Henderson v. School District No. 44

School Districts ? De Jure and De Facto Public Corporations ? Attack on Legality of Existence ? Estoppel by Acquiescence. School District is Public Corporation. 1. A school district, organized by compliance with the laws of the state, is a public corporation. Municipal Corporation De Jure ? Definition ? Immune to Assault in Court. 2. A public or municipal corporation de jure is one brought into being by full compliance by its incorporators with the requirements - Page 155 of an existing law permitting its incorporation and is proof against assault in the courts. Same ? De Facto Corporation ? What Constitutes ? Who may Attack Legality of Corporation. 3. To constitute a municipal corporation one de facto there must exist a charter or general law under which it could lawfully have been organized, there must have been an attempt made to organize thereunder, and actual user of the corporate franchise. In such a case the legality of its existence can be questioned only by the state in a direct proceeding. Where, however, there was no law under which it could have been created, or no attempt to organize under an existing law, the corporation is void and may be attacked by a private individual who is affected thereby. School District ? Organization in Good Faith Under Improper Statute ? De Facto Corporation ? Collateral Attack. 4. Semble: It would seem that where a school district attempted in good faith to annex another district under an existing law providing for annexation but mistakenly proceeded under a law permitting the extension of its boundaries by taking in part of another district, and the district thus created was acquiesced in by all concerned for more than five years, it was a corporation de facto and the legality of its existence was not open to collateral attack by resident taxpayers in an action to enjoin the sale of bonds issued by the district. Same ? Attack on Legality of Existence ? Estoppel by Acquiescence. 5. Under the rule that acquiescence in the exercise of corporate functions and dealing with the corporation as such over a period of years estops all persons who so dealt with it from assailing the legality of its incorporation, held, that where resident taxpayers had for five years acquiesced in the operation of a school district irregularly created, they were estopped, on the ground of public policy, to attack the legality of its existence, even though they did not know of its creation until shortly before instituting suit to enjoin the sale of its bonds.