Opinion ID: 1328345
Heading Depth: 1
Heading Rank: 6

Heading: de facto corporation

Text: Lastly, appellants assert Town, having assumed all the duties and powers of a municipality, is a de facto municipality and is therefore not subject to attack. We disagree. A de facto corporation is one so defectively created as not to be a de jure corporation, but nevertheless the result of a bona fide attempt to incorporate under existing statutory authority, coupled with the exercise of corporate powers, and recognized by the courts as such in all proceedings except a direct attack by the state questioning its corporate existence. McQuillen, infra, § 3.48. If, however, there is a material omission or fatal irregularity in the proceeding for the incorporation, a purported decree is void and does not create a de facto corporation. Id. at § 3.48(a). S.C.Code Ann. § 5-1-110 specifically authorizes such a challenge. Here, the plaintiffs claimed a fatal irregularity in the incorporation proceeding, i.e., lack of contiguity. We find the challenge was both timely and proper and, accordingly, we decline to confer the status of a de facto municipality simply due to the length of the appeal. Accord Dalton v. Town Council of Mt. Pleasant, 241 S.C. 546, 129 S.E.2d 523 (1963) (refusal to uphold de facto existence where plaintiff had acted promptly in contesting annexation and sought, and been denied, an injunction pending the litigation). [8] The judgment below is AFFIRMED. TOAL, MOORE and BURNETT, JJ., and H. SAMUEL STILWELL, Acting Associate Justice, concur.