Shinn v. Bd. Of Educ.

• Court: Supreme Court of West Virginia
• Writing for the Court: HOLT
• Citation: 39 W.Va. 497,20 S.E. 604
• Parties: SHINN et al. v. BOARD OF EDUCATION et al.
• Decision Date: 24 November 1894

20 S.E. 604
39 W.Va. 497

SHINN et al.
v.
BOARD OF EDUCATION et al.

Supreme Court of Appeals of West Virginia.

Nov. 24, 1894.

School Monet—Order by Board or Education —Validity—Payment in Subsequent Year —Equity Practice—New Parties.

1. A court of equity has jurisdiction of a suit by and on behalf of the resident taxpayers of a school district brought to set aside and hold for naught a contract made by the board of education so far as the same creates and incurs a debt to be paid out of the school money of subsequent years.

2. The following order is upon its face an order for the payment of money out of the building fund levied for a year subsequent to the year in which the debt was incurred, and is not negotiable according to the law of this state. Order No. 44 reads as follows: "Ripley District, W. Va., Sept. 25, 1891. Sheriff of Jackson County: Pay to the order of Educational Aid Association, or bearer, four hundred & twenty dollars, and charge to the building fund of Ripley district. By order of the board of education. Due Dec. 1st, 1892. (Without interest.) J. F. Coast, President. I. S. Little, Secretary. $420.00."

3. Where a person who files his petition asking to be admitted as a party defendant in a pending suit in equity, in which no allegation is made naming or referring to him in any way, and no relief is prayed against him, and he is admitted to become such party defendant, he does not become a party in the cause until he has been made a party by some allegation in the bill as amended.

4. The board of education of a school district is a corporation created by statute, with functions of a public nature expressly given, and no other; and it can exercise no power not expressly conferred, or fairly arising from necessary implication, and in no other mode than that prescribed or authorized by the statute.

5. A case in which certain points of equity practice are discussed and considered.

(Syllabus by the Court.)

Appeal from circuit court, Jackson county.

Injunction by and on behalf of the citizens and taxpayers of Ripley school district, restraining and enjoining the payment of three certain drafts, for $420 each, on the ground of illegality. From an order overruling a motion to dissolve the injunction, Thomas E. Davis, defendant, appeals. Affirmed.

Leonard & Archer and Warren Miller, for appellant.

Wm. A. Parsons, for appellees.

HOLT, J. This is an injunction by and on behalf of the citizens and taxpayers of Ripley school district to restrain and enjoin the payment of three certain drafts, for $420 each, on the ground of illegality. On the 15th day of November, 1893, defendant Thomas E. Davis moved to dissolve the injunction, which motion the court overruled, refusing to dissolve same, from which order this appeal was allowed. Code, c. 135, § 1, cl. 7. Stating the contract, etc., as if they were valid, the facts are as follows: On the 25th day of September, 1891, the board of education of Ripley district, in Jackson county, entered into a contract with one of the defendants, viz. the Educational Aid Associa tion of Chicago, for the purchase of 42 sets of "Public School Study Made Practical, " to be delivered on board the cars, and shipped to J. F. Coast, Jackson C. H., Jackson county, W. Va., on the 15th day of October, 1891, in consideration of which the board of education agreed and bound itself to pay to the Educational Aid Association $1,260, being $30 per set, to be paid in the following manner: $420 due 1st December, 1892; $420 due December 1, 1893; and $120 due December 1, 1894, —and the president and secretary of the board were authorized and directed to issue, sign, and deliver to the Educational Aid Association, or its agents, orders in due form on the sheriff of Jackson county payable out of the building fund of the said district, for the said $1,260, payable as aforesaid, and this contract was entered on the record of the board. The president and secretary, on the same day issued, signed, and delivered to the agent of the Educational Aid Association orders No. 44, No. 45, and No. 46, which are as follows:

"No. 44. Ripley District, W. Va., Sept. 25, 1891. Sheriff of Jackson County: Pay to the order of Educational Aid Association, or bearer, four hundred & twenty dollars, and charge to the building fund of Ripley district. By order of the board of education. Due Dec. 1st, 1892. (Without interest.) J. F. Coast, President. I. S. Little, Secretary. $420.00."

"No. 45. Ripley District, W. Va., Sept 25, 1891. Sheriff of Jackson County: Pay to the order of Educational Aid Association, or bearer, four hundred & twenty dollars, and charge to the building fund of Ripley district. By order of the board of education. Due Dec. 1st, 1893. (Without interest.) J. F. Coast, President. I. S. Little, Secretary. $420.00."

"No. 46. Ripley District, W. Va., Sept. 25. 1891. Sheriff of Jackson County: Pay to the order of Educational Aid Association, or bearer, four hundred & twenty dollars, and charge to the building fund of Ripley district. By order of the board of education. Due Dec. 1st, 1894. (Without interest.) J. F. Coast, President I. S. Little, Secretary. $420.00."

They are not negotiable, even apart from lacking the statutory requirement of being payable at a bank, etc. (section 7, c. 99, Code), for the intention in such case, as a general rule, is to authorize the payment, and furnish vouchers to the proper disbursing officers, and not to put negotiable instruments in circulation; and they do not cut out equities as against the corporation, or in this case as against the resident taxpayers, and on the ground that there is no implied authority In such officers to execute negotiable instruments. See 1 Daniel, Neg. Inst. (4th Ed.) § 427; Stienbeck v. Treasurer, 22 Ohio St. 144; School Directors v. Fogleman, 76 Ill. 189; State v. Huff, 63 Mo. 288; 2 Beach, Pub. Corp. § 799; Fox v. Shipman, 19 Mich. 218.

[20 S.E. 605]

On the 14th day of November, 1891, F. M. Durbin, of the city of Parkersburg, for a valuable consideration, sold and delivered the three orders to the appellant, Thomas E. Davis. They bear no indorsement. On the 18th day of January, 1893, the plaintiffs filed their bill, and obtained from the judge in vacation, on the 19th day of January, an order of injunction, as prayed for, restraining the late sheriff, James M. Poling, and the present sheriff, I. M. Adams, from paying said sum of $1,260, or said orders, or any part thereof. The material grounds upon which the plaintiffs base their right to the injunction in their original and amended bills are as follows: (1) The order making and setting forth the contract of purchase was illegal, because Commissioner D. L. Say-real, though present, did not concur, and he was necessary to constitute a quorum. The proceedings do not show upon their face who called the meeting and directed notice to be given. That none in fact was given. That, therefore, the meeting was illegal, and its proceedings void. (2) The board had no authority under the law to use the building fund in the purchase of such things as those designated as "Public School Study Made Practical.'" (3) It was a debt directed to be paid out of the school money of subsequent years, and was therefore unlawfully incurred, in violation of the school law (section 45, c. 45, Code). The defendant Thomas E. Davis was made a party defendant on his own petition, and answered that he purchased the orders in controversy for a valuable consideration; that a levy was made for the payment of the order No. 44, due December 1, 1892; that plaintiffs, before that time, had notice of defendant's purchase; that the levy was legal; that each plaintiff had notice of the levy, and had paid the assessment before the suit was brought, and they are therefore estopped as to the order No. 44, for $420; that, having notice, they made no attempt to supersede the levy; and that their remedy at law by writ of supersedeas was ample. Defendant denies that the meeting was illegal or irregular, but charges that the orders were legally and regularly Issued in due course of business, under sanction of law, at a special meeting of the board of commissioners, regularly and duly called, a majority being present, and all having had due notice of the time and place, when the contract was made, and the order setting forth the same was entered on the record of the board; that the articles so purchased were such as the board was authorized to purchase; that they were delivered, accepted, placed in the schools, and have since been in use; that the orders were negotiable, and not in excess of the amount authorized by law; that the board had a right to create a debt payable in one, two, and three years; and that there was at least $1,260 in the hands of the sheriff on the 25th day of September, 1891, belonging to the building fund, not otherwise appropriated. The plaintiffs replied generally, and the Issues were made up.

Several questions of pleading and practice are raised in this record, and discussed by defendants' counsel, which call for some consideration. On the 10th day of March, defendant Thomas E. Davis filed his petition, alleging that the agent of the defendant the said Educational Aid Association had placed the three orders in the bill and proceedings mentioned, amounting to $1,260, the payment of which had been enjoined, in the hands of F. M. Durbin, to be sold; and that he had bought the same, and paid the cash therefor, and was now the owner; and that defendant the Educational Aid Association had no longer any interest whatever in these orders. Thereupon the court ordered that Davis be admitted a party defendant to the suit, with leave to plead, demur, or answer. Davis appeared by attorney, waived process, and tendered In open court his written demurrer to the bill, which was ordered to be filed and set down for argument, and also filed his answer, and moved to dissolve the injunction. Plaintiffs excepted to this answer, and...