Case Name: Witmer's Appeal. [Bordner v. Witmer.]
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1888-10-01
Citations: 1 Monag. 747
Docket Number: Appeal, No. 9
Parties: Witmer’s Appeal. [Bordner v. Witmer.]
Judges: 
Reporter: Cases in the Supreme Court of Pennsylvania; being those cases not designated to be reported
Volume: 1
Pages: 747–752

Head Matter:
Witmer’s Appeal. [Bordner v. Witmer.]
A court of equity will, at the instance of taxpayers, restrain school directors, who intend, by acting together, to make sale of real estate owned by themselves to the school district, from voting as school directors in favor of the purchase, until their beneficial interest therein, shall have ceased to exist, in good faith.
May 29, 1888.
Appeal, No. 9, May T. 1888, of Henry Witmer, A. J. Kantz and Samuel B. Bishoff, from a decree of C. P. Dauphin Co. dismissing exceptions to a master’s report on a bill in equity by Benjamín Bordner et al. against the appellants, at No. 83, Equity Docket. Trunkey, J., absent.
íhe bill averred:
_ 1. That the complainants were tax-payers of the school district of Berrysburg borough.
2. That the said defendants, to wit: A. J. Kantz, S. B. Bishoff, Jacob Hess, William H. Deibler, Henry Witmer and Jonathan Brugger are the directors, A. J. Kantz, the treasurer, and Morris Daniel, the collector, for said school district.
3. That said borough is provided with sufficient school accommodations, having a large two-storied brick school house, now in use, with one acre, or thereabouts, of land attached.
4. That there is no immediate necessity for the building or purchasing of any additional school building for the use of the schools of said borough.
5. That said board of school directors levied and collected for the school year of 1883 and 1884 sufficient taxes, including the state appropriation, to keep the schools open and in operation for six months, but closed them at the end of five months, and there was, therefore, a surplus remaining in the treasury sufficient for all repairs and other lawful purposes, besides about ninety dollars received by them for lots sold by them.
6. That the said board of school directors, in the same school year, to wit: the school year of 1883 and 1884, unlawfully levied and collected, or are now collecting, an additional tax as a building tax, amounting to a larger sum of money than is now necessary, and for which they have no immediate use for building purposes.
7. That the said board of school directors have levied for the school year of 1884 and 1885, and are now collecting, a tax sufficient to keep the schools in said borough open and in operation for six months, and have levied and are about collecting an additional tax for building purposes, as alleged by them, amounting to a large sum of money not required for building purposes.
8. That your orators further aver, that said board of school directors of the borough of Berrysburg aforesaid, have fraudulently and unlawfully conspired for the purpose and with the intent to collect said alleged building tax for the purpose of purchasing a certain frame building, lately called Odd Fellows’ Hall, in which some of said directors are interested, with the intent and purpose of using said building in place of said brick school house for school purposes; and further, that to justify them in the purchase aforesaid and to carry out said unlawful conspiracy, they are now neglecting to keep said brick school house in proper repair, and are allowing it to go to destruction by neglecting to repair or renew the roof of said brick school building.
The bill prayed: 1. That said defendants be perpetually enjoined and restrained from the collection of the said alleged building tax. 2. That said defendants be enjoined and restrained from the purchase of the said building known as the Odd Fellows’ Hall for school purposes. 3. That said defendants be required and directed to pay back and refund to the taxpayers of said school district, severally and respectively, the amounts of said alleged building tax already collected. 4. 'General relief.
The defendants demurred for substantially the following causes:
The bill does not allege, 1, that the present school building is of proper size, condition or location for the demands of the immediate future; 2, that the levying or collecting the taxes complained of are unnecessary to provide suitable buildings for the immediate future; 3, the bill does not recognize the discretion of the school directors; 4, or allege that the tax was too high or for a purpose not permitted by law, except an alleged unwise discretion by the school directors; 5, paragraph 8 is a legal conclusion and not sustained by the recital of any acts warranting such conclusion; and does not allege that the.proposed building is not adapted for school purposes, or is too high in price, or that respondents intend to do anything corruptly for gain to themselves or to the prejudice of the school district; 6, or allege anything to warrant equitable interference.
Subsequently an answer was filed denying the chief allegations of the bill, averring, in substance, that the school district was not provided with sufficient accommodations, that they levied and collected taxes for the increased necessities of the school, and also a building tax to meet the wants of the school. The answer explicitly denied all matters of fact alleged in paragraph 8 of the bill.
The case was referred to Fred. M. Ott, Esq;, as master, who found that the building tax was not unlawfully laid and that, while the combination to affect the sale of the hall to the school district was not fraudulent, it was unlawful and should be restrained. Exceptions were filed to this report by appellants.
The facts appear in the following opinion of the court, by McPherson, J.:
“Confining ourselves to the bill and the evidence bearing thereupon, we are of opinion that much of the dispute concerns two questions, with which we have nothing to do, viz: 1st. Whether the district is provided with sufficient school accommodations ? and 2d. Whether the brick building ought to be sold and the hall bought? These are matters within the discretion of the school directors, and, except perhaps in a case of manifest abuse, we cannot control it. McCullough v. School Directors, 11 Pa. 476; Wheaton v. School Directors, 42 Pa. 358; Manheim Township, 4 Am. L. Peg., O. S. 163.
“ If this were all of the bill, we would dismiss it, [but the 8th paragraph goes on to assert “ that said board of school directors . . . have fraudulently and unlawfully conspired for the purpose and with the intent to collect said alleged building tax for the purpose of purchasing a certain frame building, lately called Odd Fellows’ Hall, in which some of said directors are interested, with the intent and purpose of using said building in place of said brick school house for school purposes.” This language is not'very precise, but we understand it to aver sufficiently that members of the board, all, or some of them, have an interest in the hall which is about to be bought, and are unlawfully acting together to sell this property to the district which they officially represent. The paragraph, indeed, goes further than this, but in effect it includes this averment, and thus raises a question which needs consideration.] [2]
“We have carefully examined the testimony upon this point, and think the master’s finding of facts too indefinite. The testimony, both by what it says expressly and by the silence or ambiguous answers of those who best knew the truth, is quite sufficient to warrant a finding that, during the period in question, Henry Witmer had the legal title to a portion of the property, and Dr. Kantz and S. 33. Bishoff had equitable interests therein, amounting together to one half. We so find as a fact, and we also find that these three defendants were acting together to sell to the district the hall in which they were thus interested, and that they intend by their official action as directors to buy the property for the district, if their votes will accomplish this purpose.
“ Hpon these facts, the questions are: 1st, Is their proposed action unlawful ? and, 2d, Can it be restrained ?
“ 1. The precise point has not been decided, so far as we know, but the controlling principle is well settled. A trustee or an agent, of whatever kind, may not act in his own behalf against the interests in his case, and if he has actually done this wrong, he will be put very much at the mercy of the injured party. Beeson v. Beeson, 9 Pa. 279; Hill v. Frazier, 22 Pa. 320; Rosenberger’s Ap., 26 Pa. 67; Rice’s Ap., 79 Pa. 204; Craig’s Ap., 92 Pa. 396; Keech v. Sanford, 1 Lead Cas. Eq., 4th Am. Ed. 65; Fox v. Mackreth, Ib. 215, 237 et seq., 241; Morawetz Corp., §§ 243-5, and cases cited; 1 Dill. Mun. Corp., 2 Ed., § 230, § 221 n., § 371 n.; Ang. & A. Corp., 10 Ed., § 233; Green’s Brice’s Ultra Vires, 477 et seq., 477 n., 484-5 n., 496 n.; Hofman Coal Co. v. Cumb. Coal Co., 16 Md. 456; s. c. 77 Am. Dec., 311 and n.; Gardner v. Ogden, 22 N. Y. 327; s. c. 78 Am. Dec., 192 and n.; McCants v. Bee, 16 Am. Dec. 610 and n.; Hodges v. Screw Co., 53 Am. Dec. 624 and n.
“ The question has not before arisen, we believe, in reference to school directors, but it seems plain that they, too, are in a place of trust, by whatever technical name they ought in strictness to be called. For certain purposes, they represent the people of their district; power is confided to them for a public use, and it need not be argued further that they must not use their official power on the side of the private interest. [We do not think it matters that a proposed sale of their private property to the district may be in good faith and for a fair price. In our opinion, the question is not necessarily one of fraud, but of policy, and we think the wise policy of the law disables an interested director from any use of his •official power on the side of his private interest, without stopping to inquire into the good faith of the transaction or its possible advantage to the district.] [4] Such an inquiry is exposed to obvious danger and inconvenience; the safe and simple rule is believed to be the rule of disability just stated and this is supported in many analogous cases by the authorities above cited. It is entitled to weight, also, in this discussion, that the Legislature has declared this rule in the case of councilmen. Act of 1874, §§ 6 and 10, P. L. 233, and Act of 1887, art. iv, §§ 6, 10 and 13, art. vm, § 6, P. L. 204.
“2. [The proposed action being against public policy, and, therefore, prejudicial to the interests of the community, we have no doubt of our power to restrain it at the suit of interested taxpayers.] [4]
“ [It is therefore decreed that the defendants, Henry Witmer, A. J. Kantz and S. B. Bishoff, be enjoined from voting as school directors of the borough of Berrysburg, in favor of the purchase by said school district of the building known as Odd Fellows’ Hall, until their beneficial interest in said property, whether such interest be legal or equitable, shall have, in good faith, ceased to exist.
“And it is further decreed that the said three defendants pay the costs of this proceeding.]” [4]
The assignments of error specified the action of the court: 1, In not sustaining the demurrer, and in not dismissing the bill at complainants’ costs, for the reasons stated in said demurrer. 2, In concluding that the eighth paragraph of complainants’ bill contains a sufficient averment of a fraudulent and unlawful conspiracy to buy the building known as Odd Fellows’ Hall, in which the directors, or some of them, were interested; the said paragraph averring that the alleged conspiracy was merely “ for the purpose and with the intent to collect said alíeged building tax,” the conclusion of the court being as in brackets, quoting it. 3, The master having found that the said building tax was not fraudulently and unlawfully laid, and that the same was not imposed for the purpose of buying the hall property, and these findings not being reversed by the learned judge, none of the averments of the eighth paragraph of the bill were sustained, and the court erred in not treating the case as if said paragraph had not been contained in this bill, and in not dismissing the bill. 4. The action of the court in deciding as contained in brackets, numbered 4, quoting the extracts.
S. J. M. McCarrell, of Fleming & McCarrell, with them Robert Snodgrass, for appellants.
The purchase of the property was entirely within the discretion of the directors. Act of May 8, 1854, P. L. 621; McCullough v. School Directors, 11 Pa. 476; Warfel v. Cochran, 34 Pa. 381; Miller v. Gorman, 38 Pa. 309; Hughes v. Kline, 30 Pa. 227; Wharton v. District, 42 Pa. 358; Clinton School Dist. Ap., 56 Pa. 318 ; Truesdell’s Ap., 58 Pa. 148; St. Clair School Board, 74 Pa. 252.
Conner’s Appeal, 103 Pa. 356, is not in conflict with any of these decisions, because there the tax restrained was admittedly not laid for the purpose stated in the levy, but for another and a manifestly illegal purpose.
The eighth paragraph of the bill does not properly or sufficiently charge an unlawful conspiracy to sell the hall in dispute to the district, as assumed by the learned judge. The bill must set forth the circumstance of fraud. Morris’s Ap., 78 Pa. 69. Whether there was such conspiracy, is a question of law to be determined from facts averred. Here no facts are averred to support such legal conclusion.
In all the authorities referred to by the learned judge, it is held that the trustee who has made a purchase of trust property, is entitled to a return of the purchase money paid whenever the cestui qui trust elects to set aside the voidable transaction, unless the trustee has been clearly guilty of actual fraud and bad faith. If such purchases by trustees were against public policy, as concluded by the learned judge, they would have been absolutely void, and no recovery of the purchase money could have been had. In Beeson v. Beeson, it is said the cestui qui trust has no interest to vacate the purchase if made for full value. In Craig’s Appeal, the court say bank directors can buy up claims if they act fairly and with an honest intent.
As to councilmen, the incurring of the legal penalty of forfeiture of office, under the Act of 1887, would be adequate legal remedy, and equity would not interfere to prevent in this instance, any more than it would interfere to restrain a contemplated larceny, or any other indictable offense.
Even if the contemplated action of these appellants as directors was “ against public policy, and prejudicial to the interests of the community,” as declared by the learned judge, the injunction should not have been awarded. The bill did not specifically ask for the relief which was granted. In the Cumberland Valley Railroad Co.’s Ap., 62 Pa. 218, it is decided that “ an injunction will not ordinarily be granted under a prayer for general relief, but must be expressly prayed.”
Besides, if the contemplated action “ was against public policy and prejudicial to the interests of the community,” the Commonwealth, by her attorney general, could alone interpose to prevént it. Buck Mountain Coal Co. v. Lehigh Coal and Nav. Co., 50, Pa. 99; Com. v. Burrell, 7 Pa. 34; Sparhawk v. Union Passenger Ry. Co., 54 Pa. 421.
Even if the complainants had disclosed a case giving them standing in a court of equity, they ought not to recover costs under all the circumstances of this case. These appellants have been found, by the master and the court, to have been acting in good faith, and endeavoring anxiously to comply' with the law. To impose costs upon them is to inflict punishment upon those who are without fault. They were, made respondents only in their official capacity as school directors, and not as individuals. If complainants are entitled to costs, the district, and not the individual directors should have been directed to pay them.
Mumma & Shoop and Weiss & Gilbert, not heard, for appellees.
The complainants were entitled to the injunction. Conner’s Ap., 103 Pa. 356; St. Clair School Board’s Ap., 74 Pa. 252; German Township School District v. Sangston, 74 Pa. 454.
An act against public policy is not within the discretionary powers of a school board because it is a wrong to the public, and therefore, if such act also works a private injury, as in this case, the private party can have redress in equity. Milhau v. Sharp, 27 N. Y. pp. 625 and 627; 2 Story’s Equity Jur. § 924.
It is the case of a trustee who represents the people of a given' district and exercises power entrusted to him for a public benefit, and who uses his authority for private gain by means which the law prohibits. Bergner v. Harrisburg, 1 Pears. 297.
The imposition of costs is mild chastisement for the flagrant act of official misconduct of which these appellants were guilty.
Oct. 1, 1888.

Opinion:
Per Curiam,
As to the power of the court of common pleas, as a court of equity, to restrain, at the instance of the taxpayers, an unlawful or inequitable act of the board of school directors, we have no doubt, nor do we hesitate to approve the decree of the court in the case in hand.
Decree affirmed, at the costs o'f the appellants.