City Of Valdosta v. Singleton, Nos. 14679, 14706.

• Court: Supreme Court of Georgia
• Writing for the Court: BELL, Chief Justice
• Citation: 28 S.E.2d 759
• Parties: CITY OF VALDOSTA et al. v. SINGLETON et al. SINGLETON. v. CITY OF VALDOSTA et al.
• Decision Date: 12 January 1944
• Docket Number: Nos. 14679, 14706.

28 S.E.2d 759

CITY OF VALDOSTA et al.
v.
SINGLETON et al.
SINGLETON.
v.
CITY OF VALDOSTA et al.

Nos. 14679, 14706.

Supreme Court of Georgia.

Jan. 12, 1944.

[28 S.E.2d 760]Syllabus by the Court.

1. Before a judge will be disqualified because of relationship to one who is not a party to the record, the latter must have a pecuniary interest in the result of the case or matter.

(a) Where, in a suit by a taxpayer to enjoin the mayor and council of a city from issuing revenue certificates for the purpose of obtaining funds with which to acquire an electric distribution system, the only questions for adjudication, aside from the plaintiff's right to sue, were as to authority of the mayor and council to do the things proposed, the mere fact that a different corporation, not a party, owned and operated an electric distribution system which the city desired to acquire, and contemplated acquiring either by purchase or condemnation, would not make such owner pecuniarily interested in the suit, so as to disqualify the judge because of relationship to a stockholder.

(b) Nor did the evidence demand a finding that this corporation had employed attorneys to prepare and prosecute an intervention in behalf of other persons, and had thus taken an actual interest in the litigation, as insisted.

(c) Where a suit of a taxpayer merely seeks to enjoin authorities from entering into some proposed contract on the ground that its performance or enforcement would increase the general tax burden, the judge though a taxpayer is not for that reason disqualified to preside in the case.

(d) Under the preceding rulings, the judge did not err in finding and ruling that he was not disqualified upon any ground urged.

2. Where a citizen and taxpayer hoed a suit against a city and its mayor and council seeking an injunction to prevent them from issuing revenue certificates for the purpose of borrowing money with which to acquire an electric distribution system, upon the alleged ground among

[28 S.E.2d 761]

others that the issuance of such certificates and the borrowing of money thereon would violate the provision of the constitution as to the manner in which debts may be incurred by municipalities, and where it appeared with reasonable certainty that the defendants would proceed with the proposed undertaking unless enjoined, the petition was not subject to general demurrer upon the ground that it failed to show that the plaintiff had sustained damage or injury or was in peril of being damaged by any proposed action on the part of the defendants. Whether the proposed undertaking would be valid or invalid, under the facts alleged the plaintiff would be entitled to a hearing on that question.

3. Under the amendment to the above mentioned provision of the constitution, as ratified on August 3, 1943, the authorities of a municipality cannot lawfully issue revenue anticipation certificates payable in future years as a means of acquiring an electric distribution system, without assent of two thirds of the qualified voters of the municipality voting at an election for that purpose to be held as prescribed by law.

(a) Under this law, as applied to the instant case, in which a citizen and taxpayer sought injunction to restrain the mayor and council of the City of Valdosta from issuing revenue certificates for the purpose of acquiring an electric distribution system, and for other relief, the petition stated a cause of action, and the judgment overruling the general demurrer must be affirmed.

Error from Superior Court, Lowndes County; W. E. Thomas, Judge.

Suit by C. W. Singleton against the City of Valdosta and others to enjoin defendants from proceeding under a resolution for issuing revenue certificates for the purpose of acquiring an electric distribution system. The trial court refused to disqualify himself upon any of the grounds urged and overruled general demurrer to the petition, and defendants bring error, and plaintiff sued out a cross-bill of exceptions.

Judgment affirmed on main bill of exceptions and cross-bill dismissed.

On June 1, 1943, C. W. Singleton, as a taxpayer of the City of Valdosta, filed a suit in the superior court of Lowndes County seeking injunction against the City of Valdosta, its mayor and council, and R. L. Stump, as an individual. Among other things, the petition alleged in effect that on May 17, 1943, the mayor and council, as the governing body of the municipality, adopted a resolution providing for acquisition by the city of a complete electric distribution system, to be owned and operated by it, for the purpose of distributing and selling electricity to residents of the city and also to persons residing outside the city, the resolution further providing for issuance and sale of "electric revenue certificates" to the amount of $1,-000, 000, in denominations of $1,000 each, payable in future years, for the purpose of raising funds with which to pay the costs of acquiring such electric distribution system. A copy of the resolution was attached as an exhibit to the petition, and showed that it was the general purpose of the mayor and council to acquire and operate such electric distribution system as a self-liquidating project, in that the money borrowed on the revenue certificates, and the interest, would be paid solely from the net earnings of the system, with no general liability as against the municipality. Each of the certificates would contain the following clause: "This certificate does not constitute an indebtedness of the City of Valdosta within the meaning of any constitutional or statutory limitation of indebtedness, is not payable from or a charge upon any funds of said city other than the above described fund, and the City of Valdosta shall not be subject to any pecuniary liability thereon."

The petitioner contended, however, that despite such proposed recital, and the general plan to establish a self-liquidating project, the issuance of such certificates and the borrowing of money thereon would violate the provision of the constitution, which declares in effect that no county or municipality shall incur any new debt, except for temporary loans to supply casual deficiencies of revenue, without the assent of two thirds of the qualified voters of such county or municipality voting at an election to be held as prescribed by law. Code, § 2-5501, Const. art. 7, § 7, par. 1. Besides general averments to this effect, he alleged various particular ways in which, as he contended, the resolution, if carried into effect, would violate the foregoing provision. He also challenged the validity of a suit that had been filed previously by the said R. L. Stump, as a taxpayer, upon the alleged ground that it was

[28 S.E.2d 762]

not an adversary proceeding, but was a mere collusive effort to obtain an adjudication favorable to the proposal. The petition was several times amended, and so far as appears, there was no objection to any amendment. The following among other prayers were made:

(a) That said resolution be decreed to be null and void for each and all of the reasons set forth in the petition.

(b) That in the meantime the defendants be temporarily enjoined and that on final decree, each and all of them be perpetually enjoined from proceeding as set forth in said void resolution.

(c) For general relief.

John Williams, and ten other individuals, as citizens and taxpayers, filed an intervention, praying for the same relief, on substantially the same grounds. So far as appears, no action has ever been taken on this intervention, except an order dated June 24, 1943, allowing it filed as a part of the record.

The defendant municipality, and the mayor and council, demurred generally and specially to the original petition of Singleton and to the petition as amended.

Before the demurrer was passed on, the defendants moved to disqualify the presiding judge upon several grounds, as will be shown more fully in the opinion. After hearing evidence on this motion, the judge held that he was not disqualified upon any ground taken, and then on consideration of the general demurrer, overruled the same. The city and the mayor and council sued out a writ of error complaining of both rulings. The plaintiff, C. W. Singleton, sued out a cross-bill of exceptions, complaining of admission of evidence in support of the motion to disqualify.

The order overruling the general demurrer was passed on July 16, 1943. Thereafter, according to executive proclamation, an amendment to the foregoing provision of the constitution, as to the incurring of debts by counties and municipalities, was ratified in the election of August 3, 1943, see Laws 1943, p. 47; the said amendment being as follows:

"Provided, further, that revenue anticipation obligations may be issued by any county, municipal corporation, or political sub-division of this State to provide funds for the construction, in whole or in part, of any revenue-producing facility which such county, municipal corporation, or po litical sub-division is authorized by the act of the General Assembly approved March 31, 1937, known as the 'Revenue Certificate Laws of 1937, ' as amended by the Act approved March 14, 1939, to construct and operate, or to provide funds to extend, repair or improve any such existing facility. Such revenue anticipation obligations shall be made payable, as to principal and interest, only from revenue produced by revenue-producing facilities of the issuing political sub-division, and shall not be deemed debts of, or to create debts against, the issuing political sub-division within the meaning of this paragraph or any other of this Constitution. This proviso shall apply only to revenue anticipation obligations issued to provide funds for the construction, extension, repair, or improvement of such facilities and undertakings as are specifically authorized and enumerated by said Act of 1937, as amended by said Act of 1939; and no such issuing political sub-division of the State shall...