Court Opinion

ID: 6545762
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:19:26.076182+00
Date Added: 2024-06-11T15:55:57.754510
License: Public Domain

Riddick, J., (after stating the facts.) This is an appeal from a judgment of the chancery court of Pulaski County refusing to enjoin the Special School District of Little Rock from issuing certain bonds of the district. The question involves the validity of the act of the Legislature authorizing the district to borrow money for the purpose of erecting a-high school building, and the further question whether the act, if valid, authorized the issuance of the bonds. Now, the act expressly authorizes the district to borrow money for the purposes named in the act, to issue evidences of debt therefor, and to mortgage the real property of the district as security for the loan. Acts 1905, c. 55, p. 154. The express power to borrow ’money and to issue evidences of indebtedness therefor, we think, includes the power to issue negotiable bonds of the district with interest coupons attached. 1 Dillon, Municipal Corporations, § 127, and cases cited. The power to issue these bonds having been granted by this act,.if the act was valid, the district, in attempting to issue the bonds for the purpose of completing the high-school building, was acting under the authority of law, and should not be enjoined. So far as we can see, the act was regularly passed, and the only objection urged against its validity is that it would be in violation of a provision in the State Constitution which declares that, no “county, city, town or municipality” shall issue any interest-bearing evidences of indebtedness. Const. 1874, art. 16, § 1. But this court has recently held that a levee district, though it may possess corporate powers, is not a municipality within the meaning of this provision of the Constitution. Memphis Trust Co. v. St. Francis Levee District, 69 Ark. 284. We think that it is equally clear that the Special School District of Little Rock is not a municipality within the meaning of that provision. The school district is, it is true, a public corporation, but the mere fact that it is a public corporation does not make it a municipal corporation or, in other words, a municipality. In speaking of this question, Judge Dillon says: “All corporations intended as agencies in the administration of civil government are public, as distinguished from private, corporations. Thus an incorporated school district or county, as well as a city, is a public corporation; but the school district or county, properly speaking, is not, while the city is, a municipal corporation.” i Dillon's Municipal Corporations, § 22. A municipality, properly speaking, is a corporation that has the right to administer local government, as a city or incorporated town. But a school district is only an agency of the State with limited corporate powers belonging to a class of corporate bodies known as quasi corporations. These are not muncipalities, within the meaning of the constitutional provision referred to. It follows, therefore, that the act in question is not in conflict with the Constitution, and is a valid law. It is said that the act does not authorize the district to mortgage a part only of the real property of the district. The language of the act is that the district is authorized “to borrow money and mortgage the real property of the district therefor ’’ This, to our mind, obviously empowers the district to mortgage all or part of the real property of the district as the school board may deem advisable. 'Again, it is contended that one of the directors was not notified of the meeting. But the clerk of the board who kept the records of the board testified on this point that all directors of the board were present except Mehaffy, and that he had been “notified by mail three days previous.” This, we think, was sufficient to support the finding of the chancellor that all the directors were notified. Lastly, it is contended that the recitals in the bond pledge the revenues of the district for their payment. The act under which the bonds were issued provides that the evidences of indebtedness issued by the district shall be “paid • out of the building fund in the order of their date, as the building fund is provided and collected by successive levies.” This, in effect, pledges the building fund of the district, whatever that may be, to the payment of the bonds. Besides, as the bonds are valid obligations, it was evidently the intention of the Legislature that they should be paid out of the revenues of the district, and they are therefore a charge against such revenues as any other valid debt would be. But, if we concede that the directors had no authority to pledge the revenues of the district in that way, this would not justify us in enjoining the issuance of the bonds, for, if the directors exceeded their powers in that respect, this provision of the bond would not estop the district, or bind the successors in office of the directors who issued the bonds. For, the question of whether the district has power to pledge its revenues was not committed to those directors for ascertainment and decision. Their decision on that matter is no more binding than their opinion on any other question of law affecting these bonds. Citizens Assoc. v. Perry, 156 U. S. 709. On the whole case, we are of the opinion that the judgment of the chancery court should be affirmed, and it is so ordered.