Mitsler v. Eye

• Citation: 231 P. 1045,1924 OK 1107,107 Okla. 289
• Decision Date: 09 December 1924
• Docket Number: Case Number: 15361
• Parties: MITSLER et al. v. EYE et al.
• Court: Oklahoma Supreme Court

1924 OK 1107

231 P. 1045

107 Okla. 289

MITSLER et al. v. EYE et al.

Case Number: 15361

Supreme Court of Oklahoma

Decided: December 9, 1924

Syllabus

¶0 1. Schools and School Districts--Consolidated District--Disposition of Assets of Disorganized District.

Where a consolidated school district is organized under the provisions of chapter 86, article 11, Comp. Stat. 1921, the assets of the disorganized district shall be applied to the payment of the floating indebtedness of the district, if any, then to the bonded indebtedness, any residue to become the property of the consolidated district.

2. Same--Validity of Bond Issue--Effect of Debt Limit of Component Districts.

Where several districts are consolidated under the above provisions and the consolidated district attempts to issue its bonds as provided by law, such issue will be invalid if the aggregate of the bonded indebtedness of any district, added to the new proposed indebtedness, will exceed the constitutional limit of 5 per cent. of the taxable property as provided by section 26, article 10, of the Constitution.

3. Same--Assets of Disorganized District to be Considered.

When it appears that any such district disorganized upon the forming of a consolidated district has available assets sufficient to liquidate the original bonded indebtedness, such fact may be considered in determining the validity of the subsequent issue.

4. Same--When Bonded Indebtedness "Incurred." Bonded indebtedness is incurred within the meaning of section 26, article 10, of the Constitution, when the bonds of the school district are voted, issued, approved and delivered, and not when the election is held at which they are submitted.

5. Same--Assent of "Three-Fifths of Voters."

That part of section 26, article 10, of the Constitution of Oklahoma which requires the assent of three-fifths of the voters of the subdivision of the state where the question is submitted refers to three-fifths of the electors participating in the election, and not three-fifths of the entire electorate.

Kornegay & Probasco, for plaintiffs in error.

Carey Caldwell, for defendants in error.

WARREN, J.

¶1 This is a second appeal from the district court of Craig county. It is an injunction suit seeking to prevent the issuance and sale of $ 25,000 bonds of consolidated school district No. 2 of Craig county, containing three school districts of Craig county and a part of a district in Nowata county. On the first trial in the district court, an injunction was sought for alleged irregularities in the election forming such consolidated district, because of an alleged excessive indebtedness created by the proposed $ 25,000 bond issue, and the selection of an illegal site. The injunction was denied. On the prior hearing in this court the judgment of the trial court was reversed. Cheek v. Eye, 96 Okla. 44, 219 P. 883. The ground for reversal was that in school district No. 27, one of the districts included in the consolidation, there was a prior bonded indebtedness, less sinking fund, of $ 2,500, which was approximately nine-tenths of one per cent. of the taxable value of the property, and that the proposed new indebtedness was four and two-tenths per cent. of such valuation, creating an excess of one-tenth of one per cent. over the constitutional limit of 5 per cent. for school purposes as fixed by section 26, article 10, of the Constitution of Oklahoma. The cause was reversed for a new trial for the reason that it was shown by the record that assets of school district No. 27 were still on hand, but such record did not disclose the value thereof and whether or not, if disposed of and applied to the existing indebtedness, as provided by section 10469, Comp. Stat. 1921, such indebtedness would be so reduced as to bring the net amount within the constitutional limitation. The court did not decide whether or not this could be done because the question was not briefed. The cause was retried in the district court of Craig county, and was tried by the court on the theory that the only question left open was the aforesaid question fixing the amount of the valuation of consolidated district and indebtedness of school district No. 27, including a valuation of assets on hand available for the purpose of retiring the existing bonds. The trial court found as follows:

"The court finds that the value of the property owned by school district No. 27, may be taken into consideration in estimating the financial condition of school district No. 27 at the time of the vote of the people to consolidate the several school districts into one consolidated district, and whether or not, considering the bonded indebtedness attempted to be voted, it is above the five per cent. allowed by the Constitution; and the court finds from the evidence in this case that the taxable value of the districts 27, 45, 58, and 72 for 1921 was $ 589,145; that the taxable value for the same districts for 1922 was $ 561,340; that the taxable value of said districts for 1923 was $ 541,320. The court finds from the evidence that the school building belonging to district No. 27 was of the value of $ 6,000; that the seats were of the value of $ 400; that the two vacant lots were of the value of $ 100; that the four lots upon which the school building was erected, and upon which the building is now being prepared or being built, was $ 200; and that the other personal properties belonging to school district No. 27 are of the value of $ 1,000, making a total value of the property of the school district No. 27, which it had on hand as shown by the above items, $ 7,700.

"The court finds that the indebtedness of said school district No. 27, at the time of the voting of the bonds, on July 1, 1921, was the sum of $ 3,000, and that the total value of the property belonging to said school district was greater than the indebtedness of the said district No. 27 at that time.

"The court finds that, taking the assessable value of the property as shown in 1921, the $ 25,000 voted would make something like 4.3% plus. Taking the taxable value of the property in 1922, it would make 4.4% plus; and for 1923 it would make 4.6% plus; and the court finds that, whether we consider it for 1921, 1922, or 1923, the total per centum of taxes raised for the total assessable or taxable value of all the property, as shown by the return of assessment extended on the tax books, was less than 5 per centum, and it was within the constitutional limit.

"The court finds that on May 12, 1922, there was in the sinking fund of school district No. 27, for the purpose of meeting outstanding bonds, the sum of $ 554.47, and that on June 1, 1922, there was in that sinking fund the same amount of $ 554.47, and the sum of $ 585.70 on June 30th."

¶2 Section 26, article 10, of the Constitution of Oklahoma, in part, is as follows:

"Limitation Upon Debts of City, County, etc.--Vote by People--Sinking Fund. No county, city, town, township, school district, or other political corporation, or subdivision of the state, shall be allowed to become indebted, in any manner, or for any purpose, to an amount exceeding in any year, the income and revenue provided for such year, without the assent of three-fifths of the voters thereof, voting at an election, to be held for that purpose, nor in cases requiring such assent, shall any indebtedness be allowed to be incurred to an amount including existing indebtedness, in the aggregate exceeding five per centum of the valuation of the taxable property therein, to be ascertained from the last assessment for state and county purposes previous to the incurring of such indebtedness."

¶3 The election at which these bonds were voted is attacked for the reason that three-fifths of all the voters residing in the district did not assent to the indebtedness. While it does not affirmatively appear from the record that there was not such an assent, it is only necessary under our construction of the language of the provision that three-fifths of the voters participating in the election register their approval. Faulk v. Bd. of Co. Com'rs, 40 Okla. 705, 140 P. 777. This question, and no other was squarely before the court in Mason et al. v. School District No. 72, Blaine County, 66 Okla. 239, 168 P. 798, and this court said:

"Under section 26 of article 10 of the Constitution of this

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