Security State Bank of Faulkton v. Cavour School District

SMITH, J. School- township No. 9 was -organized in April, 1883, 'covering fifty-six contiguous sections of land in Beadle ¡county. In May, 1884, eight sections were detached1 and added to 'Ouster town-ship. In J-uly, 1884, twenty-four sec-tioms on the south side of -Cavour township were detached and added to Rich-land school township-. In July, 1887, -six sections were detached [220] therefrom 'and added1 to Valley school township.' In July, 1889, eighteen sections were detached from Shoe Creek school township adjoining on the north, and added to Cavour school township. On December 1, 1884, Cavour school township had issued certain school bonds, among which were one in the sum of - $500 and one in the sum of $100, due 15 years after date, bearing 7 per cent, interest. Plaintiff became the owner of these two bonds, and on November 16, 1905, commenced an action in the circuit -court thereon, naming as defendants “Cavour school township, a corporation,” and “Cavour independent school district, a corporation.” The action came on for -trial on March 13, 1907, plaintiff appearing by its attorney and- each of the defendant school districts appearing by separate counsel. The court, after hearing -the evidence, made -and filed its findings of fact and conclusions of law and entered judgment, jointly against both school districts as named, in- the sum. of $i,004Í2i. N01 appeal was taken, and the judgment -remains unsatisfied and in full force and effect. At the time these bonds were is-sued-, the- -original C-avour school township, containing 56 sections, had been reduced in area -by the cutting off of 32 sections, which -were added toad-joining school districts, so that Cavour school district -then comprised- 24 -o-f -its -original- -sections. After said bonds were issued, 6 more sections were de-t-aohe-d an-d added to- adjoining districts, leaving 'but 18 sections of the original area of -Cavour school district. In 1889, 18 sections- were -detached from an adjoining district to the north amcl added to the remaining original 18 sections then -constituting Cavour school -district. The record1 fails to disclose the date of -the -organization of Cavour independent school district, except it appears from the findings of fact that such a district existed at a date subsequent to the issue of the bonds, and prior to- the commencement -of the action against the t-w-o districts in which a joint judgment was entered March 13, 1907. It does appear from- the findings that Cavour school dis-triot of Beadle county comp-rises the whole of township in north, range 60 west, except such portions as are included in -Cavour independent school district, and that it .was organized in -part from territory -originally embraced in Cavour school district. It appears- therefore that a p-art of the present [221] area of 'Cavour school district was embraced in and was a part of Cavour school township when, the bonds were issued, -and when judgment was entered on the bonds. The identity of this particular area embraced within the school corporation known as Cavour school district of Beadle .county, S. D., has remained, although by acts of the territorial and state Legislatures it has been variously -designated. The name of such corporation, was finally declared to be “Cavour school 'district of Beadle county/’’ S. D., and under that name it was sued in this; action. Chapter 44, Laws 1883; Comp. Laws 1887, § 1728; chapter 47 (section 42) Laws 1887; chapter 113, subd. 3 (section 5) Laws 1901; Pol. 'Code 1903, § 2326; Code Civ. Proe. § 152. [1,2] Appellant’s contentions seem to- 'be: First that the entire school corporation, Cavour school township-, had ceased-' to exist prior to the date of the judgment -on the bonds. Second, that a settlement had been made be-twen Cavour school township-, a corporation-, and Cavour independent school district, a corporation, .prior to the judgment on the bonds, under which the latter corporation is- claimed- to have assumed the outstanding bonded indebtedness; and 'that the trial -court erred in excluding evidence of such settlement as a defense in this action,-which is the result of -a proceeding -under -section 75, c. 135, Laws 1907, to- compel Cavour school district to levy a tax to pay- one-half of -said judgment. Section 73 of 'Chapter 135, which required- the county commissioners and -couirty superintendent- to make an apportionment of property and indebtedness whenever district boundaries were -changed, ivas not in force at the -time -the boundaries of the school township were Changed, n-o-r at -the date of the rendition-of the judgment on the ‘bonds, although- the act was approved March 13, 1907, the same day the judgment was entered. As to the first contention urged by appellant, it is- sufficient to aa3r that a change in the name or boundaries of a school corporation' does not -change its liability as plaintiff or defendant, and, in any -event, it cannot he successfully -contended in thi's- case that the -corporation appellant ever -ceased to- exist -as a -corporation, although its náme and boundaries have -been ' changed at various times. Peever Merc. Co. v. Fire Association, 23 S. D. 1, 119 N. W. 1008, 19 Ann. Cas. 1236; Wilhite v. Covent, 117 Ky. 251, 78 S. W. 138. Appellant’e second contention cannot be [222] substained. It is conceded' that proper service of proeeess was made upon appellant, and that both corporations appeared by counsel in the action- on- the bonds. Assuming- therefore, as contended ¡by appellant, that a complete adjustment of property and indebtedness had been made between the two1 corporations defendant, and -that Cavour school district had been legally released, by settlement, from all. liability on. the bonds, such fact was matter of defense which, might and1 should have been pleaded by said district in that action. It is clear therefore that this, as well as'all other defenses affecting1 the liability of Cavour school distract, became res judicata,-and cannot now be urged in this •proceeding, to defeat liability upon the judgment. Howard v. City of Huron, 5 S. D. 539, 59 N. W. 833, 26 L. R. A. 493; Id., 6 S. D. 180, 60 N. W. 803; Coler v. Coppin, 10 N. D. 86, 85 N. W. 989. That portion of the opinion in the Coppin case which relates to the mode of apportioning the indebtedness between two districts created from the same territory is not pertinent to the ■questions presented on this appeal, as appellant 'here seeks only to defeat all liability upon grounds which were- 'unsuccessfully urged in the Coppin case; and, in any event, the method of apportionment ini this ¡case is not challenged by appellant, except ■in so far as it might have been matter of defense in the action on the bonds. We deem it unnecessary to review other questions discussed in the briefs of counsel. The order and judgment of the trial court are affirmed. MoCOY, J., concurs in the result.