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Morgan v. Board of Sup'rs

Supreme Court of Arizona

April 5, 1948

MORGAN
v.
BOARD OF SUP'RS et al

Page 237

Appeal from Superior Court, Maricopa County; Walter J. Thalheimer, Judge.

Suit for injunction by Milo Morgan against the Board of Supervisors, Maricopa County, Arizona, and others to restrain issuance and sale of school district bonds. From a judgment dismissing complaint, the plaintiff appeals.

Judgment affirmed.

Harold J. Janson, of Phoenix, for appellant.

Francis J. Donofrio, County Atty., and Fred C. Struckmeyer, Jr., Deputy County Atty., both of Phoenix, for appellees.

John L. Sullivan, Atty. Gen., and William P. Mahoney, Jr., Asst. Atty. Gen., for amici curiae.

Udall, Justice. Stanford, C. J., and La Prade, J., concurring.

OPINION

Udall, Justice.

Page 238

[67 Ariz. 136] This is an appeal by Milo Morgan (plaintiff-appellant) from a judgment dismissing his complaint for injunctive and other relief against the Maricopa County Board of Supervisors and the Board of Trustees of Washington School District No. 6. The defendants will be termed appellees.

At a regularly called election held in said district on May 14, 1947, the vote was 308 in favor of the issuance and sale of bonds in the sum of $ 164,000, and 187 "bonds no" votes were cast. Appellant, who was a qualified elector and a real property taxpayer residing in the district, brought this suit for himself and all others similarly situated, seeking to void the results of the bond election by restraining the issuance and sale of the bonds thus voted.

The assignments of error, which will be stated more in detail later, contend that the lower court disregarded the constitutional limit of bonded indebtedness for school purposes and also challenge its implied finding that the election was fairly conducted, particularly as to the exclusion from voting of ex-service men and widows who had claimed exemption from payment of taxes.

If the bonds in the instant case are issued and sold unquestionably the property rights of the appellant and other taxpayers similarly situated would be involved; hence, appellant had the right to bring an action seeking injunctive relief on the ground that the constitutional limitation of indebtedness was exceeded.

"The right of properly interested persons to have an illegal issuance, sale, or delivery of the bonds of a political subdivision enjoined is so well settled as to be beyond dispute, and, as a matter of fact, is tacitly recognized by the courts and various litigants as a mere matter of course in many hundreds of decisions. * * *" 43 Am.Jur., Public Securities & Obligations, section 335, page 538. See also 43 C.J.S., Injunctions, § 121.

The problem as to whether the actual debt limit of ten percent, as fixed by article 9, section 8, Constitution of Arizona, was here being exceeded hinges upon the answer to two questions: (a) can moneys in the district's bond sinking fund be treated as an asset in computing the net in indebtedness? (b) does the ten percent limit of indebtedness apply separately to each distinct political unit?

As to the first question, the authorities disclose practical unanimity in holding that in determining the indebtedness of a district, within the constitutional provision limiting indebtedness, a sinking fund reserved and pledged for the payment of existing bond obligations may be deducted in computing outstanding bonded indebtedness. City of Stamford v. Town of Stamford, 107 Conn. 596, 141 A. 891, 896; First National Bank v. City of Jackson, 199 Ky. 94, 250 S.W. 795; Kirk v. School Dist. No. 24, 108 Okl. 81, [67 Ariz. 137] 234 P. 596. See also 44 C.J., Municipal Corporations, section 4056, page 1123; 38 Am.Jur., Municipal Corporations, section 481, page 160. In the case at bar the record shows that the deduction of the amount in the sinking fund brings the district's net indebtedness down to a few hundred dollars below the maximum fixed by the constitution; hence, the first question must be answered in the affirmative.

Page 239

Appellant contends (though he offered no proof in support) that the appellee school district lies within the Glendale Union High School District, and that if its proportionate part (two-fifths) of the High School District bonded indebtedness were added to appellee school district's indebtedness it would far exceed the ten percent limit; in fact, he argues that it would be possible by computing the indebtedness in this manner to saddle onto an area twenty percent indebtedness rather than the limit fixed by the Constitution. Even admitting the facts relied upon by appellant to be true, there is no merit to this contention because the grade school and the high school are distinct political units and the constitutional limitation is held to apply separately to elementary school and high school districts even though they are wholly or partly coincident in territory. Board of Education v. Upham,35 ...


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