Schwing v. McClure

166 N.E. 230 | Ohio | 1929

Lead Opinion

The statute in force in 1910, when the deed in question was executed, did not create any trustees in a township school district. Hence reference will be made throughout this opinion, not to the trustees, but to the board of education of the Crosby school district.

The Court of Appeals based its conclusion upon Section 7730-1, General Code, which provides that under certain circumstances a school building shall not be sold by the board of education of the district until after four years from the date of suspension of such school, and makes further provision for selling the building and grounds of such a school, etc. This statute, however, does not affect the particular problem set out in this record. It became effective in July, 1925, long after the date of the deed, September 12, 1910, and hence could not alter the rights of the grantor and the grantees as fixed therein. To hold otherwise would be to impair the obligation of the contract, for it would restrict the force of the agreement and alter its meaning. 6 Ruling Case Law, 323 et seq.; Goodale v. Fennell, 27 Ohio St. 426, 22 Am. Rep., 321.

Neither can this case be decided upon the rule of law laid down this day in In re Copps Chapel Methodist Episcopal Church, cause No. 21246, ante, 309, 166 N.E. 218. In that case this court held that where a deed to church trustees contains no provision for reversion or forfeiture, even though it declares that the grantees and their successors are to have and to hold said property so long as said lot is held and used for church purposes, all of the estate of the grantor is conveyed by such deed to the grantees. In the instant case, however, the deed contained a reverter clause, providing that "if at any time the premises herein described shall cease to be used for school purposes, the same shall at once vest in said grantors, their heirs and assigns forever," which completely differentiates the two cases upon the facts. Indeed the school board makes no claim here to the land.

It is to be observed that this case involves not merely a contract between private parties, but a contract made between private parties and public officers. It involves the question whether public officers can by indirection dispose of public property in a manner in which they could not dispose of such public property if acting directly. A member of a school board, while he is not a township, county, or city officer, is a public officer. 35 Cyc., 899; Ogden v. Raymond, 22 Conn. 379, 58 Am. Dec., 429; Morse v. Ashley, 193 Mass. 294,79 N.E. 481; Cline v. Martin, 94 Ohio St. 420, 115 N.E. 37; Wogoman v. Board of Education of Rural School Dist. of Perry Twp.,95 Ohio St. 409, 116 N.E. 1087; Leatherman v. Board of Educationof Allen County, 96 Ohio St. 596, 118 N.E. 1083.

The strictness with which the powers of public officers are to be exercised is evidenced by a great variety of cases, ending in this state with the decision in State, ex rel. A.Bentley Sons Co., v. Pierce, Auditor, 96 Ohio St. 44,117 N.E. 6, which holds that the contractual power of an officer or board is fixed by the statutory limitations upon his power, and that any doubt as to the power of a public officer, as between himself and the public, must be resolved in favor of the public and against the officer. Public officers have no power except such as expressly given. Ireton v. State, ex rel. Hunt, 12 Cow. C. (N.S.), 202, 21 Cow. D., 412, affirmed without opinion, 81 Ohio St. 562, 91 N.E. 1131; Peter v. Parkinson, Treas., 83 Ohio St. 36, 93 N.E. 197, Ann. Cas., 1912A, 751.

It is in line with this theory that estoppel cannot supply a total want of statute power for purely public purposes.Board of Education of Village of Westwood v. Sinton, 41 Ohio St. 504; Lee, Treas., v. Sturges, 46 Ohio St. 153,19 N.E. 560, 2 L.R.A., 556. This proposition has been applied in this state directly to boards of education. In the case of State, exrel. Clarke, v. Cook, Aud., 103 Ohio St. 465,134 N.E. 655, this court held that boards of education and other similar governmental bodies are limited in the exercise of their powers to such as are clearly and distinctly granted. This rule was drastically applied in the case of IndependentSchool District of Douds v. McClure, 136 Iowa 122,113 N.W. 554, which held that the defendant, in conveying a schoolhouse site, was charged with notice that the title to such site was acquired subject to the reversal of the action of the board of directors of the school district, and that, hence, when the action of the board in purchasing the site had been reversed, the district can recover back the purchase price without tendering a reconveyance of the property. While this case did not involve a reverter of the land, it was based upon the proposition that those who deal with officers of a school district are charged with notice of the scope of their authority, and that the school district is bound only by such contracts as are authorized by law.

It would be clearly ultra vires on the part of the school board to convey this school building to the heirs of the grantor without consideration, although by proper deed executed in compliance with every formal and technical requirement. Public officers intrusted with public funds or public property cannot give them away, nor can they pass title to public property except when acting within their strict powers. Property devoted to public use can only be disposed of by express authority, and a school corporation must pursue the statutory method of disposing of its property. Caldwell v.Bauer, 179 Ind. 146, 99 N.E. 117.

In 1910, at the time this deed was executed, Section 3953, Revised Statutes (2 Bates Ann. Ohio Stats. [6th Ed.]), provided that the income from the common school fund should be applied exclusively to the support of common schools. At that same time, Section 3971, Revised Statutes, provided that when a board of education decides to dispose of any property, real or personal, exceeding $300 in value, it shall sell the same at public auction. If the schoolhouse was worth $300, this statute would have applied. Can the board, by mere acquiescence in the terms of the deed, wipe out such limitations upon their power?

Schwing was presumed to know these provisions in the statute. He was presumed to know the strict bounds set upon the power of the school board in the use and disposal of public property. While no fraud was charged in the petition, and none is imputed to Schwing in this opinion, at the time the deed was executed he was himself a member of the school board, and had unusual reason for being actually acquainted with the statutory restrictions upon the school board's power. To hold now that this school building, erected with public funds, which perhaps could not have been sold directly, except at public auction, passes to him without consideration, violates the entire meaning and intent of these restrictive statutes.

There are certain decisions of the lower courts in this state which under such circumstances have held that the board of education is entitled within a reasonable time to remove the school building, upon the ground that it is a trade fixture. The majority of the court does not concur in this conclusion. An extensive search of the digests discloses a surprising want of authority upon the particular question, and also some authority counter to this proposition. New Hebron ConsolidatedSchool Dist. v. Sutton (Miss., 1928), 118 So. 303. Such decisions, however, do not discuss the feature of the case which we consider all-important herein.

State, to Use of Inhabitants, etc., v. State Bank,5 Ind. 353, is a decision which we consider sound, based upon the general proposition which we think controls this case. In that controversy, a school commissioner had loaned to an applicant $1,527 of school funds, taking a mortgage as security therefor. Under the express letter of the statute, the school commissioner was not authorized to loan more than $300 to any one applicant at a time. The court held that the mortgage given to secure the loan was absolutely void. The fifth paragraph of the syllabus states: "A school commissioner is not a mere agent, but an officer whose duties are prescribed by law, and any act of his, in direct conflict with a statute, is a nullity."

There was nothing in the statutes of Ohio in 1910 which authorized a board of education to use public funds to erect a public school building, and to convey such school building without consideration to any party whatever. No such power was necessarily implied from the powers which were expressly given. Since there was a total want of power in the school board to accomplish this result, acting directly, it could not be consummated by the mere acceptance of a deed containing a reverter clause under which the land itself goes back to the heirs of the grantor.

We, therefore, hold that the schoolhouse remains the property of the school district, and that the Court of Appeals was correct in adjudging that the trustees have the right to sever it from the realty, in spite of the reverter clause in the deed.

The judgment of the Court of Appeals will be affirmed.

Judgment affirmed.

KINKADE, ROBINSON, JONES and MATTHIAS, JJ., concur.

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Dissenting Opinion

I am not able to agree either with the reasoning or the conclusions reached by the majority in this case. I do, however, concur in the concessions stated in the majority opinion. I agree that this case has nothing in common with cause No. 21246, ante, 309, this day decided. I agree with the majority of the court that a school building is not a trade fixture. It follows from this that it is a general fixture and therefore subject to the rule declared in Teaff v. Hewitt,1 Ohio St. 511, 59 Am. Dec., 634, because it is a building of a permanent nature set upon stone foundations. I also agree that the deed contains a clause limiting the use of the land to school purposes, and that on default thereof the property reverts to the grantor.I also agree that the school at that particular location was legally, regularly, and definitely abandoned, and that the premises will not in the future be devoted to school purposes. I also agree that Section 7730-1, General Code, has nothing to do with this controversy. I put this action upon a broader ground than that stated in the majority opinion. It is not in the power of a Legislature by statute to create or destroy property rights. This section did not purpose to do so. If the buildings belong to the school board, the board may sell them four years after the abandonment of the purpose to conduct schools at that location. If the buildings belong to the land, and the land reverts to the grantor, the board has no title to either the buildings or the land and could never therefore at any time legally sell the same. This case therefore resolves itself into a question of ownership. The majority opinion disposes of that question upon the theory that any clause of reversion and forfeiture affecting buildings would be illegal and void, and as a result of such claimed illegality the law of fixtures, which would apply without question between individuals, will be denied application. This form of conveyance, and similar limitations upon the use of property conveyed, and similar clauses of reverter and forfeiture, have been employed for more than 100 years by rural boards of education and hundreds and perhaps thousands of school buildings have been abandoned and forfeited in the rural districts of the state during the last 100 years, yet in not a single reported case have the courts of this state ever branded such transactions with the taint of illegality. I agree that members of school boards are public officers, and that their official duties are prescribed, and that their contractual powers are fixed, and that all doubts relating to the exercise of those powers and duties should be resolved in favor of the public. I deny, however, that there is any doubt about the duties of school boards in cases similar to the present controversy, and I deny that there is any doubt as to the strict regularity of this transaction in all its phases. I agree that a school board cannot give away school property, and that it would beultra vires to make a conveyance of a school building without consideration, but I deny that this transaction has any of the elements of a gift. The reference in the majority opinion to Section 3953, Revised Statutes (now Section 7579, General Code), has no application to this controversy. Section 7587, General Code, was in full force and effect in 1910, that statute providing that the school levies shall be divided by boards of education into four funds, viz., tuition fund, building fund, contingent fund, and bonds, interest, and sinking fund. It was always the practice to pay the proceeds of the state common school fund into the first of these funds, viz., the tuition fund. Not a penny of the cost of school buildings ever was or ever could be legally drawn from the state common school fund. Section 3971, Revised Statutes (now Section 4756, General Code), forbids the sale of property of a board of education exceeding $300 in value otherwise than by public auction; but this has no application to the present controversy. If the building is adjudged to be the property of the board of education, and it is worth more than $300, it is of course its duty to sell at public auction. If it is adjudged to belong to the grantor of the deed it should not sell it at all.

The majority opinion discusses this controversy upon the theory that the grantor and the members of the board entered into an unlawful transaction to do indirectly that which they could not do directly. It is apparently a part of that theory that the action of the school board in accepting a deed with a clause of forfeiture and reversion was for the same reason an illegal act, and that the board could accept the conveyance, and that that portion of the transaction would be legal, but the condition in the deed, which operated as a part of the consideration, would be a nullity. First of all, let us inquire whether there was any illegality about that transaction, and whether the board could legally accept a conveyance containing a condition of reverter and forfeiture. If William Schwing had refused to make a conveyance in fee simple without condition or limitation, the board of education would have had no recourse except to condemn the property for school purposes. By such condemnation the board would have acquired only the right to use the premises for school purposes, and upon abandonment of the school the land would have reverted to the grantor. In such event the board of education would have acquired exactly the same title which it received by deed. The authorities on this point are so clear that citation is unnecessary. Inasmuch as it is conceded that the doctrine of trade fixtures does not apply, any permanent structure erected on the land, even though erected for school purposes, became a part of the real estate, unless it shall be held that the law of fixtures has no application to public property. If this is the law, it is quite certain that it has never been so declared in any reported case to be found anywhere. That the contrary is the law must be accepted as conclusive because it has been the uniform custom in the state of Ohio for one hundred years.

We should not lose sight of certain social and economic facts which have a strong bearing upon this controversy. The locations of one-room school buildings in the rural districts were subject to constant change prior to the time the centralization plan became effective in Ohio. No farmer sought to make a sale to the board of education. The school building was of necessity located either at the geographical center of the district, or the center of population, and wherever that point proved to be the school was located, and in the majority of cases the conveyance was made for a nominal consideration, certainly with no idea of profit to the farmer. As the population increased the center of population naturally shifted, and rural school buildings were constantly being changed from one location to another. Buildings were erected in rather flimsy fashion, and building materials were so cheap that the inconvenient building of former days always gave place to a larger building, better adapted to school purposes. All roads were unimproved and little attention was paid to the character of highway upon which the building was located. As highways began to be improved it became more and more important to locate the buildings upon improved highways. In the early days the farmers were much more interested in having a good school than in making a small profit out of a possible abandoned school building. The farmers of those days had not caught the spirit of the present generation in seeking to sell property to the public at grossly exorbitant prices.

The majority opinion apparently proceeds upon the further theory that a building erected with public funds becomes subject to a rule different from that which would apply as between individuals. Under a monarchial government such a theory might have some recognition. Under our form of government, sovereignty is not separated from the people, who are themselves sovereign. Numerous cases have been decided by this court in the past clearly establishing that the state has no advantage over individuals, and that any contract between private parties and public authorities must be subject to the same rules, as though both parties to the contract were individual citizens. In State v. Exr. of Buttles, 3 Ohio St. 309, this court declared: "When the state appears in her courts as a suitor, to enforce her rights of property, she comes shorn of her attributes of sovereignty, as a body politic, capable of contracting, suing, and holding property, subject to those rules of justice and right, which in her sovereign character she has prescribed for the government of her people."

The same principle is given out with equal clarity inCleveland Terminal Valley Rd. Co. v. State, ex rel. Hogan,Atty. Gen., 85 Ohio St. 251, 97 N.E. 967,39 L.R.A. (N.S.), 1219. The same principle was declared in State, ex rel.Crabbe, Atty. Gen., v. Middletown Hydraulic Co., 114 Ohio St. 437, 151 N.E. 653, in which all the members concurring in the majority decision in this case, save one, gave their concurrence. The Ohio cases on this point have been so emphatic and so uniform that it is difficult to understand upon what theory the majority opinion makes the claim that one dealing with a school board can do so upon any different basis than one dealing with an individual. The cases outside of Ohio are equally uniform in declaring that a contract between a citizen and the state, or any political subdivision of the state, is construed by the same rules of interpretation as a contract between individuals, and that conditions subsequent in a deed will apply with equal force to the public and to private individuals. No court in any state in the Union has ever held the contrary.

The majority opinion concedes that "an extensive search of the digests discloses a surprising want of authority upon the particular question, and also some authority counter to this proposition. New Hebron Consolidated School Dist. v. Sutton (Miss. 1928), 118 So. 303." We have also made a diligent search, and think it is more accurate to say that all the authorities are counter to the proposition stated in the majority opinion. The essential principles decided in the Mississippi case are, we think, on all fours with the instant case.

In that case premises were purchased by the school board to be used for the purposes of a public school, with the understanding and agreement that when it ceased to be used for the purposes of a public school the land should revert. That school district was later merged into a consolidated district, and it was then desired to discontinue the school at that place, and to remove the building. The court held, however: "When the building was erected on this land it became a fixture, and the fact that it was erected to effectuate the purpose for which the land was conveyed to the school district is ineffectual to prevent it from becoming a part of the realty."

The fourth paragraph of the syllabus states: "School building is subject to reversionary clause in deed conveying land for school purposes, notwithstanding it was erected and devoted to a public use, since conditions subsequent in a deed apply with equal force to public as to private individuals."

The Mississippi case is, therefore, a very definite authority in support of our position.

By the terms of the deed in the instant case the school board would not be permitted to use the premises in question for any purposes except school purposes, and, after four years abandonment, the title reverts. This frame school building could not be torn down and salvaged with any profit to the school board. If the school board should tear down the property it would probably leave a pile of rubbish. The board is making no claim to the land, and under the well-known rule of law applying to fixtures it cannot legally make any claim to the building.