Court Opinion

ID: 6737837
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:19:56.123947+00
Date Added: 2024-06-11T16:01:48.652145
License: Public Domain

Bruce, Cli. J.
(dissenting). I am of the opinion that the demurrer should have been overruled.
The greater portion of the warrants issued were paid out of the treasury during the term of office of the defendants. Section 2218, Compiled Laws of 1913, rendered the contract absolutely void and a personal liability of the members of the school board alone. In issuing the warrants therefore, and in allowing’ them to be paid, they used their official positions in order to pay their own debts, and the case is no different than if they had drawn the money themselves from the treasury and then paid it over to the contractors. They are not sued on the contract, but for the conversion of the funds, and there is no doubt that those funds were converted.
Nor does any element of estoppel exist even though the building, may have been afterwards used by the school district. Goose River Bank v. Willow Lake School Twp. 1 N. D. 26, 26 Am. St. Rep. 605, 44 N. W. 1002; Capital Bank v. School Dist. 1 N. D. 479, 48 N. W. 363; Engstad v. Dinnie, 8 N. D. 1, 76 N. W. 292; Detroit v. Detroit City R. Co. 60 Fed. 161; Bangor Twp. v. Bay City Traction & Electric Co. 147 Mich. 165, 7 L.R.A. (N.S.) 1187, 118 Am. St. Rep. 546, 110 N. W. 490, 11 Ann. Cas. 293; Cedar Rapids Water Co. v. Cedar Rapids, 118 Iowa, 234, 91 N. W. 1081.
It is elementary, indeed, that a contract of a municipal corporation which is void at its inception cannot be validated by a subsequent ratification. Cedar Rapids Water Co. v. Cedar Rapids, and Goose River Bank v. Willow Lake School Twp. supra; Engstad v. Dinnie, 8 N. D. 1, 76 N. W. 292.
Nor is there any merit in the contention that the taxpayers alone arc injured, and that the taxpayers alone may bring the suit. The money *38was paid by the taxpayers into' the treasury of the school district. It was there held as a trust fund. It was the duty of the district to conserve and properly use it. If one of its officers or all of its officers diverted it, it was still its duty to recover it and to keep it intact.
This is not a case like that of Red River Valley Nat. Bank v. Fargo, 14 N. D. 93, 103 N. W. 390, where it was held that a city could hot refuse to redeem the warrants issued in payment of a public improvement on the ground that the debt incurred was beyond the constitutional debt limit and after the taxpayers had paid the taxes levied for the specific purpose without raising the question. That decision held that the taxes paid were a trust fund for the payment of the particular debt; that it was a special assessment; and that the parties assessed had, before the incurring of any liability, had the opportunity to be heard and to protest. Here a contract is let and a tax is levied without any such opportunity being given. It may well be that the taxpayers were willing to pay for the school the amount of the constitutional limit, but the complaint alleges that other school debts were left unpaid so that these warrants might be taken care of. It may be that they are still willing to pay for the building to the extent of that constitutional limit, but still to look to the personal liability of the school board for the balance or difference. Is there anything to prevent them from doing só ?
As we understand the law, the contract was that of the defendants and of the defendants alone, and the building is practically theirs. It may be that they can recover from the district the reasonable value of the use thereof during the period it has been used, and it may be that they can sell it to the district for a price within the debt limit. The fact, however, remains that in paying for the same and in paying their own debt they wrongfully used the funds of the district, and are liable for their conversion. The taxes are paid in a lump sum and are levied in a lump sum, and are for general school purposes, and there is no presumption that, as in the case of the special assessment passed upon in the case of Red River Valley Nat. Bank v. Fargo, supra, the taxes were paid by the taxpayers for the express purpose of paying the debt imposed by the unlawful contract. It was a trust fund for lawful school purposes, to be lawfully expended, and it is the duty of the district to recover that which has been unlawfully paid out and to replenish that fund.