Cooper v. Leslie Salt Co.
| Decision Date | 28 June 1968 |
| Citation | 69 Cal.Rptr. 883 |
| Court | California Court of Appeals Court of Appeals |
| Parties | Walter S. COOPER, and all others similarly situated, Plaintiffs and Appellants, v. LESLIE SALT COMPANY and Schilling Estate Company, Defendants and Respondents. Walter S. COOPER, and all other similarly situated, Plaintiffs and Appellants, v. T. Jack FOSTER et al., Defendants and Respondents. Civ. 24800, 24801. |
Funsten & Caldwell, San Francisco, for appellants.
Chickering & Gregory, W. Burleigh Pattee, William E. Trautman, San Francisco, for, Leslie Salt Co. and Schilling Estate Co.
Long & Levit, Bert W. Levit, Gerald Z. Marer, San Francisco, for Foster respondents.
Wilson, Jones, Morton & Lynch, John E. Lynch, Robert G. Auwbrey, San Mateo, for Estero Municipal Improvement Dist., G. C. Shannon, W. A. Innes and C. W. Olmo, and St. Paul Insurance Companies.
Plaintiff Walter S. Cooper appeals from judgments of dismissal 1 which followed the sustaining of general demurrers without leave to amend in an action attacking the manner in which respondent have caused municipal improvements and services to be financed by the Estero Municipal Improvement District, of which appellant is a taxpayer.
The district was established by special act of the Legislature. (Stats.1961, First Ex.Sess. 1960, ch. 82, p. 459.) The act prescribed the boundaries, organization and powers of the district, as well as methods for its operation, monagement, financing, change of boundaries, and dissolution. Provision is made in section 121 of the act for an in rem proceeding to establish the validity of 'the creation of the district and any annexations thereto' or to determine its right to issue bonds. A judgment purporting to establish the constitutionality of the act creating the district and the validity of the district's bonds was rendered in an uncontested in rem proceeding in the Superior Court of San Mateo County on June 20, 1961.
The statute recited that (§ 215, subd. (f)) Thus it was provided that voting was to be upon the basis of assessed valuation of land, including improvements (§ 17), and that the district was to be governed by three directors (§ 26) who must be 'owners, or officers or legal representatives of owners' (§ 28). The statute places a broad array of municipal functions within the powers of the district, including provision of street lighting, sewerage storm drainage, garbage service, water service, parks and playgrounds, and reclamation of submerged land (§ 77). The district is also empowered to construct small craft harbors (§ 78), provide fire protection (§ 79), and (§ 97.) The statute includes elaborate financial provisions, including authorization for the directors to issue general obligation bonds (§§ 105-123) and other types of securities to raise money for development of the raw land included within the district so that the owners thereof, who absolutely control the operations of the district, 2 can cause the various improvements to be made which are necessary to make the land fit for marketing as a residential tract. (See Willoughby, The Quiet Alliance, (1965) 38 So.Cal.L.Rev. 72, for a review of several comparable special statutes under which governmental powers have been made serviceable to land developers.)
Appellant's complaint, alleging four causes of action upon various theories was amended twice before a general demurrer was sustained without leave to amend. Because the four causes of action contain overlapping allegations, and the dismissal was upon a general rather than a special demurrer, we shall analyze as a whole all of the factual allegations of the complaint to determine (1) whether any cause of action was stated, and (2) whether the trial court committed an abuse of discretion in cutting off further amendment.
There is no allegation that the formation and operation of the district failed to conform to the provisions of the Estero Act; rather it is charged that the act itself is void in that it purports to create a corporation for municipal purposes by special act of the Legislature in violation of article XI, section 6, of the California Constitution. 3
Respondents contend that Code of Civil Procedure section 803 precludes appellant from contesting the validity of proceedings leading to the formation of the district. Section 803 provides:
In San Ysidro Irr. Dist. v. Superior Court (1961) 56 Cal.2d 708, 16 Cal.Rptr. 609, 365 P.2d 753, the Supreme Court held that, absent constitutional or statutory regulations providing otherwise, quo warranto is the only proper remedy in cases in which it is available. Therefore, it is the exclusive remedy for testing the legality of the existence of an irrigation district. As those districts are delegated agencies of the state government their ex istence should not be subject to attack at the caprice of private interests, but should be open to question only in a direct proceeding controlled by an officer charged with protecting the public interest. The court therefore held that the superior court would not have jurisdiction of an action challenging the lawful existence of a special district unless brought by the Attorney General.
In City of San Diego v. Otay Municipal Water Dist. (1962) 200 Cal.App.2d 672, 19 Cal.Rptr. 595, the city brought an action to enjoin the district from furnishing water to its inhabitants. Three landowners intervened seeking a determination of the validity of proceedings resulting in the formation of the district. The court held that the interveners had no authority to bring the action to annul the existence of the district on the grounds that it was invalidly formed or that the statute under which it was formed was unconstitutional. Such a remedy is not available to a taxpayer; it is within the exclusive province of the Attorney General through a quo warranto action. (Accord Wilson v. City of San Bernardino (1960) 186 Cal.App.2d 603, 9 Cal.Rptr. 431; 41 Cal.Jur.2d, Quo Warranto, § 5, p. 614; 74 C.J.S. Quo Warranto § 5, p. 183; 74 C.J.S. Quo Warranto § 4, pp. 179-181.)
Appellant contends that quo warranto is not the exclusive remedy here because the Estero district is neither de facto nor de jure a corporation, citing Brandenstein v. Hoke (1894) 101 Cal. 131, 35 P. 562. There the court found patently unconstitutional, a statute under which a levee district was formed. The court considered that because there was no valid statute under which the purported corporation could have been created, no de facto corporation could exist. But later cases have held that without regard to the claimed unconstitutionality of any statute, it is only where proceedings to create a district have not been fully completed that a private citizen can question their validity. (Alden v. Superior Court (1963) 212 Cal.App.2d 764, 769-770, 28 Cal.Rptr. 387; City of Colton v. City of Rialto (1964) 230 Cal.App.2d 174, 40 Cal.Rptr. 766; Hazelton v. City of San Diego (1960) 183 Cal.App.2d 131, 6 Cal.Rptr. 723.) The following elements are prerequisite to de facto corporate status: (1) there must be a charter or general law under which a corporation may be formed; (2) there must be a good faith attempted compliance with the statute; (3) there must be a colorable compliance with the statutory requirements; and (4) there must be an assumption of the corporate powers. (1 McQuillan, Municipal Corporations, § 3.48; City of Colton v. City of Rialto, supra, 230 Cal.App.2d 174, 182, 40 Cal.Rptr. 766.) There is no allegation that the Estero District has not satisfied all these requirements; thus it would at least be a corporation de facto. Moreover, since the act is not patently unconstitutional, the rule of Brandenstein v. Hoke, supra, does not apply. Once the district's existence is established, either de facto or de jure, it follows that a private person may not contest the validity of proceedings leading to its formation. (Hazelton v. City of San Diego, supra, 183 Cal.App.2d 131, 135, 6 Cal.Rptr. 723.) In the present case the prior validation judgment declared that the district was validly created. While we question whether that judgment could foreclose the Attorney General from contesting the constitutional validity of the statute in a quo warranto action, the decree establishes that the district's existence is otherwise not subject to attack.
Appellant advances a subsidiary contention that he ought to be allowed to attack the constitutionality of the Estero Act because, in one of the causes of action, he seeks a judicial declaration that the statute is unconstitutional. But in San Ysidro Irr. Dist. v. Superior Court, supra, 56 Cal.2d 708, 715, 16 Cal.Rptr. 609, 365 P.2d 753, it was held that because the...
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