Court Opinion

ID: 9653986
Source: CourtListenerOpinion
Date Created: 2023-08-23 18:00:54.12155+00
Date Added: 2024-06-11T18:13:04.351869
License: Public Domain

ARCHER, Chief Justice.
I do dissent.
This is a suit brought by the plaintiffs, tax-paying citizens residing in the Burnet Independent School District located in Bur-net and Llano Counties, Texas, seeking to restrain the enforcement and carrying out of a purported contract between the District and the Pioneer Abstract & Title Company, alleged to be owned by Frank True, on the ground that such contract is void and un*446less restrained will result in the unlawful expenditure of public funds of the District created by taxes on plaintiffs’ property. Said contract purports to obligate the District to pay to said Abstract Company the sum of $6,600 on September 10, 1957, in consideration of certain services to be performed by it.
A temporary restraining order was issued by the District Court in Burnet County and was continued in effect by order of March 20, 1957, until April 3, 1957, by agreement of the parties.
The defendants filed a plea to the jurisdiction. This plea was sustained and judgment was rendered on April 3, 1957, dismissing the case and refusing to hear the application for temporary injunction.
The appeal is based on two points assigned as error and are as follows:
“1. The error of the Trial Court in dismissing the cause for want of jurisdiction.
“2. The error of the Trial Court in refusing to hear the application for temporary injunction.”
The appellants contend that the contract under attack is void, because (1) no funds to be derived from current revenues of the District are, or will be, available to pay the obligation, and therefore creates a debt in violation of the provisions of Article 2749, V.A.C.S., and (2) there is no discretion vested in the school authorities by law, but admitting that if there is such discretion vested in the school authorities that the judgment of dismissal is right.
Appellees claim that their sworn plea to the jurisdiction expressly challenges the jurisdiction of the Trial Court, on the ground that the matters involved in plaintiffs’ petition are matters which are peculiarly within the jurisdiction of the school authorities, and as such, cannot be considered by the court until after administrative appeals to higher school authorities have been exhausted.
Since this appeal is from an order dismissing the cause for want of jurisdiction the determination of this action by the Trial Court turns on a construction of the First Amended Petition, the Plea to the Jurisdiction, and the Judgment.
The petition alleges the existence of a bonded debt, with an unpaid balance of $202,600, constituting a fixed obligation which must be paid from local taxes, and that the budget provides for payments on this balance of approximately $14,000 annually.
Further allegations are that there remains an outstanding indebtedness of $39,-251.68, originally created for operational and maintenance costs in past years where there were deficits; that in order to pay said debts currently the trustees have set aside from local taxes collected each year an amount sufficient to pay such debts, that the payments for the year 1956-1957 being $12,000 on principal and $2,000 on interest, and future income has been budgeted from local taxes to pay the balance of said indebtedness; that in addition to such above items there are fixed obligations for main-tenances and operational costs, etc., which exceed the revenues from taxes collected from the school district for the years 1956— 1957 and 1957-1958, including current and delinquent taxes; plaintiffs alleged that despite the existing deficit in funds that on February 18, 1957, the trustees, without authority of law and in disregard to their duty, made and entered into the following contract:
“The State of Texas:
County of Burnet:
“This contract made and entered into by and between Pioneer Abstract & Title Company, hereinafter called ‘Pioneer’ and the Burnet Independent School District, hereinafter called *447‘School’; both of Burnet County, Texas, Witnesseth:
“For and in consideration of the certain sum below stated, Pioneer agrees to do and perform for the School the following services:
- “1. To transcribe, upon forms furnished by school, the names and addresses of property owners of all property within the bounds of the school district.
“2. To show on said forms, a sample of the general form of which is attached, information concerning (a) approximate acreage of rural tracts and perimeter of urban tracts; (b) size of pertinent structures located thereon; (c) types and quantities of acreage or rural lands as shown on attached card; (d) type of construction of pertinent structures; (e) location of property; (f) photograph of pertinent structures.
“3. To furnish copy of ownership map of Burnet County School District.
“4. To complete above work by August 17,1957, so that information will be available to School Assessor-Collector for use during school year, 1957-1958. A penalty of $30.00 per day shall be imposed by the school for use of additional time; no premium shall be paid Pioneer for completion of this phase of the contract ahead of time.
“5. To assist School Assessor-Collector in placing on said .cards value extensions from representative values furnished by school.
“6. To file, according to property description, all cards in permanent filing cabinets to be furnished by school.
“7. To work with and assist the Assessor-Collector and to appear as a witness for the board of equalization in their work for the school year 1957-1958.
“School agrees to furnish at their own cost, filing cabinets and forms, on September 10, 1957, school agrees to pay Pioneer the sum of $6,600.00 in cash as full and final consideration for the services above stated which shall have then been rendered and which are then yet to be rendered, in accordance with this contract, by Pioneer.
“School further agrees not to sell nor permit the use of the system to any other taxing agency within the county.
“Pioneer agrees to furnish above stated information from its records and from an inspection on the ground. But it is hereby agreed by the school that Pioneer shall not be held liable because of error or omission; and Pioneer agrees to use due skill and diligence in performing such services and to correct all errors of omissions discovered within the first period of rendition following completion.
“It is agreed between the parties that Pioneer can assign its portion of said contract to any person, persons or organizations acceptable to the school.
“Executed in duplicate this 18th day of February, 1957.
“Burnet Independent School District
By G. B. Carson
“Pioneer Abstract & Title Company
By Frank True
“Attest:
“Edgar Seidensticker
“(School Dist. Seal)”
The petition further alleges that no funds are available from the tax collection for the tax year 1957, and no funds are or will be available for the scholastic year 1956-1957, or 1957-1958, to be used to pay *448the debts and operating costs of the school; that the trustees had no legal authority to create a debt that cannot be liquidated by the application of available local tax funds of the District of the scholastic year in which such debt is created; that at the time the contract was entered into, it was apparent from the School District records that a deficit existed which would preclude the District from paying the amount set out in the contract from the available funds of the School District for the scholastic year 1956-1957 or 1957-1958, and that such contract is without sanction of law and is absolutely void.
Allegations were made that the contract was void in that it provides for the employment of private people to evaluate the taxable property, before an assessor-collect- or has been appointed and assessment made, and thereby usurp the powers of the assessor-collector of taxes of the District.
The School District and the named individuals defendants answered the petition and say that the making of the contract and its performance are matters peculiarly within the jurisdiction and discretion of the Board of Trustees of the District, and that the Court could not take jurisdiction until after the plaintiffs have taken administrative appeals to higher school authorities as provided by the statutes, and that such appeals have not been taken.
The appellees denied all and singular the allegations made by appellants.
The crux of this litigation is the necessity or lack of necessity to take appeals to higher school authorities in accordance with the statutes.
On a hearing of the cause, it having been stipulated that the plaintiffs had not taken and prosecuted any appeals from the action of the defendants, in the making of the contract, to any higher school authorities before filing their petition here, the Court sustained the plea to the jurisdiction and dismissed the cause.
I believe that the appellees, the Board of Trustees of the School District, had the authority to make the contract and had the power to appoint a tax assessor-collector for the School District. Contracts of the nature of the one involved herein have been sustained by our courts.
Arts. 2779, 2795, V.A.C.S.; Cherokee County v. Odom, 118 Tex. 288, 15 S.W.2d 538; Crosby v. P. L. Marquess & Co., Tex.Civ.App., 226 S.W.2d 461, er. ref., N.R.E.: Sheffield v. Sheppard, 120 Tex. 583, 39 S.W.2d 1111.
The case is one in which an injunction is sought to restrain the enforcement and carrying out of a purported contract on the ground that the contract is void.
This Court is not called on, under appellants’ pleadings, to decide if a suit to restrain the illegal expenditure of school funds under a void contract, that resort must be had to higher school authorities prior to the institution of legal procedure in the courts. We are concerned with the question, under the state of appellants’ pleadings if a suit to restrain the enforcement of a contract, that would otherwise be valid, can be maintained on the inconclusive allegations that there would not be future revenues that could be applied to the payment of the cost of such contract or current revenues that could be so applied, where no effort had been made by the plaintiffs in such suit to take appeals to higher school authorities from action of District Trustees in making such contract.
Appellants admit that “If discretion in such matters is vested in the school authorities, the judgment of dismissal is right.” and do not question the general rule of law that exhaustion of administrative remedies before resort to court is a necessity and that the rule was not substantially changed by the Gilmer-Aiken law, Arts. 2654-1 to 2654-7, inclusive, Arts. 2922-11 to 2922-22, inclusive, and Art. 7083a, V.A.C.S., and such admission is grounded on the case of Hinojosa v. San Isidro Independent School Dist., Tex.Civ.App., 273 S.W.2d 656, no *449writ, in which it was held that the question of whether or not appellant was rightfully-dismissed, etc., was one of fact, and that it was therefore necessary to appeal to the proper school authorities before filing suit in the District Court.
Several questions of fact are involved in the determination of the question of whether the contract involved would in fact create a deficiency or whether the School District did, or would have the funds to pay the $6,600 contracted to be paid; and was such sum to be paid from funds of 1956-1957 or 1957-1958, and if the budget for 1956-1957 could be rearranged to provide for payment out of such funds; would the tax rate and assessment for 1957 assure funds sufficient in 1957-1958 to pay the sum set out in the contract, since the tax rate had not been fixed, or the assessed values of property for taxation for 1957 been fixed, and the budget not having been made; or if the trustees had concluded that the items herein mentioned and set out in paragraph 10 of the petition would be illegal and decided not to make such payments, in which event the item of $6,600 in the contract could be paid in lieu of the $12,000 mentioned in paragraph 10 of plaintiffs’ petition, and was there an abuse of discretion in making the contract, or in determining to have a School District assessor-collector instead of using the county assessors-collectors, or what contingencies between the date of the contract and August 31, 1957, might provide a surplus in the funds for the current fiscal year.
It is apparent that there are numerous fact questions to be determined before it could be said that the contract was void, I therefore believe that the Trial Court was correct in entering the order herein complained of.
Mission Independent School Dist. v. Diserens, 144 Tex. 107, 188 S.W.2d 568, 161 A.L.R. 877, State ex rel. Nevills v. Sanderson, Tex.Civ.App., 88 S.W.2d 1069.
Appellants cite several cases and quote to some extent from such cases. The first is Warren v. Sanger Independent School Dist., 116 Tex. 183, 288 S.W. 159, but this case is distinguishable from the instant case. There was involved in the Sanger case an effort in 1925 to use 1925 taxes to pay a debt for teachers’ salaries incurred in 1924, there being no funds left from the year 1924, and such claim was a deficiency, with no funds, and in such a condition there was no need to exercise discretion or any fact determination to be made.
In the present case the order sustaining the plea and dismissing the cause was rendered when the fiscal year still had five months to run, and it was possible, as has herein been noted, that the Board would have had the money or could have so rearranged its budget for the current fiscal year as to provide the money to pay the sum provided in the contract; and too, it would have been possible and feasible that the funds to be provided for the fiscal year 1957-1958, since no tax rate had been fixed and no assessments for taxes made and no budget for 1957-1958 approved. It would have been proper, and will be proper and lawful to pay the sum provided in the contract from the funds from the 1957-1958 fiscal year.
Crosby v. P. L. Marquess & Co., supra; Teague Independent School Dist. v. Mason, Tex.Civ.App., 233 S.W.2d 176, er. ref.
In Aldine Independent School Dist. v. Standley, 154 Tex. 547, 280 S.W.2d 578, the Supreme Court stated the suit was to recover seven months salary claimed to be due for the balance of the term of the district assessor-collector after his discharge where there were no available funds out of which the claim could have been paid. Then too, the record showed that the claimant had exhausted his remedies provided for appeals and hearing as provided by-the statutes.
Chastain v. Mauldin, Tex.Civ.App., 32 S.W.2d 235.
A holding that the contract is void will result in School Districts being unable to secure professional and outside assistance *450in efforts to obtain a moré adequate and uniform system of valuations and collection of taxes so greatly needed by schools to operate in a manner to meet the needs of the school children.
I would affirm the judgment of the Trial Court.