School District No. 3 In Carbon County v. Western Tube Company

• Decision Date: 05 January 1895
• Citation: 5 Wyo. 185,38 P. 922
• Parties: SCHOOL DISTRICT NO. 3 IN CARBON COUNTY v. WESTERN TUBE COMPANY
• Court: Wyoming Supreme Court

38 P. 922

5 Wyo. 185

SCHOOL DISTRICT NO. 3 IN CARBON COUNTY v. WESTERN TUBE COMPANY

Supreme Court of Wyoming

January 5, 1895

Commenced in District Court, March 23, 1891.

ERROR to the District Court for Carbon County. HON. JESSE KNIGHT Judge.

In this action the Western Tube Company, formerly the Haxton Steam Heater Company, sought to recover from School District No. 3 in the county of Carbon upon a school warrant issued to the A. L. Strang Co. for $ 2,650, October 30, 1886, in payment for steam heating apparatus placed in the school building at Rawlins, which warrant had been endorsed by the A. L. Strang Co. and was held by the plaintiff. $ 1,206.46 had been paid upon the warrant in three installments from February 24, 1887 to January 16, 1889. The answer denied the material allegations of the petition as to the indebtedness specifically; and for a second defense alleged, in substance that no tax had been ordered levied by the district to raise money for the purpose of supplying such apparatus, or to pay the alleged warrant; that there was no money in the treasury applicable to its payment, and that the board was without authority to incur the indebtedness. For a third defense it was alleged that the district was prohibited from incurring any indebtedness exceeding four per centum, in the aggregate on the value of the taxable property within the district, and that before the warrant was issued, and prior to the time of the alleged sale and delivery of the apparatus, the district had become indebted in an amount equal to the said limitation, and the indebtedness incurred by the purchase of said apparatus and the issuance of the order or warrant was void. The evidence disclosed that in June, 1886, at a special meeting of the board of trustees of the district it was agreed to sign a contract for the construction of a schoolhouse, and that the building committee was given power to let a contract to the lowest bidder for heating apparatus for the new schoolhouse, and that the board agreed to issue warrants of the district for the payment of the same. The apparatus was purchased and put in place and the warrant in payment therefor issued. Some question seems to have been raised as to any order of the board having been made other than as above stated for the issuance of the warrant. As the case was disposed of upon the questions relating to the authority of the board and district to incur the indebtedness, the other facts are not material, except that while the evidence disclosed to some extent the condition of the "contingent fund" of the district, there was no evidence touching the schoolhouse fund. The warrant was drawn upon the contingent fund. Judgment for the balance due upon the warrant with interest was given in favor of the plaintiff, and the defendant brought error.

Judgment reversed and cause remanded.

McMicken & Blydenburgh, for plaintiff in error.

A school district is a corporation with limited powers. (Dillon Mun. Corp., sec. 24; Harris v. School Dist., 28 N.H. 61; Stanhope v. School Directors, 42 Ill.App. 570; 21 Am. & Eng. Ency. L., 800.) The purchase of heating apparatus was not in the power of the trustees. (R. S., secs. 3927, 3936; Vevil v. Clifford, 63 Wis. 435; Fluty v. School Dist., 49 Ark. 94.) The warrant was void because the statute was not followed, and the claim allowed as required by law. (Andrews v. Sch. Dist., 37 Minn. 96; Adams v. State, 82 Ill. 32; Wells v. People, 71 id., 532; School, &c., v. Fogleman, 76 id., 189; Peers v. B'd of Ed., 72 id., 508; Re Tinsley, 90 N.Y. 231.) Persons dealing with school district trustees are bound to take notice of their fiduciary character and authority. (Gibson v. Sch. Dist., 36 Mich. 404; Knabe v. B'd Ed., 67 id., 262.) Creating indebtedness is not among the powers granted such officers. (Authorities cited above.) A party suing on a warrant must show a strict compliance with the law. (Twp. v. Ryan, 86 Pa. 459; Hubbard v. Town, &c., 28 Wis. 674.) All proceedings should be made matters of record and proved by it. (Sch. Dist. v. Blakeslee, 13 Conn. 227; Sherwin v. Bugbee, 17 Vt. 337; Jordan v. Sch. Dist., 38 Me. 164; Co. Com'rs v. Chitwood, 8 Ind. 458; Trustees v. Osborne, 9 id., 458; Archer v. Com'rs, 3 Blackf., 501; El Dorado v. Reed, 11 Cal. 130; Campbell v. Brackenridge, 8 Blackf., 47; Potts v. Henderson, 2 Ind. 327; Crump v. Supervisors, 52 Miss. 107.) The holder must look to the particular fund upon which the warrant is drawn. (Campbell v. Polk Co., 76 Mo. 57; Pettis Co. v. Kingsbury, 17 id., 479; Moody v. Cass Co., 74 id., 307; Kingsbury v. Pettis Co., 48 id., 207; Bore v. Co., 4 Dill., 216; McCullough v. Brooklyn, 23 Wend., 458; Co. v. Cox, 6 Ind. 403; People v. Wood, 71 N.Y. 371; Cuyler v. Rochester, 12 Wend., 165; Argenti v. San Fran., 16 Cal. 255; Martin v. Same, id., 285; Lake v. Williamsburgh, 4 Denio, 520; 5 Binn., 392; 32 Ia. 577; 18 Cal. 126; 49 Me. 167; 30 Md. 315; 44 N.H. 424; 33 Vt. 431; 37 N.J. Eq. 123; 7 Foster, 269.) An order payable out of a particular fund operates as an equitable assignment of the fund. (91 Pa. 96; 3 Paige, 373; 26 Me. 114; 2 Metc. Ky. 530; 9 Paige, 243; 51 N.H. 407; 18 Mo. 564; 20 Vt. 25; 1 Wall., 604.) The congressional prohibition upon incurring indebtedness applied to all debts of whatever kind. (Bank v. Sch. Dist., 39 Ia. 490; French v. Burlington, 42 id., 614; 36 id., 393; 44 id., 122; 43 id., 48; 34 id., 208; 51 id., 385; 37 id., 542; 44 id., 122; Millerstown v. Frederick, 114 Pa. 435; Prince v. Quincey, 105 Ill. 138; Springfield v. Edwards, 84 id., 626; Law v. People, 87 id., 282; Sackett v. N. Albany, 88 Ind. 473; Buchanan v. Litchfield, 102 U.S. 278; Dixon Co. v. Field, 111 id., 83; Lake Co. v. Rollins, 130 id., 662; Lake Co. v. Graham, id., 674; Litchfield v. Ballou, 114 id., 190; Sutro v. Pettit, 5 Am. St., 442; Williams v. La., 13 Otto, 637; People v. May, 9 Colo., 80; App. of Erie, 91 Pa. 398; Wisconsin, &c., v. Taylor Co., 52 Wis. 39.) The warrant not negotiable. Bank v. Dist., 39 Ia. 490.) A subsequent ratification cannot validate the unlawful corporate act. (Company v. Van Duran, 40 Mich. 429; Jefferson v. Arrighi, 54 Miss. 668; 48 Pa. 528; Nash v. St. Paul, 11 Minn. 174; Brady v. Mayor, 20 N.Y. 312; 51 Tex. 332; 63 N.Y. 239; 77 id., 130; 41 N.J.L. 45; 16 Cal. 591; 108 U.S. 282; 59 Cal. 517; 84 N.C. 169; 117 U.S. 657; 43 Ia. 48; 8 Colo. 257; Wells v. People, supra; Gibson v. Dist., 36 Mich. 404; Johnson v. Dist., 67 Mo. 319; 10 Neb. 239; 33 O. St., 321; 25 Ia. 447.) Parol evidence is inadmissible to vary or control a contract. (1 Greenleaf Ev., sec. 275; 11 Mass. 30; 2 W. Bl., 1,249; 2 B. & P., 565; 1 Johns., 467; 78 N.Y. 74; 1 Rice Ev., sec. 157; 16 Pick. 227; 20 N.H. 246; 1 Fla. 301; 17 Or. 417; 3 Neb. 481; 119 U.S. 604.)

D. H. Craig and Lacey & Van Devanter, for defendant in error.

The rights of creditors or third persons cannot be prejudiced by a failure on the part of the district to keep proper minutes or records of its proceedings. (Gillet v. Com'rs, 18 Neb. 410; Dillon Mun. Corp., secs. 300-1.) Every corporation, public and private, has the power to make contracts and incur debts in discharging its corporate duties. (Dillon, secs. 117-125; Neugass v. City, 42 La. Ann., 163; Allen v. LaFayette, 89 Ala. 641.) The authorities cited contra by counsel rest upon the peculiar wording of the statutes. If the district when the contract was made had the money in its treasury to the obligations under that contract, or to meet enough of its debts to bring the balance within the limit, then the prohibitive statute would not apply. (Dively v. Cedar Falls, 27 Ia. 227.) The third defense did not allege that there was not cash in the treasury. Each defense must be tested alone. (Bliss C. Pl., 2nd ed., 346.) This contract, being for necessaries, was not incurring a debt within the meaning of the statute. (Grant v. Davenport, 36 Ia. 396.) As an expense of this kind was payable out of the school house fund, the presumption is that when the contract was made the district was acting lawfully and had money in the proper fund to meet the obligation. By afterwards misappropriating the money the district could not invalidate the obligation. (New Orleans v. U.S. 49 F. 40.) The bill of exceptions must contain all the evidence, which fact must be shown on its face. (France v. Bank, 3 Wyo. 187; Wyo. L. & T. Co. v. Holliday, id., 385; Roy v. U. Merc. Co., id., 417; Coil v. Willis, 19 O., 28; Cantrell v. State, 18 O. St., 477; Wyman v. Buckstaff, 27 Wis. 479; Moul v. Moul, 30 id., 203; Ehle v. Brown, 31 id., 405; Seig v. Long, 72 Ind. 18; Brownlee v. Hare, 64 id., 311; Armleder v. Sieberman, 33 O. St., 77; Merrifield v. Weston, 68 Ind. 70; Harmon v. Sexton, 69 id., 37; Powers v. Evans, 72 id., 23.) The evidence must be given in full. (Ry. v. Probst., 30 O. St., 104.)

GROESBECK, CHIEF JUSTICE. CONAWAY and CORN, JJ., concur.

OPINION

GROESBECK, CHIEF JUSTICE.

Judgment was rendered in favor of the plaintiff below in the sum of $ 2,364.50, and its reversal is sought by proceedings in error. The assignments of error relate to matters occurring during the trial of the cause. By repeated decisions of this court under its rules and unbroken line of decisions by courts in other jurisdictions, all exceptions taken during the trial of a cause and not embodied in the motion for a new trial are regarded as waived. The grounds for a new trial as embodied in the motion therefor alone will be considered. As one of the assignments of errors is that the district court erred in overruling the motion for a new trial, and this assignment is sufficient under the rules of this court, it brings to our notice the grounds of error stated in the motion for a new trial. These are that the decision and judgment of the trial court is not sustained by...