City of Guthrie v. Wylie

• Decision Date: 04 September 1896
• Citation: 6 Okla. 61,55 P. 103,1896 OK 56
• Parties: THE CITY OF GUTHRIE v. W. D. WYLIE, et al.
• Court: Oklahoma Supreme Court

1896 OK 56

55 P. 103

6 Okla. 61

THE CITY OF GUTHRIE v. W. D. WYLIE, et al.

Supreme Court of Oklahoma

Decided: September 4, 1896

Error from the District Court of Logan County; before Frank Dale, District Judge.

Syllabus

¶0 1. PROVISIONAL CITY--No Lawful Authority Possessed By. The so called provisional city of Guthrie was not a de jure nor de facto municipal corporation, and had no power to contract or bind itself or others, and its de facto or de jure successor or successors cannot be held liable upon its contract or for its torts.

2. MUNICIPAL CORPORATIONS--Legislative Authority For. Prior to May 2, 1890, there was no law in the Territory of Oklahoma authorizing the creation or existence of municipal corporations. Where there is no law authorizing de jure municipal corporations a de facto corporation cannot exist. Muncipal corporations can only exist under and by virtue of legislative enactment. (1 Okla., 293.)

3. ORGANIC ACT--De Facto Corporations. The Organic Act of May 2, 1890, made provision for the organization of Municipal corporations adopting and extending the Statutes of Nebraska over this Territory. The passage of said act did not eo instanti convert the provisional government of the city of Guthrie into a de facto municipal corporation. The provisions in said statute relating to the organization of villages requiring a majority of the taxable inhabitants of such village to present a petition to the county commissioners of the county, praying that they may be incorporated into a village, designating the name they wish to assume and the meets and bounds of the proposed village and requiring said commissioners to enter an order of incorporation upon their records designating the metes and bounds thereof and declaring the said proposed village incorporated and appointing trustees therefor, were conditions precedent to the vesting of any municipal authority in such village corporation. The inhabitants of the so-called provisional city of Guthrie, having failed until the first of August, 1890, to attempt to comply with these conditions, did not, before that date become a corporation de jure or de facto. To establish a corporation de facto, the existence of a law authorizing its formation; proceedings taken for that purpose, professed compliance with the law, and acts of subsequent user are essential. A de facto corporation is one where the proceedings for its organization is irregular or defective when by regularity of proceedings to incorporate, it might be one de jure.

Bayard T. Hainer, for plaintiff in error.

Keaton & Cotteral, for defendant in error.

TARSNEY, J.:

¶1 The facts presented in this record necessary to be stated are: That on the 22nd day of April, 1889, the townsite of the present city of Guthrie in this Territory was settled upon by townsite settlers; that by a popular vote the people living on said townsite in November, 1889, attempted and assumed to establish and organize a municipal city government. That they went through the forms of electing and qualifying a mayor, council, clerk, treasurer and other officers common to a city government. That the persons assuming to be such officers performed the duties usually incident to the authorities of a municipal corporation; assumed to pass ordinances, keep records, etc.; used a corporate seal, and was known as a "Provisional City Government." No distinction is shown between this organization and an ordinary city government, except that it is not assumed that it was organized by any legal authority, or under any statute or legislative grant. This provisional government, during its existence, assumed to pass ordinances, resolutions, etc., and to perform the usual functions, executive, legislative and judicial of an ordinary lawful city government, until about August 1, 1890. That on or about the fourth day of December, 1889, the common council, mayor and city clerk of said provisional government, undertook, by ordinance, to grant to W. D. Wylie, F. A. Willman and A. Devereaux the privilege of constructing, maintaining and operating a street railroad or street railroads in said provisional city. One of the conditions of said ordinance requiring the deposit, with the treasurer of said city, by the grantees in said ordinance, of a certain check for the sum of one thousand dollars, and that said grantees deposited with said treasurer a check for said amount, drawn on the North Texas National bank of Dallas, Texas, properly certified. Said check was to become forfeited to said provisional city, should the grantees in said ordinance fail or refuse to comply with certain conditions in said ordinance specified. That afterwards, by agreement, T. J. Oliver and Fred Cullen were associated with the said Wylie, Willman and Devereaux in interest in the rights assumed to be granted by said ordinance, and in said deposited check. That on the 11th day of June, 1890, said check was by the treasurer of said city converted into money and said money was deposited with the treasurer of said city. That on the 13th day of June, the said common council of said provisional city, by resolution, declared a forfeiture of the rights assumed to have been granted by said ordinance, by reason of an alleged failure upon the part of the grantees therein to comply with the provisions thereof, and declared the money drawn on said check to be forfeited to said provisional city. That said council coverted and appropriated the said $ 1,000 of money to the use of the said city, using $ 300 thereof for the purpose of a fire department, and $ 700 for the purpose of a police department.

¶2 By the Organic Act of Oklahoma Territory, approved May 2, 1890, certain chapters and provisions of the Compiled Laws of the State of Nebraska, in force November 1, 1889, in so far as applicable, were adopted and extended over the Territory of Oklahoma and put in force therein. These laws of Nebraska, thus made operative in the Territory, provided for the organization of cities of the second class and villages, and under this statute, on or about the 1st of August, 1890, the village of Guthrie was organized and continued in existence until 1891, when the present city of Guthrie, plaintiff in error, was organized according to the laws of the Territory, enacted by the legislature of said Territory.

¶3 Defendants in error commenced this suit in the district court of Logan county to recover the said $ 1,000 and interest thereon from the present city of Guthrie. On the trial below, the court found for the defendants in error and rendered judgment in their favor for $ 1,337.70, from which judgment plaintiff in error has appealed to this court. The only assignments of error necessary to be considered are the following:

First: The complaint does not state facts sufficient to constitute a cause of action.

Third: That the decision of the court is contrary to law.

¶4 It is unnecessary for us to consider the circumstances of the organization of the so-called provisional government or its action in assuming to grant to the defendants in error the privilege of constructing, maintaining and operating a street railroad, or whether there was any failure or default upon the part of the defendants in error with reference to the conditions of the pretended grant of such right as would justify and authorize the forfeiture of the deposit, made to secure compliance with said conditions; as we must conclude that all and every act of said provisional government so-called, was without authority of law, there being at the time no lawful authority for its creation or existence. At the time this pretended government was established there was no law authorizing the creation of municipal governments in this Territory, and therefore no power to invest them with any of the functions of government. This so-called provisional government was not even a de facto corporation, and had no power or authority to contract or bind itself or others dealing with it. Where there is no law authorizing de jure corporations, a de facto corporation cannot exist. It is unnecessary for us to elaborate this proposition, as it has already been clearly and definitely determined by this court (Losey v. City of Guthrie, 1 Okla. 188; Blackburn v. Oklahoma City, 1 Okla. 292, 31 P. 782; Oklahoma City v. Richardson Lumber Co. 3 Okla. 5, 39 P. 386.)

¶5 A municipal corporation which by law is the successor of another, and which acquires all the property, franchises, rights and improvements, and embraces the same territory, and is composed of the same people as its predecessor, is liable for the valid contracts and legal liabilities of such predecessor. (Blackburn v. Oklahoma, City, supra; Broughton v. Pensacola, 93 U.S. 266, 23 L. Ed. 896; Mobile v. Watson, 116 U.S. 289, 29 L. Ed. 620, 6 S. Ct. 398; Milner's Admr. v. City of Pensacola, 2 Woods 632, 17 F. Cas. 407; O'Connor v. Memphis, 6 Lea. 730; Mt. Pleasant v. Beckwith, 100 U.S. 514, 25 L. Ed. 699; New Orleans R. R. Co. v. City of New Orleans, 26 La. Ann.)

¶6 A municipal corporation will be held liable for the wrongful conversion of the money or property of a citizen. (City of Oklahoma City v. Richardson Lumber Co., 3 Okla. 5, 39 P. 386.)

¶7 It follows from these authorities that if the government of the City of Guthrie, in existence and exercising governmental functions on the 13th day of June, 1890, was a de jure government, or even a de facto government, and it then converted to its use the one thousand dollars of the moneys belonging to the defendants in error, the liability therefor to said defendants in error was transmitted to its lawful successor, the present city of Guthrie, plaintiff herein, and that said plaintiff in error would be liable to defendants in error therefor.

¶8 This court, in the case of Blackburn v. Oklahoma City, cited supra held, that the act of congress approved May 2, 1890, made provision for the organization and existence of de jure municipal corporations in Oklahoma and that...