SCHOOLS: 'l'EACHERS:

.,

The $34,000 in additional school moneys, which the Macon School Dis­trict R-I estimates it will receive

from the state, may not be all teachers already under 1970 school year.

legally paid by the district to and among contract with the district for the 1969-

Honorable Ronald M. Belt State Representative District No. 96

May 6 , 1970

State Capitol Buildine Jefferson City, Missouri 65101

Dear Representative Belt:

OPINION NO. 211

F r LED

J. I J

This official opinion is issued in response to your request for a ruling on the designated questions arising out of the fol ­lowin~ fact situation:

"Macon School District R-I included in its bud~et for the 1969-1970 school year antici­pated receipts from the State of Missouri under :io. R. S. Section 163 . 031 in the then­estimated amount of $220,000 . On the budget­ed-bas i s of such anticipated amount plus esti­mated funds from other sources, annual employ­ment contracts were timely executed for said school year by this District with numerous teachers . Each of these employment contracts designated the position to be occupied by the teacher named , the cash amount of salary to be paid and the time period covered, without in­clusion of any special provision .

'1 It now appears probable that for and during this school year this District will receive under said Section 163 . 031 the amount of $254 ,000 instead of $220 , 000 . The District has fully complied with the eighty percent re ­quirement under Paragraph 9 of Section 163. -031 and under Section 163 . 061, and also the Directors have ordered that all said moneys be placed in the teachers fund. The Distr ict Directors further desire to distribute pre­sently during this 1969-1970 school year most of the aforesaid $34,000 difference among all

llonorab le Ronald r~ . Belt

of the teachers employed by said District by paying $300.00 to each teacher~ if such pay­ment is legally permissible .

"It has been su12;gested that, by mutual consent between the District and each teacher, they may terminate each teacher's employment con­tract existing for this school year and in con­juncti on therewith execute a nevi employment contract covering only the balance of this school year and in each teacher ' s contract pro­vide for a salary which would exceed by $300 . 00 the amount otherwise payable to such teacher under such teacher ' s existing contract for such balance of this school year . The ne11 con­tract would not provide for any different ser­vice by or position for any teacher nor for any employment time period beyond the existing contract exp iration date.

"Questions : fvlay the aforesaid $34 , 000 be legally paid by the District to and among all the teachers employed as aforesaid by said District durin~ this 1969- 1970 school year? If so, by what -method, e.g . , by substitution of new employment contr act as above - mentioned or in some other manner? 11

Article III, Section 38(a) provides in part as follows:

"The general assembly shall have no power to grant public money or property , or lend or authorize the lendin~ of public credit, to any orivate person, association or corporation, except in~ aid in public calami t~;. . . . "

A school board has only those powers conferred on it by the General Assembly. Therefore, if the constitution prohibits the General Assembly from taking certain action, a school board can l1ave no greater power. Kizior v . City of St . Joseph, 329 S . W. 2d 605 , 609 (11o . 1959) .

llere, the school board has an employment contract with the teachers in question obli gating the teachers to perform cer tai n services . For these services, the school board has a greed to pay a spec i fic cash salary . Now , without altering in any manner the nature of the teacher ' s obligation , the school boar d proposes to pay each teacher an additional $300 for these same services . We

- 2-

Honorab le Ronald M. Belt

bel i eve this amounts to a 11 grant of public money" to a private per­son in violation of Article III, Section 38(a). Relying in part on the predecessor to Ar ticle III, Section 38(a) , this office has previously determined that a school district may not pay a bonus to a teacher when said bonus is not provided by a contract (Opinion No . 16 , dated April 23 , 1938). Also, we have previously decided that a school board may not make a donation or gift to a school teacher during the term of the contract (Opinion No. 21 , May 10 , 1939). In the instant case, the board proposes to pay each teacher , regardless of length of service or amount of salary , the same amount, i . e ., ~300. This payment, too, could be classified as a 11 bonus, 11

a 11gift 11 or a 11 donation . 11

Furthermore, Article III , Section 39(3), Missouri Constitution 1945 , prohibits the granting of extra compensation to public officers or agents after a contract has been entered into and performed in whole or part . Section 39(3) of Article III provides that:

11 The ~eneral assembly shall not have po~·Ter:

* * * 11 (3) To J;!;rant or to authorize any county or municipal authority to grant any extra com­pensation, fee or allowance to a public of ­ficer, agent, servant or contractor after service has been rendered or a contract has been entered into arrl performed in whole or in part; . . . 11

In the instant case, we have a proposal 11 to grant extra com­pensation11 to school teachers 11 after a contract has been entered into and performed in whole or in part. 11 Hhether this provision ap­plies to the instant situation depends on Nhether school districts are included within its coverage. In other words, i s the General Assembly prohibited from authorizing a school board to grant extra compensation to one of its agents after a contract has been per­formed in whole or in part? The answer to this question depends on whether a school district is a 11 county or municipal authority . 11

Even though school districts are not referred to expressly , we believe that , in view of the laudatory purpose of this provision and in view of the liberal construction given similar language by the Supreme Court of Missouri , school districts are included with­in the coverage of Article III, Sect i on 39(3) .

The purpose underlying Ar ticle III, Section 39(3) has been described as follows by the Supreme Court of Missouri in its opinion in Kizior v. City of St . Joseph, supra :

- 3-

Honorable Ronald M. Belt

11• • • Section 39 (3), Article III was adopted

by the people as a safe~uard against the squandering of public money and to prohibit public officers from giving gr atuities to con­tractors , and it may not be cast aside even though one who has acted in good faith may suffer hardships . The courts of this state have adhered to a policy of strictly enforc- , ing the constitutional and statutory safeguards applicable to the contracts of public corpora­tions. Likes v. City of Rolla , 18~ Mo . App. 296 , 167 S . W. 6~5 ; Webb-Boone Paving Co . v. State Highway Commission, 351 t1o . 922 , 173 S . W. 2d 580 ; Donovan v . Kansas City, 352 Mo . lJ 3 0 , 1 7 5 S . \o! . 2 d 8 7 4 . . . . 11 I d . at 610 .

The Supreme Court has generally adopted a broad definiti on of "municipal corporation'' in interpreting other provisions of t he Missouri Constitution . For instance, in interpreting the provisions of Article X, Section 6 , Missouri Constitution 1875 , which provided that ''all property . . . of the state, counties and other munici­pal corporations . . . shall be exempt from taxation . . . " , the Missouri Supreme Court , in State ex rel . Caldwell v . Little River Drainage Dist ., 291 Mo . 72 , 236 S . W. 15 (1921), stated:

11 The statutes of this state under \·lhich drain­age districts are organized declare them to be public corporations. Because of their inher­ent nature and because of the purposes for which primarily they are created, we have repeatedly held that they are not private corporations in any sense; that they are political subdivisions of the state, and exercise prescribed functions of government . r1ound City Land & Stock Co . v. Miller, 170 Mo . 2~0 , 253 , 70 S . W. 721, 60 L. R. A. 190 , 9~ Am . St . Rep. 727; f·1orrison v . Morey, lll 6 Mo . 5~3 , 561 , ~ 8 S. W. 62 9; Drain­age District v . Turney, 23 5 t1o . 80 , 90 , 138 S . W. 12 . We have also said that they are municipal corporations . Wilson v. Drainage District, 257 No. 266, 286 , 165 S . W. 73~; State v . Taylor, 224 Mo . 393 , 469 , 123 S . W. 892. In its strict and primary sense the term ' municipal corporation' applies only to incor­porated cities , towns , and villages , having subordinate and local powers of legislation . Heller v. Stremmel , 52 Mo . 30 9 . But in the larger and ordinaril~ accepted sense the term i s applied to any pu lie local corporation,

-4-

Honorable Ronald M. Belt

exercisins some function of government, and hence includes count ies, school districts, townships under township organization , special road distr icts and dr ainage distr icts. Wilson v. Trustees of Sanitary District, 133 Ill , 443, 464, 27 N. E. 203 ; Rathbone v. Hopper, 57 Kan . 211 o , 2 4 2 , 4 5 P a c . 61 o 3 4 L . R . A • 6 7 4 . • • • " Id . at 16 . [Emphasis supplied]

In t he case of Laret Inv . Co. v . Dickmann, 34 5 i'-1o. 4 4 9, 134 S . \·1. 2d 65 (En Bane 1939), the court referred again to the broad definition of 11 municipal corporation":

"The term ' raunic i pal corporation' i s sometimes used in a stri ct sense to des i gnate a corpora­tion posses sing some s pecified power of local government . In a broader sense it includes public, or quasi public, corporat i ons designed for the performance of an essential public ser­vice. See Dillon on Municipal Corporations, Fifth Ed . Sec . 32 .

11 This court has adopted the broader definition. In State ex rel. Caldwell v. Little River Drain­age District, 291 r1o . 72, loc. cit . 79 , 23 6 S . \o/ . 15, loc . cit. 16 , we said : 'In its strict and primary sense the term 11 municipal cor poration" applies only to incorporated cities, towns, and villages , having subordinate and local pow­ers of legislation. Heller v . Stremmel, 52 Mo . 309 . But in the larger and ordinarily accepted sense the term is applied to any public local corporation, exe rcising some function of govern­ment, and hence includes counties, school dis­tricts, townships under township organization, special road districts and drainage districts.'

"See also State ex re l. Kinder v. Little River Drainage District , 291 Mo . 267, 236 S . W. 848 ; Grand River Drainage District v. Reid , 341 Mo . 1246, 111 S . W. 2d 151; State ex rel Caldwell v . Little River Drainage District, 291 Mo . 72, 236 S.W. 15; Harris v . William R. Compton Bond Co ., 244 Mo . 664 , 14 9 S . W. 603 .

"The broad definition of a municipal corpora­tion requires that it be formed for the pur­pose of performing some governmental function . . . . " Id. at 68 .

- 5-

. '

Honorable Ronald M. Belt

Also, in Russell v. Frank , 348 Mo . 533, 154 S.W.2d 63 (1941) , the court, in ruling on the validity of a school tax under the pro­visions of Article X, Section 11, Missouri Constitution 1875 , stated:

"Appellants also contend that even though this tax be not for building purposes it is autho­rized under the general powers of the legisla­ture to levy taxes for state purposes non- muni­cipal in their nature. An elaborate argument, with the citation of many authorities, is made to sustain this point. It will be unnecessary to analyze all of the cases cited because the argument i s squarely opposed to the express language of the constitutional provision here involved . The section above cited imposes a special and specific limitation on school taxes . The tax in this case was levied not by the state but by the school district, which is and was a municipal corporation as we have defined that term in Laret Investment Co . v. Dickmann, 345 Mo. 449, 134 S . W. 2d 65. The very purpose for which such municioal corporation is created is that of the maintenance of a school system. . . . " Id . at 67 .

In City of Olivette v . Graeler, 338 S . W. 2d 827 (Mo . 1960) , the court reiterated its reliance on the broad definition of "municipal corporation":

"Characterizing St. Louis County as a 'munici­pal corporation ' does not necessarily determine that its land area is incorporated within the meaning of a particular statute. The same word, term or phrase may vary in meaning depending on the time, place and circumstances under which it is used. In Towne v. Eisner, 245 U. S . 418, 38 S . Ct. 158, 159 , 62 L. Ed . 372, the Supreme Court speaking through Mr . Just ice Holmes stated: ' But it i s not necessarily true that income means the same thinf> in the Constitution and the Act . A word is not a crystal , trans­parent and unchanged , it i s the sl:in of a liv­ing thought and may vary greatly in color and content according to the circumstances and the time in which it is used.'

" ' In its strict and primary sense the term "municipal corporation" applies only to incor­porated cities, towns, and villages , having

-6-

Honorable Ronald M. Belt

subordinate and local powers of legislation. * * * But in the larger and ordinarily accepted sense the term is applied to any public local corporation , exercising some function of govern­ment , and hence includes counties , school dis­tricts, townships under township organization, special road districts and drainage districts. ' State ex rel . Caldwell v . Little River Drain­age Dist. , 291 Mo. 72 , 236 S . W. 15, 16. See also Laret Investment Co . v. Dickmann , 345 Mo . 449, 134 S . W. 2d 65 , 68[2]; St . Louis Housing Authority v. City of St . Louis, 361 Mo. 1170, 239 S . W. 2d 289 , 294 [12-15]; and McQuillin, Municipal Corporations, 3rd Ed. , Vol. I, § 2.03 et seq.

" ~·lany publ ic agencies, rendering services of a municipal nature for which a corporate form of organization is provided by law, may properly be included in the cate ~ory on ' municipal cor­porations ' in the broader sense . To those men­tioned in the Caldwell case could be added county health departments and hospitals , fire districts and, notably in St . Louis County , the Metropolitan St . Louis Sewer District , 'a body corporation, a municipal corporation and a political subdivision of the state' which encompasses both the area in question and the City of Olivette. The territory which these 'municipal corporations' occupy does not ipso facto become an incorporated area within the meaning of the annexation statutes . " Id . at 835 .

The General Assembly has also on occasion classified a school district as a "municipal corporation." Section 432 . 070, RSl1o 1959 , states that "[n]o county, city, town, village, school towns hip, school district or other municipal corporation shall . .. 11 [Em­phasis supplied].

Article III , Section 39(3) refers to "municipal authority," not "municipal corporation." However, we believe that "municipal authority" is not as specific a term as "municipal corporation" and, therefore, a broad interpretation of its meaning is equally warranted.

In Watts v. Levee Dist . No. 1, Mississippi County Mo . , 164 Mo .App. 263, 145 S . W. 129 (St . L.Ct . App . 1912} , the plai ntiff sought to have certain warrants of the levee district declared void . In

- 7-

'I

Honorable Ronald M. Belt

determining whether estoppel would lie against the district, the court stated :

11 • Certainly no estoppel should be adjudged

against them but on clear and unmistakable proof of acts of ratification and acquiescence, done within the line of their powers and duties . The directors of these levee districts have no power to impose any obligations on the district unless first authorized to do so by vote of the land­owners of the district. They are quasi-public officers , officers of ' a public g overnmental corporation.' Our Constitution, section ~8, article 4, provides that the General Assembly itself, the supreme lawmaking power of the state, shall have no pmo.,~er to grant, or to au­thorize any county or municipal authority to grant, any extra compensation to a public of ­ficer, agent, servant or contractor, 'after service has been rendered or a contract has been entered into and performed in v1hole or in part, nor pay, nor authorize the payment of any claim hereafter credited against the state or any county or municipality of the state under any agreement or contract made without express authority of law and all such unauthorized agreements or contracts shall be null and void . ' While this constitutional prohibition does not literally cover t he class of officers or public agencies to which these drainage districts be­long , it would seem that its spirit should cover them, and that spirit is a gainst the al­lowance or payment for public work , services or labor of any kind done in the first instance without authority of law, as was the case here.u Id . at 134.

Consistent with t he court's conclusion in t he Hatts case , \'le

do not believe that the people of Missouri intended only to prohibit counties and municipal! ties, in the narr0\'1 sense of the word , from increasing the compensation of an agent for services he is already legally obligated to perform . We believe that Article III, Section 39(3) was intended as a broad prohibition a~ainst such action by any public , local corporation which is entrusted with public moneys . Therefore, we conclude that "municipal authority" as used in Article III, Section 39(3) includes school districts.

Having so determined , the school board cannot increase the com­pensation paid to teachers presently under contract for the 1969-1970 school year . This same conclusion was reached by the Missouri

- 8-

·1

Honor ab l e Ronald M. Belt

Supreme Court in I<izior v. City of St . Joseph , supra . The city had entered into an exclusive contract with a private corporat i on for the collection of gar bage fo r a ten year period at a spec i fic sum . An attempt was made , after partial performance , to increase the compensation pai d by the city fo r precisely the same servi ces which the contractor was already obli gated to perform . The cour t , after quoting Article III , Section 39 (3), stated :

"A careful reading of the amendatory contract does not disclose that appellant agreed ther ein to do anything except ' to continue to collect and dispose of garbage in a ccordance with the contract [of July 12, 1949] herei nabove r eferr­ed to .' Obviously, appellant was already bound to do that which it agreed to do in t he agree­ment to amend . The stated purpose of the city in agreeing to the amendment was to make it possible for appellant to continue the garbage collection operation which appellant had found it impossible to do 'by reason of conditions beyond its control.' For doing that whi ch ap­pellant was already obligated to do under the original contract, the city agreed in the amend­ment to pay appellant at least $19 , 000 annually in addition to the amount originally agreed up­on . That clear ly violated the quoted constitu­tional provision, as it was a 'grant' of ' extra compensation * * * to a * * * contractor after * * * a contract has been entered into and per­formed * * * in part . ' Article III , Section 39(3) , supra . For analogous cases, see Sager v. State High'l'ray Commission of f~issouri, 3ll 9 Mo. 3lll, 160 S. W. 2d 757, and Spitcaufsky v . State Highway Commission of Missouri , 3ll9 Mo. 117, 159 S . W.2d 647[2] . " Id. at 609 .

Any argument in favor of a conclusion different from the one reached herein must rely on Section 168 .111 , RSMo 1967 SUpp . as being legis l ative au t horizat i on for r escinding the current contr act and entering into a new one at a higher salary. Subparagraph 6 of Section 168 . 111 , RSMo 1967 Supp . provi des in par t as follows:

"A teacher 's contract may be terminated at any t i me by mutual cons ent of the t eacher and the board .. . . "

An argument can be made that t hi s authorizat i on i s intended solely to allow the termi nation of a teacher ' s employment by mutual agreement, thereby avoidi ng the res trictions on uni lateral termi na­tion contai ned i n t he previ ous subparagraphs of Section 168 . 111

- 9-

,,

Honorable Ronald M. Belt

and in Section 168 . 121, RSMo 1967 Supp . Furthermore , subparagraph 2 states that a teacher's "reemployment is subject to the regula­tions hereinafter set forth." No authority is granted to the board to reemploy teachers for the current year during the current year. Nevertheless, assuming that the legislature intended subparagraph 6 of Section 168 . 111 to permit a contract to be terminated and an­other entered int o having the same terms and conditions but provid­ing for more monetary compensation , such an interpretation would be in conflict with Article III, Section 38(a) and Article III, Sec­tion 39(3) and, therefore, beyond the pol'Ter of the General Assembly to enact.

CONCLUSION

It is, t heref ore, the opinion of this off ice t hat the i3q , ooo in additional school moneys , which t he !1acon School District R-I estimates it will receive from the state, may not be legally paid by the district to and among all the teachers already under con­tract with the district for the 1969-1970 school year.

The fo regoing opinion, which I hereby approve, was prepared by my Assistant, D. Brook Bartlett.

Yours ver! truly ,

~c .' ~.,.,z:f Enclosures: Op . No. 16

4-23-38, Chamier

Op. No . 21 5- 10-39, Dawson

Attorney General

- 10-