Case Name: MID-CONTINENT PIPE LINE CO. et al. v. CREEK COUNTY EXCISE BOARD
Court: Oklahoma Supreme Court
Jurisdiction: Oklahoma
Decision Date: 1952-09-30
Citations: 207 Okla. 266
Docket Number: No. 35373
Parties: MID-CONTINENT PIPE LINE CO. et al. v. CREEK COUNTY EXCISE BOARD.
Judges: CORN, GIBSON, DAVISON, and JOHNSON, JJ., concur. HALLEY, V. C.J., and WELCH and O’NEAL, JJ., dissent.
Reporter: Oklahoma Reports
Volume: 207
Pages: 266–271

Head Matter:
MID-CONTINENT PIPE LINE CO. et al. v. CREEK COUNTY EXCISE BOARD.
No. 35373.
Sept. 30, 1952.
Rehearing Denied Oct. 21, 1952.
249 P. 2d 79.
Mastín Geschwind, Oklahoma City, for plaintiffs in error.
Clyde Patrick, Co. Atty., Creek County, Sapulpa, for defendant in error.

Opinion:
BINGAMAN, J.
Mid-Continent Pipe Line Company and Texas Pipe Line Company, both corporate taxpayers in Independent School District No. 33, (Sa-pulpa) Creek county, protested certain tax levies made and approved by the excise board to finance general fund and sinking fund needs of the school district. Protestants charged that the tax levies so made are excessive and illegal to the extent that a certain cash surplus belonging to the district and available for appropriation to general fund purposes was not taken into account in the determination of the ad valorem tax requirements of the district for the current fiscal year.
On hearing before the Court of Tax Review it was shown that during the year ending June 30, 1951, officers and employees of the school district had collected revenues for use of facilities and services furnished by said school district in a total sum of $10,917.46; that of said sum $6,761.29 was derived from rents for use of a property owned by the district, and over $4,000 was derived from fees collected from those enrolled in various special classes or courses. These collections, together with other funds derived from various student activities, were not deposited with the regular treasurer of such school district, but were placed in the hands of a custodian named by the board of education of the school district and were retained by such custodian in a bank account subject to withdrawal by his check. The fund so established was known as the "general activity fund of Independent School District No. 33, of Creek County, Oklahoma," and was handled by this special custodian under the supervision of the board of education. Other funds were also deposited to this account and during the fiscal year numerous checks were is sued against the fund. However, there remained on hand, on June 30, 1951, an admitted balance with this custodian in the amount of $9,821.88.
None of this balance was on deposit with the treasurer of the school district and none of such balance was subject to his jurisdiction or control. When the estimate of needs for the fiscal year in question was prepared by the school district, none of these funds were shown as surplus cash on hand and none of the same were considered by the county excise board in determining the levy for the year in question.
Whether this special activity fund contains items of collection which should have been deposited to the general funds of the district is a matter sharply contested between the school district and the protesting taxpayers. The Court of Tax Review did not pass on that issue, but denied the protest for the reason the fund "was not and is not in the hands and custody of the lawful treasurer of the governmental subdivision," and therefore it was not a surplus which could be used to reduce the levy. We think the Court of Tax Review correctly so held and it is therefore unnecessary to determine whether all of these items of collection were properly diverted into the "activity fund."
By the provisions of 62 O.S. 1951 §335, all monies belonging to a school district are required to be paid over to the official treasurer thereof. By 19 O.S. 1951 §681, the county treasurer is made the official depository of county funds. In considering surplus funds involving a county, this court, in St. Louis-S. F. R. Co. v. Choctaw County Excise Board, 173 Okla. 312, 48 P. 2d 312, held that funds due such county "could not be included in a financial statement as an asset until received by the treasurer of the municipality involved."
In Empire Pipe Line Co. v. Excise Board of Carter County, 164 Okla. 126, 23 P. 2d 189, where the protesting taxpayer sought to have the school district levy reduced by reason of funds in the hands of the county treasurer which had been apportioned to the independent school district, but had not been paid over to the treasurer of the district, we held that the funds not being in the possession of the treasurer of the independent school district could not be considered in the financial statement. To the same effect is Protest of Chicago, R. I. & P. Ry. Co., 151 Okla. 137, 1 P. 2d 674, where it was sought to reduce the levy by reason of interest on hand with the State Treasurer. The same rule was adopted by us in Protest of Chicago, R. I. & P. Ry. Co., 150 Okla. 167, 1 P. 2d 383, wherein we held:
"The funds in the hands of the State Treasurer which have been apportioned by the State Auditor to the school district, but which have not been paid to the county treasurer for the benefit of the school district at the close of the fiscal year, may not be considered in the financial statement and estimate of needs for the ensuing fiscal year."
In the case of Protest of St. Louis-S. F. Ry. Co., 166 Okla. 147, 26 P. 2d 744, the protesting taxpayer sought to have the levy reduced by the amount of funds which had been actually collected during the fiscal year, but which had been unlawfully expended and were therefore not actually on hand. We held "the excise board is without authority of law to consider as a part of the surplus balance of revenue or levy on hand any amount which is not in existence, even though the amount was unlawfully expended." To the same effect is Protest of St. Louis-S. F. Ry. Co., 170 Okla. 123, 39 P. 2d 99.
It is urged by protestants that this case is controlled by Protest of Bledsoe, 161 Okla. 227, 17 P. 2d 979, and Protest of St. Louis-S. F. Ry. Co., 143 Okla. 145, 288 P. 307, wherein we held that where funds had been illegally apportioned or transferred from one fund to another, the excise board and the Court of Tax Review had authority to consider the improperly transferred fund, if it was still on hand with the treasurer of the municipality. In each of those cases, however, the fund was unexpended and was in the possession of the treasurer of the municipality. The correction of the illegal transfer was therefore simply a bookkeeping transaction in the treasurer's office. In the case at bar we do not have a similar situation. Here the funds have never been in the possession of the school district treasurer. Both the excise board and the Court of Tax Review are without authority to compel the return of such funds by the custodian of the "activity-fund" of the school district. The funds may or may not be recovered in some independent proceedings and until such time as they are actually received by the lawful treasurer of this school district, they cannot be considered as cash surplus on hand for purposes of computing the estimate of needs.
The judgment is affirmed.
CORN, GIBSON, DAVISON, and JOHNSON, JJ., concur. HALLEY, V. C.J., and WELCH and O'NEAL, JJ., dissent.