,700 matured and was all paid by July, 1931. In August thereafter, a special election was held to vote on a proposition to authorize the district to issue its bonds in the sum of $34,000 for the purpose of paying the judgments, with their accumulations of interest and costs. The proposition carried and the bonds were issued and sold. The Terre Haute Trust Company became the owner of some of the bonds, but subsequently the Merchants National Bank of Terre Haute, Ind., became the owner of practically all of the bonds, and it filed an intervening petition in the circuit court of Crawford county reciting that fact and became a party to the suit, and the Terre Haute Trust Company filed an answer averring that since the institution of the suit it had transferred all its right, title and interest in the bonds to the Merchants National Bank, and disclaimed any further interest in the cause.

The answer of the Merchants National Bank, the only appellant herein, averred many of the facts heretofore stated, and assigned as a reason for the construction of the school building at a cost in excess of the amount for which the school district might become indebted, that a smaller building than the one constructed would be inadequate to furnish the necessary facilities for the competent instruction of the pupils and would endanger their health and result in an inexcusable waste of funds, and that in view of the emergency, the board of education of the district, in good faith, believed that it was not limited, by law, to the construction of an inadequate school building. The answer stated, in part, what was done in the construction of the building, the institution of the suits by those supplying material and labor; recited that the suits were brought upon the advice of counsel and that there was no collusion with officers, agents, or attorneys of the district in filing the suits; averred that each of the plaintiffs was entitled to recover judgments against the school district for the amounts respectively asserted to be due, for which the suits were brought; that the judgments have been entered of record in the circuit court of Crawford county and have been available to be seen at all times by the complainants and the taxpayers of the school district. There were averments concerning the assignments of the various judgments and that the Merchants National Bank was the owner of bonds of the school district of the par value of $29,000.

The answer further averred that none of the complainants or taxpayers of the district had objected to the validity of the bonds until the filing of the bill on February 16, 1933; that by reason of the complainants' standing by and permitting the defendant to purchase the bonds for a valuable consideration, they had lost any right they...