#### William Stockdale et al. v. School District No. Two of Wayland, William H. White et al.

*School-districts*— Recognition *of equitable clawns*— Issue *of bonds*— Rescission *of corporate acts.*

A school district in its annual meeting may lawfully recognize and pay equitable claims even though they are not strictly legal demands against it.

A vote to issue school-district bonds in settlement of a demand, if in .excess of the limit fixed by law, may be sustained up to the legal limit.

A corporate act which can only be taken by a two-thirds vote, cannot be rescinded by a bare majority.

Appeal from Allegan.

Submitted October 14.

Decided October 27.

Injunction. Defendant White appeals.

Reversed.

*Qoclwm c& Ea/rle*for complainants.

*Padgham & Padgham*for defendant White.

Cooley, J.

The bill in this case is filed by tax-payers of a school-district to restrain the district board from issuing bonds. The facts are set forth in the answer and are as follows:

One White was contractor for building a school-house for the district, and completed his work and received the con*227tract price therefor. He also performed extra labor amounting in value to one hundred and eighty-one dollars, upon which fifty dollars were paid. At the annual school-meeting ■of 1880 the electors by a two-thirds vote, on his petition showing that he had lost money on the contract, voted to pay him in settlement $730.31, and to issue bonds therefor. Voters dissatisfied with this action procured a special meeting to be called a few days thereafter, at which the proposition to rescind the former action was voted upon, and a majority but not two-thirds voted in its favor. The moderator decided that a two-thirds vote was essential, and that ■consequently the rescinding vote was lost. This suit was then instituted, making the district and White defendants, and the court of chancery awarded a perpetual injunction. White alone appealed.

1. It is insisted on behalf of the complainants that the ■district had no power to vote a bonus to the contractor. But ■there is no statute which forbids it, and as contracts are not required to be' let to the lowest bidder, we do not think there was any want of power in this regard. On the showing made by* White he had a legal claim to the amount of :$131, and a strong equity to all that was allowed him; and it has often been decided that municipal corporations like individuals need not stand on strict legal rights, but might recognize equitable claims and provide for them. *Brewster v. Syracuse*19 N. Y. 116; *Friend v. Gilbert*108 Mass. 408; *Blanding v. Burr*13 Cal. 343; *Sherman v. Carr*8 R. I. 431; *Baker v. Windham*13 Me. 74; *Wilkinson v. Cheatham*43 Ga. 258.

2. There seems, however, to have been a statutory limit to the amount of bonds which the district might issue; and this was overlooked at the first meeting. The limit for dis"tricts having more than 100 and less than 200 children within the school ages — as this district had — is $3000. Public Acts 1877 p. 169. The district was already bonded to the amount of $2700, and if the vote had been limited to $300 it would have been valid. Having exceeded that sum, it is claimed to be void. In *McPherson v. Fosters*43 Iowa *22848, involving substantially tbe same question, the vote wa& held valid to the extent that would have been admissible had the limited sum been proposed and voted; and we agree in this 'view. See also *Grand Gulf Bank v. Archer*8 Smedes *&*M. 151. The injunction should therefore have-been restricted to the excess above $300.

3. We think the moderator was correct in holding that a mere majority could not rescind the vote which had been required to be taken by a two-thirds vote, and had been so-taken. The decree must therefore be reversed and a new decree entered, restricted as above indicated. To give-White the full benefit of his appeal the modification will be made as to both defendants. Each party will be left to pay his own costs of both courts.

The other Justices concurred.