Responsive Environments Corp. v. Pulaski County Special School District

E.D. Arkansas

Responsive Environments Corp. v. Pulaski County Special School District

366 F. Supp. 241, 1973 U.S. Dist. LEXIS 11809

CourtDistrict Court, E.D. Arkansas

DecidedSeptember 21, 1973

DocketCiv. LR-71-C-98

StatusPublished

Cited by2 cases

This text of 366 F. Supp. 241 (Responsive Environments Corp. v. Pulaski County Special School District) is published on Counsel Stack Legal Research, covering District Court, E.D. Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Responsive Environments Corp. v. Pulaski County Special School District, 366 F. Supp. 241, 1973 U.S. Dist. LEXIS 11809 (E.D. Ark. 1973).

Pincite

Opinion

MEMORANDUM OPINION

Paul X Williams, District Judge.

On February 22, 1968 Leroy Gattin, Superintendent of the Pulaski County, Arkansas, Special School District signed a “Lease Purchase Agreement” for a quantity of school library books as itemized in the agreement.

On March 14, 1968 the authorized agent of plaintiff, Responsive Environments Corporation, signed the same in *242 strument which provided for payment by the customer school district as follows:

"The customer agrees to make payments as indicated below, but at its option may prepay any balance in full,

1st payment October 1, 1968 $28,315.09

2nd payment October 1, 1969 28,315.09

3rd payment October 1, 1970 28,315.09

4th payment October 1, 1971 28,315.09

If sales tax Is applicable an additional amount of $849.45 shall be paid with each of the above payments."

A copy of the Lease Purchase Agreement is attached to this opinion as Appendix 1.

There is no question but that the district received the books covered by the lease-purchase agreement, distributed them to its various schools, used the books for a year or more and never paid anything for either the books or their use.

When called upon to pay for the books as provided by the contract, the Pulaski County Special School District responded that it considered the contract to be beyond the authority of the Superintendent and to be void and unenforceable. The District caused the books to be gathered up from the various schools and stored in a suitable place and notice to be given to Responsive Environments Corporation to come get them. The defendant cites Beckley-Cardy Inc. v. West Point Special School District No. 3, 209 Ark. 792, 192 S.W.2d 540; Arkansas National Bank v. School District No. 99, 152 Ark. 507, 238 S.W. 630; Brown v. Gardner, 232 Ark. 197, 334 S.W.2d 889; Texarkana v. Friedell, 82 Ark. 531, 102 S.W. 374.

In its brief defendant states:

“There is no doubt but that the Board in the case before the Court could have ratified the contract and could have waived the formalities of the contract. However, all witnesses testified that the Board did not ratify the contract. Mr. Gattin testified that the Board never gave him authority to make the contract. Mr. Payne also testified that he was not given any authorization to enter into the contract. It is obvious that from the beginning, the Board did not intend to enter into the contract and the evidence shows that Mr. Marder contacted the Board and even appeared back before the Board in an effort to get them to accept the contract. In an effort to make the contract acceptable to the Board, the plaintiff sent an amendment to the contract which provided that the Board would not be out any district funds on the books. The stipulation or addendum to the contract made it clear that no school funds would be used and that only Federal Funds approved for such purposes would be used.”

Defendant’s brief further states:

“. . .in the present case we have either a void or voidable contract. I feel it is probably voidable inasmuch as it was not an ultra-vires subject ff • • ♦ >

and later:

“There was a complete understanding between the plaintiff and Mr. Gattin that if Title II funds were not available, or some other funds from the Federal Government to be used for that purpose, the district would not pay for the books.”

The Court finds that neither party to the contract is without fault. The conduct of both is subject to criticism.

The plaintiff’s salesman, Mr. Marder, was so anxious to sell his company’s books that he oversold his merchandise and carelessly misled the purchasers by his sales pitch. He represented that he had the approval of the State Department, when in truth he and Mr. Payne both had been informed that the lease-purchase form he proposed to use did not meet the requirements of the Arkansas Law and that Title II funds could not be used for payment at that time.

On the other hand, Superintendent Gattin relying upon the advice of Mr. Payne and Mr. Cox was willing to make the deal if federal funds were used to pay for the books. His philosophy was clearly and aptly expressed when he testified that “Federal Funds are free.”

In this case we have the plaintiff seeking the pot of gold at the end of the *243 Federal rainbow and the defendant willing to go along if the acquisition was paid for by federal funds.

Both the present plaintiff and the R.E. C. are wholly owned by Prentice-Hall. During the rainbow days, the plaintiff was acquiring and selling a large number of books — many of which were not the kind or quality desired nor needed by school libraries, but which in this case Mr. Gattin was willing to receive if payment came from the gold at the end of the rainbow.

It is elementary that the business affairs of a school district in Arkansas are by statute entrusted to its board of school directors.

In this ease there is no evidence that the contract in question was ever approved or sanctioned by the school board except the action of the board authorizing the Superintendent to execute proper forms to secure federal funds.

Exhibit 11 is a copy of the Record Proceedings of the Pulaski County Special School District of June 11, 1968. A pertinent part thereof being as follows:

“Motion was made by Mr. Chandler, seconded by Dr. Baker and passed unanimously to authorize the Superintendant to sign all federal forms necessary for the Federal Programs in the district.”

The Court finds that this action of the board did not authorize Mr. Gattin to enter into the contract here sued on. The Court finds that Mr. Gattin did not have authority to enter into the said contract and further finds that the school board did not ratify or adopt the action taken by Mr. Gattin. On the contrary, the board expressly refused to go along with the venture and changed some of its personnel and later, even the Superintendent himself.

The Court finds that the subject matter was not “ultra-vires”; the board could have ratified the contract, but deliberately chose not to do so.

The Court finds that it was the practice of the defendant district at the time when negotiations were being carried on between Mr. Marder for the plaintiff and Mr. Payne for the defendant to accept the benefit of any and all federal moneys that the school administration could find available; and that the books in this case had already been received, distributed and used extensively before any criticism was voiced.

To say that the board didn’t know — or to say that the board ought not to have trusted its own school administrators— will not put the parties back in the same position they were in before the books had been distributed and used.

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