Carter v. Town of Muscle Shoals

The statute under which it is sought to dissolve a municipal corporation, here in question, requires that a petition to do so shall be signed by three-fourths of the qualified voters residing within the corporate limits. Title 37, section 18. The probate judge sets the same down for hearing and gives thirty days' notice by posting. Section 19. Upon the hearing the only inquiry is whether three-fourths of such voters are in favor of the dissolution. If so, that finding puts into operation the legislative act by which the corporation becomes dissolved. There is no special provision describing the persons who may be heard in opposition to the petition. But a hearing is provided for in section 20. That hearing only relates to the question of whether three-fourths of the resident voters favor the dissolution. Naturally, any interested person should have a right to be heard on that question. Resident citizens are of course interested.

As to private corporations, the general rule is that if the proceeding admits its legal existence, but seeks to dissolve it on some ground which does not go to the legality of its existence, the corporation as such is the party against whom the proceeding must be directed. 13 Amer.Jur. 1184, § 1331; 19 Corpus Juris Secundum, Corporations, § 1698, p. 1466, notes 29 and 30.

When the proceeding goes to the validity of the organization, the corporation is not a necessary party. State v. Webb,97 Ala. 111, 12 So. 377, 38 Am. St. Rep. 151. But is made by statute a proper party. Title 7, section 1139, Code of 1940; Floyd v. State, 177 Ala. 169, 59 So. 280.

It is our view that the principle by which a private corporation, legally created, has an interest in any proceeding which looks to its dissolution, applies to a municipal corporation.

It is not an answer to this to say that the legislature can without the will of a municipal corporation or its residents dissolve it. That has not been done. The existing statute may as well for that reason be held to cut off residents from being heard on the issue. The legislature could do so. But it has not done so, and has not cut off any interested person, we think, from being heard on it. It is our view that a legally constituted municipal corporation has an interest in its continued existence, and is in an attitude which resembles a private corporation which is sought to be dissolved on some ground which admits its legal incorporation. Compare the case of Rice v. Gwinn, 5 Idaho 394, 49 P. 412.

And being such an interested party as that, it has a right to be heard upon the subject of its dissolution. It has the implied power to employ counsel to represent it upon such hearing, and, therefore, to incur and pay a proper attorney's fee in that connection. It is our judgment, therefore, that the note, which is the subject matter of this suit being duly executed by authority of the governing body of the city as compensation for attorneys employed by them upon the hearing as to whether the corporation should be dissolved, is not void for want of authority on the part of the city.

It results that the demurrer to the complaint on the ground which we have here discussed should, in our opinion, have been overruled, and the lower court was in error in sustaining the demurrer on that ground. The judgment is therefore reversed and the cause remanded.

Reversed and remanded.

GARDNER, C. J., THOMAS, BOULDIN, and BROWN, JJ., concur.

LIVINGSTON, J., dissents.

KNIGHT, J., not sitting.