Mathews v. Darby

• Decision Date: 13 January 1928
• Docket Number: 6272.
• Citation: 141 S.E. 304,165 Ga. 509
• Parties: MATHEWS v. DARBY, Mayor, et al.
• Court: Georgia Supreme Court

141 S.E. 304

165 Ga. 509

MATHEWS v. DARBY, Mayor, et al.

No. 6272.

Supreme Court of Georgia

January 13, 1928

Syllabus by Editorial Staff.

The mayor and council of the city of Vidalia are authorized under general powers contained in city charter (Laws 1922, p. 1004) to build schoolhouses within its limits.

Under charter of the city of Vidalia (Laws 1922, p. 1004) authorizing city to buy, hold, exchange, and convey property mayor and council of city are authorized in their discretion to sell the city hall and use the proceeds in erecting school building for city.

Mayor and council of city of Vidalia being authorized under its charter (Laws 1922, p. 1004) to sell city hall and use proceeds in erecting school building for city, court of equity will not interfere to restrain or control such action on ground that officers are selling city hall for less than fair market value, but to sustain interference it must appear either that act is ultra vires or fraudulent and corrupt.

That light plant and city hall of city of Vidalia were built with proceeds of bonds sold by city does not require that proceeds of sales of these properties should be applied to redemption of bonds, since properties are in no way pledged by city to payment of bonds, and Constitution and Civ. Code 1910, § 6564, requires city, at or before issuing bonds, to provide for tax to pay bonds within 30 years from incurring indebtedness.

Where city of Vidalia failed to levy and collect tax to pay bonded indebtedness as required by Const. 1877, art. 7, § 7, par. 2 and portion of proceeds of property built with proceeds of bonds were set aside as sinking fund to pay bonds, funds so set aside will be treated as sinking fund which city was required to assess and levy for paying bonds, and hence officers of city were under duty to invest proceeds in securities specified by Laws 1910, p. 100, § 1 (Park's Ann. Civ. Code, § 467 [a]), and any other investment or disposition of said bonds would be illegal and void.

In petition to enjoin city of Vidalia from diverting portion of proceeds of city property set aside as sinking fund to meet bonded indebtedness, it was error to refuse injunction against diversion of sinking fund to erect school building for city, where city had failed to levy and collect tax for purpose of paying bonded indebtedness, proceeds of which were used in constructing city property as required by Const 1877, art. 7, § 7, par. 2.

Error from Superior Court, Toombs County; R. N. Hardeman, Judge.

Petition for injunction by G. N. Mathews against S. P. Darby, Mayor of the City of Vidalia, and others. Judgment for defendants, and plaintiff brings error. Affirmed in part, and reversed in part.

The mayor and council of the city of Vidalia sold the electric light plant of that city for $50,000. On June 1, 1913, the city contracted a bonded indebtedness of $23,000. These bonds bear 5 per cent. interest, and mature June 1, 1943. Nine thousand dollars of the proceeds of this bond issue were used in erecting and equipping this light plant. By resolution of the mayor and council, $23,000 of the proceeds of the sale of the light plant were set aside as a sinking fund to discharge the bonded indebtedness. The remainder of these proceeds had been expended otherwise by the mayor and council of the city. Besides the above bond issue, the city has issued the following bonds: July 1, 1904, $12,000, bearing 5 per cent interest, none of which have been redeemed; June 1, 1913, $25,000, bearing 5 per cent. interest, maturing June 1, 1943, $5,000 of which have been redeemed; and July 1, 1921, $60,000, bearing 5 per cent. interest, $2,000 of which mature annually up to 1951, inclusive, and of which $6,000 have been redeemed up to June 14, 1927. The total outstanding bonded debt of the city on said date amounted to $109,000, and the city had a sinking fund of $1,500 in bank. On May 13, 1927, the mayor and council passed a resolution revoking the previous resolution setting aside said sum of $23,000 as a sinking fund, and providing that said sum should be used in the erection of a school building in the city. The same resolution provided for advertising for bids for the purchase of the present city hall, the city reserving the right to accept or reject any or all bids submitted. In pursuance of this resolution, bids were advertised for the sale of this hall. The highest bid was one of $15,000, submitted by J. F. Darby. By this resolution the proceeds of the sale of the city hall were to be used in the erection of a school building for the city. The mayor and council purpose to accept this...