Darnell v. Montgomery County

Decision Date06 December 1957
Citation6 McCanless 560,308 S.W.2d 373,202 Tenn. 560
Parties, 202 Tenn. 560 A. J. DARNELL, Complainant-Appellant, v. COUNTY OF MONTGOMERY et al., Defendants-Appellees.
CourtTennessee Supreme Court

James C. Cunningham, Clarksville, for appellant.

Waller, Davis & Lansden, J. Paschall Davis, Nashville, for the Trane Co.

Allison B. Humphreys, Sol. Gen., Nashville, for George F. McCanless, Atty. Gen.

J. Thomas Traughber, Clarksville, for Montgomery County.

SWEPSTON, Justice.

T.C.A. § 5-715 extends to counties the same powers as are conferred upon municipalities by T.C.A. § 6-1701 et seq. with reference to acquisition, operation and disposition of industrial buildings and the financing of same.

Acting under the authority of said statutes and according to the terms thereof, Montgomery County has, pursuant to a special election authorizing the contract herein mentioned by a vote of 6,045 for and 51 against, followed by a proper resolution of the Quarterly County Court of said County authorizing the issuance of bonds herein referred to, entered into a contract with the Trane Company in substance as follows:

The Trane Company will erect an industrial building on land acquired by it from the Chamber of Commerce of said County and will convey the same to Montgomery County. The said County will issue $1,500,000 of bonds in accordance with said statutes, which will be purchased by the Trane Company and the proceeds of which will be used to pay it for the said building and land on which it is situated. The Trane Company will then lease from the County the building for a term of 15 years at a rental sufficient to pay the interest on and to amortize the principal of the bonds; and an option is granted to the Trane Company to purchase the leased premises at any time within the last 10 years of the lease at a price equivalent to the aggregate principal amount remaining at that time outstanding and unpaid on said bonds, together with all interest and charges required to be paid on calling the bonds, plus $1,000.

This suit is filed by A. J. Darnell as a taxpayer seeking to enjoin the consummation of this proposed transaction and to have the same declared invalid for the alleged reasons that (1) it is unauthorized by statute, (2) it violates the Constitution of the State in that (a) it attempts to grant to the Trane Company an exemption from State and County property taxes in violation of Art. II, Sections 28 and 29 of said Constitution and (b) attempts to extend the credit of the County to a private corporation and authorizes the expenditure of public funds and the disposition of public property for a private purpose in violation of Art. II, Section 29 of said Constitution; (3) because the proposed grant of an option to purchase the building at any time within the last 10 years of the term of the lease is an invalid restriction on the right of the County to sell its own property at the best price obtainable and is against public policy.

All defendant demurred to the original bill. The Attorney General demurred on the ground that the alleged unconstitutionality is not pointed out with sufficient particularity. Montgomery County demurred on several grounds in substance that the resolution, the contract and the lease as well as the entire transaction is valid and in accordance with said statutes and that the latter are not unconstitutional. The Trane Company demurred for the same reasons and for the additional reason that the exemption from taxation of the property purchased by Montgomery County and leased to the Trane Company is valid and not unconstitutional.

The first assignment of error to the action of the Chancellor in sustaining the demurrers is that T.C.A. § 5-715 in attempting to extend to counties the same power that is granted to cities to issue industrial revenue bonds is unconstitutional. No authority for this position is...

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15 cases
  • State ex rel. Tomasic v. Kansas City
    • United States
    • Kansas Supreme Court
    • 25 Noviembre 1981
    ...v. Hosdreg Company, 62 N.M. 18, 303 P.2d 920 (1956); Elliott v. McNair, 250 S.C. 75, 156 S.E.2d 421 (1967); Darnell v. Co. of Montgomery, 202 Tenn. 560, 308 S.W.2d 373 (1957); County Court v. Demus, 148 W.Va. 398, 135 S.E.2d 352 (1964). See generally Note, "Legal Limitations on Public Induc......
  • Mitchell v. North Carolina Indus. Development Financing Authority, 532
    • United States
    • North Carolina Supreme Court
    • 6 Marzo 1968
    ...the property at the termination of Hazleton's lease destroy the public character of the enterprise. See Darnell v. County of Montgomery, 202 Tenn. 560, 308 S.W.2d 373, 374, 375. 'Having held that authorities created for the purpose of acquisition and development and operation of produce mar......
  • City of Gaylord v. Beckett
    • United States
    • Michigan Supreme Court
    • 24 Agosto 1966
    ...602; Opinion to the Governor, 79 R.I. 305, 88 A.2d 167; cf. Opinion to the Governor, 88 R.I. 202, 145 A.2d 87; Darnell v. County of Montgomery, 202 Tenn. 560, 308 S.W.2d 373; McConnell v. City of Lebanon, 203 Tenn. 498, 314 S.W.2d 12; Almond v. Day, 197 Va. 782, 91 S.E.2d 660; State ex rel.......
  • Uhls v. State ex rel. City of Cheyenne
    • United States
    • Wyoming Supreme Court
    • 12 Junio 1967
    ...257 Ala. 49, 57 So.2d 629, 637; State ex rel. Meyer v. County of Lancaster, 173 Neb. 195, 113 N.W.2d 63, 68; Darnell v. County of Montgomery, 202 Tenn. 560, 308 S.W.2d 373, 374-375; Fairfax County Industrial Development Authority v. Coyner, 207 Va. 351, 150 S.E.2d 87, 93. There, of course, ......
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