Commercial State Bank v. School District No. 3

The two contentions of plaintiff's counsel which we shall consider are these: (1) That the district board was authorized by section 5676, 2 Comp. Laws 1915, then in force to make the repairs on the schoolhouse and to borrow money in anticipation of the tax; and (2) that the district ratified the action of the board. Defendant's contention is that the board under the guise of repairing the schoolhouse practically built a new schoolhouse and that ratification of the action of the board was not efficient because no notice was given in the notice of the annual meeting that such question would be brought before the meeting.

This record does not sustain the contention of defendant's counsel, evidently accepted by the trial judge, that the work done practically amounted to the erection of a new schoolhouse. It is true that the old schoolhouse was only insured for $1,000 and after the repairs costing $2,500 were made the insurance was increased $2,000, but there was no testimony as to the value of the old building or that the insurance either before or after the repairs approximated its value, nor does an examination of the report of the treasurer showing in detail the purpose for which the money was expended disclose any items paid for which might not be used in the repair of an old building. Not infrequently, as many have learned from experience, the cost of repairing an old building and putting it in shape for use exceeds the value of the old structure. This record does not make a case of the erection of a new schoolhouse, either actually or practically, and the issuance of bonds in payment therefor, and the provisions of Act No. 43, Pub. Acts 1919 (Comp. Laws Supp. 1922, § 5712), are not applicable.

Section 5676, 2 Comp. Laws 1915, since amended by Act No. 315, Pub. Acts 1921 (Comp. Laws Supp. 1922, § 5676), was in force when the proceedings here involved were had. So far as important here it provided:

"The district board shall have authority to vote such taxes as may be necessary for the regular running expenses of the school, which shall include school furnishings, and all appurtenances, the care of school property, teachers' wages, water supply, premium upon indemnity bond for the treasurer of the district, transportation of the pupils, record books and blanks, and all apparatus and material which may be necessary in order that the schools may be properly managed and maintained, and for the services of district officers. All such taxes when collected and received shall be accounted for under the title of 'general fund.' * * * When the taxes herein provided for have been estimated and voted by the district board, they shall be reported for assessment and collection the same as other district taxes. When any tax has been estimated and voted by the district board or by the district under the provisions of law, and the money is needed before it can be collected, the district board may borrow on the strength of such tax a sum not exceeding the total of such tax."

It was manifestly the intent of the legislature that the district board should see that the school property was maintained in a usable condition and supplied with all the apparatus and material necessary to the proper conduct of the school. In Creager v. School District, 62 Mich. 101, where the liability of the district for the erection of a line fence was involved, it was said:

"The word 'appendage,' as used in our school statutes, does not mean simply the school apparatus to be used inside the building; nor do I think it can be limited to such articles as brooms, pails, cups, etc., but must be construed in a broader sense, as it has in other courts, to include fuel, fences, and necessary outhouses."

New seats may be purchased (McLaren v. Town Board of Akron,48 Mich. 189) and heating and ventilating systems installed (Waterman-Waterbury Co. v. School District, 183 Mich. 168,174), and obviously a considerable discretion must be vested in the district board. The money need not be in hand before the action is taken (Hamtramck Township Board v. Holihan,46 Mich. 127); it may be borrowed in anticipation of the tax (see statute above quoted, Kelsey v. Township of Burns, 223 Mich. 173) . This court has held as have other courts that where the power exists in a municipal corporation to bind itself, where the contract isintra vires, it will be bound even though it may have proceeded irregularly and in disregard of directory provisions as to the exercise of its power. Coit v. City of Grand Rapids, 115 Mich. 493;City of Saginaw v. Consumers' Power Co., 213 Mich. 460, and cases cited at page 480.

But laying aside every other consideration we are persuaded that this record discloses unequivocal ratification of the acts of the district board. The school district itself might have authorized this expenditure or even voted a tax to pay for an entirely new building. Section 5667, 2 Comp. Laws 1915, subdivisions 6 and 7. What the district at its annual meeting could authorize, it could subsequently ratify at an annual meeting. Wheat v. Van Tine, 149 Mich. 314; Crane v. SchoolDistrict, 61 Mich. 299; Davis v. Mayor, etc., of Jackson,61 Mich. 530; Haney School Furniture Co. v. SchoolDistrict, 133 Mich. 241; Jones v. School District, 110 Mich. 363 . And in Stockdale v. School District, 47 Mich. 226, this court held that the school district at its annual meeting might authorize payment to a contractor in excess of the contract price for the erection of a schoolhouse where there was a moral obligation and it was equitable so to do. This case was cited with approval in Michaels v. McRoy, 158 Mich. 605. In the instant case the money furnished by plaintiff was devoted to repairing and making usable defendant's schoolhouse. What each dollar was used for was reported by the treasurer to the annual meeting and approved by it. At an annual meeting by resolution quoted in the statement of facts the loan procured from plaintiff by the board was expressly ratified. But it is insisted that in the notice of the annual meeting nothing was said about voting on the question of ratification and therefore such action could not be taken. But the meeting was the annual meeting held at the time fixed by statute, and no call or notice was necessary. Auditor General v. Sparrow,116 Mich. 574, 596. Upon this record the trial judge should have directed a verdict for plaintiff.

The judgment will be reversed and a new trial granted. Plaintiff will recover costs of this court.

WIEST, C.J., and McDONALD, CLARK, BIRD, SHARPE, MOORE, and STEERE, JJ., concurred.