Beyer v. Templeton , 208 S.W.2d 692 ( 1947 )

LOONEY, Justice.

Appellants, resident citizens, property owners and qualified voters within the territory known as Honey Springs, in their individual capacities brought this action seeking a writ of mandamus to compel Honorable Al Templeton, County Judge of Dallas County, to canvass the votes and announce the result of an election held to determine whether or not the Town of Honey Springs should be incorporated under the Commission form of government; also to enjoin the City of Dallas from enforcing its ordinance No. 3973 by means of which the City sought to annex the territory known as Honey Springs; the contention of appellants being that the ordinance and the attempt to annex the territory were unauthorized and void. Appel-lees answered fully, among others filed a plea in abatement and a motion to dismiss on the grounds (1) that on December 18, 1946, the County Judge having revoked the order for the election issued on the previous day before it was acted upon, the election held thereunder was without authority and void; furthermore, that the •County Judge was without authority to -order the same, for reasons hereinafter stated; and (2) that the suit was a collateral attack upon the ordinance of annexation adopted by the City which was a valid municipal act authorized by law or ■color of law. The case was submitted to the court without a jury on an agreed statement of facts applicable both to the merits as well as to the dilatory pleas. The court sustained the dilatory pleas and dismissed the suit; hence did not pass upon the merits of the case. However, this appeal brings up for review the entire case.

The material facts giving rise to this litigation, including the original acts of incorporation, the efforts of citizens to ■abolish same, the proceedings pursued by the City of Dallas to annex the territory, the quo warranto suit against the City of Honey Springs, the judgment of ouster rendered therein, and the efforts of citi.zens of the Honey Springs territory (appellants herein) to re-incorporate, are epitomized as follows: In the year 1937, the territory known as Honey Springs was sought to be incorporated under chapter 11, Art. 1133, R.C.S. and in 1945, by ordinance, the City accepted the provisions of Art. 961, R.C.S., thus attempting to enlarge its powers. On February 9, 1946, the County Judge of Dallas County called an election under Art. 1261, R.C.S., for the purpose of abolishing the corporation; on February 20, 1946, the election was held and the proposition abolishing the corporation was carried. In that status, on February 27, 1946, the City Council of the City of Dallas passed its ordinance No. 3973 on its 'first reading, annexing the territory comprising the Town of Honey Springs. On March 28, 1946, there was filed with the City of Dallas a petition by about one-hundred and twenty-one property owners and electors of the territory of Honey Springs (presumably a majority in the absence of -any showing or contention to the contrary), requesting the City of Dallas to vote to its final passage its ordinance No. 3973. Thereafter, on May 29, 1946, a suit was filed in a District Court of Dallas County (the City of Dallas not being a party) in the nature of a quo warranto proceedings questioning the corporate existence of the City or Town of Honey Springs, which, on September 13, 1946, resulted in a judgment of ouster, thus terminating its corporate existence for all purposes. The quo warranto suit having been appealed to this Court, on January 17, 1947, we affirmed the judgment of the court below and thereafter the Supreme Court refused an application for writ of error (N.R.E.). See report of the case, Richardson et al. v. State, Tex.Civ.App., 199 S.W.2d 239. On September 25, 1946, after the judgment of ouster was rendered, the City of Dallas passed its ordinance No. 3973 on its second reading, and on December 18, 1946, finally passed the same on its third reading, annexing said territory.

The record discloses that on December 17, 1946, Al Templeton, County Judge of Dallas County, upon the petition of residents of the territory of Honey Springs, ordered an election to determine whether or not the said City of Honey Springs should be re-incorporated, but on the next day, December 18, 1946, having ascertained the facts in regard to the status of the territory in question, that is, that by ordinance the City of Dallas had annexed the same, the County Judge revoked his previous order calling the election, on the ground that he was without jurisdiction or authority, that the City of Dallas had exclusive jurisdiction over the territory from the time of the passage of its ordinance on February 27, 1946.

Notwithstanding the revocation of the order of election issued by the County Judge, an election was held for the re-incorporation of the territory of Honey Springs which apparently received' a majority vote, and on January 26, 1947, returns were made of the election to the County Judge of Dallas County; however, on the 3rd of February, 1947, the County Judge entered an order refusing to make any further orders in regard to said election and presented in writing his reasons for canceling the election order of December 17, 1946, as hereinbefore stated.

Appellants urge two points of error as follows: (1) That the trial court improperly sustained appellees’ plea in abatement and in dismissing the suit; (2) that the trial court erroneously failed to hold as void ordinance No. 3973 of the City of Dallas, annexing the Honey Springs territory, and, in this connection, appellants concede that unless the ordinance is void they are without capacity to bring this suit; hence, that the sole question presented is, whether or not ordinance No. 3973 is void.

Appellees counter with the following: (1) That the court did not err in sustaining appellees’ plea in abatement and in dismissing the suit, in that, on December 18, 1946, the County Judge of Dallas County revoked his order of the day before calling an election for the purpose of re-incorporating the Honey Springs territory; thereby vitiated and destroyed the right of the voters of said territory to conduct a valid election; (2) that the appellants were improper parties, in that, the instant case is a collateral attack upon an ordinance valid on its face, enacted by a duly constituted municipal corporation; hence appellants were not authorized to raise the sole question as to whether or not the territory known as the Town or City of Honey Springs was properly brought within the City of Dallas. Appellees also agree with appellants that the question whether or not ordinance No. 3973 of the City of Dallas is void, necessarily is determinative of the entire controversy.

In reviewing the quo warranto suit heretofore mentioned, we held, among other things, that prior to and at the time of the rendition of the judgment of ouster, Honey Springs, although illegally incorporated because containing excess territory, nevertheless was invested with a de facto status. Richardson v. State, Tex.Civ.App., 199 S. W.2d 239, 245; see also Wilson v. Carter, Tex.Civ.App., 161 S.W. 411, 412. We also held that the proceeding to abolish the corporation of Honey Springs was void because dissolution was attempted under Art. 1261, whereas Art. 1241 should have been pursued. So these questions will be treated as settled by our previous holdings.

Did the action of Judge Templeton, in rescinding his order of the previous day for an election to incorporate the Honey Springs territory, effectuate its purpose? If so, the election held January 25, 1947, was wholly without authority and void. It is obvious, we think, that, in ordering the election, the County Judge, of necessity, had to exercise a judicial discretion; among other things, to determine whether the territory sought to be incorporated was unincorporated and contained the requisite number of inhabitants. On December 18, 1946, the day after the County Judge issued the order calling the election, having ascertained that the City of Dallas, by its ordinance No. 3973, previously had annexed or at least acquired jurisdiction for the purpose of annexing the territory sought to be incorporated, the Judge revoked his order of the day before. After the purported election was held under the rescinded order, the proposition having received a majority of the votes, Judge Tem-pleton was called upon for an order declaring the result of said election. Refusing this request, Judge Templeton entered an order in extenso stating the reason for his action in revoking the order for the election and in refusing to announce the result of the said election; gave a short history of the original incorporation of Honey Springs, its dissolution, the quo warranto suit in which it was ousted of all municipal functions; and, among other things pertinent to the question under consideration, said: “At the time the petition for the election to incorporate the area in question was offered on December 17, 1946, no proof or evidence was offered, and no hearing was had as to whether said property sought to be incorporated was already incorporated for municipal purposes, nor, was there any proof that the signatures of said petition constituted 10 per cent of the qualified voters, nor was there any proof of the population of the area, * * * the court was not aware, nor was it made known to him, that the City of Dallas had already, prior to the filing of said petition, instituted and commenced annexation proceedings by ordinance, in accordance with law, to annex all of the area included within the attempted incorporation of 1937 of the Town of Honey Springs, and including all of the area sought to be incorporated by the petition of December 17, 1946, and that the City of Dallas was, on December 17, 1946, then proceeding, and in the course of completing, said annexation. * * * That, by reason thereof, this Court was and is wholly without jurisdiction to entertain said petition of December 17, 1946 to incorporate into a separate municipality a part of the property which was already involved in the annexation proceedings of the City of Dallas. That, on December 18, 1946, the annexation proceedings by the City of Dallas were, in all things, completed in accordance with law, and all of the area described in said petition for incorporation of December 17, 1946 now is, and has been, a part of the City of Dallas, a municipal corporation, since December 18, 1946. The undersigned signed the order prepared and presented to him calling for the election, relying on the statements made in the petition and not knowing that the statement made in said petition that the area was not incorporated for municipal purposes was untrue; that, upon ascertaining the true facts, the undersigned, in his official capacity as County Judge of Dallas County, Texas, on the 17th day of December 1946, did, within a few hours after signing the original order, enter an order setting aside and canceling the said original order and denying the petition for the election, and the proponents of said petition were so advised of the court’s action and appeared in court and conferred with the court concerning such action. That, in spite of the action of this court and in spite of the knowledge that the ordei for election had been set aside, the election was attempted to be held. * * * ” (See Templeton’s Exhibit “F”)

In State ex rel. Burkett v. Town of Cylde, Tex.Civ.App., 18 S.W.2d 202, 203 (writ ref.), Judge Funderburk, speaking for the Eastland Court, among other things, said: “* * * Article'581 of the Revised Statutes of 1895, which was in force at the time in question, prescribed the duties of the county judge upon being presented with a proper petition as follows: Tf satisfactory proof is made that the town or village contains the requisite number of inhabitants, it shall be the duty of the county judge to make an order for holding an election on a day therein stated, and at a place designated within the town or village, for the purpose of submitting the question to a vote of the people.’ The duty thus imposed upon the county judge was one of a judicial nature, and the law provided no right to have his decision revised and no procedure for doing so. State v. Goodwin, 69 Tex. 55, 5 S.W. 678. Any judicial action involves the possibility of error. In the absence of a right of appeal or some other method of revision, the courts are powerless to correct error in such action. * *

Analogous to the judicial discretion exercised by a trial judge during the term at which a judgment is rendered, that is, to set same aside, we think it follows that, for the reasons stated, the county judge had the power to revoke the election order at any time before the proceedings contemplated thereunder were finally consummated. See 25 Tex. Jur. Sec. 150, pp. 545, 547; Gulf C. & S.F. R. Co. v. Muse, 109 Tex. 352, 207 S. W. 897, 4 A.L.R. 613.

It follows, we think, that the election held in defiance of the order of revocation, without regard to the result, was utterly void. See Countz v. Mitchell, 120 Tex. 324, 38 S.W.2d 770, by the Commission, opinion adopted by the Supreme Court; Smith v. Morton Independent School District, Tex. Civ.App., 85 S.W.2d 853 (application dismissed), and Coffee v. Lieb, Tex. Civ.App., 107 S.W.2d 406.

We will now discuss the other question presented, that is, whether ordinance No. 3973, enacted by the City of Dallas, annexing the Honey Springs territory, is void. If not void, appellants concede that they have no standing in court.

In annexing the territory, the City of Dallas (a home rule city) acted under the provisions of both sec. 4 and sec. 4(a) of its charter. The pertinent portions of these sections are as follows: “Sec. 4. Additional Territory. Any territory adjoining the present or future boundaries of said city may from time to time in any size or shape desired, be admitted and become a part thereof on application made or written consent given to the City Council by the owner or owners of the land, or, as the case may be, by a majority of the legal voters resident on the land sought to be added. * * “Sec. 4(a). As an alternative method of enlarging or extending the corporate boundaries, the City Council shall have the power by ordinance to provide for the alteration and extension of said boundary limits, and the annexation of additional territory lying adjacent to the City, with or without the consent of the territory and the inhabitants annexed. Upon the introduction of any such ordinance in the City Council, it shall be published one time in the newspaper designated as the official newspaper of the City of Dallas, * * *. The proposed ordinance shall not thereafter be finally acted upon until at least thirty (30) days have elapsed after the publication thereof; and upon the final passage of any such ordinance, the boundary limits of the City shall thereafter be as fixed in such ordinance, * *

On February 27, .1946, the City Council, on its own initiative, under the provisions of sec. 4(a), enacted ordinance No. 3973 on its first reading and the publication required was made. On March 26, one-hundred and twenty-one owners of land and legal resident voters in the territory, petitioned the City Council to vote to its final passage ordinance No. 3973. It seems that thereafter on May 29, 1946, the quo warranto proceedings hereinbefore mentioned (to which the City was not a party) was filed, questioning the corporate existence of the Town or City of Honey Springs; and on September 13, 1946, a judgment of ouster was rendered in the suit, thus terminating the corporate existence of Honey Springs. Now, after all these proceedings, on September 25, 1946, the City of Dallas, acting under the provisions of both sections 4 and 4(a), passed ordinance No. 3973 on its second reading and on December 18, 1946, passed the same finally on its third reading. It was not until December 17, 1946, the day before the ordinance was passed on its third reading, that appellants began their proceedings seeking the re-incorporation of territory formerly a part of the Town or City of Honey Springs.

Appellants contend that ordinance No. 3973 of the City of Dallas, seeking to annex the territory known as Honey Springs, was void for the reason that, at the time, there existed over said territory a municipal gov-erment. As heretofore shown, we held in the quo warranto case, Richardson v. State, that Honey Springs was simply a de facto corporation at the time. In support of their contention, appellants cite the case of City of West University Place v. City of Bellaire, Tex. Civ. App., 198 S.W.2d 766. It is obvious, we think, that both Bellaire and South Side Place, whose territory was sought to be annexed by City of West Uni- ' versity Place, were de jure municipal corporations, and functioning as such; hence the territory sought to be annexed had previously been expropriated for municipal purposes. We think the court correctly held that this could not be done, but we do not think that case is in point, in that, the territory sought to be annexed to the City of Dallas had not been legally expropriated by a de jure corporation,- as in the case cited. Honey Springs was the mere ghost of a corporation, recognized as having a de facto status as a matter of public policy for the protection of individuals who had, or were compelled to have, transactions with it while acting as a corporation. However, before the proceedings begun by the City of Dallas were finally consummated, Honey Springs had been ousted of its function as a de facto corporation, thus removing any impediment, if that constituted a legal impediment, in the way of the City of Dallas annexing the territory.

As to the nature of a de facto corporation and the reason for giving validity to its contracts and acts, Judge Williams, speaking for the Supreme Court in Parks v. West, 102 Tex. 11, 18; 111 S.W. 726, 729, said: “The rule is founded in public policy and convenience merely, and is not to be so applied as to defeat the assertion of just legal rights by parties in the courts. * * In 37 Am.Jur., p. 630, sec. 11, it is stated that: “The doctrine of de facto municipal corporations is generally recognized in the United States. The doctrine is that where there is authority in law for a municipal corporation, the organization of the people of a given territory as such a corporation under color of delegated authority, followed by a user in good faith of the governmental powers incidental thereto, will be recognized by the law as a municipal corporation de fau-:o, wnerever through failure to comply with statutory requirements the corporation cannot be said to exist de jure. * * It is stated in 13 Am.Jur., p. 194, sec. 47, that: “ * * * The reason generally for holding such a corporation to have achieved a de fact.o existence is that if rights and franchises have been usurped, they are the rights and franchises of the sovereign which alone can interpose. Until such interposition, the public may treat those possessing and exercising the corporate powers under color of law as doing so rightfully. The rule is in the interest of the public and is essential to the validity of business trans-actions with corporations. * *

So we conclude that the territory not being within the limits of a de jure corporation, the City of Dallas obtained jurisdiction over the territory for the purpose of annexing same on Feburary 26, 1946, by the introduction and passage of its ordinance No. 3973 on its first reading, and that it retained such jurisdiction until the annexation proceedings were consummated.

In State ex rel. Binz v. City of San Antonio (writ ref.), Tex.Civ.App., 147 S.W. 2d 551, the court said; “Where territory sought to be annexed by home rule city was not within the limits of another municipality on date when annexation proceedings were commenced by city, those proceedings were valid, and a subsequent attempt to incorporate territory was ineffective arid void, even though incorporation proceedings were completed before annexation proceedings were completed.” Also, see State of Texas ex rel. George v. Baker, 120 Tex. 307, 40 S.W.2d 41.

However, if it cannot be correctly said that the City of Dallas obtained jurisdiction over the territory for annexation purposes on February 26, 1946, when ordinance No. 3973 was passed on its first reading, we think unquestionably jurisdiction was obtained on September 25, 1946, when the ordinance was passed on its. second reading, for at that time no impediment existed to prevent the acquisition or exercise of jurisdiction by the City as the judgment of ouster in the quo warranto suit had been rendered and Honey Springs existed no longer, not even as a de facto corporation. It may be true that had the annexation proceedings been fully consummated before the judgment of ouster, the administrative powers of the City of Dallas over the annexed territory would have been .held in abeyance, a point wé do not decide because as just stated Honey Springs was ousted of all municipal functions on September 13, before the City passed the ordinance on its second reading September 25, 1946. At that time the City acted on its own initiative under sec. 4(a) of its charter; also under sec. 4 in response to the petition of land owners and legal resident in the - territory sought to be annexed; the annexation proceedings becoming final on the passage of the ordinance on its third reading, December 18, 1946, since which time said territory has been treated as a part of the City of Dallas.

In all its proceedings, the City acted in'compliance with its charter provisions and if it can be said that irregularities characterized some of the proceedings, yet, the annexation at least was .de facto and immune from collateral attack; hence in no event were appellants as individuals authorized to institute and prosecute the suit.

It follows that in our opinion the court-did not err in abating -and dismissing the suit for two reasons: First, because the election reincorporating the territory, under and by virtue of which appellants proceeded, was void because held without authority, as heretofore shown; and, further, for the reason -as just stated, we do not think the action of the City- in annexing the territory was subject to collateral attack. Therefore, appellants were not authorized to prosecute the suit.

The judgment of the court below is affirmed.