- 990 FELTS- V. CHERRY - HILL Scrioori DIS`L:NO. 10. L-188 - :'.• FELTS V. CHERRY HILL S6HOOL DISTRIdT No: 10. , 4-33S1
Opinion delivered February 26, 1934. .scrians DISTRICTS—WARRANTs.-4here a school building ,contractor • and sellers of school equipment accepted warrants to be Paid out of the -State equalizing fund, they haa no , 'right • to haVe such Warrants . - re-isSued ' payable out of ' the , district's general revenue . fund, withoUt 1 a vote of the electors of the 'district. , Appeal from Polk Chancery CdUrt; Pratt P.* Bacan, Chancellor ; affirmed.. ' . /16.Lon. 0,. for 'aPpellant. Pake Frederick, foy appellee.. .AlcHANEY, J. On June -14,4930,. the county board of education of Polk County, on petition of a majority of. the electors therein, abolishe . d certain school districts arid formed the territory - in . such . districts, into a new district known as Cherry Hill Consolidated Schoril District No. 10. Thereafter on petition,-. the county' board called an- election _for July, 19_ . -in said -new •district for the purpose of -the electors- therein voting, on the proposal to borrow Money from the revolving loan fund and to levy a tax of 7 mills on. the, assessed valuation of the real aiid personal-property of the district. The election was held a.nd the proposals carried. Bonds- were issued and deliVered to the State Board of Education in the sum of .$9,800; being 7 per cent.. of the assessed valuation. The district under the advice of the-State Board entered upon a large building prOgram. --Instead of erecting and equipping such buildings as the -bond issue wOuld pay for, it entered into contracts for three large stOne build-
ARK.] FELTS V. CHERRY HILL SCHOOL DIST. No. 10. 991 ings, two of which cost $3,075 each, and one, at Cherry Hill, .cost $9,750; or a • total of $15,900 for 'buildings alone; The building contracts with the 'contractor prOvided that they should be paid . for "by Warrants on revolving and C'qualizing funds." 'And it appears frOm the evidence that the State DePartment of ,Education agreed to furnish the inoney to cover the cost of the buildings in excess Of the- bond issue and to • pay the Cost of all equipment, including- three •uses, out Of the State "6quhlizing 'fund." About $6,000 was expended for furniture, equipment and buses. The contractor and, equipment furnishers Were given warrants of the district drawn on the "equalizing fund" for the excess cost above the bond issue. In May, 1932, the then holders of said warrants, .appellantS; except Felts, induced the district's directors to re-isshe said warrants, including • in-te i.T.st to date, withont designating the fund on which they were draWn and apparently making them the direct ohligations of 'the:district, , payable out of its ' general revenues. This sl i it 'was thereafter . brought to • enjOin the county treasurer,from paying them out .of. the district general revenues and to have them declared void as to said district and its school funds. The re4ssued warrants total $11,886:67. Trial resulted in a decree grant-ing-the relief prayed, and , thiS aPpeal followed. • • We think the trial court correctly 'so held. -Appellants argue that this is a- consolidated district; and that there is a distinction between the powers of ' the board. of directors in • such a . district and in a rural special school district. We. think it unnecessary to discuss or decide this question. The undisputed evidence shows that it was never contemplated by- any of the parties that said district' should pay any Part Of the excess cost of the buildings and- equipment, that.is , • excess Over the bond issue, out of the general revenues of the district. It • wag understood ancl agreed Ahat the' State Board -would furnish such excess from the " equalizing. fund." The electors voted a tax on.themselves of 7 mills to sechre the payment Of a bond issne of $9,800, Which'is 7 per cent. of the total assessed valuation of the property in the dis-
trict. The directors had the authority to borrow so 'much money- and no more, and the contractor and equipment vendors elected to take warrants drawn- on the "equalizing fund" for the excess. They have no right to demand or receive warrants drawn on the general school revenues of the district, and the directors had no power , to bind the district thereto without a vote of the electors of the district. Act 252 of 1925, p. 742. These warrants will be payable out of the " equalizing fund," if, and when, there is anything in such fund to pay them. Affirmed.
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