Kelly v. Board of Education of Millard County

• Decision Date: 27 July 1920
• Docket Number: 3504
• Citation: 56 Utah 582,191 P. 1070
• Court: Utah Supreme Court
• Parties: KELLY v. BOARD OF EDUCATION OF MILLARD COUNTY et al

191 P. 1070

56 Utah 582

KELLY v. BOARD OF EDUCATION OF MILLARD COUNTY et al

No. 3504

Supreme Court of Utah

July 27, 1920

Proceedings by James A. Kelly to prohibit the Board of Education of Millard County and others from issuing and selling bonds.

PEREMPTORY PROHIBITION AWARDED.

Grover A. Giles and J. S. Giles, both of Fillmore, for plaintiff.

James A. Melville, Jr., of Salt Lake City, for defendants.

THURMAN J. CORFMAN, C. J., and FRICK, WEBER, and GIDEON, JJ., concur.

OPINION

THURMAN, J.

Plaintiff instituted this proceeding to prohibit defendants from issuing and selling certain district school bonds and paying the indebtedness referred to in the application. The material facts are not in dispute.

On the second of May, 1916, the county commissioners of Millard county, by appropriate resolution, consolidated all of the school districts in said county into one school district of first class, under the name and style of "the board of education of Millard county school district, in Millard county, state of Utah." By said consolidation the defendant board became liable for all the outstanding debts and obligations of the school district existing in the county at the time of the consolidation. Comp. Laws Utah, 1917, section 4619. Among the districts so consolidated were the Central school district No. 5 and the Holden school district No. 8, each of which was burdened with an indebtedness created in excess of the taxes of the current year, in violation of section 3, article 14 of the state Constitution. The debts of the two districts aggregated a sum in excess of $ 20,000.

On the twelfth day of August, 1919, after notice duly published and in pursuance of the provisions of chapter 91, Sess. Laws Utah 1919, providing for the redemption, cancellation, and refunding of school bonds and issuance of funding bonds, the defendant board, composed of the other defendants as members thereof, adopted a resolution for the issuance and sale of bonds of the defendant school district in the sum of $ 20,000 for the purpose of paying the aforesaid indebtedness. The plaintiff is a resident and taxpayer of the said county and school district, and as such makes this application for relief.

The complaint of plaintiff with great particularity details the various steps taken by the county commissioners and defendant board from the date of the consolidation of the school districts down to the commencement of this action. Every necessary step, under the laws of this state, seems to have been taken by the board, and the provisions of the law carefully followed in every respect, prior to the adoption of the resolution providing for the issuance and sale of the bonds. Plaintiff, in his brief, charges various irregularities and omissions on the part of the defendants in regard to the proceedings prior to the adoption of the resolution, but after a careful investigation of the proceedings and the law applicable thereto we are of the opinion that the law was substantially complied with in every essential particular. The only question to be determined, therefore, is: Does the defendant board have the power, under the law to which we have referred, to issue and sell bonds of the school district to pay an indebtedness created in violation of the Constitution? The section of the Constitution above referred to reads as follows:

"No debt in excess of the taxes for the current year shall be created by any county or subdivision thereof, or by any school district therein, or by any city, town or village, or any subdivision thereof in this state; unless the proposition to create such debt, shall have been submitted to a vote of such qualified electors as shall have paid a property tax therein, in the year preceding such election, and a majority of those voting thereon shall have voted in favor of incurring such debt."

Chapter 91, Sess. Laws Utah 1919, upon which defendants rely, after stating the necessary steps to be taken by the board and the requisites to be observed in refunding bonds previously issued, has the following provision on page 282:

"Bonds may also be issued by a consolidated school district without an election, for the funding, purchase or redemption of the outstanding indebtedness of any such consolidated school district, provided such debt was contracted prior to consolidation and was assumed by such consolidated school district pursuant to law. The legality, regularity, and validity of any such outstanding indebtedness may be determined in the manner hereinbefore set forth for determining the validity of bonds to be refunded by any board of education."

It is assumed by the defendants that the board of education of the consolidated districts has the power to refund the indebtedness of a school district incurred prior to its consolidation with other districts in the county, whenever it is made to appear that such district has received the consideration for...