Wright v. Consol. Sch. Dist. No. 1, Major Cnty.

• Decision Date: 03 February 1925
• Docket Number: Case Number: 15787
• Citation: 109 Okla. 147,1925 OK 99,234 P. 736
• Parties: WRIGHT v. CONSOLIDATED SCHOOL DIST. NO. 1, MAJOR COUNTY, et al.
• Court: Oklahoma Supreme Court

1925 OK 99

234 P. 736

109 Okla. 147

WRIGHT v. CONSOLIDATED SCHOOL DIST. NO. 1, MAJOR COUNTY, et al.

Case Number: 15787

Supreme Court of Oklahoma

Decided: February 3, 1925

Syllabus

¶0 Schools and School Districts--Consolidated District--Bond Issue--Computation of Indebtedness.

Where school districts have been consolidated, it is proper in determining the indebtedness of the consolidated district to charge as a debit the outstanding bonded indebtedness of one of the districts forming such consolidation, and it is also proper to offset against said indebtedness the value of assets, including a school building owned by said school district. Mitsler v. Eye, 107 Okla. 289. 231 P. 1045, followed.

Claud B. Wood and Tom E. Willis, for plaintiff in error.

Warren K. Snyder, for defendants in error.

LYONS, C.

¶1 The appellant in this case attacked the legality of a bond issue of consolidated school district No. 1, of which what was formerly school district No. 264 is a portion. Bonds were voted in the sum of $ 25,000, and it is contended that said issue is void and illegal for the reason that the indebtedness represented thereby is in excess of five per cent. of the valuation of the taxable property within the school district, as shown by the last assessment for state and county purposes previous to the incurring of such indebtedness.

¶2 The controversy turns upon the question of how the total amount of indebtedness should be reached. It is the contention of the appellee that the property and money of school district No. 264, which is one of the district's component parts by the consolidation, may be offset against the preexisting bonded indebtedness of such district No. 264. The appellant contends to the contrary.

¶3 The testimony discloses that said district was the owner of a building the value of which was estimated at $ 3,500; that said school district was liable for bonded indebtedness incurred prior to the consolidation in the sum of $ 3,843.52; that if the value of the building was permitted to be offset against the total indebtedness that the new bond issue in the sum of $ 25,000 was not in excess of the five per cent. limit.

¶4 It is earnestly contended by the appellant that the value of such building cannot be offset against the indebtedness, and that under the statutes regulating the issuance of bonds and the incurring of indebtedness, the trial court committed a reversible error in permitting the value of such building to be taken into consideration as an offset.

¶5 We think this question has been squarely decided in the case of Mitsler v. Eye et al., 107 Okla. 289, 231 P. 1045, where it is said:

"In determining the assessment which governs the calculation it is only necessary to read the latter part of the constitutional provision. It provides the valuation shall be 'ascertained from the last assessment for state and county purposes previous to the incurring of such indebtedness.' When is the indebtedness incurred? Obviously when the obligations by which the district is bound are issued and value received for them. There is no indebtedness until the money is received by the district. The money is not received until the bonds are issued, approved as required by law and delivered to the purchasers. 'Where a vote is required, the validity of bonds issued pursuant to such vote is to be determined by the last assessment of the property before the bonds are issued, not the last assessment before they are voted or directed to be issued.' Dillon on Municipal Corporations (5th Ed.) vol. 1, page 403. This holding is sustained by the vast weight of authority: Gray on Limitations of Taxing Power, section 2162; McQuillin on Municipal Corporations, vol. 5, sec. 2232; 28 Cyc. 1584; Frost et al. v. Central City (Ky.) 120 S.W. 367; City of Austin v. Valle (Tex.) 71 S.W. 414; Goodson v. Dean (Ala.) 55 So. 1010; State ex rel. Calles v. Bd. of Com. (Mont.) 185 P. 456; Seymour v. City of Tacoma (Wash.) 33 P. 1059; Culbertson v. City of

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