Reeve School Township v. Dodson

98 Ind. 497, 1884 Ind. LEXIS 594

• Court: Indiana Supreme Court
• Decided: November 24, 1884
• Docket: No. 11,837
• Status: Published

Opinion

Elliott, J.

The appellee’s complaint counts on two promissory notes executed by the trustee of the school township. The notes recite that they were given for eleven of the G. McBride Tellurians, purchased for the benefit of the schools ■of said township. There is no averment in the body of the complaint that the articles furnished were necessary for the schools nor suitable for use therein, nor is there any averment that they were delivered to or accepted by the school corporation.

The trustee of a school township is a special agent, with very limited authority. His authority is purely statutory in so far as concerns the financial affairs of the school corporation, and, as his authority is prescribed by a public statute, all who deal with him are charged with notice of the scope of his authority.

A trustee of a school corporation has no authority to borrow money, nor to incur any indebtedness, except for school purposes, and then only in the cases contemplated by statute.

A trustee of a school corporation has no general authority to"execute promissory notes; his authority in this respect is a special one, and can only be exercised in conformity to the statute creating the corporation. The authority to execute-promissory notes is confined to cases where the debt which the note evidences is for legitimate school purposes. In the case of Sheffield School Tp. v. Andress, 56 Ind. 157, the complaint set forth the note, which showed upon its face that it was executed for- work done in erecting a school-house, and it therefore appeared that the township had received the consideration of the note for a legitimate corporate purpose. In the case of Bicknell v. Widner School Tp., 73 Ind. 501, it was-held that no recovery could be had upon a note executed for borrowed money, but that where the money was rightfully and actually used in constructing a school-house, and the-trustee had no corporate fun'ds that could be devoted to that ■purpose, a recovery might be had as upon an implied promise. In Wallis v. Johnson School Tp., 75 Ind. 368, the question was fully discussed, and it was held that no action could be maintained upon a promissory note- executed by a school trustee, and that a complaint counting on the note was insufficient, but that if it had been shown by the complaint that the money obtained on the note was actually expended for the benefit of the school township, the complaint would have been good. This case was approved in First Nat’l Bank v. Union School Tp., 75 Ind. 361, and Pine Civil Tp. ,v. Huber, etc., Co., 83 Ind. 121. In the last of these cases the complaint averred that the note was given for property purchased and used by the township.

The complaint in the case before us is bad, for the reason that it does not show that the articles for which the obligations sued on were executed were received by the school corporation. The cases to which we have referred very clearly establish the principle that the corporation is only liable on an implied contract, and not on the notes, and such a contract can not exist unless it is shown that the school township received the consideration of the notes. The recital in the note that the articles were purchased for the benefit of the school corporation does not raise an implied promise; in order to do this it is necessary to allege that the articles were received and accepted by the corporation. The authorities all agree that an implied contract only exists in cases where the defendant received the consideration of the contract, ancl where this appears, and only where it appears, he is liable for the reasonable value of the property received.

Filed Nov. 24, 1884.

Judgment reversed, with instructions to sustain the demurrer to the complaint.