Horne v. Paragould Special School District No. 1

• Decision Date: 20 February 1933
• Docket Number: 4-2873
• Citation: 57 S.W.2d 568,186 Ark. 1000
• Parties: HORNE v. PARAGOULD SPECIAL SCHOOL DISTRICT NO. 1
• Court: Arkansas Supreme Court

57 S.W.2d 568

186 Ark. 1000

HORNE v. PARAGOULD SPECIAL SCHOOL DISTRICT NO. 1

4-2873

Supreme Court of Arkansas

February 20, 1933

Appeal from Greene Chancery Court; J. M. Futrell, Chancellor affirmed.

Affirmed.

L. P Biggs, Wallace Townsend and Elcock & Martin, for appellant.

W. F Kirsch and Horace Sloan, for appellee.

OPINION

MCHANEY, J.

Appellee, an urban special school district, of Paragould, Arkansas, brought this action against appellant, county treasurer of Greene County, in which the city of Paragould is located, to enjoin him from paying out on bond issues of the district, both maturities and interest, that part of the 18-mill school tax voted by the electors of the district, under Amendment No. 11 to the Constitution, for general school purposes, in the year 1931, payable in 1932. A 6-mill tax was voted for the building or bond payment fund and 12 mills for general school purposes. The bonds were all issued prior to the passage of act 169, Acts of 1931, and totaled approximately $ 400,000 now outstanding. The complaint alleged that "said bond issues (were) secured by various pieces of real estate belonging to said district, and, in addition, by an attempted pledge on the part of the district of all of the income of the district for the purpose of paying off and retiring said bonded indebtedness, together with the interest thereon." It was further alleged that the collector of the county had collected school taxes in the district, so voted, as above stated, in the year 1932 for the tax of 1931, in the sum of $ 33,061.86, and that additional revenues to accrue to the district from the State for the school year 1932-1933 are estimated at $ 7,518.64, or a total revenue of $ 40,580.50, one-third of said sum of $ 33,061.86, or the sum of $ 11,020.62 being voted by the electors of the district and set aside for the retirement of bonds and interest, and the remainder being available for general school purposes; that during the school year 1932-1933 bond maturities and interest will amount to $ 40,567.50, just $ 13 less than the total gross revenue of the district from all sources; that the whole of the sum voted by the electors for bond retirement had been paid out by appellant for such purpose, and that, unless restrained, he would pay out the remainder of the funds now in his hands, $ 15,605.75, thereby using all the 18-mill tax so voted and all other available revenue, so that no schools could be conducted in said district.

To this complaint a demurrer was interposed by appellant, which was overruled by the court, and, on his declining to plead further, he was perpetually enjoined in accordance with the prayer of the complaint.

The issue to be determined by this court on this appeal is succinctly stated by counsel for appellee as follows: "Whether or not the directors of an urban special school district under the law as it stood at the time of the issue of the said bonds had authority of law to make, without submission of the question to the electors of the district, a pledge of all the proceeds of the 18-mill tax for the sole purpose of paying bonds and interest when future levies thereof were not and could not be within the control of the school board (or of the Legislature itself, for that matter) but depended for their existence on the favorable annual vote of the electors of the district."

Only the 12-mill tax voted by the electors is involved. Appellant claims the right, by virtue of the pledge of all the income of the district for the payment of bonds, made by the directors of appellee district when the bonds were issued, to pay out the proceeds of said 12-mill tax to the retirement of bond maturities and interest, thereby closing the schools. Whereas appellee contends that the directors had no power to pledge revenue or income of the district, which was uncertain and contingent on a vote of the electors of the district annually. It appears to be conceded by appellee (a point we do not decide) that all revenue, save and except the amount voted annually by the electors for general school purposes, including the State tax of 3 mills, the tobacco and severance taxes and the amount voted for bond purposes, is subject to the payment of bonds and interest.

The framers of the Constitution of 1874, recognizing the great importance of educational advantages for all the children of the State through a system of free public schools, imposed on the State the duty of establishing and maintaining such schools in the following eloquent language in § 1, article 14: "Intelligence and virtue being the safeguards of liberty and the bulwark of a free and good government, the State shall ever maintain a general, suitable and efficient system of free schools whereby all persons in the State between the ages of six and twenty-one years may receive gratuitous instruction."

The same Constitution by § 3, of...