Evens v. Anderson
| Citation | 155 N.W. 1040,132 Minn. 59 |
| Decision Date | 14 January 1916 |
| Docket Number | 19,488 - (126) |
| Parties | J. H. EVENS AND OTHERS v. PETER ANDERSON AND OTHERS |
| Court | Minnesota Supreme Court |
Action by J. H. Evens and three other freeholders and voters against the trustees of Consolidated School District No. 46 of Aitkin county to restrain defendants from issuing bonds of such district, from conducting the business of said district and incurring expenses in the management thereof. The case was tried before Wright, J., who made findings and ordered judgment in favor of plaintiffs. From the judgment entered pursuant to the findings, defendants appealed. Reversed and judgment for defendants ordered.
Consolidation of school districts.
1. Five school districts in Aitkin county undertook to consolidate. The proceedings were in good faith and sufficient in form. After the order of consolidation, meetings were held officers elected, bonds voted and other business done. It is now alleged that some of the signers of the petition for consolidation were disqualified.
Consolidation of school districts -- public corporation de facto.
2. A public corporation de facto exists where there is (1) some law under which a corporation with the powers assumed might lawfully have been formed; (2) a colorable and bona fide attempt to perfect an organization under such a law; (3) user of the rights claimed to have been conferred by the law for an appreciable length of time. The consolidated school district was a de facto corporation.
Consolidation of school districts -- validity questioned only by the state.
3. Where a municipal body has assumed, under color of authority to exercise the power of a public corporation of a kind recognized by the organic law, the validity of its organization can be challenged only by the state, and neither the corporation nor any private party can, in private litigation, question the legality of its existence.
Consolidation of school districts.
4. The fact that the organization was so defective as to be void in its inception does not change the rule.
De facto corporation.
5. Time of exercise of the functions of a corporation is not controlling importance.
Quo warranto.
6. These rules preclude direct as well as collateral attack by private litigants. Quo warranto, at the instance of the attorney general of the state, is the exclusive proceeding to determine the legal existence of a public corporation.
Louis Hallum and Cray & Eaton, for appellants.
E. H. Krelwitz and Mantor & Ebner, for respondents.
1. Early in 1914 proceedings were commenced for the consolidation of five school districts in Aitkin county. After proper preliminaries, petitions were circulated and, when signed, were presented to the county superintendent of schools. The county superintendent gave due notice of an election to vote upon the question of consolidation. The election was held and consolidation carried. The superintendent then made his order of consolidation. No appeal was taken therefrom. He then gave due notice of a meeting to elect officers. This meeting was held and the individual defendants were elected trustees, and they qualified and proceeded to act as such. They caused a meeting of the consolidated district to be held, and at said meeting a majority of the voters present voted to issue bonds in the amount of $18,000. The trustees entered upon negotiations for the sale of the bonds to the state of Minnesota, and bonds were issued running to the state, but no money had been received thereon. The trustees further proceeded to negotiate for a site for a school house for said consolidated district and to procure plans and specifications for a school house to cost $18,000, and gave notice of another school meeting of the consolidated district.
Plaintiffs claim that the petition for consolidation was insufficient. The statute requires, as a preliminary to the organization of a consolidated school district, "presentation to the county superintendent of a petition signed and acknowledged by at least twenty-five (25) per cent of the resident freeholders of each district affected, qualified to vote at school meetings, asking for the formation of a consolidated school district." G.S. 1913, § 2687. From four of the five districts the number of qualified signers was sufficient. The fifth district, number 93, was small in population. It is claimed that there was in the district but one resident freeholder qualified to vote at school meetings and that this one did not sign. Three others in good faith did sign. It is claimed none of them were qualified.
A petition, signed by the requisite number of qualified signers, is essential to the jurisdiction of the county superintendent to act. Schweigert v. Abbott, 122 Minn. 383, 142 N.W. 723. On the ground that this petition was insufficient in this particular, plaintiffs bring this action to enjoin defendants from taking any further proceedings in relation to the issuance of bonds, and from conducting and carrying on any business as a school district. The court ordered an injunction. Defendants appealed.
At the threshold of the case we meet this question: Can these individual plaintiffs in this private litigation draw into question the capacity of this consolidated district to act as a corporation? We are of the opinion they cannot.
2. A school district, if not technically a municipal corporation, is at least a public corporation. This consolidated school district was at least a public corporation de facto. A public or municipal corporation de facto exists when there is (1) some law under which a corporation with powers assumed might lawfully have been created; (2) a colorable and bona fide attempt to perfect an organization under such a law; (3) user of the rights claimed to have been conferred by the law. Tulare Irrigation District v. Shepard, 185 U.S. 1, 22 S.Ct. 531, 46 L.Ed. 773. This is in substance the rule adopted in numerous cases in this state as applicable to private corporations. Finnegan v. Noerenberg, 52 Minn. 239, 53 N.W. 1150, 18 L.R.A. 778, 38 Am. St. 552; Johnson v. Okerstrom, 70 Minn. 303, 73 N.W. 147; Healey v. Steele Center Creamery Assn. 115 Minn. 451, 457, 133 N.W. 69; and the same rules apply whether the corporation be public or private. Pierce v. Town of Lutesville, 25 Mo.App. 317, 320. All these elements are found in this case. The user has not been for any great length of time, but we do not deem this essential. The essential thing is that there should be user in good faith for an appreciable length of time.
3. A de facto public corporation has, as to all but the state, the qualities of a de jure corporation. Its right to exercise corporate functions can be challenged only by the state. Some courts have given as the reason that "corporate franchises are grants of sovereignty only and, if the state acquiesces in their usurpation, individuals will not be heard to complain." Miller v. Perris Irrigation District, 85 F. 693, 699. Others place it upon consideration of public policy, suggesting the importance of stability and certainty in such matters and the serious consequences which might follow if the existence of a municipal corporation should be called into question, and perhaps determined void in actions between the corporation and private parties. State v. Honerud, 66 Minn. 32, 68 N.W. 323. But, whatever the reason, the rule is fixed by unanimity of authority that where a municipal body has assumed, under color of authority, to exercise the power of a public corporation of a kind recognized by the organic law, the validity of its organization can be...
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