dents, and the question is not open to debate in this jurisdiction. Bank v. Willow Lake School Tp., (N. D.) 44 N. W. Rep. 1002. This controversy illustrates the wisdom of the rule we enunciate. This contract, if valid, would mortgage the entire property of the district for one-third of its assessed value, and the equivalent for this enormous incumbrance would be only a school house. Place no limit upon the power of the inhabitants and it would be easy for corrupt men to secure and wield the controlling power in sparsely settled districts, and create obligations binding upon the district so appalling in amount as to drive out its inhabitants, and prevent others from settling within its borders. It is gratifying that in this case law and justice go hand in hand. The question of legal fraud is not before us, but he indeed must be obtuse who cannot find corruption in the conception and consummation of this school house project. No community, without being the victim of fraud, would ever burden itself to build a school house with a debt equal to one-third of its entire wealth. The loss may fall upon one guiltless of any participation in or actual knowledge of that‘fraud; but, had the plaintiff made those inquiries touching the purpose for which these warrants were issued, and respecting the assessed valuation of the district, which the law’s behests and common businesss prudence required, suspicion of fraud must have been aroused. The judgment of the district court is affirmed. All concur.
ON REHEARING.
We see no reason to alter our views in this case. On the contrary, we are strengthened in our opinion. We will discuss the new arguments advanced by appellant’s counsel. It is said that the statute designates three distinct school district funds—one for the erection of school houses, etc., for the purchase of school-sites, and the payment of debts contracted for that purpose and called the “school house fund;” a second for rent, repairs, fuel, etc., known as the “contingent fund;” and a third for the payment of teachers’ wages, named the “teachers’ fund.” § 52. And it is then insisted that when the statute limits the power of the district board to build a school house out of the funds pro-
