City of Summerville v. Georgia Power Co.

• Decision Date: 14 September 1949
• Docket Number: 16763.
• Parties: CITY OF SUMMERVILLE v. GEORGIA POWER CO.
• Court: Georgia Supreme Court

55 S.E.2d 540

205 Ga. 843

CITY OF SUMMERVILLE v. GEORGIA POWER CO.

No. 16763.

Supreme Court of Georgia

September 14, 1949

Rehearing Denied Oct. 13, 1949.

Syllabus by the Court.

1. A franchise granted by a city council to a public service corporation, under the charter powers of the city constitutes a binding contract, and as such is not violative of the Code, § 69-202, which prohibits one city council from binding itself or its successors, by ordinance, so as to prevent free legislation in matters of municipal government.

2. A municipal corporation may be estopped, as right and justice may require, where the act or contract relied on to create the estoppel was within the charter powers of the corporation, although the method of exercising the power was irregular.

This is the third appearance of the present litigation in this court. In City of Summerville v. Georgia Power Company, 204 Ga. 276, 49 S.E.2d 661, the writ of error was transferred to the Court of Appeals because of lack of jurisdiction. In that proceeding the City of Summerville sought to have a franchise--alleged to have been illegally granted to Georgia Railway & Power Company, the defendant's predecessor to occupy and use its public streets in connection with an electric-distribution system--declared illegal and void because the city council had granted it without first complying with the charter provision, providing that no such franchise could be legally granted until notice of an application therefor had been posted at the county courthouse door for ten days and published in the official county gazette once a week for two weeks. While the case was pending in the Court of Appeals, later affirmed on the ground that no cause of action for declaratory relief was stated, 78 Ga.App 666, 667, 51 S.E.2d 702, the City of Summerville filed, in Fulton Superior Court against the same defendant, a petition which--after quoting the substance of the previous petition for declaratory judgment--alleged that the defendant was a continuing trespasser upon its streets, and prayed that the defendant be temporarily restrained from collecting power and light bills or from disrupting electric service to the city pending the adjudication of the matters complained of, and that upon a final hearing the defendant be permanently enjoined from trespassing on the city's streets and public places, and for general relief. On the interlocutory hearing, the ex parte restraining order was dissolved and the temporary injunction denied. The city excepted, and this court affirmed the judgment, and held that the trial court had not abused its discretion. City of Summerville v. Georgia Power Co., 205 Ga. 83, 52 S.E.2d 288. Thereafter, Georgia Power Company interposed general and special demurrers. The 8th and 11th general grounds assert that the city, by its acquiescence in the use of its public streets, without any legal objection, for a period of over 20 years under the alleged illegal franchise, is now estopped to deny its validity. These and several other grounds of the general demurrer were sustained, the petition was dismissed, and the exception here is to that judgment.

Jesse M. Sellers, Summerville, T. J. Espy, Jr., Summerville, for plaintiff in error.

MacDougald, Troutman, Sams & Branch, Gilmer A. MacDougald, Atlanta, Wright, Rogers, Magruder & Hoyt, Barry Wright, Rome, for defendant in error.

CANDLER, Justice (after stating the foregoing facts).

1. It is generally recognized that a franchise granted by a city council to a public-service corporation to use its streets and public places, where the city has the charter power to grant such a franchise, is a binding contract, and cannot be impaired in view of the prohibition against impairment of the obligation of contracts contained in the United States constitution. Art. 1, § 10. Fletcher v. Peck, 6 Cranch 87, 10 U.S. 87, 3 L.Ed. 162; State of New Jersey v. Wilson, 7 Cranch 164, 11 U.S. 164, 3 L.Ed. 303; Union Light, Heat & Power Co. v. City of Fort Thomas, 215 Ky. 384, 285 S.W. 228. The obligation resting upon the public utility to comply with the terms and conditions of the grant or franchise is generally considered a sufficient consideration to support such a contract. 23 Am.Jur. 718, § 6, et cit. In Williams v. City Council of West Point, 68 Ga. 816, this court held: 'A municipal corporation may bind itself, and cannot abrogate any contract which it has the right to make under its charter.' See also 43 C.J. 563, § 888. Under the express terms of the charter, the council of the City of Summerville had the power to grant franchises to public utilities; and this being true, the franchise in the present case is not subject to the attack that it is void as being in violation of Code § 69-202, which provides that 'One council may not by ordinance bind itself or its successors so as to prevent free legislation in matters of municipal government.'

2. The charter of the City of Summerville Ga.L.1909, p. 1376, § 19, provides that, 'The city council shall have the right to grant franchises for the use of their streets for the erection of * * * electric light lines, * * * and for other public utilities', upon the condition that certain prior publications of the application for such franchise be made. The charter also provides that 'The city council of Summerville may prohibit all persons, firms and corporations to whom they do not grant a franchise from using said streets for erection of poles, wires or encreachments of any nature.' Pursuant to this charter authority, the City of Summerville, on June 13, 1924, granted permission to Georgia Railway & Power Company, the defendant's predecessor, to occupy and use its public streets 'within the present and future limits of the said city as from time to time the said company, its successors, lessees, and assigns,...