State ex inf. McGinnis ex rel. Kemble v. Consolidated School District No. 3 , 277 Mo. 28 ( 1919 )

BOND, C. J.

The prosecuting attorney of Pike County, upon the relation of D. R. Kemble and others, filed an information in the nature of a, quo warranto for the purposes of annuling the corporate franchise of Consolidated School District No. 3, which had been created according to law, and of ousting its duly elected directors from their offices as such, upon the ground that said corporation and its directors had failed to perform the duty prescribed by law, “to-wit, the maintenance of a high school or consolidated district school therein. "

After the overruling of their demurrer, respondents answered, admitting the incorporation of the consolidated district out of portions of territory of five school districts, at an election held on June 29, 1915; admitting that said consolidated school district had not maintained a high school, but averring that it had maintained two public schools within said consolidated district for instruction up to and including what is known as the eighth grade, and that all school advantages which the inhabitants of said consolidated district had enjoyed before its incorporation were provided and had been maintained for them ever since;, averring further that said prosecuting attorney, shortly after the formation of said consolidated district, to-wit, October 4, 1915', filed an information in the nature of a quo warranto upon the relation of D. R. Kemble and other persons, attacking the validity of the incorporation of said- consolidated district and seeking to forfeit its franchise and oust its then directors from their offices as such; that upon issues joined by answer and reply, said cause was tried in the circuit court on October 22, 1915, and a judgment entered therein against the relators in said proceeding and in favor of the respondents therein; that thereafter the relators in said proceeding duly appealed to this court. Respondents further answered that they promptly moved to advance the hearing of said cause in the Supreme Court in order that the validity of the incorporation of said district should be established and that they might thereafter take a vote for the issuance of bonds for the erection of a high-school building.

To this answer respondents, in the present proceeding, filed a reply admitting their previous attempt by information in the nature of quo warranto, to annul the charter of said consolidated district, and that judgment in that proceeding was rendered in favor of respondents therein; averring that respondents, after the institution of the present action, sought to prohibit its entertainment in the circuit court and that the Supreme Court denied that application. Respondents further replied that thereby the Supreme Court held that the pendency of the former proceeding did not bar the institution of the present information in the nature of a quo warranto, which was brought pending the appeal in the former.

Upon these issues the present case was submitted to the court without a jury. The learned trial judge found that respondents had not established or maintained a high school or consolidated district school since the organization of said Consolidated School District Number Three, whereupon he rendered judgment, on June 14, 1918, “that said Consolidated School District No. 3 of Pike County, be and the same is hereby dissolved and i-ts charter, rights and franchises in all respects forfeited and held for naught,” and further, that its directors named in the present proceeding be ousted from their positions and shorn of all authority as such directors. The learned trial judge further ordered and decreed that the several school districts out of whose territory said consolidated district was formed be restored to all the rights they had prior to the establishment of said consolidated district, with full power and authority in each of said districts 23, 26, 28, 32 and 33 to manage its own school affairs by a hoard of directors as if no consolidated school district had ever been formed.

In addition to the admissipns in the pleadings, the evidence showed that for three years prior to the judgment of the circuit court the respondents had maintained an organization and disbursed the moneys received by them in the maintenance of two common schools for two years during eight months of each year, and for the third year the maintenance of said schools for seven months; that they had expended for these purposes all of the sixty per cent levy of taxation for their, benefit, except what was used in defraying attorneys fees in the litigation attacking the validity of the incorporation of said consolidated school district; that they had not taken a vote for a bond issue to construct a high school, for the reason that such securities would not be marketable pending an appeal from the former judgment in their favor establishing the validity of the incorporation of the consolidated school district.

It is suggested in this case that our records show that the appeal taken from the former judgment in their favor in the former suit was dismissed by the appellants therein after the obtention by them of the judgment from which the present appeal is taken.

The evidence showed that respondents have been seeking to accomplish the ends for which the consolidated district represented-by them was formed, to the extent that the revenue derived by them from taxation and other purposes, except what was paid to their counsel, has been devoted to the maintenance of schools for the benefit of the inhabitants of the district.

Excessive judgment. I. Plainly the judgment of the circuit court which sought to resuscitate the defunct school district was dehors the pleadings in this case and dehors the power of the court to render. [Laws 1913, p. 723, sec. 6;. State ex inf. v. Smith, 271 Mo. l. c. 177.] If the Present consolidated school district was legally established (which is the basic allegation of relator’s snit) then its dissolution, even if validly decreed, would not, per se, restore the corporate franchises of the previous school districts, nor restore its directors to their former offices and functions. Neither was it within the judicial power of the circuit court after dissolving the consolidated district, to recreate and restore the former districts or their officers even if such issue had been within the pleadings, for when the former districts ceased to exist as' such, the terrain comprehended within them became a part of the new consolidated, district formed thereof, and upon a valid dissolution of the latter, such terrain would become “unorganized territory” (R. S. 1909, sec. 10776), and could thereafter be organized into school districts only by the method prescribed in the statute and upon the votes of its inhabitants. [R. S. 1909, sec. 10836.] It is clear, therefore, that so much of the judgment of the learned trial court as undertook to reincorporate the former school districts and refunetion their officers, was outside' the issues on trial, as well as outside the pale of judicial authority. So much, therefore, of the decree in the present case as undertook to do this, was a simple nullity.

Information. II. The decisive question on this appeal is whether or not the remainder of the judgment of the trial court purporting, to annul the incorporation of the Consolidated School District No. 3 and oust its officers, can be sustained under the pleadings and con-ce(je(j facfs. Without stopping to inquire whether as to that part of the decree which undertook to disincorporate one of the respondents, it was not indispensable under the rule in this State that the information in the nature of a quo warranto should have been filed by the prosecuting, attorney in virtue of his office, of Ms own initiative and as the representative of the State (State ex inf. v. Smith, 271 Mo. l. c. 178; State ex inf. v. Woods, 233 Mo. 380; Black v. Early, 208 Mo. l. c. 307; Bank v. Rockefeller, 195 Mo. l. c. 151; State ex rel. v. Birch, 186 Mo. l. c. 219; State v. St. Louis, etc., Ins. Co., 8 Mo. 330; Inhad. Fredericktown v. Fox, 84 Mo. l. c. 65; Gribbs v. Somers Point, 49 N. J. L. 515, et cases cited), we will dispose of the case on its merits in so far as the decree annulling the charter is concerned and determine the correctness or incorrectness of that judgment as if the quo warranto had been filed by the prosecuting attorney, not upon the relation of private persons (State ex rel. v. McSpaden, 137 Mo. l. c. 634), but solely in his official capacity as a representative of the State. We decided to take this course for the further reason that in so far as the information in the nature of quo warranto was filed for the additional purpose of ousting the directors, it might well have been exhibited for that object only, by the prosecuting attorney upon the relation of private persons. [R. S. 1909, sec. 2631; State ex rel. v. McSpaden, 137 Mo. l. c. 634.]

Jurisdiction. This quo warranto seems to have been instituted under the views expressed by the Kansas City Court of Appeals in State ex inf. Brownfield v. Consolidated School District No. 5, 195 Mo. App. 507. That action, like the present, was a quo warranto by the prosecuting attorney of Cooper County upon the information of private persons seeking a judgment of forfeiture of the corporate franchise of said district and to oust the directors. A judgment of the circuit court of forfeiture and ouster was rendered. This was affirmed by the Kansas City Court of Appeals upon its view that the Act of the Legislature (Laws 1913, p. 722 et seq.) made it the duty of consolidated districts formed thereunder to maintain high schools under penalty of forfeiture of their charters. In addition to the inadequacy of the reasoning of that opinion, as pointed out in State ex inf. v. Con. School Dist. No. 2, 275 Mo. l. c. 528, it is apparent that the Court of Appeals overlooked a question presented by the record proper, which ousted them of any jurisdiction of the subject-matter of the appeal, since the pleadings sought and the court affirmed a judgment ousting the directors of the consolidated district from further tenure of their offices as such. On the subject of appellate jurisdiction of such questions, after reviewing all the authorities, Marshall, J., speaking for this court, said:

“ Those cases were bottomed upon the proposition that the title to an. office under this State was involved, although the person was not a State officer within the meaning of the Constitution. Since the rendition of those decisions this court has entertained jurisdiction in cases seeking to oust school directors from their office on the ground that the case involved the title to an office under this State, although the person was not a State officer, and this, too, notwithstanding it has also been held that a school district is not a political subdivision of this State so as to confer appellate jurisdiction upon this court in cases where a school district is a party.” [State ex rel. v. Harter, 188 Mo. l. c. 527.]

It is apparent from this ruling that the Kansas City Court of Appeals had no jurisdiction whatever of the subject-matter of the action as far as it sought to oust the school directors from the tenure of their offices as such, and that its judgment affirming that of the circuit court on that point was void.

The undisputed facts in this case bring it clearly within the doctrine announced by this court in banc in State ex inf. McAllister v. Con. School Dist. No. 2, 275 Mo. 522. In that case it will be noted that the quo warranto was brought by the Attorney-General of the State, solely in his official capacity, to forfeit the charter of a consolidated school district and oust its directors, for the alleged failure on their part to comply with Section 10776, Revised Statutes 1909, and the statute (Laws 1913, p. 721) providing for the formation of consolidated school districts and prescribing their duties. The substance of the testimony in that case disclosed that the respondent school district, as far as it was able to do so, endeavored, to maintain and conduct the schools referred to in the act authorizing the creation of consolidated school districts; that some inhabitants of the district were recalcitrant and instituted litigation affecting the right of the consolidated school district to receive and disburse its revenues; that the school district, as far as it could do so, performed all of its statutory duties. Upon consideration of these facts it was ruled that no ground of forfeiture existed under the terms of the statute invoked by the relator in that case and the' judgment of the trial court decreeing a forfeiture was reversed and the cause remanded with directions to dismiss the proceeding.

It is not denied in the present case that all the revenue obtainable by the respondent Consolidated School District has been honestly and faithfully applied to the purposes of its organization. The pith of the contention of the learned counsel for relator is that the Consolidated District has not up to the present time erected a high school building. A complete answer to that suggestion is furnished by the record facts disclosing that until the rendition of the judgment of the lower court in this case, there was pending on appeal in this court a quo ivarrcmto filed for the purpose of dissolving the respondent corporation. It was a simple matter of prudence and in consonance with the advice of their counsel, that the respondent directors did not hold an election for the purpose of authorizing an issue of bonds while the question of the validity of their incorporation was before the court and undetermined. It is common knowledge that it would have been impossible to market or sell such bonds at anything like their fair value, while a suit was undisposed of which challenged the right of the corporation to exist at all. Capital is as sensitive as a mimosa plant. It instinctively shrinks from any offering whose validity is open to legal attack or question. Cognizant of this capitalistic creed, respondents acted with praiseworthy prudence in postponing an election for a bond issue until the determination of the snit touching the validity of the charter of the Consolidated School District. The evidence leaves no donht of the intention and purpose on the part of the respondents to take prompt and proper steps to secure a bond issue as well as State aid, for the erection of a central high school and the performance of the duties prescribed in the highly remedial act authorizing such consolidations.

Under the pleadings and evidence the judgment of the trial court was erroneous: it is therefore reversed and the cause remanded with directions -to dismiss the petition. It is so ordered.

All concur.