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05/02/89 the Village of Leland Ex v. Leland Community School

May 2, 1989

THE VILLAGE OF LELAND EX REL. GERARD BROUWER ET AL., PLAINTIFFS-APPELLANTS

v.

LELAND COMMUNITY SCHOOL DISTRICT NO. 1 ET AL., DEFENDANTS-APPELLEES (AMERICAN LEGION POST NO. 570 ET AL., DEFENDANTS)



APPELLATE COURT OF ILLINOIS, THIRD DISTRICT

539 N.E.2d 750, 183 Ill. App. 3d 876, 132 Ill. Dec. 187 1989.IL.645

Appeal from the Circuit Court of La Salle County; the Hon. Louis J. Perona, Judge, presiding.

APPELLATE Judges:

JUSTICE STOUDER delivered the opinion of the court. WOMBACHER, P.J., and HEIPLE, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE STOUDER

The plaintiffs, Gerard and Henry Brouwer, filed suit against the defendants, Leland Community School District No. 1, John Scholfield (superintendent of schools of Leland Community School District No. 1), American Legion Post No. 570, and four of its members. Plaintiffs purport to bring this action as taxpayers on behalf of the Village of Leland and the Leland Community School District No. 1. The plaintiffs seek a variety of legal and equitable relief, including an accounting, a judgment for profits, imposition of a constructive trust, appointment of a receiver and an injunction.

The trial court granted defendants Leland Community Unit School District No. 1 and John Scholfield's motion to dismiss pursuant to the Illinois Code of Civil Procedure (Ill. Rev. Stat. 1987, ch. 110, par. 2-615), the court finding, among other things, that plaintiffs do not have standing to bring this action.

Plaintiffs appeal from the trial court's May 21 judgment, arguing the court erred in finding plaintiffs lacked standing to bring this cause of action. The remaining defendants are not involved in this appeal.

On May 19, 1982, the school board of Leland Community School District No. 1 voted to adopt the bylaws of the Ted Fisher Scholarship Fund (Fund) and a resolution placing $20,000 presented by American Legion Post No. 570 (the Post) under the control of the board of directors of the Fund. On that same date, the school board accepted a cash gift of $3,000 from the Post to present awards to a member or members of that year's graduating class.

The purpose of the Ted Fisher Scholarship Fund is to annually award a sum of money to a Leland High School graduating senior attending college. The source of the funds used to establish the Fund and make the $3,000 cash gift was profits obtained by American Legion Post No. 570 through its operation of a tavern, the alleged prohibited sale by it of alcoholic liquors, and the operation of games of chance in the Village of Leland between 1970 and May 1982.

The bylaws of the Ted Fisher Scholarship Fund, which were written by John Scholfield, provide that the Fund be administered independently of the school district, the Fund directors making all decisions related to the Fund, with the district itself lacking any authority in administering or supervising the Fund. The monies comprising the Fund are invested at the discretion of the Fund's board, and the signatory of the investment is the Fund's chairman or vice-chairman. Five persons comprise the Fund's board of directors, three being members of American Legion Post No. 570, one of these being John Scholfield, Fund board chairman.

The plaintiffs allege the school district's actions in adopting the bylaws of the Ted Fisher Scholarship Fund, accepting money pursuant to the bylaws' adoption and becoming involved in the administration of the scholarship fund are ultra vires as to the purposes of the school district. Plaintiffs also allege John Scholfield is personally liable for improperly paying out monies belonging to the Leland Community School District. For the reasons stated below, we agree with the trial court's finding that plaintiffs lack standing to bring this action.

In their amended complaint, plaintiffs bring this action as "the plaintiff, Village of Leland ex rel. Gerard and Henry Brouwer." The plaintiffs rely on their status as taxpayers to argue they possess standing to bring this cause of action.

The Illinois Municipal Code (Code) (Ill. Rev. Stat. 1987, ch. 24, par. 1-1-1 et seq.) provides standing for taxpayers to sue in certain ...


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