In re Bd. of Educ. of Perry

• Decision Date: 12 April 1913
• Docket Number: Case Number: 2153
• Citation: 35 Okla. 733,130 P. 951,1913 OK 238
• Parties: In re BOARD OF EDUCATION OF THE CITY OF PERRY.
• Court: Oklahoma Supreme Court

1913 OK 238

130 P. 951

35 Okla. 733

In re BOARD OF EDUCATION OF THE CITY OF PERRY.

Case Number: 2153

Supreme Court of Oklahoma

Decided: April 12, 1913

Syllabus

¶0 1. JUDGMENT--Validity--Persons Concluded--Judgments Against School Boards. The owner of several judgments against a board of education is not concluded by a judgment against their validity in a suit by the board against its treasurer to mandamus him to pay certain judgments, in which said suit the dormancy of the judgments sought to be concluded was directly involved, although the owner of said judgments employed counsel in that suit and urged their validity and assumed the conduct of and actually engaged in said suit.

2. LIMITATION OF ACTIONS--Agreement to Waive--Estoppel. Where public property of a board of education cannot be seized on execution, and the board enters into a valid agreement with judgment creditors to apply the judgment fund to judgments in order of entry and complies therewith, it cannot, after the expiration of the statutory period when a judgment becomes dormant for failure to issue execution, plead the statute of limitations as a bar to those judgments not yet reached for payment under the agreement. The board of education is estopped both on the contract and on the ground of equitable estoppel.

Devereux & Hildreth and Dale, Bierer & Hegler, for the board of education. H. E. St. Clair and H. A. Johnson, for the judgment creditors.

TURNER, J.

¶1 On June 8, 1910, "the board of education of the city of Perry of the state of Oklahoma," a corporation, commenced proceedings in the district court of Noble county the object of which was to fund certain judgments outstanding against the board by an issue of negotiable coupon bonds pursuant to section 25 of the Schedule to the Constitution and an act entitled "An act to enable counties, municipal corporations and boards of education of any city or school district to refund their indebtedness, approved March 11, 1905." The petition set forth a list of its outstanding judgment indebtedness accrued prior to November 16, 1907, marked "Exhibit A," which is admitted to be valid. Also a list of judgments, marked "Exhibit B," rendered and entered against the board prior to that time, which it alleged were dormant and constituted no part of the judgment indebtedness of the board, for the reason that the same had been rendered and entered more than six years prior to said date and had not been revived, and for the further reason that no process had issued to enforce the payment of the same. The petition, among other things, sought to have the validity of said judgment indebtedness determined, and alleged that an arrangement had been made with all valid judgment holders for funding the same at par and accrued interest with the funding bonds of the school district; that by prior resolution of said board said bonds had been duly authorized and directed to issue upon the adjudication and approval of the court; that the form of bonds and interest coupons had been prescribed, and due provision made for the necessary tax to pay said interest when due and to provide a sinking fund to pay said bonds at maturity; and prayed that the amount of the valid judgment indebtedness outstanding against said board be determined by the court and that the board be ordered to issue, etc. Thereafter came J. B. Beadles, L. N. Beadles, partners as J. B. Beadles & Sons, and, in effect, alleged themselves to be the owners and assignees of sixteen of the 26 judgments set forth in "Exhibit B," and by answer put in issue the validity of said judgments, and alleged that for certain reasons the board was estopped to assert their dormancy. Like answers were filed by the owners of the remaining judgments set forth in said exhibit. After reply, in effect, that said Beadles were estopped to assert the validity of said judgments, and that the other judgments were barred by the statute of limitations, there was trial to the court and judgment for the board declaring said judgments and each of them "void and dormant and no legal indebtedness against said board." The Beadles alone bring the case here. The sole question involved is the dormancy of their judgments. The record discloses that, being pressed by judgment creditors, the board met July 14, 1899, when, as shown by its minutes:

"The matter of paying off judgments pro rata and bonding was referred to finance committee and they to confer with Attorney Quick and report at next meeting."

¶2 On June 4, 1900, it was:

"Moved that Treasurer Todd is hereby requested to pay out money pro rata--money now held by him--pro rata, on judgments against the district. Motion received no second. On motion the matter was referred to finance committee and Attorney Quick."

¶3 On July 6, 1900:

"On motion Treasurer Todd was requested to hold the money now in his hands belonging to the district as a judgment fund until further directed by the board. On motion the attorney for the board was instructed to defend all cases where there is any doubt as to the legality of their claim."

¶4 And on November 5, 1900:

"Letter read by secretary from R. J. Edwards, of Oklahoma City, this territory, regarding the payment of judgment against this district in order of their rendition. Said Edwards writes both as an attorney and as holder of about fifteen thousand dollars of the judgment against the board. Mr. Beadles holding five or six thousand dollars represents with him about four-fifths of the judgment indebtedness. They agree upon the plan. Plan proposed by letter discussed. It being perfectly fair and reasonable, it was moved and seconded that this board acquaint Mr. Todd, treasurer of this school district, with their desire to proceed after the plan already mentioned, namely, paying judgment indebtedness in the order of their rendition, as the only practical way to wipe out the total debt in the near future. Motion carried."

¶5 Thereafter Mr. Todd write thus:

"To the judgment creditors of the school district 52, board of education of the city of Perry, Oklahoma.

"I, as treasurer, through the advice and consent of the board of education, have formulated the following plan to liquidate the judgment indebtedness of said school district:

"All creditors who are conversant with the facts know that on October 3, 1894, the school district bonded for $ 18,000 having at that time a floating warrant indebtedness of $ 10,000, making a total indebtedness of $ 28,000, the limit of indebtedness that could be legally contracted under the United States statutes, limiting the amount of debt which municipal corporations can create to four per cent. of the assessed valuation. The assessed value at that time being in round numbers $ 700,000, four per cent. making a possible legal indebtedness of $ 28,000. Shortly after this debt was created it was decided that lots in the city of Perry not deeded by the townsite board to the individuals were not subject to taxation, this item with the subsequent depreciation of the value of city property, reduced the valuation to below $ 400,000, which has since steadily increased until now we have a valuation approximately $ 450,000. In the meantime school buildings have been erected costing far in excess of the amount raised by bonds, buildings more expensive than the original estimates. This with a yearly deficit of funds in the early days to meet the current expense run up a warrant indebtedness of $ 29,000 of this amount about $ 19,000 has been put into judgments. At this point the school board thought it advisable to allow no more judgments, hence informed the warrant holders that in the future the 4 per cent. limit would be pleaded and no judgments have been taken for about one year. Eighteen months ago a peremptory mandamus was asked by one judgment creditor in the Supreme Court, requesting an order (2) to compel a levy to be made sufficient to pay judgments, which was refused by the Supreme Court of the territory. In consideration of all these facts we are placed in the position, as public servants, to decide between standing on the technical legal rights and refusing payment in total or recognizing our moral obligations to pay the debt. Public sentiment is divided with a predominant disposition to finally pay out if it can be done without oppressing the taxpayer. It is a controverted legal point as to whether payment on the judgments shall be made in order of rendition or pro rata and no party at interest has ever been willing to take the initiatory steps to determine the issue. The payment pro rata involves an endless complication of court records in entering the pro rata payments which under the present laws and valuations could not exceed six or seven per cent. per annum, not as much annually as the accruing interest, many of the judgments are small. In view of these facts, we have thought that if a written waiver of the right (if such right exists) of each judgment creditor who may be affected to payment pro rata be signed by each creditor, we might then see our way clear to finally liquidate the whole judgment indebtedness; and if such waiver be signed by each creditor, we as a board pledge our official and personal influence to carry out the above plan and ask that the enclosed waiver be signed and mailed to us by return mail.

"GEO TODD."

¶6 To which each judgment creditor, save one, responded by signing said waiver, which reads:

"I, the undersigned judgment creditor, holding judgment of record against the board of education of the city of Perry, Noble county, Oklahoma Territory, hereby ask that the school treasurer pay all judgments against the board of education of the city of Perry, in order of rendition, hereby waiving right (if such right exists) to payment pro rata and this waiver shall apply to grantees and assigns; said judgment was rendered , 18 , for the sum of dollars."

¶7 The record further discloses that pursuant to this arrangement, which was made with all judgment holders...