54 N.E.2d 498 | Ill. | 1944
In this consolidated cause, appellant, Board of Education of the City of Chicago, seeks a reversal of orders denying its motions to vacate the judgments in seven separate cases. In No. 27489, Chicago City Bank and Trust Company et al. v. Board of Education of the City of Chicago; No. 27490, Irving K. Hutchinsonet al. v. Same; No. 27491, Waukesha Lime Stone Company et al. v. Same; No. 27492, F.J. Lewis v. Same; No. 27493, Boston Stock Exchange et al. v. Same; and No. 27494, Reconstruction Finance Corporation v. Same, the orders from which the appeals were taken were entered by the circuit court of Cook county. In No. 27495, Chas. H. Deppe et al. v. Board of Education of the City of Chicago, the appeal is from an order entered by the superior court of Cook county. The judgments which appellant sought to have the courts below set aside were entered in 1938 and *510 1939, against the board of education, alone. The motions to vacate were filed in November, 1942.
The judgments here involved are those referred to in the opinion in Leviton v. Board of Education of the City of Chicago,
From the pleadings it appears that for the year 1929, taxes were levied for school purposes in the city of Chicago, aggregating approximately $95,000,000. Anticipation warrants were issued against the taxes so levied in excess of $63,000,000. The total anticipation warrants issued were less than 75 per cent of the taxes levied. However prior to the time the taxes were actually extended, the assessed valuation of real estate was materially reduced by a reassessment which was ordered by the State Tax Commission. This delayed the extension of the taxes for some two years. The taxes actually extended were slightly in excess of $66,000,000. As the taxes were collected, the funds applicable to the payment of anticipation warrants were not distributed pro rata to the payment of outstanding warrants. The warrants were paid in the order in which they were issued. As a result, some of the warrants were paid in full and no payments whatever were made on others. At the time these suits were instituted, some $53,000,000 of the warrants had been paid, leaving unpaid warrants in excess of $10,000,000, plus accrued interest, for the payment of which there were no funds available from the taxes collected.
In 1933 the legislature passed an act purporting to authorize school districts in cities having a population exceeding 500,000 inhabitants, to issue bonds for the purpose of paying outstanding unpaid tax anticipation warrants. (Laws of 1933, p. 1012.) This Act was held invalid by this court in Berman v. Board ofEducation,
In 1937 the legislature passed an act purporting to authorize school districts in any city having a population exceeding 500,000 inhabitants, to issue bonds to pay judgment indebtedness based upon any order or decree of any court of record, theretofore or thereafter entered. (Laws of 1937, p. 1083.) On September 15, 1939, steps were taken for the issuance and sale of $80,000 of bonds for such purpose, purporting to be issued under the authority of said statute. Said bonds were to be issued for the purpose of discharging the judgment entered in cause No. 27492, on this appeal, in favor of F.J. Lewis. This judgment was entered on April 21, 1939. Prior to the proposed issue of bonds referred to, judgments had been entered in all of the other cases consolidated on this appeal, except No. 27495. The judgment in that case was entered later. These judgments aggregated several million dollars. The validity of the act of 1937, purporting to authorize such bond issue, was challenged by a taxpayer inLeviton v. Board of Education,
Thereafter, the board of education filed a motion in each case to vacate the judgment. These motions were based on the ground that the judgments were alleged to be void. This contention is based on the fact that the judgments were entered against the school board for the wrongful diversion of taxes collected, applicable to the payment of anticipation warrants. The liability, established by the judgments sought to be set aside, is based upon the failure *512 of the officers of the school board to distribute the taxes collected to the payment of all outstanding anticipation warrants pro rata. The finding in the judgment, as to the basis of the liability in each case, is substantially as follows: "(II) The Court finds that large amounts of money have been received by the Board of Education of the City of Chicago on account of said tax levies and have been wrongfully diverted and distributed contrary to the requirements of the law and in breach of trust on several separate occasions prior to the filing of the complaint herein, and on each of said occasions the money so distributed should have been distributed pro rata among all of the owners and holders of the said tax anticipation warrants, including the plaintiffs. (III) And the Court finds from the evidence adduced and from the accounting had in open court that the plaintiffs, and each of them, are entitled to have judgment against the defendant, Board of Education of the City of Chicago, for the respective pro rata amounts based upon the ratio of the warrants held by each of the plaintiffs, respectively, to the total amount of warrants issued, less the warrants surrendered to the County Collector for the payment of taxes from time to time, * * *."
It should be noted in this connection that the warrants involved were all issued prior to the passage of the 1935 amendment to section 132 of the School Law, requiring such warrants to be numbered consecutively and paid in the order issued, beginning with the lowest number. Ill. Rev. Stat. 1943, chap. 122, par. 155.
In the Berman case this court held that the tax anticipation warrants, which constituted the basis for the judgments, were not liabilities of the school district; that the act of 1933 purporting to authorize the school district to issue bonds for the payment of such warrants was invalid for the reason that this would constitute the use of tax funds of the district for a noncorporate purpose, in violation *513
of section 9 of article IX of the constitution. The decision in the Berman case is supported, in principle, by an unbroken line of decisions of this court. In commenting on that case in Leviton
v. Board of Education,
Thereafter, by the passage of the act of 1937, the legislature attempted to confer upon school districts, in any city containing more than 500,000 inhabitants, the power to issue bonds to pay judgments. It was held in the Leviton case that this act also violated section 9 of article IX of the constitution, in so far as it purported to authorize the issuance of bonds to pay judgments which had been entered on anticipation warrants.
As already stated, the judgments here were based upon the supposed liability of the school district resulting from the failure of its officers to distribute taxes collected, applicable to the payment of anticipation warrants, pro rata. The rule announced by this court in Rothschild v. Village of Calumet Park,
A school district is a quasi-municipal corporation. Such corporations are not liable for a breach of duty of their officers. Leviton v. Board of Education,
Appellees deny the application of this rule. They contend that the judgments were entered in cases where the court had jurisdiction of the parties and of the subject matter; that the judgments became final with the expiration of thirty days from the dates they were entered, and that the courts below were without jurisdiction to vacate said judgments after that time, although it be conceded that they were erroneously entered.
The question of the liability of the board of education for the payment of the anticipation warrants here involved, and its right to pay such warrants with funds raised by taxation, was first before this court in Berman v. Board of Education,
In the course of the opinion in that case, it was held that these anticipation warrants were not liabilities of the *515 school district; that the payment thereof from the proceeds of the sale of the bonds, which would have to be paid by taxation, would clearly violate section 9 of article IX of the constitution. Thereafter, the judgments here involved were entered.
In Leviton v. Board of Education,
The question was next before this court in People ex rel. Toman
v. Granada Apartment Hotel Corp.
The Leviton case, (
This review of the former cases, involving the litigation of the same question involved on this appeal, has been made for the purpose of demonstrating that it has been definitely settled by those decisions that the board of education could not be held liable on the anticipation tax warrants and could not lawfully pay the same, even after the supposed liability had been changed into a judgment against the school board, purporting to have been entered, not on the warrants, but on a supposed liability of the district, growing out of the wrongful distribution of taxes collected, applicable to the payment of the warrants. *519
The result is that it has been settled by the decisions of this court that the board of education is not liable to pay the judgments here involved, nor can it lawfully do so, with funds raised by taxation, under section 9 of article IX of the constitution. It has no other means of raising money. This is tantamount to a decision that the judgments created no liability against the board of education, and cannot be paid by it, under the constitution. As the record now stands, the judgments are judgments of record which, under the above decisions of this court, the board of education cannot lawfully pay. By the final decision in the Leviton case,
From the foregoing, it would seem obvious that the questions presented by this appeal are essentially academic, if not actually moot.
A question is said to be moot when it presents or involves no actual controversy, interests or rights of the parties, (Wick v.Chicago Telephone Co.
The leading case on the subject is Mills v. Green,
The question of whether the judgments here involved are valid or invalid, and the question of whether such judgments should now be vacated, have been rendered wholly abstract and academic by the prior decisions of this court. Under those decisions the payment of the judgments by the board of education cannot be enforced. Those decisions go further, and hold that the board cannot lawfully pay such judgments with money raised by taxation. The only means by which the board may raise funds for any purpose, is either by taxation direct or by the sale of bonds payable by taxation. In either event the result is the same. All questions concerning the duty and lawful authority of the board of education to pay either the anticipation warrants or the judgments entered thereon, or based on the acts of its officers in the alleged wrongful distribution of tax money, available for their payment, have already been finally settled. This renders the question of whether the judgments shall remain of record as evidence of a potential liability which the board cannot pay, and which it has been enjoined from paying, or whether such judgments be vacated, purely abstract and, in effect, to all intents and purposes, moot. The decision of this court on the question of whether the courts below were either right or wrong in denying the motions to vacate the judgments, would afford no relief to any party to the judgments. In this case no effective relief could be granted to the board of *522 education by vacating the judgments, for the reason that it has already been held by this court that the board is not liable to pay the judgments, and cannot lawfully do so. No effective relief could be granted to the appellees by the affirmance of the orders denying the motions to vacate the judgments, for the reason that this court has already held that such judgments are unenforceable against the board. It has been permanently restrained and enjoined from the payment of the judgments out of funds raised by taxation, or from the sale of bonds, payable by taxation, its only sources for obtaining funds for any purpose.
For the above reasons, all of the questions involved in the appeals in this consolidated cause are purely academic and raise only abstract propositions which have already been decided by this court in its decisions in the same and similar litigation. Since no effective relief could be granted to either party on the questions raised, those questions have become moot. The appeals will, therefore, be dismissed.
Appeals dismissed.