Alabama City, G. & A. Ry. Co. v. City of Gadsden

• Decision Date: 04 December 1913
• Citation: 185 Ala. 263,64 So. 91
• Parties: ALABAMA CITY, G. & A. RY. CO. v. CITY OF GADSDEN.
• Court: Alabama Supreme Court

64 So. 91

185 Ala. 263

ALABAMA CITY, G. & A. RY. CO. v. CITY OF GADSDEN.

Supreme Court of Alabama

December 4, 1913

Appeal from City Court of Gadsden; John H. Disque, Judge.

Action by the Alabama City, Gadsden & Attala Railway Company against the City of Gadsden. From a judgment for the defendant, the plaintiff appeals. Reversed and remanded.

O.R Hood, of Gadsden, for appellant.

M.C Sivley, of Gadsden, for appellee.

SAYRE J.

Appellant company had been furnishing light to the city of Gadsden under a contract calling for monthly settlements, and appellee had fallen far behind in making payment. Appellant demanding its money, and appellee being unable to pay negotiation between them resulted in the adoption of a resolution by the board of mayor and aldermen on October 1, 1906, as follows: "Resolved by the mayor and board of aldermen of the city of Gadsden that warrants be issued covering the amounts due, bearing interest at the rate of eight per cent. per annum, and the clerk be instructed to issue said warrants." The resolution was shown by the minutes of the board, and was carried into effect, so far as concerned the issue of warrants, by the clerk's interlineation of words into then outstanding warrants which imported that they were to bear interest. Viewed in connection with the evidence as to the previous contention between the parties, we think this resolution cannot be fairly construed otherwise than as an agreement on the part of the city, on the consideration that appellant would continue to carry the warrants then due and continue to furnish light under its contract, to pay interest on warrants then due and outstanding. We find no sufficient justification in the language employed for an interpretation which would bring future indebtedness within the scope and influence of the resolution. For a time the clerk issued warrants for subsequently accruing claims on account of light furnished which purported to bear interest. But this feature of the later warrants created no obligation on the city for the reason that in wording them as interest bearing the clerk acted without authority. True, there was testimony going to show an informal agreement by the members of the board of aldermen of later date that interest should be paid; but this agreement found no place upon the record of the proceedings of the board of aldermen. In fact, the understanding of the parties and the direction of the board was that the so-called agreement should not be spread upon the minutes, this because it was supposed that publicity in the matter would stimulate other creditors of the city to demand interest on their deferred claims and because there was an appreciation of the consideration that all creditors in like case were entitled to like treatment. This manner of dealing with the so-called agreement rendered it null and of no effect. "The law requires a record to the end that those who may be called to act under it may have no occasion to look beyond it; to avoid the mischief of leaving municipal corporate action to be proved by parol evidence; to make it certain that rights which have accrued under such actions shall not be destroyed or affected by the always fallible and often wholly unreliable recollection of witnesses, however truthful and intelligent they may be." 2 McQuillan, Mun. Corp. p. 1358. This is the doctrine of our cases. Perryman v. Greenville, 51 Ala. 507; Greenville v. Water Works Co., 125 Ala. 625, 27 So. 764.

On January 1, 1909, a number of warrants in favor of appellant, including those covered by the resolution of October 1, 1906, and as well others of later issue, were presented to the city treasurer for payment; but payment was denied for lack of funds. On December 31, 1909, appellant received payment of the principal of all these warrants with interest from the date of presentation to the treasurer, such interest being paid under authority of section 1205 of the Code of 1907 (Act of Aug. 13, 1907, p. 820, § 54), which provides that, "if no interest is stipulated to be paid on warrants drawn upon the treasurer and not paid for want of funds, then the legal rate shall be allowed from the time of presentation," etc., the denial of interest for the antecedent time being based, as the brief for appellee would seem to indicate, upon the theory that the municipality was without authority to contract for the payment of interest.

This action was brought to recover a balance due of interest claimed. The evidence shows very clearly that appellant (plaintiff below) has received the principal of the debt in controversy and received the same as a payment of the principal with the understanding and purpose that the contention as to whether appellee was further liable on account of interest should be settled by a resort to the courts, thus eliminating all question as to whether the amount so received should be applied first to the payment of interest.

Our judgment is that appellant was also entitled to interest upon the indebtedness covered by the resolution-contract of October 1, 1906, to the date of the payment made, less, of course, any interest then paid. In view of the city's inability to meet its obligation to appellant at the time the meaning of the contract was that appellant should receive interest during the time payment should be further...