Board of Trustees of Plymouth Graded School District v. Pruden & Co., 179 N.C. 617 (1920)

June 2, 1920 · Supreme Court of North Carolina

179 N.C. 617

BOARD OF TRUSTEES OF PLYMOUTH GRADED SCHOOL DISTRICT v. PRUDEN AND COMPANY.

(Filed 2 June, 1920.)

1. School Districts— Schools — Buildings—Equipment—Statutes—Bonds.

Legislative authority to a school district to issue bonds to erect a school building or buildings for the accommodation of the public schools therein, includes the power to provide the ordinary equipment. Commissioners v. Malone, 179, N. C., 110.

2. Same — Taxation—Interest—Sinking Fund.

Where a statute authorizes a school district to issue bonds to erect a school building or buildings, with provision for a special tax to pay the interest thereon “and to create a sinking fund sufficient to retire said bonds at their maturity,” the provisions of the statute would control those of an ordinance limiting the amount, assuredly if the bonds were in the hands of an innocent purchaser for value; and were it otherwise, the validity of the bonds would not be affected under the principle applied in Commissioners v. McDonald,, 148 N. C., 125.

Civil acjtion, beard on case agreed before Lyon, J., at Spring Term, 1920, of WASHINGTON.

It appears from tbe facts properly presented, tbat pursuant to an act passed for the purpose in reference to Plymouth Graded School District, cb- 128, Laws 1919, an election was held on 8 July, 1919, and the votes of .said district by a large majority approved the proposition to issue coupon bonds to the amount of $60,000, to provide a fund for the erection of a school building for the accommodation of the public schools of said district, the said majority.vote having been expressed on a ballot “for school bonds and taxes,” as the statute directs.

In reference to the taxes to be levied to carry out this measure, the act provides in sec. 1, “that the proposition to be submitted shall be for the issue of $60,000 of bonds for the purpose designated, and for the levying of a tax sufficient- to retire said bonds.” And again, in sec. 8, “That if in the election provided for in the act the majority of the qualified voters of the district shall have voted for school bonds and taxes, and said bonds shall have been issued and sold, the board of commissioners is hereby authorized and directed to levy annually upon the property and polls of the district a special tax sufficient to provide for the payment of the interest on said bonds, and to er,eate a sinking fund sufficient to retire said bonds at their maturity.” The bonds having been prepared, the defendants agreed to purchase the same at a stipulated price, and now resist payment on the grounds:

1. That in the resolution of the county commissioners ordering the election it is provided that the proceeds of the bonds are to be used for the equipment as well as the erection of the buildings.

2. That in said resolution it is provided that the maximum annual tax for the payment of the interest and final retirement of said bonds shall be 75 cents on property, and $2.25 on the poll.

It further appears in the case agreed that according to the valuation of property in Plymouth Graded School District now prevailing the maximum tax is more than sufficient to meet the annual interest and retire the bonds at maturity as the statute contemplates and provides.

On these the facts chiefly relevant, there was judgment for plaintiff, and defendant excepted and appealed.

Zeb Vance Norman for plaintiff.

Van B. Martin for defendant.

Hoke, J.,

after stating the facts: The power to erect a school building or buildings for the accommodation of the public schools of a given district in our opinion includes the power to provide the ordinary equipment. As indicated in a recent decision of this Court, this equipment consists in great part o£ seats and desks for tbe pupils, fastened to tbe building after tbe manner of fixtures, and comes clearly witbin tbe terms and purport of sucb a law as ordinarily expressed, and tbe first objection of tbe defendant bas been properly disallowed. Comrs. v. Malone, ante, 10.

In reference to tbe second objection raised by tbe defendant, we are inclined to tbe opinion tbat tbe proceedings having been instituted, and tbe bond issue approved under tbe provisions of tbe statute specially applicable, tbat tbe provisions of tbe statute would be controlling, and tbe commissioners at all times empowered to levy a tax sufficient to pay tbe interest annually and retain tbe bonds at maturity — assuredly so if tbe bonds are beld by an innocent purchaser for value. Comrs. v. Malone, supra.

Tbe question, however, is not presented in tbe record, for even if tbe limitation in tbe amount of taxation contained in tbe resolution of tbe commissioners should be beld effective, it would in no wise affect tbe validity of tbe bonds, under tbe principle applied by tbe Court in Comrs. v. McDonald, 148 N. C., 125.

We therefore concur in tbe ruling of bis Honor tbat tbe proposed bond issue will constitute a binding obligation on tbe school district, and tbat tbe defendants must comply with the contract concerning them.

There is no error, and tbe judgment of tbe lower court is

Affirmed.