School District No. 6 v. Ætna Ins.

AppletoN, C. J.

The school district number six, composed of the previously existing school districts number three and number six, effected a policy on their school-house with the defendant corporation, dated March 1, 1860, for the, term of one year.

At a legal meeting of this district on the fourth of June, 1860, it was voted to sell the school-house, and a committee was appointed for that purpose, by whom a sale was made on 19th July, 1860, and the purchasers immediately took possession of the building and removed the same to a lot owned by them.

On the first of April, 1861, the plaintiffs effected a renewal of the policy to which we have referred.

On May 11, 1861, the school-house was burned, and this suit is brought upon the renewal to recover compensation for the loss.

If a school district has authority to sell its school-house, and finally to determine the necessity of such sale, and if, in pursuance of such authority a sale has been made, the plaintiffs would have no insurable interest in the school-house. The simple inquiry, then, seems to be whether a school district has a right to do what it pleases with its own.

In the action of coi’porations, the controlling principle is that the majority must govern,' — the majority of those present and voting,t— not of those absent or present and declining to vote. The will of the majority is to be taken as the will of all. It is immaterial whether the vote be unanimous, or with a mere majority of one, the result is the same. In either alternative it is the conclusive determination of the corporation. It is immaterial, too, what may have been the motives of the opposing voters, — all a court can regard is the ultimate conclusion as expressed in and by the record.

By R. S., 1857, c. 11, § 22, "a school district, at any legal meeting called for the purpose, shall have power : —

"First, — To raise money for erecting, repairing, purchasing and removing such school-houses and out buildings as the wants of the district require; for purchasing or renting land for them to stand upon, and for yards and play grounds; for purchasing a library, utensils, blackboards, globes, maps and other useful apparatus ; for providing water for schoolhouses bv means of wells or aqueducts, with necessary conveniences for the health and comfort of teacher and pupils ; and for inclosing the grounds and appurtenances of the school-houses.

"Second, — To determine where their school-houses shall be located.

"Third, — To sell and dispose of any school-house or other property, if necessary.”

School districts may raise money for certain purposes, "as the wants of the district require,” — in other words, as the district may deem necessary. They may furnish " necessary conveniences for the health and comfort of teacher and pupils.” No right of appeal from their judgment is given. What that judgment may be is to be ascertained only by the votes of a majority and, when thus ascertained, it is conclusive. It is not for a jury to say what "the 'wants of the district require,” or what may or may not be " necessary conveniences.” No limitation is imposed upon the district as to the exercise of its judgment in respect to the matters over which it has full power to act.

The question was submitted to the jury to determine whether it was necessary for the plaintiffs to make sale of the school-house in controversy, to which they responded, it was not. But the matter of necessity was a fact for the district to consider and settle, and not the jury.

School districts "have power * '* to sell and dispose of any school-house or other property, if necessary.” The term necessary has relation to the state of mind of the person by whom it is used. The same thing m ay be viewed as necessary by one and as unnecessary by another. The conveniences in a school-house necessary, — and so regarded in one place, would be viewed as unnecessary in another. The "wants” of one district may "require” much more than those of another. A school-house which one district would deem it "necessary” to sell, might be amply sufficient for and satisfactory to another differently situated. So, the majority of a district may deem the sale of a school-house " necessary,” while the minority entertain different and conflicting views. The words " necessary” and unnecessary express only the different states of mind of opposing parties in reference to one and the same act, —and that act is made by law to depend upon the votes of a majority.

The district own their school-house. The voters are interested in the most judicious disposition of .its property. They know the present necessities as well as the future wants of the district better than strangers possibly can. Besides, the matter is thejr business and nobody’s else.

If the district is not the exclusive and final judge of the necessity of a sale of its property, — whatever it may be, then it cannot "sell and dispose” of its property, because it cannot give a perfect title. Its action is only tentative and experimental. The purchaser can at best get but a defeasi-ble title. If the jury are tl|e final judges of this necessity, a lawsuit and a verdict are indispensable prerequisites to ultimately determine the validity of a sale by a school district of any of its property.

The same power exists to sell a school-house as to sell an old stove or table, and if the district cannot finally determine the necessity which would require the sale of the former, neither can they of the necessity which would justify that of the latter.

The power to sell is given absolutely. That includes the right to determine the questions, — shall there be a sale,— is it necessary to sell. The district has full power to determine when to build or buy a school-house. It has none the less to sell or dispose of the school-house it may have built or bought.

The phrase if necessary, in article third, is to have the same effect as the expression in article first, " as the wants of the district require,” or as "if they think proper,” in the fifth article of § 22. In all these, as well as in many analogous instances, the judgment given by the party, to whose action reference is had, is final and conclusive on all.

By K. S., 1857, c. 3, § 26, "the qualified voters of a town, at a legal town meeting, may raise such sums as are necessary for the maintenance and support of schools, and the poor; for making and repairing highways, towuwaya, bridges, &c., &e.; and for other necessary town charges.”

By § 27, towns, cities and village corporations may make such by-laws as they think proper, not inconsistent with the laws of the State, and enforce them by suitable penalties,” &c.

Now are not the qualified voters of a town at a legal town meeting to determine what sums are necessary f Is not their judgment, whether by a larger or smaller majority, conclusive as to the amount to bo raised to meet the necessary town charges ? Is the validity of an assessment to be submitted to the judgment of a jury and to be held void because the jury should happen to differ in opinion from the majority of the qualified voters as to the necessity of the sums voted to be raised? The town could not contract, its municipal action would be suspended, if it were not permitted to be its own judge of the amount needed for roads, bridges, schools and other necessary town charges.

So the by-laws of towns and cities would be of little avail, if their propriety were to be submitted to a jury. One jury might find their propriety by their verdict, while in the judgment of another, they might be deemed improper. The opinion of those to whom the power is specially entrusted, would bo set at naught.

The school district may raise money for erecting, repairing, purchasing or removing a school-house " if the wants of the district require,” &c. But, if the district is not the ultimate judge of its wants, but there is an appeal to a jury, who are to determine what its wants require, then the ultimate judgment is by the jury and not by the district. If the jury differ from the district, then the assessment is void, the contract, based upon such assessment and its anticipated collection would be void, because the district can only build or buy such a school-house as its wants require, and, as the jury will have decided that its wants did not require what the voters of the district voted they did require, and as they are not allowed to be judges of their own wants, the contract based upon the hypothesis that they were to determine what the wants of the district required could not be upheld.

The power given in these and numerous other instances must be exercised. There are duties to be performed, the performance of which can neither be avoided nor evaded. The town would be liable to indictment if it should neglect to make due provision for the performance of the various duties imposed by statute. So far as regards the inhabitants of a town or school district, the vote of the majority, as to a matter over which they have jurisdiction, is conclusive, though, as regards the rights of the State, it may be otherwise.

When a power is to be exercised upon a certain contingency, and the existence of such contingency is submitted to the judgment of an individual or a corporation, their determination that the contingency has arisen is final and conclusive. Thus, the Legislature of Maryland, when incorporating the Mayor and City Council of Baltimore, gave the corporation full power and authority "to enact and pass all laws and ordinances necessary to preserve the health of the city, prevent and remove nuisances,” &c., within certain limits. In commenting upon one of the ordinances of the corporation, passed in pursuance of this power thus conferred, Dorsey, J., in Harrison v. Baltimore, 1 Gill., 276, says, — "To accomplish, within the specified territorial limits, the objects enumerated, the corporate authorities were clothed with all the • legislative powers, which the general assembly could have exerted. Of the degree of necessity for such municipal legislation, the Mayor and City Council of Baltimore were the exclusive judges. To their sound discretion was committed the selection of the means and manner (contributory to the end) of exercising the powers which they might think requisite to the accomplishment of the objects of which they were made guardians.” So, "whenever a statute gives a discretionary power to any person,” observes Story, J., in Martin v. Mott, 12 Wheat., 31, "to be exercised by him upon his own opinion of certain facts, it is a sound rule of construction, that the statute constitutes him sole and exclusive judge of the existence of those facts.” Where, by the terms of the power, the executors are to sell if, in their opinion, it shall be necessary for the purpose of paying debts and legacies, the necessity need not be shown, the conveyance being conclusive. Roseboom v. Mosher, 2 Denio, 51. "It does not seem necessary to inquire into the reasons which actuated the Mayor, Aldermen and Commonalty of the city of New York, in adopting it, (a certain ordinance regulating the running of cars in the city,) nor would such inquiry be proper, because the courts are bound to assume that, when a discretion is vested in a municipal body, exercising functions of a legislative character, good reasons existed for the adoption of a regulation or ordinance which was the result of such discretion.” N. Y. & Harlem Railroad Co. v. Mayor, &c. of N. Y., 1 Hilton, 562.

These are general principles. Their application has been enforced in cases like the present. In Williams v. School District in Lunenburg, 21 Pick., 76, the plaintiff claimed to recover back a tax assessed to pay for a school-house. He " offered evidence to prove that another school-house of brick had been erected by the district but a short time before the one for the payment whereof the tax was assessed, which was sufficient to accommodate all the scholars, and offered to introduce witnesses, inhabitants of the district, who would give it as their opinion that the brick house was all the district required, and that one school-house was all the district intended to have. But the Judge refused to admit the evidence,” and directed the jury to return a verdict for the defendant, to which the plaintiff excepted. In delivering the opinion of the Court, Shaw, C. J., says,— " The plaintiff offered to prove that the district had one sufficient school-house, but the evidence was rejected. We know of no law which prevents a school district, when their school-house is, in their opinion, too small or ruinous, or when, by a change of districts, a school-house, though within the limits of the district, is in an inconvenient situation, or when, for any other cause, it is unfit for the purposes for which a school-house is intended, to. vote to build another before the former is actually taken down.” If the evidence offered had been proper for the jury, the exceptions most manifestly should have been sustained. In Spaulding v. Lowell, 23 Pick., 80, the action was to recover back a tax assessed to pay for a market-house. It was objected, among other grounds, that the house was larger and more expensive than was necessary. " As to the size and other circumstances of the building,” obsexwes Shaw, C. J., "if the accomplishment of the object was within the scope of the corporate powers of the town, the corporation itself was the proper judge of the fitness of the building for its objects, and it is not competent in this suit to inquire whether it was a larger and more expensive building than the exigencies of the city required.” Accordingly a nonsuit was ordered. In Haven v. Lowell, 5 Met., 35, a bill in equity was brought to compel the specific performance of a contract to purchase land for a market-house, which the city had made, but refused to perform, on the ground that the land was not necessary for the purpose contemplated by the city. The Court refer to the decision in Spaulding v. Lowell, approve it and hold that whether necessary or not was a question for the city to determine, and, having so determined, the contract was held valid and a decree entered for its performance. In George v. School District in Mention, 6 Met., 510, an action was brought to recover back a tax assessed for building a school-house. The objection was taken that the house and site were more expensive than accessary. "We cannot,” remarks Shaw, C. J., in delivering the opinion of the Court, "take into consideration various other objections, turning upon the question whether the site of the house was a good one; whether the contract was beneficial or judicious, &c.; these were questions for the 'Consideration of the district, to be determined according to their view of their wants of a school-house and its incidents and are entirely within their jurisdiction.”

These authorities seem to establish the proposition that, when an act is within the scope of a corporate power, the corporation are the exclusive judges of the necessity of the cut and of the means to accomplish it, as between the corporation and its members.

The argument from the possible abuse of a power proves nothing against its existence. The district may err in their judgment as to their wants and the best means of supplying them. But a jury is not infallible, and they too may err. It is difficult to conceive of a power the exercise of which is not susceptible of abuse, but it by no means follows that, for that cause, the power does not exist, or that there should he an appeal from one fallible tribunal to another, at least equally fallible, to correct the possible mistakes of the former or to commit greater ones.

The district had power to build, or purchase, or to sell what had been built or purchased, and to determine the necessity of doing the one or the other. If it cannot determine the size and general form of the structure to be built and raise money to pay for its erection, then no one can safely contract with it, for a jury, accidentally assembled by lot, may differ in judgment, as to the size and cost of the building, and vacate the whole proceedings. So, it may vote to sell. The purchaser has nothing to do with the district and is not responsible for its action. ITe finds a duly recorded vote to sell, passed at a legal meeting, upon the strength of which he purchases and pays the price, and removes the building. Is his purchase to be null because a jury happen to differ in judgment from a majority as to the necessity of a sale by the district? If such be the law, it is manifest that the price of a school-house, to be purchased or built, will be increased, or, if to be sold, will be diminished, from the uncertainties in case of controversy, as whether a jury will concur or non-concur in judgment with the district.

In certain -instances the power of the district is not nor was it intended to be final, and special provision is made for an appeal from its decision to that of the town, as in § 24, where, in case a majority decline raising a sum of money sufficient in the opinion of the minority, thej may have, by their appeal, the judgment of the whole town. So, in case of a disagreement as to the location of a school-house, provision is made by § 27 for a tribunal to settle the controversy. By § 30, the plan for a school-house is required to be approved by the superintending school committee.

When the Legislature do not intend that the action of the district should be final, they give the special right of appeal and not otherwise. But no supervisory power is given to control, — no appellate jurisdiction is granted to correct the doings of a district in reference to the purchase or sale of its own property. It is much more consonant with'our institutions that corporations as well as individuals should be allowed to dispose of their property according to their judgment of the necessity and expediency of so doing,— rather than to leave the question to that of any other body of men, howsoever constituted.

In fine, it is for the district to determine whether or not the necessity exists for a sale of its property. Of this necessity they are the conclusive and most fitting judges. The vote of a majority is the legal expression of that judgment.

It follows, that the submission of the necessity of the sale to the jury was erroneous, and that they were required to pass upon a question with which they had nothing to do. The evidence relating to the greater or lesser degree of necessity of such sale should not have been received. The district having acted wisely or unwisely, — the jury, upon evidence of those who voted for or against the sale, should not have been permitted to overrule and nullify the- action of the district and determine how they should have voted.

But the jury, it is argued, have found the sale fraudulent on the part of the school district. But there is no pretence of any fraud, save that inferrible and deducible from an alleged want of necessity to sell. The majority of the district voted to sell. The jury think it was not necessary to sell,— and, from that solitary premise, infer fraud. But, if the right to buy, build or sell school-houses was a matter left by statute to the discretion of the district, it is difficult to see how there can be fraud on their part in doing or refusing to do what the statute gives them the power to do or refrain from doing. Their action may be unwise, injurious or inexpedient, but folly, lack of judgment or want of expediency do not constitute fraud.

It is equally difficult to maintain the proposition that a corporation by its own vote can defraud itself. It may be defrauded by others, but, that it can, by its own vote, commit a fraud upon itself, is sheer nonsense.

If the corporators have been wronged or defrauded, they must seek a remedy by such process as the law affords them, but this case presents the astounding novelty of the party seeking to avoid his act on account of his own fraud.

If there has been any violation of any law of the State, the State must proceed according to the recognized mode of procedure.' But neither the State nor the corporators invoke the aid of any law or complain of any violation.

The plaintiffs’ claim is not aided by the alleged fact that its conduct was fraudulent and in contravention of the object and purpose of the law which provides for the education of tbe people. An individual is not allowed to rescind a sale made by him in fraud of his creditors, and base his right of rescission upon his fraudulent conduct. The claim of the district is strong only in the direct proportion of its violation of the objects and purposes of the statute.

If the sale was fraudulent, — with intent to evade the statute and in hostility to great objects of education, still, the district did vote to sell, — a sale was made, — possession taken under that sale, — and the price paid.

The presiding Judge instructed the juiy "that the plaintiffs cannot predicate their right to recover in this action on its own want of good faith in voting to sell the school-house or in making sale thereof in pursuance of such vote.” If this be law, it is difficult to see on what grounds the plaintiffs can recover, for they constitute the only substantial foundation of their claim.

If a sale is voidable on account of fraud, the party defrauded cannot rescind the sale without placing the party by whom he was defrauded in statu quo, or offering to do it. The law cannot be deemed more lenient to the party by whom the fraud is committed. Here, if there be any fraud or violation of law, the plaintiffs are those committing the fraud or violating the law. If therefore they would rescind the sale, they would seem to be bound at least to tender the notes and money received, in other words, to do what is required in cases of rescission.

The district having given authority to sell and a sale having been made in pursuance of such authority, by its legally constituted agent, and the purchasers having taken possession of the school-house, if the district have not rescinded the sale, if it was made under such circumstances as gave it the right of rescission, the renewal of the policy would be void for the reason that district No. six had no then existent title to the property insured.

A sale had been made. If valid, the sellers, after the sale, had no insurable interest. If voidable, the title none the less passed and, before it could be reacquired, there must be a rescission of the contract of sale.

No rescission is shown. The vote of District No. 6, on 19th March, "to put the new school-house back on the old spot,” would not constitute a rescission. The district, by its legal agent, bad ten per cent, of the price of the schoolhouse in money and the notes of the purchasers. These have neither been returned nor had they been offered to the purchasers prior to the pretended renewal of the policy.

There had been a change of title between the date of the original policy and the alleged renewal, which was not disclosed to the insurers. This, by the very terms of the policy, rendered it void. It is immaterial to the then defendants whether the sale was valid or voidable. In either event there was a change of title, and none the less a change though the sale may have been made under a state of facts which would have authorized the seller to rescind the sale.

Exceptions sustained — JSTew trial granted.

CUTTING, Walton and Dickersok, JJ., concurred. Tatley, J., concurred in the result. Dakitorth J., having been of counsel, did not sit.