CARLTON M. PRANKARD and WALTER F. BLAISDELL, Respondents,
JAMES S. COOLEY, as School Commissioner, Defendant, Impleaded with the VILLAGE OF MOTT'S POINT, VILLAGE OF SANDS POINT and VILLAGE OF BARKERS POINT, Claiming to Be Municipal Corporations, Appellants.
APPEAL by the defendants, the Village of Mott's Point and others, from an interlocutory judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of Nassau on the 28th day of March, 1911, upon the decision of the court, rendered after a trial at the Nassau Special Term, sustaining the plaintiffs' demurrer to an affirmative defense set up in the answer of the said defendants.
Howard Thayer Kingsbury [Paul Fuller and Frederic R. Coudert with him on the brief], for the appellants.
W. Bourke Cockran [Robert J. Fox and Martin T. Manton with him on the brief], for the respondents.
The amended complaint alleges in substance that the plaintiffs are owners of real estate and are assessed taxpayers in the Union Free School District No. 4, in the town of North Hempstead in the county of Nassau; that the defendant James S. Cooley is the school commissioner of that school district; that each of the three villages has been created within the territory constituting said school district to be separate school districts, but that each has been created under the form of law applicable to such creations illegally, in pursuance of a fraudulent scheme instituted and instigated by certain unnamed persons who were parties to the formal propositions under which the villages were created and whose motive was the construction of separate school districts in order to escape their share of taxation for school purposes and to throw upon other persons, including the plaintiffs, an additional financial burden in that respect. The relief sought is the permanent restraint of the defendant, the school commissioner, from declaring by certificate the territory within the limits of the said villages as separate
school districts or from taking any other proceedings in that respect. The answer of the defendant villages contains a categorical denial of the allegations of the complaint, excepting the allegation relating to the fact of the incorporation of the villages, and as a separate defense alleges that the plaintiffs have no legal capacity to sue. The plaintiffs demurred to the separate defense, upon the ground that it is insufficient in law, and the interlocutory judgment appealed from sustains the demurrer.
We are of opinion that the action is not maintainable by the plaintiffs; that the validity of a municipal corporation created by proceedings legal and regular in form cannot be questioned collaterally by a private individual, but can only be determined in proceedings instituted by the Attorney-General in the name of the State and in the nature of a quo warranto. The general principle is well stated in the Cyclopedia of Law and Procedure (Vol. 10, p. 256) as a doctrine 'founded in public policy and convenience and supported by an almost unanimous consensus of judicial opinion, which is that the rightfulness of the existence of a body claiming to act, and in fact acting, in the face of the State, as a corporation, cannot be litigated in actions between private individuals or between private individuals and the assumed corporation, but that the rightfulness of the existence of the corporation can be questioned only by the State; in other words, that the question of the rightful existence of the corporation cannot be raised in a collateral proceeding.'
In McFarlan v. Triton Ins. Co. (4 Den. 392) it appears that the defendant in error sued the plaintiff in the court below, alleging, among other things, that the corporation was illegally created. In the opinion in the Supreme Court the chief justice said (p. 397): 'It is unnecessary to inquire what may be the rights of the people in relation to this corporation; or as against the individuals who were concerned in getting it up, and setting it in motion. The defendant does not represent the sovereign power, and has nothing to do with the question whether the company should be dissolved. So long as the State does not interfere, the company may sue, or do any other lawful act, whatever sins may have been committed in bringing the body into existence.'
In Willis v. Stapels (30 Hun, 644) an order denying a motion to vacate a temporary injunction restraining the holding of an election to promote the organization of a village was reversed and the injunction dissolved, notwithstanding it had been decided in Matter of Village of Elba (30 Hun, 548) that the proceedings taken for the incorporation of the village were illegal, it being held that the plaintiff's remedy for any injury which may come to him by the proceedings may be enforced by the usual modes of law or under the statute under which the defendants sought to illegally effect the incorporation of the village.
In People v. Carpenter (24 N.Y. 86) it was expressly held that the question whether a town has been illegally erected could be tested in an action in the nature of quo warranto against one claiming to exercise the office of supervisor, the court saying (p. 89) that quo warranto was 'the proper action to determine the question as to the right of the defendant to discharge the duties of the office.'
In People ex rel. Kingsland v. Clark (70 N.Y. 518) the action was to restrain the defendants from proceeding to incorporate a village under the general act applicable. The court said (p. 520): 'A legal action in the nature ...