54 N.E.2d 508 | Ill. | 1944
On November 13, 1942, the People of the State of Illinois upon the relation of Reconstruction Finance Corporation and some three hundred fifty other persons, hereinafter referred to as relators, filed a verified petition for writ of mandamus in the circuit court of Cook county against the board of education of the city of Chicago and *524 the members and president thereof, hereinafter referred to as the board, alleging substantially as follows: That the relators were the owners of judgments against the board, all of which were fully described in the petition; that the respondent is a school district constituted by law as a body politic and corporate, charged with the establishment, support, maintenance, supervision and control of free schools for the area within the city of Chicago, Illinois; that said board is required to adopt a budget within the first sixty day of each fiscal year to appropriate such sums of money as may be necessary to defray all necessary expenses and liabilities of the board, to be paid or incurred during the fiscal year; that it is required by statute that the estimates of the expenses of said budget shall include final judgments accruing against the board, and that upon adoption the annual school budget becomes the appropriation bill, and constitutes an appropriation of the funds and moneys to be used for the purposes therein set forth.
In the year 1939 the relator Reconstruction Finance Corporation commenced a certain cause in equity in Cook county against the board, and in response to process duly served the board appeared and defended the cause, and April 28, 1939, a final decree was entered in favor of Reconstruction Finance Corporation. Other allegations are contained showing that all of the several relators obtained judgments against the board in like proceedings, and upon a like basis, and that although such judgments stood unmodified and in full force and effect and unpaid at the beginning of the fiscal year of January 1, 1940, no provision for payment of said judgments was made in the annual school budget.
A description of the time of filing and obtaining decrees in the other cases is set forth and like allegations made that no provision was made for payment thereof in the annual school budget. Some of the judgments have been *525 assigned and the names of the assignees set forth. The relators also charge that since the entry of the judgments they have made demands upon the board, and the members and president thereof, that said judgments be paid, and that respondents bring about the payment of said judgments with interest, and that respondents have failed and refused to pay any of such judgments, or to include them in the annual school budget, or make appropriation for the payment thereof, and that they now threaten to fail to include them in the annual school budget beginning January 1, 1943, and relators pray for a writ of mandamus requiring the board, when it adopts its annual school budget, to include an appropriation for the payment of such judgments so they may become a part of the appropriation for the payment of which a levy of taxes may be made by the board. A copy of the judgment decree in each of said cases is attached to the petition as an exhibit, and will be referred to later.
On June 7, 1943, an amendment to the petition for mandamus was filed, setting forth that, while said cases were pending, a cause had been decided in the United States district court holding the board liable to holders of outstanding unpaid 1929 tax anticipation warrants for their prorata share of the proceeds of the collection of such taxes, and that the General Assembly had enacted a statute authorizing the board of education of any school district constituted by law in any city having a population exceeding 500,000 inhabitants to issue bonds to pay judgment indebtedness, which enabled the board of education to issue such bonds to pay the indebtedness of the relators, and prayed as alternative relief that the board be required to do every act and thing necessary under said statute authorizing bonds to provide funds necessary to pay the several judgments owned by the relators, together with accrued interest. *526
The answer of respondents admits such judgments were entered; denies they are valid; denies that they have been in noway impeached; but, on the other hand, alleges that the decision of this court in Leviton v. Board of Education,
The answer then proceeds to set forth the proceedings under which it had attempted to comply with the act authorizing the issuance of bonds to pay judgments, and the litigation resulting, and described in Leviton v. Board of Education,
The answer further admits that the judgments described in the petition were entered against the board of education after a hearing in open court, but alleges that the respective courts, in entering the same, exceeded their jurisdiction and transgressed the law, and did not have jurisdiction to enter the same in any of the said respective causes, and that said judgments are void. It also admits that there was a statute enacted by the General Assembly, such as set forth in the amendment to the petition, but alleges that said statute was held void in Leviton v. Board ofEducation,
The answer also alleges that the cases in which the judgments were entered are still pending in the courts, and that as a part of the decrees the courts retained the jurisdiction of the causes for the purpose of affording other relief. The respondents further allege that, under the constitution of Illinois, the board is required to provide a thorough and efficient system of free schools, and that if it is required to make appropriations for the payment of the alleged judgments it will not have sufficient income to pay said judgments or any part thereof, and also to continue to comply with its requirement to provide proper schools for children in the Chicago school district, and that it would be compelled to so reduce and curtail the school system and educational facilities that such children would not receive the common-school education guaranteed by the constitution. It then sets forth the limit to which it can raise taxes, together with its resources and liabilities and anticipated school expenses, and shows there is no other money that can be raised other than necessary to defray the necessary expenses of the school system, and that it has no excess revenue, and that it is impossible to raise funds to maintain the school system and to pay the alleged judgments, which amount to more than ten million dollars. A motion to strike the answer and for judgment against the board was made by the petitioners. The motion to strike was denied and, the petitioners electing to stand by their motion to strike, judgment was entered in favor of the respondents, and petitioners appeal to this court.
At the outset, appellants contend that the only contested issue is the validity of the judgments, and that such depends upon whether the record shows jurisdiction of the *528 parties and the subject matter in the several cases in which judgments were entered. Appellees counter with the proposition that a writ of mandamus is not a writ of right, and that its issuance would require the board to violate the constitution of the State of Illinois; that the several courts entering the judgments exceeded their jurisdiction and transgressed the law in that respect.
In support of its contention, appellants cite the long and uniform line of authorities holding that jurisdiction of the parties and the subject matter of a suit make a judgment unassailable in a collateral proceeding, and the appellees, on the other hand, among other things, claim that the decision in the Leviton case holds that such judgments are void. Neither appellants nor appellees present the precise issued indicated by the record in this case, and that is, should the board be compelled by mandamus to budget these claims and levy taxes for their payment?
A proper consideration of this question requires an examination of the decrees entered in the several cases, and which are attached as exhibits to the petition for mandamus. The decree in the case of Reconstruction Finance Corporation is that the court, being advised, finds it has jurisdiction of the subject matter and parties, and that plaintiff is entitled to recover from the Board of Education of the City of Chicago "its pro rata share of all moneys at any time received and disbursed prior to the commencement of this suit by the defendant Board of Education of the City of Chicago, as the proceeds of the taxes collected on the tax levies of the Board of Education of the City of Chicago for Educational purposes and for building purposes for the year1929, against which the tax anticipation warrants legally held bythis plaintiff were issued."
The court found that large amounts of money had been received by the board as the proceeds of taxes collected on account of the levies of 1929, and were diverted and *529 distributed contrary to the requirements of law and in breach of trust on several separate occasions, and on each of such occasions the money so distributed should have been distributedpro rata among all of the owners and holders of the then outstanding warrants. It then proceeds to find from the evidence that the plaintiff is entitled to "have judgment * * * for the respective pro rata amounts of the proceeds of the aforesaid tax levies which the plaintiff should have received, based upon the ratio which the warrants held by the plaintiff bear to the total amount of warrants issued, less the warrants surrendered to the County collector for the payment of taxes from time to time, together with interest at the rate of five (5) per cent per annum upon said pro rata amounts" excluding interest already paid.
The court then finds that the plaintiff is the owner of certain tax anticipation warrants of the taxes levied for the year 1929, aggregating the principal sum of $110,000. It then finds from the evidence that plaintiff, upon the said basis of computation, isentitled to have and recover of and from the defendant Board the sum of $128,913.50, together with interest at the rate of five per cent from the date of decree, and thereupon it orders and decrees that the plaintiff have and recover of the said board the sum above mentioned, and have judgment for same as at common law, and that execution issue in favor of plaintiff against the defendant; and retains jurisdiction to afford such other relief as may be necessary for the collection of the amount found due; and "also for the collection of any other or further amounts upon the said tax anticipation warrants," and for such other relief as the court may thereafter determine the plaintiff is entitled to.
Summarized, the judgment decree in this case finds: (1) that plaintiff is entitled to a prorata part of the 1929 taxes collected; (2) that the board has diverted and misapplied *530 part of such taxes; (3) that the plaintiff is entitled to a judgment for the prorata part of the 1929 taxes; (4) that the plaintiff holds and owns warrants on such taxes aggregating with interest $128,913.50; (5) that on the basis of computation the plaintiff is entitled to said sum; (6) that the plaintiff have judgment for said sum as at common law and that execution issue.
It is plain from the judgment that the matter involved and determined by the court was an accounting for the taxes collected from the 1929 levy, and for the plaintiff's prorata part of such moneys collected as is represented by the holding of tax anticipation warrants. The judgment decree shows upon its face that it never should have been entered, because of the reasons set out in Leviton v. Board of Education, 374, Ill. 594, but it is not now necessary to determine the validity of such judgment in disposing of the real issue of whether the board of education can be compelled by mandamus to levy a new tax to pay judgments showing upon their face that to compel such act will require the board to violate the constitution.
No question of collateral attack is presented by this issue, but the question is whether the relators are entitled to the remedy sought under the disclosure made by their pleading. Thus, in the late case of Leviton v. Board of Education,
We have repeatedly held a tax anticipation warrant does not create a debt; that the legislature is without power to authorize a city to issue bonds to pay warrants *531
where the taxes levied were insufficient to pay them; (Berman v.Board of Education,
We have also held that constitutional limitations of the amount of money that may be raised by taxation cannot be avoided by permitting obligations to take the form of judgments. (People exrel. Cox v. Cleveland, Cincinnati, Chicago and St. Louis RailwayCo.
Looking at the face of the judgments obtained by the relators, it appears that whatever rights they had as holders of the tax anticipation warrants of 1929 were merged into the decree judgments, payment of which they are trying to enforce bymandamus. In Brownsville v. Loague,
In Town of Sparland v. Barnes,
Counsel for appellants cite a number of cases which they contend hold otherwise. (Edmundson v. Independent School Dist.
The distinction between the cases seems plain. (a) If there is authority of law for the creation of the debt, whether it takes the form of bonds, claims, or otherwise, *534
and may be paid from a levy of taxes, mandamus may be employed because, there being authority in law to pay such class of claims, a judgment is deemed conclusive of the merits thereof; thus a municipal officer is not compelled to violate the law in doing the things proper to bring about payment. (b) If there is no authority for the creation of the debt, or if a levy of taxes for its payment would be in direct violation of a positive statute or the constitution, and such fact appears as a part of plaintiff's case when seeking mandamus, the court will not issue the writ to compel a violation of the constitution, because the judgment gives him no new rights with respect to its payment.United States v. County Court,
The nature and character of the plaintiff's claim being fully disclosed upon the face of the judgment, and indicating facts which would require the officers to violate the constitution in order to levy a tax for its payment, mandamus may properly be refused, not because we invalidate the judgment, but because we cannot require public officers to violate the provisions of the constitution. The alternative prayer that the board be required to do all things necessary to issue bonds under the Judgment Refunding Act of 1937 requires no comment, because of our holding that it is unconstitutional. Leviton v. Board of Education,
Another equally cogent reason for denying mandamus in this case is the inability of the board of education to maintain public schools as is required by the constitution, and at the same time levy taxes to pay these judgments. The law has long been settled that the writ of mandamus is not a writ of right, and a court, in the exercise of wise judicial discretion, may, in view of the consequences attendant upon its issuance, refuse the writ.(People ex rel. Akin v. Board of Supervisors,
Considerable discussion has been engaged in by both appellants and appellees as to the effect of the decision of this court inLeviton v. Board of Education,
While we have discussed the facts relating to petitioner, Reconstruction Finance Corporation, the facts with regard to all of the other relators, except in amount and time of procuring judgment, are identical, and therefore do not require special consideration. Many other points are discussed in the able briefs of counsel, which we have carefully considered, but most of which have no application to the question presented, and hence are not discussed in this opinion. *536
We are of the opinion, upon examination of the character and terms of the judgments, as well as the additional facts adduced by the answer of the board, that relators were not entitled to the remedy afforded by a writ of mandamus, and the judgment of the circuit court of Cook county is accordingly affirmed.
Judgment affirmed.