Speer v. Rural Special School Dist. No. 50 of Norphlet, Union County

100 F.2d 202, 1 Fed. R. Serv. 642, 1938 U.S. App. LEXIS 2611
CourtCourt of Appeals for the Eighth Circuit
DecidedDecember 2, 1938
DocketNo. 11232
StatusPublished
Cited by3 cases

This text of 100 F.2d 202 (Speer v. Rural Special School Dist. No. 50 of Norphlet, Union County) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Speer v. Rural Special School Dist. No. 50 of Norphlet, Union County, 100 F.2d 202, 1 Fed. R. Serv. 642, 1938 U.S. App. LEXIS 2611 (8th Cir. 1938).

Opinion

STONE, Circuit Judge.

Because the parties are in sharp disagreement as to what are the issues before this Court, it is necessary to state an outline of the litigation up to and including the order which is the subject of this appeal. Otherwise, the various contentions of the parties are difficult to state in an understandable 'way.

Plaintiff (an appellant) Speer claims to be trustee under two deeds of trust executed by Rural Special School District No. 50 of Norphlet, Union County, Arkansas (sometimes called Norphlet Special School District of Union County, Arkansas), to secure bonds issued by the district. In each of these deeds of trust, was a provision ‘requiring the district to create a “Building Fund” in which should be set aside sufficient revenue from district taxes to take care of interest on and retirement of the bonds secured by the respective deeds of trust. He brought this bill in equity against the officers of the school board, the county collector and the county treasurer. The reliefs sought were (1) a temporary order restraining defendants (until the case can be heard) from paying out any monies of the district or from accepting school warrants in payment of taxes due the district and that the order be made permanent after hearing of the case; (2) judgment for past due interest and principal payments on the bonds (also for compensation to the trustee and attorney fees) ; (3) the district be required to pay “as rapidly as possible, and still permit the reasonable operation of its schools, said sums”, to set up a “Building Fund” account to be credited annually “out of its first revenues” with the sums specified in the, deeds of trust, and to remit same before the due dates under the deeds of trust; (4) for foreclosure and general relief.

On the day the above petition was filed (May 23, 1935), appellant Arkansas Municipal Bond Bureau (an Arkansas corporation) filed a petition in intervention wherein it claimed to be agent for holders of past due bonds and interest of the district issued under “various deeds of trust and mortgages”, each of which provided for a “building fund” and which pledged the “faith, credit and resources” of the district. The prayer was “in addition to the prayer of the bill in equity filed herein” for judgment and for participation “pro rata with plaintiff herein and the other bondholders” in any sums paid by the district in liquidation of its bonded indebtedness.

Process to answer the bill and the intervention was served May 24, 1935.

February 18, 1936, the above Bureau filed a “second intervention” covering other bonds and interest and seeking the same relief as in its original intervention.

The same day, defendants answered the bill and the interventions by a general denial and a defense attacking the validity of the various bonds and various deeds of trust.

July 7, 1936, the above Bureau filed a “third intervention” covering yet other bonds and praying the same relief as in the earlier interventions.1

October 19, 1936, a hearing on the application for a restraining order resulted in an order (1) directing defendants to set aside “the equivalent of eight (8) mills taxes” and place same in an account to be designated as “building fund”, to be paid out upon future orders of the court; (2) defendants (county collector and county treasurer) were restrained from accepting school warrants in payment or redemption of district taxes; (3) $2,500 theretofore deposited with the clerk by the district, was ordered paid in redemption of past due interest coupons; (4) allowance of fee to attorney for trustee; (5) express retention of jurisdiction.

This hearing was upon a stipulation which admitted the “building fund” provision in the various deeds of trust; which set forth the dates, amounts and interest rates and defaults on the bonds issued by [204]*204the district; which set out the assessed value of property in the district, an annual tax of 18 mills, the revenue therefrom and the incoiiie of the district (from that and other sources) for the calendar year 1935; and which set forth that no amount had been set aside as a “building fund” in 1934 or 1935 but that, in 1935, 6 mills had been so voted for the year 1936.

Also, on October 19, 1936 (a supplemental order was entered October 29, 1936), an order was entered appointing The First National Bank of Eldorado, Arkansas, as “paying agent” to disburse the above deposited funds and future accumulations in the “building fund” in payment of defaulted bond interest.

On July 6, 1937, an order was entered (on a petition of the district filed that day) allowing the district to borrow funds from the State Board of Education to purchase its own bonds at a discount and providing . for the payment of interest coupons and certificates of indebtedness for accrued interest' on bonds so purchased.. One provision of said order is as follows: “And the court doth further order that the debt service fund of eight mills heretofore set up by order of this court shall be disbursed as follows: The district shall pay out of said fund in order of maturity, paying the oldest items first, all interest coupons1 and all accrued interest on the $109,000.00 outstanding bonds, including accrued interest to May 1, 1937, and all certificates of indebtedness which the defendant district may have to issue in order to provide for the payment of interest up to date or purchase of any bonds purchased, at a discount, and such certificates shall be considered the same as interest coupons and ■shall be entitled to the same priority that they would have if they were interest coupons due as of the date for which they may be given, and that after all interest has been paid on the $109,000.00 outstanding bonds to May 1, 1937, as hereinabove provided for, whether evidenced by coupons or certificates, then the balance of the said eight mills fund set up for debt .service shall be apportioned between the State Revolving Loan Fund which will receive 4,7/109 of said fund, and the other 62/109 of said fund shall be set aside for the payment of interest and principal on the .$62,000.00 of bonds that are not purchased at a discount but now remain in the .hands ,of private owners.” •

In an order (July 16, 1937) directing payment of premiums for insurance of the property of the district appears a recital as follows:

“the court doth find:

“That, by proper orders of this court, heretofore made, eight mills has been set aside and is paid to The First National Bank of Eldorado, Arkansas, as paying agent, to meet the bonded indebtedness, interest and other expenses, and that ten mills is permitted the District to carry on the school;”.

The entire, above recital pictures the state of this litigation when the plaintiff and intervener filed a joint motion (April 19, 1938) resulting in an order from which they bring this appeal.

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Bluebook (online)
100 F.2d 202, 1 Fed. R. Serv. 642, 1938 U.S. App. LEXIS 2611, Counsel Stack Legal Research, https://law.counselstack.com/opinion/speer-v-rural-special-school-dist-no-50-of-norphlet-union-county-ca8-1938.