Arkansas National Bank v. School District No. 99

Hart, J., (after stating the facts). The decision of the chancellor was correct. It is the settled rule in this State that school districts have and can exercise only such powers as are expressly granted and such incidental ones as are necessary to make those powers available and effective. It is equally well settled that all persons who deal with school officers are presumed to have knowledge of the extent of their powers. First National Bank of Waldron v. Whisenhunt, 94 Ark. 583. Our statute does not give the directors of common school districts the power to borrow money. The note was given for the purpose of borrowing money with which to build a schoolhouse. It may be also stated that the bank knew that the money was to be used for that purpose, and it does not appear from the record that the directors had been given the power to construct a schoolhouse. It is not shown that the directors gave notice before, the annual meeting that the electors would vote on.the question of raising money to build a schoolhouse. - It necessarily follows that the school district is not liable on the note sued on. . 'The. authority of common school districts to build schoolhouses is derived from secs. 8926 and 8942 of Crawford & Moses’ Digest. Sec. 8926 reads as follows: “The directors shall give notice of .each annual meeting by posting notices thereof, at least 15 days previous to such meeting, in three or more conspicuous places within the district-; but it shall not be lawful for a district at .any annual meeting to fix a site for a.schoolhouse, or to raise money for building or purchasing a schoolhouse, unless the .directors shall have particularly set forth in the previous notice given of such meeting that these matters were to .be. submitted for their consideration and action.” We.have copied the section correctly, although there is a mistake in inserting it in Crawford & Moses ’ Digest. It will be noted that the words, “but it shall not be lawful for a district” are left out and the following words, “at any annual meeting” are changed to “at the annual meeting” and these words are added, “an estimate of the expense of the district.” This statute was construed in Fluty v. School Dist., 49 Ark. 94, where the court held that the directors of a school district have no power to build a schoolhouse with the- funds of the district unless authorized to do so .by the annual school meeting, and that a contract made for such building under authority conferred at a special meeting held later is void. Judge Smith, who delivered the opinion of the court, said: “And it is not lawful, even at. .the annual meeting, to'fix a site for the schoolhouse or to raise money for building or purchasing a schoolhouse, unless the directors shall have previously advertised that such matters will come before the meeting for its determination.-,. ‘The law: makes' no' provisión for called-meetings, except for the- single 'purpose'-of*filling a vacancy.-in--the -office of director. -The directors have charge of the school affairs and educational interests in their district, and the care and custody of the schoolhouses, grounds and other property 'belonging to the district. But they have no power to purchase or lease in the corporate name a sehoolhouse site, or to hire, purchase or build a sehoolhouse with funds provided or to be provided by the district, unless thereunto authorized by a majority vote at the district meeting.” That principle is controlling here. It will be noted that the statute makes it unlawful to raise money for building or purchasing a sehoolhouse at the annual meeting unless the directors shall have particularly set forth in the notice for-such meeting that this matter was to be' submitted to the electors. This was not done. In the application of the principles above announced, where the statute prescribes the only method in which a valid contract can be made, the adoption of the prescribed mode is a jurisdictional prerequisite to the. exercise of the power to contract at all; and the power can be exercised in no other manner so as to incur any liability on the part of the school district. This want of power or authority can not be supplied by the unauthorized acts of the directors or by any attempted ratification afterwards. It is apparent that, if the directors had no power to make the contract in the first instance, they' could not subsequently pass a resolution ratifying their act. In other words, under the record in this case, there could be no ratification by the directors, for they had no power to contract to build the sehoolhouse by ratification or otherwise. It has been well said that the law never implies an obligation to do that which it forbids the party to agree to do. Again, it is urged that there has been a ratification by the electors of the school district acquiescing in the action of the directors and using the sehoolhouse after it was built. In the first place, it may be said that the land on which the sehoolhouse was built belonged to the school district, and the use of the sehoolhouse was inseparable from the enjoyment of the land. Again, it may be said that, if the taxpayers of the district could be made liable by the fact that the money was used in building a schoolhouse, the statutory prohibition, making it .unlawful for a district to raise money for building a schoolhouse unless due notice had been previously given in the manner prescribed by the statute, would be useless. The limitation or restriction imposed by the statute would be practically of no avail, if it could be brought to naught by the unauthorized act of the directors acquiesced in by the electors of the district. The public by such a doctrine would be exposed to the very abuse which the Legislature intended to prevent. The statute in question was passed as an act of public policy by the Legislature, and it would be a very unsafe rule to establish to hold that school officers might borrow money without complying with the statute and bind the district because it was used in constructing a schoolhouse and the house was used afterwards for school purposes. As we have already seen, any one who deals with a school district, the mode of whose power to contract is restricted by statute, must see to it that the contract on which he relies is entered into in the manner prescribed by the statute. The district being without power to construct the schoolhouse so far as the record discloses, there could be no ratification of an act done in violation of the statute, and such act was a nullity, so far as the liability of the district was concerned. Goose River Bank v. Willow Lake School Township (N. D.) 26 Am. St. 605; Young v. Board of Education (Minn.) 40 Am. St. 340; McDonald v. Mayor (N. Y.) 23 Am. Repts. 144; Newbery v. Fox (Minn.) 5 Am. St. 830, and Turney v. Bridgeport (Conn.) 12 Atl. 520. In the last mentioned case the facts were that the plaintiff had contracted with the committee of a town to erect a schoolhouse, excepting certain parts, for an agreed price, and the town took possession and used the schoolhouse after it was finished. It was held that the taking possession and use by the town of the schoolhouse erected on its land was not such a ratification of unauthorized expenditures in the erection of the building as would make the town liable therefor. It follows that the decree must be affirmed.