State ex rel. Emerson v. Allison

• Decision Date: 22 December 1933
• Docket Number: No. 31275.,31275.
• Parties: STATE EX REL. S.B. EMERSON, Collector, v. J.W. ALLISON, Appellant.
• Court: Missouri Supreme Court

66 S.W.2d 547

STATE EX REL. S.B. EMERSON, Collector, v. J.W. ALLISON, Appellant.

No. 31275.

Supreme Court of Missouri.

Division One, December 22, 1933.

Appeal from Polk Circuit Court. — Hon. C.H. Skinker, Judge.

AFFIRMED.

Herman Pufahl for appellant.

(1) In order to make a valid levy and in order to make taxes valid it is necessary that there be a valid and legal assessment or indebtedness: Abbott v. Lindenbower, 42 Mo. 162; State ex rel. v. Railroad, 114 Mo. 1; State ex rel. v. Burrough, 174 Mo. 700; State ex rel. v. Burrough, 216 S.W. 536; State ex rel. v. Hamilton, 293 S.W. 378. (2) While Section 12, Article X of the Constitution provides that any county, city, town or school district, etc., incurring any indebtedness requiring the assent of the voters, shall, before or at the time of doing so provide for the collection of an annual tax sufficient to pay the interest on such indebtedness as it falls due, and also to constitute a sinking fund for the payment of the principal within twenty years, and while this court in the cases of Evans v. McFarland, 186 Mo. l.c. 727, and in the case of Black v. Early, 208 Mo. l.c. 312, has held that said Section 12 is self-enforcing and it is not necessary to vote on a levy for interest and sinking fund each year, yet under the laws of this State "before any bond issued by any county, city, town, school district, or road district shall obtain any validity or be negotiated, such bond must first be presented to the State Auditor and be registered, etc. R.S. 1929, secs. 2915, 2920. All the authorities hold that if these requirements are not complied with, then the bonds are void, and that until they are complied with the bonds have no validity. Anthony v. Jasper County, 101 U.S. 393, 25 L. Ed. 1005; Young v. Township of Clarendon, 132 U.S. 340, 33 L. Ed. 356; Frank v. Butler Co., 139 Fed. 122, 71 C.C.A. 571. (3) No action can be maintained on a bond unless it is endorsed by the State Auditor and certainly if no action can be maintained on the bond, no taxes are legal to collect the interest on the bond, or to create a sinking fund for a bond which has not been registered. Anthony v. Jasper County, 101 U.S. 393, 25 L. Ed. 1005; Young v. Township of Clarendon, 132 U.S. 340, 33 L. Ed. 356; Frank v. Butler County, 139 Fed. 122, 71 C.C.A. 571; No debt is incurred until the bonds are issued and delivered. State ex rel. City of Dexter v. Gorden, 251 Mo. 315; Young v. Township of Clarendon, 132 U.S. 340, 33 L. Ed. 362. (4) While it is true that in a suit for taxes, the tax bill makes a prima facie case, yet it is not conclusive. The defendant may show that the assessment or proceedings were invalid. In the case at bar it was distinctly shown that the bonds were not registered until April 10, 1930, and therefore there was no valid or legal indebtedness existing against the Flemington School District for these bonds in the year 1928 or 1929. R.S. 1929, sec. 9953; State ex rel. Hammer v. Vogelsang, 183 Mo. 22; State ex rel. Morris v. Cunningham, 153 Mo. 651; State ex rel. Jamison v. St. Louis-San Francisco Ry. Co., 300 S.W. 277; State ex rel. Hawkin v. Edwards, 286 S.W. 27. (5) The school board had no authority to make any estimate to pay interest on bonds which had not been sold. Black v. Early, 208 Mo. 312.

Frank S. Sea and T.H. Douglas for respondent.

(1) The issuance of the bonds was authorized by a vote of the people of the Flemington School District as provided in Section 12, Article 10 of the Constitution of Missouri. The above provision of the Constitution which provides for the levying of a sufficient rate to pay the interest and create a sinking fund for the payment of the principal of the bonds is mandatory. State ex rel. v. Gordon, 217 Mo. 118; State ex rel. Audrain County v. Hackman, 275 Mo. 534, 205 S.W. 13; State ex rel. Wayne County v. Hackman, 199 S.W. 990; Heather v. City of Palmyra, 276 S.W. 877; Black v. Early, 208 Mo. 312; State ex rel. v. Allen, 183 Mo. 293; Evans v. McFarland, 186 Mo. 727. (2) The defendant, J.W. Allison, being a party to the injunction suit which held up the actual issuance of the bonds from March, 1928, until the mandate of the Supreme Court was filed in the office of the Circuit Clerk of Polk County, Missouri, on January 6, 1930, is estopped from taking any advantage of any delay of the Flemington School District in the actual issuing and registering of the school bonds. Such conduct on part of the defendant is inconsistent with his present position. 21 C.J., p. 1226, sec. 230; Coney v. Laird, 153 Mo. 435; State ex rel. v. Consolidated School District No. 1 of Lincoln County, 209 S.W. 942. For the school bond case above referred to, see Remington v. Flemington School District, 22 S.W. (2d) 800.

FERGUSON, C.

This is a proceeding by the State at the relation and to the use of the Collector of Polk County against J.W. Allison to enforce lien for certain school taxes levied for the year 1928 against land owned by defendant and situate in the Flemington School District in that county. The circuit court found the issues for plaintiff, entered its judgment accordingly and defendant appealed.

The Board of Education of the Flemington School District of Polk County, which recently theretofore had been organized as a town or village school district, called a special election for March 1, 1928, at which a proposition to issue bonds of said district in the sum of $12,000 for the construction of a new school building was submitted. The proposition was approved by more than two-thirds of the voters voting thereon at such election and thereupon the board of education, on March 3, 1928, duly authorized the issuance of twelve bonds, each in the sum of $1000, bearing date of March 2, 1928. Apparently at the same time provision was made for a levy "on all taxable property" in said school district of an annual tax to create "a sinking fund for the payment of the principal and interest on said bonds." Pursuant to such authorization the bonds were issued and duly executed by the proper officers. On March 6, 1928, the defendant herein, and nine other resident taxpayers of said school district, brought a suit, naming the school district and the members of the board of education as defendants therein, seeking an injunction restraining the issuance of the bonds "and levying of a tax to pay interest and to provide a sinking fund for payment of the bonds." No temporary injunction was asked or granted. At the first term of the circuit court thereafter, being the May Term, 1928, the court sustained defendants' demurrer to the petition filed in the injunction suit whereupon plaintiffs filed an amended petition. The amended petition attacked the regularity and validity of the special election and the validity of the bonds authorized thereat, alleged that the school district "was never legally organized as a town or village school district and that it has no legal existence," that the "election was absolutely null and void" and prayed that the board of education be restrained from issuing the bonds and that the making of a tax levy "to pay interest and to provide a sinking fund" be enjoined. On July 10, 1928, the court sustained defendants' demurrer to the amended petition; plaintiffs declining to plead further the court entered judgment dismissing plaintiffs' bill or petition and plaintiffs' appeal therefrom came to this court. Here the judgment of the circuit court was affirmed, December 11, 1929. [See Remington v. Flemington School Dist. (Mo.), 22 S.W. (2d) 800.] Though no injunction was granted restraining the sale of the bonds authorized, executed and issued as aforesaid nevertheless the pending injunction suit operated, in practical effect, to delay and postpone the completion of negotiations for the sale of the bonds so that the sale could not be, and was not, finally consummated until after the mandate of this court affirming the judgment of the circuit court in that suit went down in January, 1930. Thereupon the bonds were duly registered and delivered to the purchaser who paid over the purchase price thereof to the school district. Pursuant to the provision made therefor the annual tax to be levied for the year 1928 for the purpose of creating a fund for the payment of interest on said bonds as it should fall due and "to constitute a sinking fund for the payment of the principal thereof within the time said principal" should become due (Sec. 9199, R.S. 1929, Sec. 12, Art. 10, Constitution of Missouri) was fixed at twenty-five cents on the one hundred dollars valuation. The defendant (and appellant) herein paid all taxes, state, county and school, for the year 1928, levied against the land which he owned in said school district except this levy of twenty-five cents for interest and sinking fund which he failed and refused to pay.

[1] In August, 1930, this suit was filed seeking to enforce the collection of the 1928 tax levied for interest and sinking fund in the total sum of $5.40. The petition and the accompanying tax bill, which was made a part of the petition and introduced in evidence, are in conventional form. The defense set up and relied upon is stated in the answer as follows: "That the amount of $5.40 which plaintiff claims is due as a school tax for the year 1928 is not a legal tax and defendant is not liable therefor ... that the taxes are claimed to be due to Flemington School District ... as taxes for the purpose of raising a sinking fund and paying the interest on school bonds claimed to have been voted by said district ... that no bonds had been executed nor were any in existence in 1927 or 1928 or 1929. That there was no existing indebtedness against said school district at said time and therefore the Board of Education had no right or authority to make any estimate or ask for any levy for the purpose of raising funds to create a sinking fund to pay off any bonds or the interest on any such bonds or indebtedness."

Such was defendant's...