Case ID: sd_38/html/0216-01.html
Source: Caselaw Access Project
Author: {"author": "SMITH, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

SECURITY STATE BANK OF FAULKTON, SOUTH DAKOTA, Respondent, v. CAVOUR SCHOOL DISTRICT OF BEADLE COUNTY, SOUTH DAKOTA et al. (Cavour School District, Appellant.)
    (160 N. W. 850.)
    (File No. 3965.
    Opinion filed December 30, 1916.)
    1. Schools — School Townships — School Districts — Change of Boundaries — Division of Township, of Districts, Effect on School Township Bonds — Liability of School Township, of Independent School District — Statutes.
    
      Where parts of a school township were detached therefrom at various times, and certain sections of land were sub-subsequently attached - thereto, and thereafter school township’ bonds were issued by said townsihip by name, and the owner of some of the 'bonds sued said township as “Cavour School Township, a corporation,” and also as “Cavour Independent School District, a corporation,” to recover upon said bonds, each of the defendants appearing by separate counsel, and judgment was rendered jointly against both school districts as named, held, that although after the bonds were issued, certain other sections of land were detached from- Cavour School District and still later other sections were detached from an adjoining district and added to' the remaining sections in said original school district, and the existence of Cavour Independent School District at a date subsequent to the 'bond issue and prior to the commencement of suit, wras shown, it appearing that Cavour School District comprised the whole of a township, except such .portions as are included in Cavour Independent School District, and that the latter was organized in part from territory originally embraced in Cavour School District and was part thereof at date of bond issue and when judgment was entered; yet the identity of the area of said independent district has remained, although variously designated under territorial and state statutes, and finally designated, and sued in the .present action to enforce said judgment, as “Cavour School District of Beadle County;” and said joint judgment should stand; and said Cavour School District was properly required to levy a tax to .pay a part of said judgment. So. held, under Laws 1 883, Chap. 44; Comp. Laws 1887, Sec. 1728, (being Laws 1887, Chap. 47, Sec. 42), providing that where civil township government has been established, any school township thereafter organized shall assume the same ■boundaries and name as the civil township and when organized as school townships shall be known in law, etc., under the proper name and style of each, as a school township; and Laws 19 01, Chap. 113, Sub-Chap. 3, Sec. 1, providing that in all counties organized for school purposes under district system each school district shall be and remain a school district corporation until changed as therein .provided, and that each township consisting of territory not organized into a civil township shall be and remain a school district corporation until so changed, and Sec. 5 (Pol. Code, 1903, Sec. 2326) providing that every school district consisting of a civil township shall be named.School District, etc., with the name of the civil township inserted in the blank, etc., and that every school district consisting of territory not organized into a civil ■township, -but having a distinctive name, shall have such name inserted in the blank, etc.
    2>. Taxation — School District — Levy to Pay- Judgment — Statute, Non-application of — Approval of Daw on Date of Judgment.
    In a .proceeding under 'Laws 1907, 'Ohap. 13B, Sec. 75, to compel 'Cavour School District to levy a tax to pay half of a certain judgment rendered against Cavour Township and against Cavour Independent School District, jointly, held, that Sec. 73 of said Chap., requiring county commissioners, and county superintendent to apportion property and indebtedness whenever district boundaries were changed, was not in force when the .boundaries of said school township were changed, nor at date of rendition of the judgment on certain school bonds, although ■tibe act was approved on the day the judgment was entered.
    3. Schools — School Corporations — Change in Name of Boundaries, Effect on Identity, on Liability Under Bond Issue.
    A change in name or boundaries of a school corporation does not change its liability as .plaintiff or defendant; nor does a school corporation cease to exist, although its name and boundaries have been changed at various times.
    4. Schools — Bond Indebtedness, Settlement of Between School Township and Independent School District, Effect — Suit on Bonds— Necessity of Pleading Defense of Release by Settlement — Res Judicata — Evidence, Exclusion of.
    The fact that a complete adjustment of property and bonded indebtedness had been mad© between a school district and a school township by which the school district claimed to lhave ■been released from its liability on the bonds, was matter of defense in a suit against both school corporations to recover upon certain bonds, and should have been pleaded in the action; and where proper service was made upon the corporation claiming to have been released, and both corporations appeared by counsel in the suit, this and all otiber defenses affecting the liability of the school district became res judicata, and cannot be urged on appeal to defeat liability on a judgment entered in the suit. Held, further, that the trial court did not err in excluding evidence of such settlement as a defense. Coler v, Uoppin, N. D., 85 N. W. 898, distinguished.
    McCoy, J., concurring in the result.
    Appeal from Circuit Court, Beadle County. Hon. John F. Huoiiss, Judge.
    Proceeding- “by Security State Bank of Faulkton, South Dakota, against Cavour School District of Beadle County, South Dakota, and Cavour Independent School District of Beadle County, South Dakota, to compel Cavour School District to levy a lax to pay a portion of a certain judgment. From a judgment in favor of plaintiff, and from an order denying a new trial, defendant Cavour School District appeals.
    Affirmed.
    
      Null & Rotyhl, for Appellant
    
      Gardner & Churchill, and F. B. Snider, for Respondent.
    (i) To point one of the opinion, Appellant cited-: Stanley County v. Jackson 'County (S. D.) 154 N. W. 806. Appellant submitted that: Cavour School District was1 a new corporation', not a continuation of the old -organization. That no levy 'should be made against -the Cavour School District in this action. That a judgment against the original corporation is mot a judgment •against Cavour District, exJcep-t as a proper tribunal may order a levy thereunder based on the fact that the -present Cav-our District was a portion of the original -corporation at the time -the indebtedness w-as incurred; and cited: Livingston v. School District N-o. 7, 9 S. D. 102; Ooler v. Dwight School Township, 55 N. W. 587; 'Co-ler v. Coppin, 75 N. W. 795, and Coler v. Coppin, 85 N. W. 988.
    Respondent submitted that: Cavour School Township and 'Cavour Stehiool District are the same corporation; and cited: Session La-ws 1883, Chap. 44, 'Secs. 2 ¡and 23; Levisee Dakota Codes 1885, ,p. 550; Compiled Laws- 1887, Sec. 172-8; Session Laws 1887, Chap. 47, Sec. 42; Laws 1901, Chap. 113, Sub-chap. Ill, Sec. 5; Pol. Code 1903, Sec. 2326; Code Civ. Broc., Sec. 151; 10 Cyc. 156; Ency. of Pleading and Practice, V-ol, 14, pp. '295 to 301; Peever Mere. Go. v. State Mutual Co., 23 S. D. 1; Wilhite v. Convent, (Ky.) 78 S-. W. 138; Hoffield v. Bd. of Education (Kan.) 77 Pac. 216. That the- change made in the territory or Cavour School Township did not necessitate an -apportionment -of the ind'ebetdness due on its bonds; -citing: Livingston v. 'School District No. 7, 9 S. T>. 102.
    (4) To -point four of the opinion, Respondent cited: Howard: v. City o-f Huron, 5 S. D. 539, 6 S. D. 180.
   SMITH, J.

School- township No. 9 was -organized in April, 1883, 'covering fifty-six contiguous sections of land in Beadle ¡county. In May, 1884, eight sections were detached1 and added to 'Ouster town-ship. In J-uly, 1884, twenty-four sec-tioms on the south side of -Cavour township were detached and added to Rich-land school township-. In July, 1887, -six sections were detached therefrom 'and added1 to Valley school township.' In July, 1889, eighteen sections were detached from Shoe Creek school township adjoining on the north, and added to Cavour school township. On December 1, 1884, Cavour school township had issued certain school bonds, among which were one in the sum of - $500 and one in the sum of $100, due 15 years after date, bearing 7 per cent, interest. Plaintiff became the owner of these two bonds, and on November 16, 1905, commenced an action in the circuit -court thereon, naming as defendants “Cavour school township, a corporation,” and “Cavour independent school district, a corporation.” The action came on for -trial on March 13, 1907, plaintiff appearing by its attorney and- each of the defendant school districts appearing by separate counsel. The court, after hearing -the evidence, made -and filed its findings of fact and conclusions of law and entered judgment, jointly against both school districts as named, in- the sum. of $i,004Í2i. N01 appeal was taken, and the judgment -remains unsatisfied and in full force and effect.

At the time these bonds were is-sued-, the- -original C-avour school township, containing 56 sections, had been reduced in area -by the cutting off of 32 sections, which -were added toad-joining school districts, so that Cavour school district -then comprised- 24 -o-f -its -original- -sections. After said bonds were issued, 6 more sections were de-t-aohe-d an-d added to- adjoining districts, leaving 'but 18 sections of the original area of -Cavour school district. In 1889, 18 sections- were -detached from an adjoining district to the north amcl added to the remaining original 18 sections then -constituting Cavour school -district.

The record1 fails to disclose the date of -the -organization of Cavour independent school district, except it appears from the findings of fact that such a district existed at a date subsequent to the issue of the bonds, and prior to- the commencement -of the action against the t-w-o districts in which a joint judgment was entered March 13, 1907. It does appear from- the findings that Cavour school dis-triot of Beadle county comp-rises the whole of township in north, range 60 west, except such portions as are included in -Cavour independent school district, and that it .was organized in -part from territory -originally embraced in Cavour school district. It appears- therefore that a p-art of the present area of 'Cavour school district was embraced in and was a part of Cavour school township when, the bonds were issued, -and when judgment was entered on the bonds. The identity of this particular area embraced within the school corporation known as Cavour school district of Beadle .county, S. D., has remained, although by acts of the territorial and state Legislatures it has been variously -designated. The name of such corporation, was finally declared to be “Cavour school 'district of Beadle county/’’ S. D., and under that name it was sued in this; action. Chapter 44, Laws 1883; Comp. Laws 1887, § 1728; chapter 47 (section 42) Laws 1887; chapter 113, subd. 3 (section 5) Laws 1901; Pol. 'Code 1903, § 2326; Code Civ. Proe. § 152.

Appellant’s contentions seem to- 'be: First that the entire school corporation, Cavour school township-, had ceased-' to exist prior to the date of the judgment -on the bonds. Second, that a settlement had been made be-twen Cavour school township-, a corporation-, and Cavour independent school district, a corporation, .prior to the judgment on the bonds, under which the latter corporation is- claimed- to have assumed the outstanding bonded indebtedness; and 'that the trial -court erred in excluding evidence of such settlement as a defense in this action,-which is the result of -a proceeding -under -section 75, c. 135, Laws 1907, to- compel Cavour school district to levy a tax to pay- one-half of -said judgment. Section 73 of 'Chapter 135, which required- the county commissioners and -couirty superintendent- to make an apportionment of property and indebtedness whenever district boundaries were -changed, ivas not in force at the -time -the boundaries of the school township were Changed, n-o-r at -the date of the rendition-of the judgment on the ‘bonds, although- the act was approved March 13, 1907, the same day the judgment was entered.

As to the first contention urged by appellant, it is- sufficient to aa3r that a change in the name or boundaries of a school corporation' does not -change its liability as plaintiff or defendant, and, in any -event, it cannot he successfully -contended in thi's- case that the -corporation appellant ever -ceased to- exist -as a -corporation, although its náme and boundaries have -been ' changed at various times. Peever Merc. Co. v. Fire Association, 23 S. D. 1, 119 N. W. 1008, 19 Ann. Cas. 1236; Wilhite v. Covent, 117 Ky. 251, 78 S. W. 138. Appellant’e second contention cannot be substained. It is conceded' that proper service of proeeess was made upon appellant, and that both corporations appeared by counsel in the action- on- the bonds. Assuming- therefore, as contended ¡by appellant, that a complete adjustment of property and indebtedness had been made between the two1 corporations defendant, and -that Cavour school district had been legally released, by settlement, from all. liability on. the bonds, such fact was matter of defense which, might and1 should have been pleaded by said district in that action. It is clear therefore that this, as well as'all other defenses affecting1 the liability of Cavour school distract, became res judicata,-and cannot now be urged in this •proceeding, to defeat liability upon the judgment. Howard v. City of Huron, 5 S. D. 539, 59 N. W. 833, 26 L. R. A. 493; Id., 6 S. D. 180, 60 N. W. 803; Coler v. Coppin, 10 N. D. 86, 85 N. W. 989.

That portion of the opinion in the Coppin case which relates to the mode of apportioning the indebtedness between two districts created from the same territory is not pertinent to the ■questions presented on this appeal, as appellant 'here seeks only to defeat all liability upon grounds which were- 'unsuccessfully urged in the Coppin case; and, in any event, the method of apportionment ini this ¡case is not challenged by appellant, except ■in so far as it might have been matter of defense in the action on the bonds.

We deem it unnecessary to review other questions discussed in the briefs of counsel.

The order and judgment of the trial court are affirmed.

MoCOY, J., concurs in the result.