Burns v. City of Nashville

• Decision Date: 17 March 1920
• Citation: 221 S.W. 828
• Parties: BURNS et al. v. CITY OF NASHVILLE et al.
• Court: Tennessee Supreme Court

Page 828

221 S.W. 828

BURNS et al. v. CITY OF NASHVILLE et al.

Supreme Court of Tennessee.

March 17, 1920.

COPYRIGHT MATERIAL OMITTED

Appeal from Chancery Court, Davidson County; John Allison, Chancellor.

Suit by R. Miles Burns and others against the City of Nashville and others. From the decree, the defendants effected appeal. Decree reversed, and bill dismissed, except as to recoveries against certain defendants, as to which it is affirmed.

W. E. Norvell, Jr., Walter Stokes, P. D. Maddin, Aust & McGugin, Hume & Cornelius, Thos. H. Malone, C. C. Trabue, A. G. Ewing, Jr., M. T. Bryan, Bradley Walker, Jordan Stokes, Jr., Parks & Bell, Pitts & McConnico, J. M. Anderson, and F. M. Bass, all of Nashville, for appellants.

W. C. Cherry, J. G. Stephenson, Laurent Brown, and T. T. McCarley, all of Nashville, for appellees.

HALL, J.

The original bill in this cause was filed on June 25, 1915, by the complainant, R. Miles Burns, comptroller of the city of Nashville, but who had been suspended from office a short time prior to the filing of the bill by the board of commissioners of the city, consisting of Hilary E. Howse, mayor and commissioner of the department of public affairs, police, and health, Lyle Andrews, commissioner of finance, lights, and market house, J. M. Wilkerson, commissioner of streets, sewers, and sidewalks, Robert Elliott, commissioner of waterworks, street cleaning, and workhouse, and J. D. Alexander, commissioner of fire, sprinkling, and building inspection.

Said bill was filed against the city of Nashville, the above-named members of the board of commissioners (both in their official capacities and individually), Charles R. Myers, treasurer of the city of Nashville, and the United States Fidelity & Guaranty Company, surety upon the official bonds of all the defendant officials except J. D. Alexander.

The bill alleged that complainant was a resident and taxpayer of the city of Nashville; that the defendant commissioners were charged with the general supervision of the municipality of the city of Nashville, their specific duties being specified by its charter, which is chapter 22 of the Acts (Private) of 1913.

It further alleged extravagance on the part of said officials in the use and expenditures of the funds of said city, and that the financial condition of the city had become seriously impaired by reason of the many acts of nonfeasance and misfeasance on their part.

The bill alleged that the financial affairs of the city had been handled and conducted in a grossly negligent manner, without regard to the provisions of its charter, and for the personal benefit of said commissioners, and to the great financial loss and injury of complainant and all other taxpayers; that funds of the municipality had been paid without any appropriation being made by ordinance, as required by the city's charter; that, contrary to the charter provisions, funds that were required to be kept in bank separate from the ordinary funds of the city, were kept in a single, ordinary account, and indiscriminately checked against for general expenses.

The bill alleged at length various instances showing how these violations of the charter were committed for the purpose of allowing extravagant expenditures and covering up the true financial condition of the city, when a compliance with the law would have forced a check upon these extravagant and illegal expenditures.

It specifically averred that the board of commissioners had illegally erected a market house on Hay Market, by letting a contract for the construction of said market house to the contractor without due advertisement and receiving bids therefor, in violation of the city's charter, and that said contract was therefore void; that the Southern Bitulithic Company and Warren Bros. Company had illegally furnished the city bitulithic paving, and they had been paid therefor by the commissioners of the city under specifications requiring the use of a patented article, wherein the successful bidder was required to purchase such patented article from Warren Bros. Company at a stipulated price, whereby competition in bidding for said paving was stifled and destroyed, and said specifications were prescribed by the commissioners in violation of the charter provisions of the city; that likewise was this true as to certain bitustone paving done by the Foy-Proctor Company under similar specifications, and that these contracts were also void.

The bill prayed that proper process issue, to the end that the parties named as defendants therein be made such, and that they be required to make answer thereto, but not under oath, which was waived; that from time to time complainant be permitted to make additional defendants thereto upon petition or amendment, and that process issue and be served on such parties as might be so brought in, so as to give the court full and complete jurisdiction of the matters involved; and that a reference to the master be ordered to determine what amounts had been squandered, misappropriated, and lost by said defendants, or paid out on illegal or void contracts, and upon the incoming of said report that the complainant have and recover for his use and for the use of all other taxpayers of the city said amounts from said defendants, and their respective sureties.

A motion was made by the defendants that the bill be dismissed on the ground that the court was without jurisdiction to entertain it, and that the complainant had no honest purpose in its filing, and that it was vague, indefinite, and without equity on its face.

Before this motion was acted upon certain taxpayers of the city of Nashville filed a petition, in which they asked permission of the court to become parties complainant to the cause. This petition was granted by decree of the chancellor, after which the motion of the defendants to dismiss was overruled, and T. J. Bailey was appointed special commissioner to execute the reference ordered.

Thereafter the prayer of the bill was amended, so as to ask for an injunction restraining the commissioners and other city officials from paying any moneys on any contracts theretofore made or thereafter to be made, for any work or labor performed or materials furnished on any public works or improvements, sewers, streets, school buildings, etc., whether such contracts were made under ordinance or not, etc.

The injunction was granted and issued in accordance with the prayer of the bill.

On July 5, 1915, the city of Nashville and the commissioners, in their official capacities, answered the bill, denying all of its allegations charging said commissioners with acts of nonfeasance and misfeasance in office, and denying that any funds of the city had been wrongfully used or spent by the officials of the city, and all illegality in the letting of contracts for the city, and the contracts for street paving and the building of the market house at Hay Market was specifically denied.

The allegation charging the illegal specifications of the patented street materials, bitulithic and bitustone, for paving, was elaborately set out, and it was specifically denied that the use of such specifications was illegal, and that the contracts for paving let under them were void.

On July 10, 1915, upon motion of the complainants, and by decree of the chancellor, an amendment to the bill was made, which alleged, upon information and belief, that the commissioners had purchased all of their property with money belonging to the city of Nashville, and asking an injunction to restrain them from disposing of any of their property. This injunction was ordered to issue by the chancellor upon the execution of an injunction bond by complainants in the sum of $2,000.

The amendment was answered by the commissioners, who denied its allegations in toto.

On July 19, 1915, complainants filed an amended bill. This bill named as defendants the following additional parties, to wit: Peerless Motor Car Company, Southern Bitulithic Company, Foy-Proctor Company, and Warren Bros. Company.

It alleged, among other things, that the E. O. Elliott Company, a corporation, in which E. O. Elliott, a son of Commissioner Robert Elliott, owned a one-third interest, and in which Commissioner Elliott was also interested, was agent for the Peerless Motor Car Company, and that a representative of the home office of the Peerless Motor Car Company came to Nashville and induced Commissioner Elliott to purchase a Peerless truck for the city, and that later the E. O. Elliott Company received secretly a commission from the Peerless Motor Car Company for the sale of said truck; that the price of said truck was $4,500, and that Commissioner Elliott connived at this scheme, so that the E. O. Elliott Company could get a commission; that the E. O. Elliott Company further did repair work for the City of Nashville, and in order to cover up its connections the work was done in the name of the Union Motor Car Company, and that Commissioner Elliott had knowledge of these transactions, which were in violation of the provisions of the city's charter, and were illegal and void.

In this amended bill the question of the use of bitulithic and bitustone paving was gone into more fully and specifically. It was alleged that the specifications contained a license agreement, under the terms of which the successful bidder purchased the patented materials from Warren Bros. Company at a specified price; that said patented materials were specified and the license agreement inserted in order to frighten away competitors of the Southern Bitulithic Company. The bill also contained charges of fraud in the procurement of these contracts.

The bill prayed that an account be taken showing all moneys paid by the city of Nashville to Warren Bros. Company, Southern Bitulithic Company, and Foy-Proctor Company on bitulithic and bitustone paving.

On July 28, 1915, a second amended bill was filed by complainants. It made the banks of...