266 Pa. 67 | Pa. | 1920
Opinion by
In June, 1911, the Moorhead Sub-School District of the City of Pittsburgh contracted with the legal plaintiff for material and labor, necessary in the construction of a school building, for the sum of $4,300. Plaintiff completed the work in September, 1911, and on September 29th, the district school board authorized payment and directed that a warrant be issued for the amount, payable January 3,1912. The warrant was subsequently issued and transferred to the Allegheny Trust Company, the use-plaintiff, and, on presentation for payment to the Pittsburgh school district, the successor to the Moor-head Sub-School District under the School Code of 1911, payment was refused on the ground that the Moorhead Sub-School District in issuing the warrant had exceeded the two per cent constitutional limit of indebtedness allowed without a vote of the people. The facts were not in dispute and the trial judge directed a verdict in favor of defendant, from which plaintiff appealed. .
The bonded indebtedness of the Moorhead Sub-School District in 1911 was $290,000, made up of four bond issues as follows: issue of 1905, $115,000; 1907, $30,000; 1909, $134,000; 1910, $11,000. The issue of 1909 was authorized by a vote of the electors of the district, while the other three issues, amounting to $156,000, were created by the school board. This total indebtedness existed in June, 1911, at the time the contract in question was entered into, subject only to a. small deduction to the extent of $1,583.76, consisting of a sinking fund, Avhich will be hereafter considered. The assessed valuation of property within the district in 1911 of $7,548,-480, gave the board a borrowing capacity of $150,969.60. It thus appears the district had borrowed far in excess of its tAVO per cent constitutional limit if the total bonded indebtedness of $290,000 should be included in the calculation.
The first question raised is whether the bond issue of 1909, amounting to $134,000, shall be treated as a debt
It is further argued that if the $134,000 bond issue is eliminated the school district had nevertheless contracted indebtedness beyond its constitutional limit. The remaining indebtedness is $156,000, to which must be added $3,800, debt represented by an outstanding note for that amount, making a total of $159,800 existing at the time the $4,300 contract in controversy was let, aggregating in all $164,100 of indebtedness, from which must be deducted the sinking fund of $1,583.76, leaving a balance of $162,516.25; deducting from this the borrowing capacity of the board $150,969.50, ’there remains $11,546.74, of excess indebtedness to be provided for out of current funds. The rate of school tax for the year 1911 was 6y2 mills, which should realize a total school tax of $49,065.12, to this amount should be added the sum Of $12,295.67, representing taxes assessed in previous years and collected during 1911, making a total available in,come of $61,360.79, out of which current running expenses and the additional debt of $11,564.74 must be pro
The judgment is reversed and the record remitted with direction that judgment be entered for plaintiff for the amount of its claims.