Taxpayers' Ass'n v. Houston Independent School Dist., 10296.

• Decision Date: 04 April 1935
• Docket Number: No. 10296.,10296.
• Citation: 81 S.W.2d 815
• Parties: TAXPAYERS' ASS'N OF HARRIS COUNTY v. HOUSTON INDEPENDENT SCHOOL DIST. et al.
• Court: Texas Court of Appeals

81 S.W.2d 815

TAXPAYERS' ASS'N OF HARRIS COUNTY v. HOUSTON INDEPENDENT SCHOOL DIST. et al.

No. 10296.

Court of Civil Appeals of Texas. Galveston.

April 4, 1935.

Rehearing Denied April 18, 1935.

Appeal from District Court, Harris County; Ewing Boyd, Judge.

Suit by the Taxpayers' Association of Harris County, a corporation, against the Houston Independent School District and others. From an adverse judgment, plaintiff appeals.

Affirmed.

J. S. Bracewell, of Houston, for appellant.

Andrews Kelley, Kurth & Campbell, M. E. Kurth, all of Houston, for appellees.

GRAVES, Justice.

The Taxpayers' Association appeals from a judgment of the Fifty-Fifth district court refusing it a temporary injunction against the Houston independent school district and its officials as such, whereby it sought to restrain the district and its school board from restoring in part, as of January 1, 1935, certain cuts it had made in all city teachers' salaries during the scholastic years of 1932 to 1935, and from expending, out of cash on hand at the end of 1934, $37,500 for the construction of 23 temporary school buildings, determined by it to have been necessitated from an unexpected overcrowded condition in the schools at that time, pursuant to a contract for the purpose it had made with the appellees Bond and the two Kennedys.

The learned trial court, before thus declining the application of appellant (a resident taxpaying corporation of Harris county, merely in that capacity for itself alone suing only the school district, its officials, and the building contractors, without joinder of or permission of intervention to any of its teachers, or other employees) to so harness the official discretion touching the matters at issue deemed by it to have been vested by existing law in the city school board, heard full evidence from both sides; from it—along with the pleadings and other record proceedings—the salient facts conclusively, if not undisputedly, appearing were these:

(1) The appellee school board was originally created by, and has ever since existed and done business by virtue of, the Special Act of the Thirty-Eighth Legislature of 1923 (chapter 91, p. 317, Laws 38th Legislature, Regular Session), which has never been expressly repealed, nor even impliedly modified or added to unless by the general state "Uniform Budget Law" of 1931, enacted by the Forty-Second Legislature (chapter 206, p. 339 [Vernon's Ann. Civ. St. art. 688 et seq., and Vernon's Ann. P. C. art. 414b]); this act gave the distinct plenary power to lease grounds, erect and equip school buildings, contract and be contracted with, and to control, supervise, and manage its schools, specially providing for the fixing of all employees' salaries by schedules to be printed as part of its standing rules, all changes therein to take effect only with the scholastic year following the one when made.

(2) With its powers, privileges, and duties so derived and comprehended, the governing body thereof, the school board, in due conformity to this law of its creation, made contracts and published the salary schedules of all its employees, including the teachers.

(3) In January of the respective years of 1932-33, however, the board—due to a prevalent economic depression—made effective, each for the scholastic year following its infliction, two successive temporary cuts in these so theretofore fixed salaries of all its employees, first reducing those for the scholastic year of 1932-33 by 10 per cent., then those for the scholastic year of 1934-35 by an additional 17 per cent., the contracts for the former year carrying the 10 per cent. reduction, those for the latter one carrying both that and the succeeding 7 per cent. additional; that is, the amounts specified therein as being payable were those of the original schedules, less 10 per cent. for 1932-33, and less 10 per cent. plus 7 per cent. for 1934-35.

(4) As shown by the two successive resolutions of the board for the different scholastic years respectively suspending the salary schedules as on those dates existing and ordering the 10 and 7 per cent. reductions below the rates of pay prevailing prior to January 1, 1932, under the otherwise undisturbed contracts of all employees, as well as by the uncontroverted evidence, these suspensions were not only expressly made as emergency measures, but also upon the distinct recognition of that fact on both sides and the mutual agreement between the board and the employees that such reductions thereby made were only temporary, that the original pay basis of prior to 1932 was still in force and effect, except as so cut for the duration of the stated cause thereof, and if and when possible would be restored; that, pursuant thereto, the employees accepted the cuts, and all contracts thereafter entered into named the amounts as compensation to which they were severally entitled, under the schedule of salaries as it existed prior to such temporary suspensions, less the 10 and 7 percentages, "subject to budget," likewise "subject to revenues available, and such adjustments as might be deemed necessary by the Board"; up to January 1, 1935, both parties accordingly carried out these contracts, performing their several obligations thereunder, as therein specified.

(5) On February 4, 1935, at a time when there was not only an unexpected cash balance on hand of approximately $121,000, left over from the August 13th budget of 1934, but anticipated total revenues ahead for 1935 of $4,527,565 as against total estimated expenditures during 1934 of $4,285,127.22, the board, deeming the contingencies at hand upon which it had so agreed to begin the return to the pre-existing salary schedule, the need for the buildings exigent, and the funds for both undertakings reasonably in sight, expressly amended this August 13th budget of the preceding year, effective as of January 1, 1935, so as, among other things, (1) to restore to the teachers and other employees a portion of the aggregate cuts so before visited upon them, thus complying with the stated understanding to that effect with them at that time, totaling some $188,000; and (2) to award contracts for the construction of the 23 temporary school buildings referred to supra, entailing the contemplated expenditure of about $37,500 more. It is the expenditures for these two purposes—aggregating $225,000—the appellant sought to enjoin.

The record contains neither averment nor intimation of anything other than the good-faith exercise for the public good of its best judgment on the part of the school board in ordering these expenditures, it merely being contended that it lacked the power under the law to do so, the specifications being that they were in violation of both the act creating the appellee in 1923 and the State Uniform Budget Law of 1931, as well as sections 53 and 55, article 3, of the Constitution of Texas, forbidding the granting of gratuities or increased compensations to individuals.

As against this attack, in the opinion of this court on the facts stated, the refusal of the writ may be upheld upon at least these considerations:

(1) There was a fatal want of parties in the failure to bring in the teachers and other school employees. Appellant seeks to defend this upon the sole ground that the action was one to restrain the expenditure of public money alone; no other relief being sought, and the contracts of the employees not being attacked. The vice in this position, however, lies in the undisputed fact of the mutual understanding set out supra upon which the salary cuts were inaugurated and accepted, to the effect that, if and when the financial stringency that caused their visitation was lifted, they would be restored; the service under them by the employees having been performed in the meantime, the action of the school board on February 4, 1935, determining, as was its exclusive province, that such condition, as well as any other impediment that might have stood in the way, had been removed, and ordering the beginning of the restorations in accord with such understanding, was nothing more than compliance with what would have been a legal obligation upon it any way; such mutual agreements between it and the teachers, being contemporaneous with and upon the same consideration as the contracts between them, were as much a part thereof as if they had been at the time expressly incorporated therein; wherefore, since this suit directly sought the abrogation of a very material part of the contract between the school board and all its employees, it was an attack thereon at least pro tanto, and the employees, being in virtue thereof beneficially interested in the subject-matter of the suit, were necessary parties thereto, having the right, as they sought to do by intervention, to have their interests disposed of therein. Butman et al. v. Jones et al. (Tex. Civ. App.) 24 S.W.(2d) 796; Crystal Falls Common School District v. Sanders et al. (Tex. Civ. App.) 54 S.W.(2d) 834; County School Trustees et al. v. Common School District No. 6 et al. (Tex. Civ. App.) 284 S. W. 306; 32 Corpus Juris, 296; 32 Texas Jurisprudence, "Parties," § 88; 17 Texas Jurisprudence, "Equity," § 32; Joyce on Injunctions, § 374; Storey's Equity Pleading, § 72; People of State of California v. Southern Pacific Co., 157 U. S. 229, 15 S. Ct. 591, 39 L. Ed. 683; Associated Oil Co. v. Miller (C....