§ 89. Payment of debts of illegal corporations. Whenever an attempt
has been or is hereafter made to create a municipal corporation, either
by special act of the legislature or by proceedings taken under the
general laws of the state, and such corporation has chosen officers and
has exercised the powers, duties and authority vested in it by the law
under which it purports to have been created, and such corporation has
become indebted to any person, association or corporation in the
aggregate amount of five hundred dollars or more, and such corporation
shall have been held or declared to be no corporation by a court of
record of competent jurisdiction of this state, either because the
special act creating it is declared to be unconstitutional, or
otherwise, then such corporation shall be deemed a de facto corporation
for the purpose of winding up its affairs and paying its indebtedness;
and its officers shall be deemed de facto officers and shall have all
the powers and authority and shall perform all the functions and duties
vested in or required of them under the law pursuant to which such
corporation was attempted to be created, so far as may be necessary to
liquidate the affairs of such corporation and to pay its money
obligations, including all the power and authority to assess, levy and
collect taxes upon the taxable persons and property within the corporate
limits of such illegal corporation, to such an amount as shall be
sufficient to pay obligations of such corporation and the expense
incident thereto.

2. Such de facto officers shall keep an accurate record of all their
proceedings hereunder, including the amount of money raised by taxation
and the purpose for which it was raised and the amount of money paid
out, to whom and for what purpose. They shall audit all bills before
payment and shall take receipts for all moneys paid out.

3. When all the indebtedness of such illegal corporation has been paid
and its obligations discharged, such de facto officers shall make a
full, complete and accurate report, under oath, to the county judge of
the county in which such illegal corporation is located or to a justice
of the supreme court of all their proceedings hereunder and on the order
of such judge or justice approving and confirming such report, such de
facto officers shall be discharged and their functions and duties shall
cease. Such report and order shall be filed in the office of the county
clerk of the county in which such illegal corporation was located.