Two teachers, one former teacher, three bus drivers, also directors of Floyd Special School District No. 37 of White county, and others, were sued by thirty-nine taxpayers. Charges were fraudulent diversions of school money.1
*98Appellants, who were defendants below, stress the fact that those against whom judgments were rendered did not benefit personally by the transactions complained of. They say the district received value for all warrants issued, although process by which funds were withdrawn from the treasury was admittedly illegal. Limitation is pleaded.
When employed, each of the three bus drivers was related to one or more of the directors within the prohibited degree. 2 There was no satisfactory proof, it is argued, that two-thirds of the school patrons signed petitions requesting directors to employ teachers who were related to members of the board within the fourth' degree. [But see Act 389, approved March 26, 1941.]
Employment of J. R. Lammers as janitor is an example of indirect methods to which recourse was had. Griffin, a teacher, was authorized by the directors to hire a janitor. He engaged Lammers. Payment was accomplished by adding Lammers’ salary to Griffin’s compensation. Effect was that school records did not disclose Lammers’ dual status: janitor and member of the board.
O. T. Dulaney was chairman of the board. A bus was purchased in the district’s name for O. L. Dulaney, who was O. T.’s brother. Sales tax was paid by the district.
During December, 1939, on a salary of $100 per month, O. L. Dulaney, as bus- driver, drew more than $600. He admitted the bus was purchased as his personal property, although postdated school warrants issued in part payment August 1, 19-38, were outstanding when suit was filed November 5, 1940.
While O. T. Dulaney was chairman, Thomas, a brother-in-law, operated a bus for the district under con*99tract. It belonged to Dulaney, who testified Thomas procured it by lease.
Significance attaches to the fact that payment of $250 by warrant was made to M. D. King, a teacher. This occurred, it is said, before the district contracted with him. King purchased real property from O. T. Dulaney (as appellees’ counsel expresses it) “. . . about the same date, paying therefor $250. While King would not admit the Avarrant Avas issued to enable him to make the purchase, he did not deny it.”
Copies of teacher and bus driver contracts were not filed, as provided by law.
O. T. Dulaney, Avhile chairman, used his truck to transport lumber and other building materials for the district and was substantially compensated. He was paid in cash realized from excess amounts added to salaries of teachers and bus drivers.
There Avere many irregularities. The marginal tabulation 3 shoAvs twenty-four items found by the court to have been fraudulent. O. L. Dulaney settled for the postdated warrants. King also settled. 'Charges against C. A. Turpin, L. M. House, M. D. King and his Avife, Cal Aclin, International Harvester Company, and Mrs. John V. Crockett, county treasurer, were dismissed. The tabulation is an itemization of judgments, all of which Avere joint and several, and amounted to $2,209.61. Security Bank paid $174.62 (the amount adjudged against it representing sums added to Avarrants payable to O. T. Dulaney and cashed by the bank). Net judgments, exclusive of interest, are $2,034.99.
Quoting from appellants’ brief, “The greater part of the transactions complained of arose from the attempt of directors to complete a gymnasium building, also used for class rooms.” The building Avas a National Youth Administration project. When nearly finished, but without a roof, NYA apportionment of funds ceased. The school directors claim they Avere advised it Avas legal to divert money from the transportation budget. The
*101credit tiras tapped by padding strategy came to tbe district from tbe state equalizing fund.4
When money from the equalizing fund is paid to school districts, it becomes property of the payee, subject only to such control as the state has imposed. See § 142 and subsequent sections of Act 169 of 1931.5 The state ■board of education is empowered to make such reasonable rules as may be necessary to administer the equalizing fund. A regulation is that failure to supply required information shall disqualify the delinquent district from right of allotment. The report must be available to the commissioner of education not later than June 30 of each year. 'Changes in rules have been made as necessity and as efficient administration required.
*102Appellants’ first contention is that the money (found by the court, in effect, to have been siphoned from the treasury) was spent by the directors “in entire good faith.” It would perhaps be more accurate to say there was no diversion for personal gain.
Faced by NTA’s failure to complete the gymnasium, those who conceived this plan of financial triangulation for obtaining money, and those who lent themselves to the scheme, no doubt justified the expedient as the only available means to an end.
' A judgment holding that a member of the Brinkley town council was liable for tiling he sold the municipality was reversed in Frick v. Brinkley, 61 Ark. 397, 33 S. W. 527. The opinion by Chief Justice Bunn held the transaction was illegal. But the town, he said, could not in good conscience retain benefits and recover the purchase price. The decision was that while the statute prohibited councilmen from being interested in profits of any contract or job for work or services to be performed for the corporation, Frick’s sale of tile could not “. . . necessarily or even reasonably be considered a ‘contract or job for work or services to be performed,’ as is contemplated by the statute.” The question, as stated by the chief justice, was: “. . . where the contract made is not void in the strict sense, but only voidable, and where it has been fully executed by both parties, and the object of the litigation is, in effect, to annul and rescind, ’ ’ what were the relative rights 1 The case turned on one proposition: the relief sought could only be granted on the principles of right and justice, “. . . and these.[were] not with the plaintiff.”
Attention is called to Smith v. Dandridge, 98 Ark. 38, 135 S. W. 800, 34 L. R. A., N. S., 129, Ann. Cas. 1912D, 1130, where it was held that even thoug’h a school director could not make a binding contract with the district to pay a director an agreed sum for services performed outside his official duties, yet if the district should accept benefits it ought to make just compensation. Spearman v. Texarkana. 58 Ark. 348. 24 S. W. 883, 22 L. R. A. 855, is cited in *103the Dandriclge case. Mr. Justice Frauenthal made comment, as shown below.6
Mr. Justice Wood, speaking for the court in Hendrix v. Morris, 134 Ark. 358, 203 S. W. 1008, said that in order to make school directors liable it was essential to allege that the wrongful act was wilfully and maliciously done.
These arguments are answered in the case at bar by the facts. However meritorious appellants may have thought the transactions were, to consummate them it became necessary to falsify records. By this departure from the law it Avas possible to draw money from the treasury for the masked purpose in view.
Because there was deceit and concealment, limitation as a plea is unavailing. Agreement between the actors constituted a conspiracy which became consummate Avhen warrants showing upon their face that they were for a designated purpose were in fact issued for a wholly different end. While the fraudulent motiAre actuating execution of the warrants remained undisclosed there Avas concealment, and the statute did not begin t'o run. Conditt v. Holden, 92 Ark. 618, 123 S. W. 765, 135 Am. St. Rep. 206.
In rendering judgment, the chancellor correctly declared the law. Affirmed.