Court Opinion

ID: 7982195
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:13:03.976051+00
Date Added: 2024-06-11T16:35:04.444746
License: Public Domain

Thomas Gallagher, Justice
(dissenting).
M. S. A. 475.53, subd. 4, limits the bonded indebtedness to which any school district may be subjected for the acquisition or betterment of schools to 50 percent of the last assessed value of the taxable property within such district. I am of the opinion that the limitation described relates to the territory within the consolidated school district, rather than to the district as a separate corporate entity. It seems clear that by the language of § 475.53, subd. 4, the legislature intended to protect property owners from excessive tax loads by limiting the indebtedness to which their property might be subject to 50 percent of the assessed value thereof.
There have been a number of decisions defining school districts as separate corporate entities. See, Bang v. Independent School Dist. 177 Minn. 454, 225 N. W. 449; Danculovic v. Zimmerman, 184 Minn. 370, 238 N. W. 695; Muehring v. School Dist. 224 Minn. 432, 28 N. W. (2d) 655. If the separate corporate structure of defendant be considered alone, it is true that the proposed bond issue in itself would not exceed 50 percent of the last assessed value of all the property within such district. However, as indicated above, I do not feel that the legislature was considering corporate entities as such in prescribing this 50 percent limitation, but was rather considering the tax load to which the property within such entities might be subjected by virtue of the total bonded indebtedness thereof, and that the property within such an entity was the factor to be considered in enforcing the limitation described.
In a number of decisions in other jurisdictions, this construction has been placed upon constitutional restrictions similar in form to the statutory provisions here involved. See, State ex rel. Zylstra v. Clausen, 66 Wash. 324, 119 P. 797; Cheek v. Eye, 96 Okl. 44, 219 P. 883; Ikard v. Union Graded School Dist. 101 Okl. 80, 223 P. 141; Mitsler v. Eye, 107 Okl. 289, 231 P. 1045.
*301In the Cheek case, in upholding this viewpoint the Oklahoma supreme court stated (96 Okl. 46, 219 P. 885):
“It is next contended that the bonds were illegal for the reason that it violates section 26, art. 10, of the Constitution, in that the bonded indebtedness of the old district No. 27, when added to the present indebtedness, exceeds five per centum of the valuation of the taxable property in what is old school district No. 27. The indebtedness of district No. 27 amounts to approximately nine-tenths of one per cent, of the total valuation of such school district, and the bonds voted create an indebtedness of more than four and two-tenths per cent. That portion of consolidated school district known as No. 27 will have an indebtedness of over five per centum of the valuation of the property therein. * * *
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“* * * Defendants in error, however, contend that it is necessary to add the indebtedness of the old district together with the indebtedness to be created, and if the aggregate does not exceed the constitutional limitations, then it is not a violation of the Constitution.
“The fallacy of this argument as applied to the facts in the instant case permits the people’s property in what was old school district No. 27 to be incumbered for school purposes with a bonded indebtedness exceeding five per centum of the taxable value of the property as shown by the last assessment. The law provides that the assets of the old district shall be applied to paying off the indebtedness of the old district. * * * The case, as here presented, shows that the indebtedness, so far as it affects district No. 27, increases the bonded indebtedness of that district to over five per centum of the taxable value of that district, and is in violation of the Constitution.”
In the Zylstra case, the Washington supreme court, in adopting this viewpoint, stated (66 Wash. 326,119 P. 798) :
“* * * It is manifest that the constitution intended to limit the amount of indebtedness any particular territory could incur for *302school purposes to five per centum of the value of the taxable property therein, * * *. To, hold with the relators’ contention would be to do away with the limitation entirely, as the legislature, by providing for successive reincorporations of the same territory, could create a new limitation whenever the existing limitation should be reached.”
It is true that a number of states have adopted an opposite viewpoint. See, Pinion v. Walker County School Dist. 203 Ga. 99, 45 S. E. (2d) 405; State ex rel. Consol. School Dist. v. Hackmann, 277 Mo. 56, 209 S. W. 92; Eapp v. Bethel-Tate Consol. School Dist. 58 Ohio App. 126, 16 N. E. (2d) 224; Walker v. Bennett, 125 S. C. 389, 118 S. E. 779; Welch v. Getzen, 85 S. C. 156, 67 S. E. 294.
These cases appear to adopt the separate-corporate-entity theory, and hold that where the law does not specify that the new corporation must assume the indebtedness of the former districts comprising it the limitation in question in each instance relates only to the bonded indebtedness for which the new corporation is actually liable, rather than to the property involved, or the total burden of indebtedness which it must bear.
In view of what I believe was the legislative intent in the enactment of § 475.53, subd. 4, I feel that the more logical reasoning is that of the Oklahoma and Washington courts; that it is the property within a district rather than the district or entity involved which must be considered in determining whether or not the debt limitation provided for in said section has been exceeded.
Mr. Chief Justice Loring took no part in the consideration or decision of this case.