Fannin-Lamar-Delta Improvement Dist. No. 3 v. State

• Decision Date: 21 June 1934
• Docket Number: No. 4481.,4481.
• Citation: 73 S.W.2d 1101
• Parties: FANNIN-LAMAR-DELTA IMPROVEMENT DIST. NO. 3 v. STATE et al.
• Court: Texas Court of Appeals

73 S.W.2d 1101

FANNIN-LAMAR-DELTA IMPROVEMENT DIST. NO. 3 v.STATE et al.

No. 4481.

Court of Civil Appeals of Texas. Texarkana.

June 21, 1934.

Rehearing Denied June 28, 1934.

Appeal from District Court, Fannin County; A. L. McRae, Judge.

Suit in the nature of a quo warranto by the State of Texas, acting by the County Attorney of Fannin County, upon the relation of certain persons, against the Fannin-Lamar-Delta Levee Improvement DistrictNo. 3.From a judgment decreeing dissolution of the improvement district, canceling certain bonds voted and issued by the district, and perpetually enjoining defendant from using lands embraced within the boundaries of the district, defendant appeals.

Reversed and rendered.

W. P. Dumas, of Dallas, and McKinney & Berry, of Cooper, for appellant.

Cunningham & Lipscomb, of Bonham, and Edgar Wright, of Paris, for appellees.

SELLERS, Justice.

This appeal is prosecuted from a judgment of the district court of Fannin county decreeing a dissolution of the Fannin-Lamar-Delta Levee Improvement DistrictNo. 3, canceling certain bonds voted and issued by the district, and perpetually enjoining the defendants from using the lands embraced within the boundaries of the district.

The suit was in the nature of a quo warranto brought against the levee district and its bondholders by the state acting by the county attorney of Fannin county, pursuant to permission granted by the judge of the district court of Fannin county, upon the relation of three named individuals who were alleged to have land or an interest in land or liens thereon within the boundaries of the levee district.

The petition alleged fraud in the creation of the levee district, in that the names of certain persons and corporations were attached to the petition for the creation of the district fraudulently and without their consent, as also were the names of persons who did not own land within the district, and estates under administration, which being eliminated, the petition was not signed by the owners of a majority of the acreage in the proposed district as required by article 7974 of the Revised Statutes.It was also alleged that the levee district was not legally incorporated and that it had no status as a body corporate in the state; that it was conceived in fraud and its pretended incorporation was effected by fraud; that the boundaries of the district were fraudulently run in such a way as to include many acres of land not subject to overflow and not for any reason subject to be included, and were also fraudulently run as to exclude from its boundaries many persons having the qualifications of voters and to include voters known to be favorable to the organization of the district; also, that the benefits assessed were greatly in excess of the value of the land itself and in the course of a few years would result in confiscation of all property in the district.

The levee district and Trinity Farm Securities Company, as a bondholder, filed an answer, the nature of which will hereafter sufficiently appear in the course of the opinion.The case was tried to the court without a jury, and judgment rendered as stated.No findings of facts or conclusions of law were requested or filed.

Appellant contends that the suit could not be instituted or maintained by the county attorney, but only by the Attorney General or under his direction.Under article 4, § 22, of the Constitution, the Attorney General alone can institute a proceeding to forfeit the charter of a private corporation.State v. Waller(Tex. Civ. App.)211 S. W. 322, 323;State v. Railway Co., 89 Tex. 562, 35 S. W. 1067;Brady v. Brooks, 99 Tex. 379, 89 S. W. 1052;Oriental Oil Co. v. State(Tex. Civ. App.)135 S. W. 722.However, the levee district in question is a governmental agency and a body politic and corporate (Wilmarth v. Reagan[Tex. Com. App.]242 S. W. 726, 727), and a different rule applies.The district or county attorney, after obtaining leave from the district court of the county, as was done here, may file an information in the nature of a quo warranto against such corporations.This seems to be well established.State v. Waller(Tex. Civ. App.)211 S. W. 322, 323;Brennan v. City of Weatherford, 53 Tex. 330, 37 Am. Rep. 758;Crabb v. Celeste Ind. School District, 105 Tex. 194, 146 S. W. 528, 39 L. R. A. (N. S.) 601, Ann. Cas. 1915B, 1146;Minear v. McVea(Tex. Civ. App.)185 S. W. 1048;State v. Bradshaw(Tex. Civ. App.)228 S. W. 655.The court may not deny leave to the county or district attorney to file an information or petition in the nature of a quo warranto except in the exercise of sound judicial discretion.State v. Huntsaker(Tex. Civ. App.)17 S.W. (2d) 63;State v. Hoff, 88 Tex. 297, 31 S. W. 290.

It is next contended that quo warranto proceedings do not lie in this case to test the validity of a public or quasi public corporation and to cancel its bonds where it appears that the bonds were approved by the Attorney General and registered by the comptroller in the method and manner required by statute(Vernon'sAnn. Civ. St. arts. 8009, 8010) and the same have been put into circulation through the channels of commerce on the faith and credit of such political subdivision.

The Attorney General issued a certificate approving the bonds of the levee district in the sum of $155,000, reciting that they were valid and binding obligations and that the district was legally established.The bonds were likewise registered by the comptroller.Prior to the approval of the bonds, the state reclamation engineer certified to the Attorney General that the record of organization of the levee district had been filed in his office as required by law and that the plan of reclamation for the district had been approved by him.

The effect of this contention is to ascribe judicial power to these officers and to make their acts final and conclusive, and not subject to review by the courts.We think the certificate of the Attorney General and the acts of the other state officers done in connection with the issuance of such bonds afford at most only prima facie evidence of validity and regularity.It is not a judicial act.Rogers v. Lynn, 121 Tex. 467, 49 S.W. (2d) 709, 51 S.W.(2d) 1113.

Certainly where fraud is alleged, as here, in the creation of the district and the issuance of the bonds, it can hardly be asserted that the courts are powerless to inquire into the proceedings looking to the creation of the district and issuance of bonds and render such judgment as the evidence justifies or requires notwithstanding their approval by the Attorney General.Wilmarth v. Reagan(Tex. Com. App.)242 S. W. 726, 730;Stockwell v. State, 110 Tex. 550, 221 S. W. 932, 12 A. L. R. 1116.

Again, it is urged that the judgment of the commissioners' court creating and establishing the levee improvement district and defining its boundaries was the final act of the court under the statute(Vernon'sAnn. Civ. St. art. 7972 et seq.), and its judicial findings import absolute verity, and is not subject to collateral attack.The order of the commissioners' court recites that the petition for the creation of the district "complies with the law in all respects" and "that the parties whose names are signed to the said petition are the owners of a majority of the acreage of the proposed district."

This question has been decided against appellant's contention.In Trimmier v. Carlton(Tex. Civ. App.)264 S. W. 253, 257, it is said: "When the questions touching the validity of the formation of a public corporation merely extend to the regularity of the procedure which has been followed or the correctness of the rulings of some board or other body vested with the authority to determine preliminary matters, it is generally held that the state alone has the right to raise such question.Crabb v. School District, 105 Tex. 194, 146 S. W. 528[39 L. R. A. (N. S.) 601], Ann. Cas. 1915B, 1146;Drainage District v. Higbee(Tex. Civ. App.)149 S. W....