Gillespie v. Gibbs

41 So. 868, 147 Ala. 449, 1906 Ala. LEXIS 231

• Court: Supreme Court of Alabama
• Decided: June 13, 1906
• Status: Published

Opinion

TYSON, J.

This is the case of a bill filed by certain taxpayers of the municipality of the town of ITanceville, one of whom was an alderman of the said town, against the intendant and the other aldermen, to enjoin ultra vires acts of the corporation. The particular act complained of was the application of corporate funds to the repair and completion of school property- owned by the Hanceville school district situated in the town, and the purchase of an additional lot for the said school. After an injunction liad, issued, the town authorities, recognizing the want of power to dO' the act complained of, revoked the orders under which they were directed to be done, and apparently abandoned the project, but immediately afterwards rented for a town hall a portion of the same schoolhouse for five years, and paid the rent for the whole term in 'advance, amounting to $250. Thereupon amendments to the bill were interposed, setting up these facts, alleging that they were a mere subterfuge for avoiding the injunction, and making new parties. Motions were made to strike the amendments as departures, to dismiss the bill for want of equity, and to dissolve and discharge the injunction, and at the same time demurrers were interposed to the whole and to parts of the bill. The chancellor dissolved the injunction, struck the amendments, sustained the demurrers, and, finding in his decree that the bill could not be amended so as to give it equity and that complainants made no effort to amend, dismissed the bill. The appeal is brought by the complainants below to reverse this decree.

We do not doubt the right of an alderman, to join in his individual capacity as a taxpayer of the town with the other complainants to enjoin ultra vires acts by the town authorities and their officers. One does not lose his character and capacity and rights as a citizen by becoming an officer of the town in which he lives, and he by no means complains of himself by joining with others in the institution of a suit in his capacity as a citizen and taxpayer against the corporation and its officers other than himself. Nor do we doubt that the officers of the corporation engaged in the perpetration of' ultra vires acts in behalf of the corporation are proper parties defendant to a suit to enjoin such acts, or to correct them. In such case there may be a personal liability in favor of the corporation, to be imposed upon the officers engaged in the illegal acts complained of. Nor does the fact that, after a suit has been instituted, complaining of ultra vires acts about to be done, the corporation and its officers discover their error and revoke the orders under which the acts were directed to be done, and abandon the illegal scheme, afford any canse for the dismissal of a suit properly instituted to prevent the acts complained of, although such' matters he set up as amendments to the bill as having occurred. McMinn v. Karter, 123 Ala. 502, 26 South. 649. Such .acts of recantation by the corporation and its officers, as stated, in the case cited, strengthen the case made by the original bill, and confirmed the title to -relief therein alleged, and by no means have the effect of destroying the equity of the original suit. The amendment in this case, while it might not give the complainants any right to relief against the acts complained of theiein, in reference to the renting of a portion of the school house as a town hall, on the ground that the municipal authorities have a legislative discretion in reference to such matters, which cannot be inquired into, and particularly so in ,a case of this kind, instituted for a different purpose, did not interfere with the equity of the original bill to have the judgment of the court' ifi striking the amendments, which is necessarily-am act antecedent in its nature to the dismissal of the bill, would certainly leave the bill unimpaired by the amendments.

But there is a defect about the original bill which seems to render the sustaining of the demurrer thereto unobjectionable. The suit is in reference to corporate property and alleged corporate conduct. Ordinarily the corporation itself would be the proper complainant to bring such suit, but, being under control of officers who were united in the project of misapplying the corporate funds, the right to prevent such injuries to the corporation by the institution of suits such as this by the taxpay-. ers of the town is-undoubted, and it is fully recognized; but the municipal corporation in its corporate capacity is a necessary party to the proceeding, when it is not a plaintiff. When the suit is one to vacate a charter and restrain persons from acting as a corporation, it- was improper, prior to section 3423 of the code of 1896, to make the alleged corporation a party defendant, since it rvould be an admission of its existence. — State ex rel. Sanche v. Webb, 97 Ala. 111, 12 South. 377, 38 Am. St. Rep. 151. But when the suit is in behalf of a corporation, and to preserve its property against illegal acts done in its name by its officers, the corporation as-such is certainly an indispensable party. The analogy in such cases between municipal corporations and private corporations, when suits are instituted in behalf of the latter by corporators, is perfect. — 10 Cyc. pp. 995, 996, and authorities there cited; 2 Dillon on Corporations, §§ 915, 916. Though the inhabitants of a town are, as stated in City of Eufaula, v. McNab, 67 Ala. 589, 42 Am. Rep. 118, the corporators, and the officers are but public agents of the corporation, the corporation itself is the legal owner of all the'property standing in its name, as much as a private corporation, and neither can be. dispensed with as a party defendant to a legal proceeding such as this. — Ency. Pl. & Pr. vol. 10, p. 914; Id. vol. 14, p. 224; 36 Cent. Dig. col. 3126; New Orleans M. & C. R. R. Co. v. Dunn, 51 Ala. 128; Turner v. Cruzen, 70 Iowa, 222, 30 N. W. 483; Moore v. Held, 73 Iowa, 538, 35 N. W. 623.

The demurrer ill this case on the ground of the absence of the corporation as a party to the suit was distinctly made, and was sustained in term time, and the complainants, by not offering to amend, stood by their bill. There was thus no alternative left but to- dismiss the bill, since “no court can adjudicate directly upon a person’s right without the party being either actually or constructively before the court.” — Mallow v. Hinde, 12 Wheat (U. S.) 130, 15 L. Ed. 158; 3 Brick. Dig. 373. As this point is decisive, and must result in the affirmance of the decree of the lower court, it is unnecessary tó consider other matters in the case.

The decree of the lower court is therefore affirmed.

Weakest, C. J., and Simpson and Anderson, JJ., concur.