Missouri Drainage & Levee District Legals

12:20:39 PM EST

The Birmingham Drainage District last signed a document to sponsor the Birmingham levee as part to the Federal Levee System in 1946.

However, the Birmingham Drainage District public corporation charter expired (and the corporation died) on December 22, 1963 after Kansas City incorporated that area into the City Limits. According the the Missouri Supreme and Appeals courts, Kansas City had exclusive jurisdiction over drainage and levees and the dead corporation could not be legally reorganized seven years later (1970) by landowners within the city limits of Kansas City.

http://journals.aol.com/amintertrust/MissouriDrainageLeveeDistrictLeg/entries/1466

http://journals.aol.com/amintertrust/MissouriDrainageLeveeDistrictLeg/entries/1472

Kansas City, Missouri Charter

Flood protection provisions are constitutional. Charter provisions for flood protection were held constitutional in State v. Kansas City, 310 Mo. 542, 276 S.W. 389.

http://library12.municode.com/gateway.dll/MO/missouri/174?f=templates&fn=default.htm&npusername=10156&nppassword=MCC&npac_credentialspresent=true&vid=default

Annotations-- In re East Bottoms Drainage, etc., Dist., 305 Mo. 577, 259 S.W. 89.

Authority conferred by this section is exercise of police power, assessment of benefits is not tax, is not governed by constitutional limitations in regard to taxation and is not taking private property for public use without due compensation. Morrison v. Morey, 146 Mo. 543, 48 S.W. 629.

Sec. 321. 
The council shall have power to provide for the establishment of levee districts within the city limits and for the construction of levees, dikes, drains and other works therein, and roadways thereon and connected therewith, for the protection of the lands within such levee districts from floods or overflow of waters, and for the acquisition of lands, rights-of-way, easements and otherrights required therefor by the city, by purchase, condemnation or otherwise, including railroad property. The cost of such land, rights-of-way and other rights, and of the construction of said levees, dikes, drains, roadways and other works within any levee district may be paid by assessment of benefits upon all the lands within said levee district, exclusive of improvements thereon, or out of the general fund of the city, or out of funds obtained by the issue and sale of the bonds of the city according to law, or partly by assessment and partly out of the general fund, or of the proceeds of bonds, as may be provided by ordinance; or when two (2) or more of such levee districts may be joined as one benefit district as hereinafter provided, for the acquisition of such lands or rights, and the construction of such improvements, the council shall have power, by ordinance, to provide that the cost of such acquisition and construction may be paid by assessment of benefits upon the lands, exclusive of improvements thereon, in all such districts so joined.

Sec. 343. 
The council shall have the power to pass ordinances for the protection of the levees, dikes, roadways and other works constructed under the authority of this article, and for the proper policing of the same, and to establish penalties for the violation of such ordinances; and shall have power to pass such ordinances, not in conflict with this article, or the constitution and laws of the state, as may be deemed necessary and expedient for more fully carrying into effect the objects and purposes of this article.

Sec. 341. Maintenance tax.
The real estate, inclusive of improvements thereon constituting a part thereof, in any levee district or districts, may be specially assessed annually for maintaining and repairing any levees, dikes, drains, roadways, or other works constructed therein or thereon, and such assessments may be made according to valuation and assessment for taxation of real estate in such levee district or districts made for general city purposes; provided, that any real estate which shall not be listed on the assessment books used for taxation for general city purposes, may by ordinance of the council be listed and valued by the city assessor for purposes of this article; and provided further, that such annual assessments authorized by this section shall never exceed in any one year one mill upon each dollar of valuation as shown on such assessment books, as aforesaid. Every such assessment shall be made and collected as provided by ordinance of the council, and the council shall have the power to provide penalties for the failure to pay such assessments when due and may provide for the sale of the property assessed to satisfy said assessments.

Sec. 29. Duties.
Except as otherwise provided in this charter, the director of public works shall have charge of: (a)      Where not under control of any other department, the designing, construction, repair, maintenance, and keeping open and in a safe and clean condition [of] all municipal buildings, bridges, viaducts, subways, canals, waterways, levees, tunnels and structures, including alterations, replacements, additions and appurtenances.

Currently, since 1993, the Clay County Collector has inappropriately collected taxes in the name of the Birmingham Levee District, levee, or Birmingham levee, and turned the tax money over to some individual claiming to represent the Birmingham Drainage District, who has no statutory authority to receive the money collected.

The Corps of Engineers is required to have a legal sponsor for a Federal Levee before it can do any work or studies or even set foot on a levee that the federal government does not own as indicated by the current sponsor list.

While Kansas City does not own the levee, collect taxes for the levee, or maintain the levee, the Corps claims Kansas City as the current sponsor of the dead Birmingham Drainage District's levee with the Corps of Engineers. The sponsorship is based on a March 24, 1922 Ordinance, as authorized by Kansas City's freeholder's charter of 1908 as undated, which included all lands within its limits in a levee and drainage district.

That Ordinance was upheld by the Missouri Supreme Court in 1923, but a Court of Equity was never appointed after 1963 to sell or transfer the Birmingham Drainage District assets to the city of Kansas City.  

Corps of Engineers current list of sponsors can be found at:

http://www.nwk.usace.army.mil/projects/7levees/sponsorship.htmSponsorship

  Sponsorship of the Kansas Citys Levees Feasibility Study is dispersed among four local sponsoring organizations as indicated.

Kansas Citys Levees Feasibility Study Sponsors

                                                                                                                                       District                                                   Sponsor                                             

Central Industrial District                      City of Kansas City, Missouri
(Missouri & Kansas)                               Kaw Valley Drainage District
   

Armourdale                                            Kaw Valley Drainage DistrictArgentine

Argentine                                                Kaw Valley Drainage District
 

Birmingham   Levee Unit                         City of Kansas City, Missouri for the                                                                               Birmingham Drainage District

North Kansas City Levee District                 City of Kansas City, Missouri
 

Fairfax-Jersey Creek                                   Fairfax Drainage District
                                                                             (Operation and Maintenance of the Fairfax   portion)

                                                                                            Kaw Valley Drainage District
                                                           (Operation and Maintenance of the Lower Jersey Creek area)
 

Northeast Industrial District (East Bottoms)   City of Kansas City, Missouri

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4:01:57 PM EST

On December 4, 2003, the above 1923 Missouri Supreme Court ruling was filed in the Clay County Clerk's Office which states that the Circuit Court cannot legally create a drainage or levee district within the City limits of Kansas City on a petition of landowners.

Kansas City incorporated the land composing the Birmingham Drainage District in 1962. The district was forced to let its charter expire on December 22, 1963.

However, the Clay County Collector continued to collect district maintenance taxes.

Seven years after the charter expired, in early 1970, attorney Alan Wherrett petitioned the Circuit Court to extend the charter of the district even though it had become a dead corporation. See #6 & # 7 above for letter to Corps of Engineers in which Wherrett stated he knew Kansas City had exclusive jurisdiction over drainage and levees within the Kansas City limits.

In late 1970, Wherrett's son-in-law petitioned a different Division of the Circuit Court to reorganize the district on a petition by Kansas City landowners. The Court knew it could not legal reorganize the district and and refused to send its decree reorganizing the Birmingham Drainage District as a public corporation to the Secretary of State within the 60 day limit required by law.

RSMO 242.040.3. Within sixty days after the said district has been declared a corporation by the court, the clerk thereof shall transmit to the secretary of state a certified copy of the findings and decree of the court incorporating said district, and the same shall be filed in the office of the secretary of state in the same manner as articles of incorporation are now required to be filed under the general law concerning corporations.  (RSMo 1939 § 12326)

Howard Couty Levee District number Two was at that time appealing a ruling which stated that once the term of life of a corporation expired it was in fact dead and could not be reorganized. The last Board of Supervisors were trustees. "Such trustees could not continue to conduct the business of the corporation but could only pay the debts of the corporation and liquidate the business."

See Kansas City Court of Appeals ruling. Scroll down for the ruling.

Lawyers in Missouri depend on the Southwestern Reporter to keep up with legal cases and cite them in there briefs for the courts to review. As an example, this case was cited as 259 Southwestern Reporter 89. Later ones are cited as (volume) S.W.2d (Page).

The following excerpts bring up the main points:

Page 89

IN re EAST BOTTOMS DRAINAGE & LEVEE DIST.

MERIWETHER et al. v. KANSAS CITY.(No. 24857.) '

(Supreme Court of Missouri, 'Division No. 2. Dec. 20, 1923; Motion to Transfer to Court in Banc Overruled March 4, 1924.)

I. Drains <8=»I4(2)?Drainage and levee districts including land within city cannot be formed on petition of landowners.

In view of Rev. St. 1919, § 4681, authorizing incorporation of joint drainage and sewerage districts in areas partly within cities of more than 300,000 inhabitants on petition by the-city or the county court, ratified by the legal voters "resident In such area," section i 7856, authorizing joint action by such cities with drainage districts in building "sanitary sewers" and leveees, and section 7857, author izing them to Condemn land for such purposes with the consent of adjoining states, such joint districts cannot be formed on petition of land- owners therein under articles 1, 9, but may be 'organized only on petition of the city or the county court and for sanitary drainage purposes only; levees not being authorized by article 8.

2. Municipal corporations <g=>70?Provisions ? for construction of levees and drains in city I properly included in charter.

While the general drainage and levee laws (Rev. St. 1919. $i 4378-4711) expressly declare the districts therein provided for public corporations, which are mere arms or branches of the state government, levees and drains exclusively within cities are matters of local municipal concern, for which provision may properly be made in the city charter, as in the ease of the Kansas City Freeholders' Charter of 1908, authorized by Const, art. !>. § 16.

The provisions of Kansas City Freeholders' Charter of 1908 making th« board of public works' estimate of the cost of constructing drains and levees conclusive on the jury and court in assessing benefits or damages to property held not unconstitutional as denying due process of law, in view of section 6, requiring the jury to estimate the benefits to each lot within the district, and provisions for reduction of assessments if the total benefits exceed the estimated cost, notice-to property owners trial by jury, and letting of contracts to the lowest bidder.

Page 90

The city of Kansas City appeared in said cause and filed a motion to dismiss such petition or plea to the jurisdiction, on the ground that a portion of said land was with-in said city limits and that said city had previously, on March 24, 1922, as authorized by its freeholders' charter of 1908, enacted an ordinance, including said lands within its limits in a levee and drainage district wholly within said city, and that the circuit court had no authority or Jurisdiction to incorporate'- said lands in said city, with other lands outside thereof in the levee and drainage district, sought to be established by the .petition filed in said, circuit court; that to construe the general statutes relied on as authorizing said proceeding violates Its charter and ordinances, and violates the constitutional provisions giving such city the right to frame its own charter. The court below ruled for the city, and sustained said motion or plea and dismissed said petition, and the petitioners appealed to this court.

[1] I. The real question before us is whether the circuit court had power or jurisdiction to incorporate a drainage and levee district, where part of the lands sought to be included are in Kansas City and part thereof outside of the limits of said city, in Jackson county, upon the petition of the landowners in such district.

Page 91 & 92

We must therefore rule that the charter provisions of said city relating to the establishment of levee and drains within said city are a matter of essential local municipal concern, properly contained in the freeholders' charter of Kansas City, and prevail over the general law on that subject, if , there is any difference or conflict between them.

Page 93

[8] The trial court reached a correct conclusion in holding that property within the corporate limits of Kansas City, Mo., could not be legally included within the boundaries of the proposed district, yet it went too far in dismissing the action, as the petitioners may be able to show that a satisfactory district can be established without including within the boundaries thereof any of the property aforesaid within the corporate limits of Kansas City, Mo.

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12:34:43 PM EST

Extinct Howard County Levee District Number Two. Legals referenced to as:  WATTS v. GROSS  and cited as 408 S.W.2d 223. Kansas City Court of Appeals, Missouri. April 5, 1971. Filed in Clay County Clerk's Office May 13, 2004. 

Applys to Clay County, Missouri's "Birmingham Drainage District" whose 50 year term of life expired on December 22, 1963.  Section 242.020. 1.RSMO 1939

According to documents, the lawyers and court were aware of the lower court rulings when they attempted to reorganize the district in 1970. Not withstanding the fact that a drainage or levee district could not legally be formed within the city limits of Kansas City, Missouri on a petition by landowners. Cited as In East Bottoms Drainage and Levee Dist. 259 S.W. 89, filed in Clay County Clerk's Office on 12-4-2003

Clay County Collector still collecting taxes for 2004 even though these legal documents were filed County Clerk's Office in May of 2004.

Excerpts of main points:

Page 230

"It is further ordered and adjudged on Count II of the petition that the defendant James L. Agnew, Collector of Revenue of Howard County, Missouri, and all agents and employees acting under the direction and authority of the defendant James L. Agnew, be and they are hereby enjoined and restrained from collecting any taxes from plaintiffs and any property owner of lands within the boundaries of Levee District Number Two of Howard County, Missouri levied by the acting Board of Supervisors on behalf of Levee District Number Two of Howard County, Missouri for the year 1969 and from collecting any 1968 taxes levied by said District on lands of plaintiffs which are unpaid at this time." is affirmed

Page 223

3. Levees and Flood Control <S=>5

Where county levee district was organized on January 11, 1910 by circuit court under statute requiring that its articles of association state "the number of years the same is to continue," and articles of association for the district recited that "this corporation shall continue for a term of fifty years," such district ceased to exist as a public corporation on January 11, 1960, and after such date action of those who continued functions of the district was without statutory authority. Section 245.-015 RSMo 1969, V.A.M.S.

Page 225

Defendants next contend that even if the existence of the district has legally."terminated, it still has de facto existence and that the individual defendants are de facto supervisors of the district and that their actions are valid. We cannot agree with such contention. In Bradley v. Reppell, 133 Mo. 545, 32_S.W._645, it was held that where a corporate charter expired by the passage of time as limited in such charter, the corporation is both de jure and de facto dead; that in such circumstances the corporation ceased to exist as a separate entity and that any powers in relation thereto resided in its last officers and

Page 226

board of directors as trustees. Sec 1 McQuillin, Municipal Corporations, 3d Edition, Sections 3.48, 3.49 and 3.50. Such trustees could not continue to conduct the business of the corporation but could only pay the debts of the corporation and liquidate the business. It has been otherwise expressed that where the law ceases to authorize the existence of the corporation, the corporation expires as a matter of law. This doctrine is said to apply'to'both private and public corporations alike, Mer-amec Spring Park Co. v. Gibson, 268_Mo. 394, 188 S.W.179.

Page 227

(In a separate situation) the district ceased to have legal existence in 1920 by reason of the 20 year limitation contained in its charter, and the life of the district could not be extended because there was no district in existence whose life could be continued. The court held that the district ceased to exist in 1920 and the landowners within the district were in the same situation as if there never had been a drainage district and they could not organize a new district by attempting to comply with the reorganization statutes then in existence. The reasoning of the court is all founded upon the premise that the district ceased to exist on the expiration of the time limitation contained in its charter. Whether this contention was conceded by the defendants or not, it was necessary for the court to reach this result before it could proceed to the specific conclusion enunciated.

[3] We, therefore, conclude in the case at bar that Levee District No. Two of Howard County, Missouri, ceased to exist as a public corporation on January 11, 1960, by reason of the limitation contained in its articles of association that it exist for a period of 50 years. It follows that from and after such date, there was no levee district and the action of those who continued the functions of such district was without any statutory authority. As a consequence, the holding of meetings of property owners within the district, the election of officers, the levying and collection of levee district taxes and the expenditure of monies derived therefrom were without legal authority. We, therefore, affirm that part of the trial court's order by which the defendants were "enjoined and restrained from operating Levee District Number Two of Howard County, Missouri, as a public corporation and attempting to exercise any powers or authority granted by the laws of the State of Missouri to supervisors of such levee district and particularly the levying and receiving taxes on lands within the boundaries of the District for the year 1969." We further affirm that part of the order of the trial court enjoining the county collector from collecting taxes purportedly levied by the district.

Page 228

This does not mean that the affairs of the district shall be left suspended in midair for all time to come. It is pointed out in 2 McQuillin, Municipal Corporations, Third Edition (1966 Revised Volume), Section 8.15, page 577, that in the absence of any statutory provision (and none exists in Missouri), a court of equity will administer the affairs of a defunct corporation for the benefit of its creditors and stockholders. Here, the landowners stand in the same position as the stockholders of a private corporation.

Page 229

"Sometimes by virtue of express constitutional provisions, statutes commonly provide for the satisfaction of debts, the enforcement of contract obligations, and the winding up of the affairs of the dissolved corporation. * * * (I)n the absence of statute, or in supplementation thereof, according to the just rule of the modern adjudications, both federal and state, a court of equity will now lay hold of the property of the extinct corporation, and administer it for the benefit of its creditors and stockholders. All contracts made while the corporation was in existence survive the dissolution and may be enforced in equity, so far as to subject, for their satisfaction, any property possessed by the corporation at the time. In the view of equity, the property constitutes a trust fund, pledged to the payment of the debts of creditors and stockholders. This well-settled rule, relating to private corporations, applies with like force to municipal corporations: 'If a municipal corporation,' declares the Supreme Court of the United States, 'upon the surrender, or extinction in other ways, of its charter, is possessed of any property, a court of equity will equally take possession of it for the benefit of the creditors of the corporation.'

The protection of these rules extends generally speaking not only to claims or debts resting on contracts, but also to other lawful claims and obligations whatever their nature or character.

This doctrine received the approval of this court in Diekroeger v. Jones, 235 Mo.App. 1117, 151 S.W.2d 691, supra.

This result is particularly appropriate in this case because it does not appear from the record what the assets of the district may be or what its obligations may be. It was stipulated that there are no district bonds outstanding and the evidence disposed that at the time of trial, the district had more than $1,000.00 on deposit in a bank and owned some type of a mowing machine. Nothing more appears in the record as to the assets and liabilities of the district. Since there are no statutes providing for the disposition of the public works constructed by the district, many and varied legal questions can be foreseen and the guidance of a court of equity would be beneficial, if not indispensable, in the liquidation of the affairs of the district.

Howard County Circuit Court Judge Samuel Semple enter his order to appoint a special master to take control of and dispose of the assets of Howard County Levee District number Two on February 3, 1972 in case number 2414.  

It is clear that once the corporate life a drainage district has expired a Court of Equity is required to take charge of the assets. The State of Missouri has since recognized the corporate life term of districts in law as to when a drainage district may be dissolved during its life: As an example, if the Birmingham Drainage District was still within its corporate life term (and since it has over one million dollars in the bank), one tenth of the landowners owning one tenth of the land (about 60 acres) could petition the court to dissolve the corporation.

RSMO 242.140.2. At any time during the corporate life of such drainage district, when all outstanding bonds shall have been paid and when all otherindebtedness of said district shall have been paid or when there is sufficient money on hand to pay any and all outstanding indebtedness, and when there is sufficient money on hand to pay the costs and expenses of the dissolution of said corporation as herein provided, the board of supervisors may, and, on a petition of one-tenth of the landowners, owning one-tenth of the lands in said district, shall, call a meeting of the landowners in said district for the purpose of determining whether or not said district shall bedissolved and its corporate life terminated, first giving three weeks' notice of the object, purpose and place of such meeting by notices printed for three weeks successively in some newspaper or newspapers printed and published in the county or counties in which said drainage district lies; provided, however, that not more than one such meeting for purposes of dissolution shall be held each year.
RSMo 1939 § 12361, A.L. 1978 H.B. 1634)

The State of Missouri also recognizes the many drainage and levee districts that are listed as inactive for long periods of time. In spite of appropriate rules, the Secretary of State doesn't require an address or contact for even active districts. The Birmingham Drainage District was listed as inactive by the State until April fools day 2003.

Clay County was required by law to collect drainage district taxes as long as the Birmingham Drainage District was an active public corporation within its legal 50 year term of life as defined by the original Articles of Association and outside the city limits of Kansas City. Based on the Missouri Supreme Court as well as the  Kansas City Appeals Court ruling Clay County has had no legal authority to collect drainage district taxes for the Birmingham Drainage District since December 22, 1963.

Since Clay County has had these documents on file since December 2003 and May of 2004, it would appear that Clay County, and its Commissioners, have chosen to ignore the laws in collecting the taxes and turning the money over to an individual with no statutory authority to receive them. However, that may not be the complete case since the Clay County Auditor is in the process of reviewing this matter.

The big questions are: 1) what happens to the taxes that have been collected for a dead district and turned over to an individual with no statutory authority to receive them; and 2) will the county commissioners allow the collector to turn over the 2004 tax money to an individual who claims to represent the dead Birmingham Drainage District before the Auditor completes his review?

 

 

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