Wilson v. King's Lake Drainage & Levee District
| Citation | 165 S.W. 734,257 Mo. 266 |
| Parties | THOMAS C. WILSON, Administrator of Estate of HENRY W. PERKINS, Appellant, v. KING'S LAKE DRAINAGE & LEVEE DISTRICT |
| Decision Date | 02 April 1914 |
| Court | United States State Supreme Court of Missouri |
Appeal from Lincoln Circuit Court. -- Hon. James D. Barnett, Judge.
Reversed and remanded.
F. L Schofield and E. B. Woolfolk for appellant.
(1) The defendant had a valid de facto existence at the time of incurring the obligations sued on, and cannot now escape liability thereon. While it may be conceded that the defendant corporation was never a perfectly constituted de jure corporation until the entry of the second judgment of the county court confirming the report of the commissioners of November 29, 1904, it by no means follows that it had no real or responsible existence prior to that date. Our contention is that the body which, under the name "King's Lake Drainage & Levee District," entered into the contract with Wilson's assignor for the building of this twelve miles of the levee, was and is the defendant in this case and none other. That the contract was precisely such as a levee and drainage district might enter into and was entered into in the precise manner required by the statute. That at the time of entering into this contract the defendant had a legally accountable and responsible de facto corporate existence with adequate capacity and authority to enter into and bind itself by this contract, at least to the extent that its potential liability became complete by its thereafterwards enlarging its de facto existence into an existence de jure and accepting and prosecuting to completion the work already done under this contract. And that under the circumstances set out in the petition the defendant is estopped to deny either its said identity or its liability. 8 Am. & Eng. Ency. Law, p. 747; 2 Cook on Corp. (4 Ed.), pp. 1233, 1238; 10 Cyc. Pl. & Pr., pp 249, 1066; Morawetz on Corp. (1 Ed.), sec. 143; 3 Am. R. R. & Corp. Rep. 662; Roll v. Smelting Co., 52 Mo.App. 66; 2 Beach on Priv. Corp., 1248; Note to 2 Cook on Corp. (4 Ed.), p. 1235. The principles relating to and governing the question of the existence of de facto corporations, are not confined to private corporations. They are equally applicable to public or quasi-public corporations of the exact character of the defendant drainage district. Savings Inst. v Board of Education, 75 Mo. 408; Rice v. McClelland, 58 Mo. 116; Sayre v. Tompkins, 23 Mo. 443; Speer v. Board of Co. Com'rs, 88 F. 749; Herring v. Irrigation Dist., 95 F. 705; Miller v. Irrigation Dist., 85 F. 693; Irrigation Dist. v. Shepard, 185 U.S. 1. (2) But passing the question of the actual identity of the defendant corporation while acting under and through its lastly appointed commissioners, with the de facto corporate body executing the obligations in suit acting through the commissioners first appointed, and treating them for the nonce as distinct and separate bodies, there would still remain a legal identity by succession, the application of familiar principles of the law relating to which would render the defendant equally liable. And these principles seem applicable alike to all corporations public and private. Where a municipal corporation is organized embracing the same territory which was included in former towns, it is liable for all the obligations of the latter. The same result also follows against an organized city which by extension of its limits takes in the territory embraced in former surrounding towns. Shapleigh v. San Angelo, 167 U.S. 646; Mount Pleasant v. Beckwith, 100 U.S. 514; Mobile v. Watson, 116 U.S. 289; Beach, Pub. Corp. (1893), sec. 476; Hughes v. School Dist., 72 Mo. 644; Thompson v. Abbott, 61 Mo. 177; Evans v. Bank, 79 Mo. 186; Grand River College v. Robertson, 67 Mo.App. 336. (3) It was perfectly competent for the defendant drainage district, through its new commissioners after due appointment, to ratify what had been previously done by the first commissioners, although done before acquiring full legal authority. 1 Dillon Mun. Corp. (4 Ed.), sec. 463; Water Co. v. Aurora, 129 Mo. 583. (4) The defendant should be estopped to deny its liability in this action. It is undoubtedly true that many of the rules of estoppel which ordinarily govern private corporations have no application to public or quasi-public corporations. But the estoppel here invoked does not rest alone nor chiefly upon the mere acceptance and appropriation of the twelve miles of levee built under the Wilson contract. It is confidently maintained that this contract was neither an unauthorized nor an illegal one. The very purpose of creating the defendant drainage district corporation was to build this twelve miles of levee along with other like work. The contract was entered into and the work was done in the precise manner required by the statute. True this was while the drainage district had only a de facto corporate existence; but when this de facto existence afterwards ripened into a de jure existence, its newly appointed commissioners found that this much of the levee had already been built by their predecessor commissioners and therefore reported to the county court that the twelve miles of levee "could and would be and had been adopted, availed of, and used as a part of the work committed to them to be done."
O. H. Avery and William A. Dudley for respondents.
In developing the legal principles upon which the defense to this case rests, no attention need be given to the general proposition often recognized in this State, that one corporation succeeding another by reorganization or merger takes its property and assumes its obligations. The defense rests upon principles as well established but lying outside of the doctrine of the case cited by appellant to prove that point. (1) Drainage districts organized under the provisions of Article 5, chap. 122, R. S. 1899, are not private corporations having general powers, but are public corporations, exercising limited powers delegated to them for specific purposes by the State. Morrison v. Morey, 146 Mo. 543; Land & Stock Co. v. Miller, 170 Mo. 240; State ex rel. v. Drainage Dist., 192 Mo. 517. And the proceedings by which the lands of the property owners of the district may be charged with any burden are identical in principle with those employed in paving streets and building sewers in the city, where a specific sum is raised and charged against the benefited lands and expended for the specific purpose for which it is raised. Land & Stock Co. v. Miller, 170 Mo. 240. (2) The first point being conceded, and every step in the proceedings prior to 1903, except the filing of the petition having been declared utterly void (Jamison Case, 176 Mo. 557), we have the single question, had the defendant the power to charge the lands of the district with the obligations contracted by the illegally constituted board of 1894, and if it had such power, has it exercised it in such a way as to legalize those obligations? As shown by the Jamison Case, there were no legal officers of the district, no funds, no assessments and no right of way to build upon and no corporation, at the time Wills made the contract and Wilson performed the work for which the warrants sued on were issued. The case presented, therefore, is that of one who has contracted with the assumed agent of a non-existing principal, the effect of which is that either the agent alone or no one is bound. Mechem on Agency, secs. 541-550; Bishop on Contracts, secs. 1119-1120; 31 Cyc. 1548-1549, pars. 2 and 3; Michael v. Jones, 84 Mo. 578; Humphrey v. Jones, 71 Mo. 62; Jaquemin v. Andrews, 40 Mo.App. 507. (3) Merely completing the organization in the name and in accordance with the general plans proposed in the original petition, would not amount to the ratification of the illegal proceedings previously had, otherwise the county court would have had no option but to enforce those illegal contracts or dismiss the petition. (4) The old levee being on the right of way under the plan of improvements finally adopted it had to be used, removed, or the organization abandoned. Wilson suffered no loss by its use. Defendant had no election between accepting or rejecting the work. Hence, on general principles, there was no estoppel. 16 Cyc. 787, par. b; 31 Cyc. 1267-1270. (5) State ex rel. v. Saline Co., 45 Mo. 242; Heidelberg v. St. Francois Co., 100 Mo. 69; Drainage Dist. v. Daudt, 74 Mo.App. 575; Maupin v. Franklin Co., 67 Mo. 327; Bernard v. Knox Co., 105 Mo. 382; State ex rel. v. Thomas, 183 Mo. 220; Book v. Earl, 87 Mo. 246; Phillips v. Butler Co., 187 Mo. 698; Bauer v. Franklin Co., 51 Mo. 208; Seaman v. Drainage Dist., 219 Mo. 1. (6) While it is, in some instances, competent for a municipal corporation to ratify an unauthorized act done in its behalf, this can only occur where the act was within the scope of the powers of the corporation, and where the ratification is accomplished in the special mode prescribed by law for the performance of the act. State ex rel. v. Cowgill, 156 Mo. 634; Johnson v. School Dist., 67 Mo. 319; State v. Lawrence, 178 Mo. 372; Milligan v. Lexington, 126 Mo.App. 715; Neill v. Gates, 152 Mo. 585. (7) But aside from the general principles already considered, there are difficulties inherent in the constitution of these districts which place it beyond their power to pay this sort of a claim. They are these: (a) The only purpose for which the court could make a special (or any) assessment under the Act of 1893 were: 1st. For the probable cost of the work proposed in the report, including all incidental...
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