Case Name: ISAACSON, Appellant, v. PARKER et al, Respondents. (2 Cases); ALATALO, Appellant, v. PARKER et al, Respondents. (2 Cases)
Court: South Dakota Supreme Court
Jurisdiction: South Dakota
Decision Date: 1920-06-05
Citations: 43 S.D. 142
Docket Number: File Nos. 4591, 4596, 4592, 4593
Parties: ISAACSON, Appellant, v. PARKER et al, Respondents. (2 Cases) ALATALO, Appellant, v. PARKER et al, Respondents. (2 Cases)
Judges: 
Reporter: South Dakota Reports
Volume: 43
Pages: 142–146

Head Matter:
ISAACSON, Appellant, v. PARKER et al, Respondents. (2 Cases) ALATALO, Appellant, v. PARKER et al, Respondents. (2 Cases)
(178 N. W. 139)
(File Nos. 4591, 4596, 4592, 4593.
Opinion filed June 5, 1920 )
1. Schools — School District — Non-de Facto District, Acquiescence in Formation Of, Estoppel Re — Quo Warranto Complaint Negativing Acquiescence, Good Faith, Effect.
On rehearing, respondents urge, and cite decisions which they contend support their position, i. a. that parties who sit idly by and acquiesce in formation of a public corporation arel estopped . from questioning validity of its organization, even though not at the beginning a, de facto corporation, which contention is untenable; this action having been brought before money was expended by the alleged corporation and before bonds were issued; moreover, the complaint negatives acquiescence, and negatives good faith of the attempted organization, and the authorities cited are not applicable.
2. Schools — School Districts — Non. die Facto Organization — Recovery of Taxes Paid,' Annulling Organization, Complaint, Sufficiency of Re Injunction.
Where, in proceedings by taxpayers and a school director and patron under Laws 1915, Ch. 289 (Sec. 6826 Rev. Code 1919,) to recover taxes levied by an alleged consolidated school district, and paid under protest and to annul, through quo' warranto, a purported consolidated district, and to enjoin further levy and collection of taxes, the complaint alleges facts which show invalidity of the proceedings, and that the purpose of the consolidation was fraudulent, etc., and for the purpose of shifting of the burden of taxes from the independent district to rural districts, held, that the allegations set forth show sufficient facts and prayer for relief to constitute a complaint for injunctive relief.
3. Same — Consolidating Independent and Rural Districts — Bettering Rural School Conditions as Purpose, Benefit to Rural Pupils Irrelevant — Resulting Policy of Abandonment of Rural Schools on Consolidation — Former Decision Adhered To — Non-application of Consolidation Law to Independent Districts.
On rehearing, former opinion (43 S. D. 562, 176 N. W. 653) adhered to, sustaining sufficiency of complaint to entitle plaintiffs to the relief sought re re-payment of taxes and annulment of consolidated district; the fundamental thought underlying Laws 1913, Ch. 194, being the “purpose of promoting better condition in rural schools,” hence, question whether or not the inclusion of an independent district in a consolidated district would benefit rural pupils is irrelevant; it being demonstrable from history of other consolidations that when an independent district is part of a consolidated district the schools in the former are abandoned and the consolidated school established in the city; therefore said consolidation law is inapplicable to independent school districts.
Whiting, J., dissenting.
On rehearing.
Former decision adhered to.
Bugene. F. Campbell, and Loucks, Hasche & Foley, for Appellants.
■ M. 7. Russell,. F. 7. Benthin, McFarland & Kremer, and Hanten & Hanten, for 'Respondent.
Byron S. Payne, Attorney General, Amicus Curiae.
(i) To point one of the opinion, Appellant cited: Wickre et al. v. In. Twp. et al, -31 S. D. 23.
’Réspondent cited: St. Paul Gas Company v. Sandstone, 73 Minn. 225, 75 N. W. 1050; 'School District 50 v. State, 29 Kan. '57; 'Coler v. Rhoda School Twp., 6 S. D. 640, 63 N. W. 158.
The Attorney General, Amicus Curaie, cited: Continental Trust Company v. Toledo, etc., 82 Red. 842.
(2) To point three, Respondents cited: Laws 1915, ch. 289, sec. 1.
(3) To point three, Appellant cited: People et al, v. Stewart (111.) 118 N. E. 55; State ex rel Baleh v. Fry, et al, (Mo.) 85 S. W. 328.

Opinion:
GATES, J.
The respondents petitioned for a rehearing. The former opinion of this court is found in 176 -N. W. 653-The Attorney General, representing the educational department of the state, filed a petition as amicus curiae. In view of the fact that the decision of this court was adverse to the construction placed 'by the educational department upon the consolidated school law, we granted a rehearing. Able counsel argued the questions before the court. Elaborate ibriefs wer.e filed by the parties and by the Attorney General. The principal ground urged' by respondents, aside fromi the claims that this court erred in its interpretation of section 1, c. 194, Laws of 1913, is that the we erred in asserting that the consolidated district was not only not a de jure district, but was not a de facto district, and therefore that we erred in holding that the plaintiff could attack the organization without obtaining the refused permission of the state's attorney and the Attorney General. In support of this ground cases are cited by respondents which tend to establish a rule that parties that sit idly by and acquiesce in the formation of a corporation may be estopped from, questioning the validity of the • organization even though it was not at the beginning a de facto corporation. But such is not this case. This action was brought before money was expended, 'before a contract for a school building was let, and before bonds were issued. The recitals in the complaint also negative acquiescence by appellants and negative the good faith of the attempted organization. How can such authorities be applicable to the present situation? Among the cases cited are the following: Tulare Irr. Dist. v. Shepard, 185 U. S. 1, 22 Sup. Ct. 531, 46 L. Ed. 773; Coler v. Rhoda Sch. Tp., 6 S. D. 640, 63 N. W. 158; Schweigert v. Abbott, 122 Minn. 343, 142 N. W. 723, the soundness of which decisions we do not challenge.
Respondents admit that appellants would have had a standing in court if the action had been brought for an injunction. In addition to the relief asked for the recovery of taxes paid, under the provisions of chapter '289, Laws of 1915 (section 6826, Rev. 'Code 1919), the allegations of the complaint set forth sufficient facts and prayer for relief to constitute the complaint one for injunctive relief. Let it also be borne in mind that the statements contained in the former opinion are to be applied to the facts of these cases as alleged in the amended complaints and as admitted by the demurrers thereto.
After giving much thought and careful consideration to this case and to its probable consequences, we are still of the opinion that the allegations of the complaint entitle appellants to the relief sought. We are still of the opinion that the reason and fundamental thought underlying the passage of the act of 1913 was the "purpose of promoting a better condition in rural schools." Such being the issue, the question whether or not the inclusion of an independent district in a consolidated district would be a benefit to the pupils of the rural territory is entirely irrelevant. It is a demonstrable fact from the record in this case and from the history of other consolidated districts that when an independent school district is a part of a consolidated district the' schools in the former rural districts are abandoned, and the consolidated school is established in the city. 'While, as stated in our former opinion, this may furnish better schooling for the pupils, yet the avowed purpose of the act was not to furnish better schooling for the pupils, but it was to promote a better condition in the rural schools. Therefore it is clearly apparent (not a matter of conjecture or opinion) that the application of the act to independent school districts would not be consistent with such avowed purpose, but would frustrate the same. The conclusion therefore is inevitable that the Legislature did not intend that act to apply to independent school districts.
The formler opinion is adhered to. The orders appealed from are reversed, and the causes remanded for further proceedings in harmony with that opinion and this.