Curtis v. Haynes Special School District H.

Wood, J., (after stating the facts). This proceeding was begun in the county court under the authority of the act of April 1, 1895, Act 66, page 82, which provides: “Section 1. The county courts of this State shall have power to dissolve any school district now established, or which may hereafter be established in its county, and attach the territory thereof in whole or in part to an adjoining district or districts, whenever a majority of the electors residing in such district shall petition the court so to do. ’ ’ Section 2 provides for notice to be given. Section 3 provides: “ Whenever, under this act, any district shall be abolished, any indebtedness due by it or funds on hand to its credit shall be proportioned by the court among the districts to which its territory has been attached, according to the value of the territory each received, of which action of dissolution and distribution of indebtedness or funds, as the case may be, the clerk of the court shall give due notice to directors of each district affected, showing the territory attached to their district, and amount of indebtedness adjudged against it, or funds credited to it, as the case may be. ’ ’ (1) As already set forth in the statement, in the recent case of Hughes v. Robuck, 119 Ark. 592, we held that under this statute county courts had jurisdiction to dissolve special school districts, as well as common school districts. It appears from the recitals in the judgment that the intervention was presented on the day and at the time when the court took up the matter for final hearing. The recitals also show that at the same time there was a motion to strike and a demurrer filed to the intervention, which the court sustained. The judgment further recites that “all indebtedness due by Special School District H and all funds on hand held by it be proportioned between said District No. 1 and said District No. 39 in proportion to the value of the territory received by said common school districts,” and the clerk of the county court was directed to give.due notice to the directors of each of the districts affected by the judgment of the territory attached to their respective districts. Appellant Speer contends that the allegations set forth in his intervention, which the court disposed of’ on demurrer and motion to strike, were sufficient to show that he was the owner of valid and subsisting obligations of the district amounting in principal and interest to the full time of maturity, in excess of $14,000, and that these allegations were conceded by the demurrer and motion, and that therefore the court, on these facts, had no power to dissolve the district. The ground of his protest goes to the power and jurisdiction of the county court to render a judgment dissolving the district rather than to any error in the judgment of the court as to the apportionment of the indebtedness of the district. He argues that the Legislature did not intend to confer upon county courts the jurisdiction to dissolve special school districts because a dissolution of such districts would have the effect to impair the obligations of its valid subsisting contracts, and that the act, when thus construed, is unconstitutional and void. This court held otherwise in Hughes v. Robuck, supra, and it adheres to that decision. In the above case we recognized the doctrine that special school districts could not be dissolved if such dissolution had the effect to impair the obligations of their contracts. We there say that “the legislative control over the creation and boundaries of school districts is plenary, subject only, however, to the limitation that such action shall not impair the contracts or obligations of such districts. ’ ’ But in the judgment dissolving the district the court adjudged that all indebtedness due by the special school district and all' funds on hand by it be proportioned between District No. 1 and District No. 39 in proportion to the value of the territory received by each of said common school districts. Moreover, in Special School Dist. No. 2 v. Special School Dist. of Texarkana, 111 Ark. 379, we held that, “the Legislature has unrestricted power over the formation of school districts, and the making of boundaries thereof; and legislation on the subject is not affected by a failure to adjust the equities between the old and new districts.” •Now learned counsel for appellant Speer concedes in his brief that the amount received from the bonds, towit, the sum of $8,500, “is now in the hands of the district and under the control and management of the board of directors.” While Speer alleged "that some of the interest on the bonds was then past due and unpaid, he does not anywhere specifically allege what the amount of that interest is, and in response to the motion to make his complaint more definite and certain, he alleges that he did not know the names of the owners, or the amounts and numbers of the bonds that were held by other owners, nor could he state how many of the bonds were sold and how many unsold. In the prayer of his complaint he does not ask for judgment for the $8,500 with accrued interest thereon up to the date of the judgment dissolving the district, but he only prays that the petition for dissolving the district be dismissed and that the district be not dissolved. (2) If upon the order of the county court dissolving the district, the $8,500 that had been furnished the district had been returned to the owners, with interest that had accrued thereon, this would be all that the district was obligated to pay. Speer and the bondholders contracted with the district with reference to the laws of the State, and they must be held to have known, if we are correct in our construction of the act of April 1,1895, that such districts could be dissolved by the county court, and that such dissolution would necessarily have the effect to destroy any executory contracts of the district. When the district was dissolved, ipso facto its outstanding bonds became due, and there was no obligation upon the district to pay more than the face of such bonds with the interest that had accrued at the date of the order dissolving the district. There are no allegations in Speer’s intervention asking that this be done or alleging facts showing that such relief would have been impracticable. (3) Moreover, as we have already seen, the court adjudged that all indebtedness due by the Special School District IT and all funds on hand by it be proportioned betweeh District No. 1 and District No. 39. If these districts, Nos. 1 and 39, were adjoining districts to District IT, which was dissolved, then the judgment of the court not only did not impair the obligations of the contracts of District H, but, on the contrary, expressly recognized these obligations and provided for their payment by Districts Nos. 1 and 39 in proportion to the value of the territory received by each of said common school districts. It was not an abuse of discretion or an error for which a judgment of the court dissolving the district should be reversed because it did not undertake to ascertain and fix the amount of the obligations then outstanding against Special District H and adjudge the proportional sums of the indebtedness that the adjoining common school districts should pay. That is a matter that could be ascertained and worked out in the future. The only limitation upon the power of the court to dissolve the district 'is that it “shall not impair the contracts or obligations of such district. ’ ’ The county court was correct in treating the intervention of Speer as a protest against the jurisdiction of the court to dissolve District H, and did not err, from this viewpoint, in holding that Speer was not a proper party and in sustaining the demurrer to his intervention. While the intervention alleges that the order of the county court is illegal and void because the same is not in compliance with the statutes of the State of Arkansas, and is illegal and void because no notice of the petition to dissolve was given as required by law, this allegation is not argued in the brief, and therefore is treated as abandoned. II. The other appellants who joined in the intervention and remonstrance with Speer against the dissolution of the district contend that the county court abused its discretion and erred in apportioning the territory that was embraced in the district before it was dissolved. District No. H was formed by taking all the territory of Common District No. 39 and a part of the territory embraced within Common District No. 1, and in the order dissolving the district the county court restored to Common District No. 1 that part of the territory taken from it and the remainder of the territory it transferred to Common District No. 39, and also Common District No. 1. This court held, in Hughes v. Robuck, supra, that the statute does not require that the petition for dissolution shall state the disposition to be made of the territory of the dissolved district, in order to give the county court jurisdiction of the subject matter. But we did not hold that the court could exercise its jurisdiction to dissolve in any other manner than that required by the statute. (4) Appellants further contend that the court, after having acquired jurisdiction of the subject matter, must proceed in the exercise of that jurisdiction according to the requirements of the statute, and that its failure to do so is error for which the judgment must be reversed. Now when all of the territory of Common School District No. 39 was taken in the creation of District H, Common School District No. 39 went out of existence and was no longer a common school district. The statute authorizing the county court to dissolve any school district requires that the territory that constituted such special school district be attached “in whole or in part to an adjoining district or districts.” (5) In the opinion of a majority of the court, when the county court, and the circuit court on appeal, entered an order dissolving District H, it could not attach in whole or in part the territory of District H to Common District No. 39, for at the time of the order of dissolution there was no Common District No. 39. Having passed out of existence in the creation of Special District H, it could not be re-established in proceedings for the dissolution of District H. Having once been absorbed in the special district, and therefore abolished as a common district, in order for the same territory to be re-established into a common district numbered 39, it will be necessary for a majority of the electors residing upon the territory constituting the district to be formed, to petition for such district. Act of April 8,1887, Kirby’s Digest, § 7544. Common School District No. 39, having been abolished in the order creating District H, a new common school district composed of the same territory could not be re-established under the statute without such petition. A petition of a majority of the electors residing in District H for the dissolution of that district might not constitute a majority of the electors residing in the territory that formerly constituted Common School District No. 39. The petition for the dissolution of a district is entirely different from one to create a district. The power to dissolve a special district and to attach the territory thereof, in whole or in part, to adjoining districts did not include also authority to establish new common school districts without auy petition therefor signed by a majority of the electors residing upon the territory to be included in such new district. Now the effect of the order of dissolution was to reestablish a new Common School District No. 39, composed of all the territory embraced in the old District No. 39 and to add to the new District No. 39 other territory, without any petition asking that same be done, and the effect of the order, as shown by the boundaries of the new District No. 39 as created without a petition shows that it is composed of noncontiguous territory. In other words, a narrow strip of the territory of District No. 1 lies between and separates District No. 39 into two parts. Five of the six directors of Special District H filed what is designated their intervention or remonstrance, setting up that “the order and proceedings are void for the reason that there is no authority conferred on the county court, under the petitions filed therein, to create a new school district, and that the order of the court is therefore void and without legal effect.” It is also urged that there was no competent evidence to show that the petition for dissolution contained the requisite majority of electors. Inasmuch as the cause must be reversed and remanded for the error indicated, we deem it unnecessary to dispose of this issue, for if the proof was not made by competent evidence it is a matter that can be easily correctéd by a production of the record showing the number of .electors residing on the territory of the special school district on a new trial. The court erred in dissolving the District H without attaching the territory thereof to adjoining districts, and since there was no common school district No. 39 it necessarily follows that the court also erred in not apportioning the indebtedness of District H as required by the statute, and for these errors the judgment is reversed and the cause remanded for a new trial. Smith, J., concurs in the judgment.