City of East Point v. Upchurch Packing Co.

• Decision Date: 25 November 1938
• Docket Number: 27017.
• Citation: 200 S.E. 210,58 Ga.App. 829
• Parties: CITY OF EAST POINT v. UPCHURCH PACKING CO.
• Court: Georgia Court of Appeals

200 S.E. 210

58 Ga.App. 829

CITY OF EAST POINT v. UPCHURCH PACKING CO.

No. 27017.

Court of Appeals of Georgia, First Division

November 25, 1938

Syllabus by the Court.

In the operation of an electric-light and water plant, a municipal corporation is engaged in a non-governmental function, and may be subject to an equitable estoppel where it is guilty of such negligence as to work a fraud on the party setting up the estoppel.

Error from Municipal Court of Atlanta; T. O. Hathcock, Judge.

Suit by the City of East Point against the Upchurch Packing Company for electric power furnished the defendant by the plaintiff. To review a judgment for the defendant, the plaintiff brings error.

Affirmed.

Ezra E Phillips, of Atlanta, for plaintiff in error.

Norman H. Fudge, of Atlanta, for defendant in error.

BROYLES Chief Judge.

The City of East Point, a municipal corporation, brought a suit against the Upchurch Packing Company, in the sum of $2118.21 for electric power furnished to it by the city from August 1934, through February, 1937. The petition alleged that the amount sued for was the difference between what defendant was charged for power during the above-stated period and what it should have been charged, because of the fact that the readings of the meter measuring the current were multiplied by "30," whereas they should have been multiplied by "40." The defendant in its answer denied any indebtedness; and, in an amendment thereto, set up an estoppel by alleging that, when the meter was installed in the defendant's plant, Ernest Hutchinson, acting for the plaintiff, as superintendent of its water and electric-light department, advised the defendant that, in computing the amount of current consumed, the reading of the meter should be multiplied by "30;" and that thereafter the plaintiff had rendered to defendant bills on such basis until early in 1937, when defendant's East Point Plant had been discontinued and dismantled; that defendant had relied on the plaintiff's representations, made through its agent Hutchinson, and had no way of knowing they were not true that all of said current was used by the defendant in processing its packing-house products, and that the selling-price thereof was based on a cost that included the cost of the current, and that all of said products were sold by the defendant during the period covered by plaintiff's suit at a lower price than they would have been sold had the higher current cost now claimed by the plaintiff been demanded each month during said period; that, furthermore, if the higher charge had been so demanded by the plaintiff, the defendant would have discontinued the operation of its East Point plant two years before it was discontinued, and would have operated solely in its Atlanta plant where all of its business could then have been handled and is now being handled; that the plaintiff was guilty of gross negligence in failing to make a proper inspection of the meter when it was installed, or within a reasonable time thereafter, and that such an inspection would have disclosed the alleged defect, and that because of such negligence the plaintiff is now estopped to deny the correctness of the bills for electric current which it has heretofore presented to defendant and collected.

The plaintiff demurred to said amendment on various grounds, the principal ones being: (a) That it is not alleged in the amendment that Ernest Hutchinson, while acting as superintendent of the water and light department of the city, was authorized by the city to advise the defendant that the cost of electric power used by it should, be ascertained by taking the reading of the meter and multiplying it by "30," or that such an agreement was made with the consent or knowledge of the city, or that it was ever known by the city; and (b) that no facts set up in the amendment are sufficient "to raise an estoppel" against the city. The amendment was allowed, and the demurrer thereto was overruled. The case proceeded to verdict and judgment for the defendant; and, subsequently, the plaintiff's motion for a new trial was overruled.

The first question is whether the demurrer to said amendment was properly overruled. We think this question, as well as the question whether the court erred in denying a new trial, is controlled by the answer to the further question: Was the city, under the pleadings and the evidence, estopped from denying the correctness of the bills for electric current which it had collected from the defendant? It is well-settled law in this State that "in the operation of an electric light and water plant, a municipal corporation is engaged in a nongovernmental function." Carruthers v. City of Hawkinsville, 42 Ga.App. 476 (2), 156 S.E. 634, and cit. It is also well settled that "in order to create an equitable estoppel it is not necessary that there should be an intentional moral wrong, [but that] negligence, when there is a duty cast upon a person to disclose the truth, may supply the place of intent, where the effect of such negligence is to work a fraud on the party setting up the estoppel." 21 C.J. 1169, § 175. This...