Board of Ed. of City of Oilton v. Short , 126 Okla. 70 ( 1926 )

The parties to this action occupy the same relative position in this court as they did in the court below, and will be herein so referred to.

On May 24, 1915, the plaintiff issued its bonds in the sum of $22,000, for the purpose of building and furnishing a schoolhouse, such bonds maturing and becoming payable on May 24, 1925. At the time of issuance of the bonds the entire indebtedness of plaintiff, including the bond issue, was within the 5 per centum of its assessed valuation. When the bonds matured the plaintiff had not accumulated sufficient funds with which to retire them, and accordingly issued its refunding bonds in the sum of $23,000, payable in 25 years, which refunding bonds were to be accepted at par by the holders of the original issue in lieu of the amount due on the original issue. However, it was found that the $23,000 refunding bonds plus the other indebtedness of plaintiff exceeded 5 per centum of the assessed valuation of the plaintiff district, and the Attorney General, as ex-officio bond commissioner, for that reason refused to approve the bonds, and suit was filed in the district court of Oklahoma county, in which plaintiff prayed for a writ of mandamus against the Attorney General requiring him to approve such refunding bond issue. Judgment was rendered in favor of defendant, and plaintiff prosecutes this appeal.

The question presented by this appeal is whether the refunding bonds are valid when issued without a vote of the people, and which, when added to the already existing indebtedness of the district, bring the total indebtedness above 5 per centum of the assessed valuation of the district.

It is contended by plaintiff that the issuance of the refunding bonds will not create a new indebtedness, but merely changed the form of a valid existing debt, citing In re Menefee, State Treasurer, 22 Okla. 365, 97 P. 1014, State ex rel. Board of Education v. West, 29 Okla. 503, 118 P. 146, and In re Application of State to Issue Bonds to Fund Indebtedness, 33 Okla. 797, 127 P. 1065 (and cases therein cited).

While, upon the other hand, it is contended by defendant that if the issuance of the refunding bonds in question is to be considered merely changing the form of an old debt, since the refunding bonds run for a period of 25 years from the date of their issue, that this is violative of the provisions of section 25 of article 10 of the Constitution of Oklahoma, providing that all such debts must be paid within 25 years. In other words, if the issuance of the refunding bonds to run 25 years is the mere continuation of the old debt, already having run ten years, making a total period of 35 years the indebtedness would run that the bonds are void as violative of the above-quoted provision of the Constitution. And, if the issuance of said refunding bonds is the creation of a new debt, running the total indebtedness of the district to above 5 per centum of its assessed valuation without a three-fifths vote of the people, that this is violative of the provisions of section 26 of article 10 of the Constitution.

It is suggested by counsel in their briefs that the trial court in refusing to grant the writ was controlled by the decision of this court in Eaton, County Treasurer, v. St. Louis-San Francisco Railway Co., 122 Okla. 143, 251 P. 1032. And in view of the rule laid down in that case, we deem an extended discussion here or the citation of other authorities unnecessary, but, instead, reference is hereby made to that case, and guided by that authority, the trial court committed no error in refusing to grant the writ, and its judgment is therefore affirmed.

HARRISON, MASON, LESTER, CLARK, and RILEY, JJ., concur.

NICHOLSON, C. J., BRANSON, V. C. J., and HUNT, J., dissent.