Smith v. Dandridge

• Decision Date: 27 February 1911
• Citation: 135 S.W. 800,98 Ark. 38
• Parties: SMITH v. DANDRIDGE
• Court: Arkansas Supreme Court

135 S.W. 800

98 Ark. 38

SMITH v. DANDRIDGE

Supreme Court of Arkansas

February 27, 1911

Appeal from Logan Chancery Court, Northern District; J. V. Bourland Chancellor; affirmed.

Decree affirmed.

Appellant pro se.

1. A director of a special school district can not lawfully receive pay out of the funds of the district for services as a member of the building committee of the school board in supervising the erection of a school building. Kirby's Dig. §§ 7685, 7687, 7692.

2. Four directors, including the one who is to receive pay, can not legally pass on the claim authorizing the issuance of the warrant to him for such services by the president and secretary of the school board. Kirby's Dig. §§ 7683, 7686; 78 F. 62; 56 F. 54; 24 S.W. 223; 89 Mo. 445; 130 Wis. 631; 109 N.W. 581; 110 N.W. 798; 95 P. 349; 61 Conn 138; 81 Cal. 303; 57 Misc. (N.Y. ) 392; 44 Id. 572; 68 A. 778; 133 N.Y. 887; 17 Misc. (N.Y. ) 272; 40 N.Y. 366; 2 N.Y.S. 576.

Carmichael Brooks & Powers, for appellee.

1. The statute providing that no member of a school board, except the secretary, shall receive compensation for his services applies only to those duties which are enumerated by the statute or are impliedly required of the directors. Kirby's Dig. § 7687. The sections cited by appellant have no application, as it is not contended that the building of the schoolhouse was beyond the power of the board of directors. A contract between a public board and one of its members is not invalid by reason of the official relations existing. It is not void, but voidable. 15 L. R. A. 520; 135 Mass. 376; 141 Mass. 496; 168 Mass. 53. There is no allegation of fraud in the pleadings; and, while the action of the board in allowing the bill was voidable, any actual fraud or corruption is negatived by the finding of the lower court. 52 L. R. A. 518. The work was necessary, and it was not appellee's duty, under the statute, as a director to do it. He was in fact acting in this capacity as agent of the board, and is entitled to compensation on a quantum meruit. 58 Ark. 348; 61 Ark. 397.

2. Four members of a school board constitute a quorum for the transaction of business. Kirby's Dig., § 7683. When a quorum has met, it represents the whole body; and the majority of the quorum may bind the corporation. 13 Am. St. Rep. 576; 16 Id. 633; 13 Id. 576; 144 U.S.1; 95 U.S.360; 12 Am. St. Rep. 53; 85 Am. Dec. 516; 32 Id. 243; 29 Id. 636; 16 Ia. 284; 85 Am. Dec. 516.

OPINION

FRAUENTHAL, J.

This was an action instituted by appellants, who were residents and taxpayers of the Special School District of Paris against the treasurer of the county in which the school district is situated and G. G. Dandridge, to enjoin the payment of a school warrant which had been issued by the president and secretary of said school district to said Dandridge for work and labor alleged to have been performed by him for the school district. The Special School District of Paris had duly entered into a contract with certain contractors for the erection of a school building, and later it was deemed necessary to employ some one as superintendent to be present at the work and represent the school district to see that specifications as to the brick work were fully complied with. G. G. Dandridge was one of the directors of the school district, and at the request of a number of the other directors he performed the duties of superintending this work, and later presented his claim for such services to the board of directors. His claim, amounting to $ 172.50 for 69 days' work, was allowed by the directors at one of the regular meetings of the school board. At that meeting four directors were present, one of whom was said Dandridge, and the other three members voted in favor of the allowance of the claim.

It is not claimed that there was any fraud practiced either in the selection of Dandridge or in the allowance of his claim, or that services of the kind performed by him were not required. It appears that these services were deemed necessary, and were for the benefit of the school district, and were duly performed by Dandridge; and the amount of his claim was a fair and reasonable compensation therefor. It is urged that Dandridge was one of the school directors, and on that account he could not enter into a contract for his own employment by the school district; and it is also urged that his claim was allowed at a meeting where either his vote or his presence was necessary to constitute a quorum, and on that account its allowance was not legally made; and for these reasons it is contended that the warrant issued for the payment of his claim is illegal, and its payment should be enjoined.

As a general rule, it is unlawful for a director to enter into a contract with the school district in which he has a personal and individual interest. His relation to the school district as a director thereof is of a confidential and fiduciary nature; he represents the school district, and is its agent. On this account he can not place himself in a position where his own personal interests might conflict with those of the school district which he must represent. The law and public policy forbid him from making a contract with the school district in which he has an individual interest; and a contract so made by a director will not be enforceable. The principle upon which this public policy is founded is that where one is acting in a fiduciary capacity for another he will not be permitted to make a contract with himself in his individual capacity relative to the subject-matter of such employment. Pickett v. School District, 25 Wis. 551; People's Savings Bank v. Big Rock S. & C. Co., 81 Ark. 599, 99 S.W. 836; Hoyle v Plattsburgh & M. Rd. Co., 54 N.Y. 314; Steele v. Gold Fissure Gold Mining Co., 42 Colo. 529, 95 P. 349. But a director is disabled from making a binding contract with the school district, not because the thing contracted for is itself illegal or tainted with moral turpitude, but because his personal relation to the district as its agent requires that he should have no self-interest antagonistic to that of the district in making a contract for it. The contract however in such case is not absolutely void, but it is simply not a binding agreement and may be avoided. If under such voidable contract the school district has accepted and retained benefits, it would still be liable to make just compensation therefor, not because of the contract but upon the principle that one ought to pay for valuable benefits received. This principle has been recognized and enforced in the case of Spearman v. Texarkana, 58 Ark. 348, 24 S.W. 883. In that case a physician was a member of the board of health of the city of Texarkana, and was employed by the board to render services on behalf of the city which were outside his duties as a member...