Renfroe v. City Of Atlanta

Citation78 S.E. 449,140 Ga. 81
PartiesRENFROE et al. v. CITY OF ATLANTA et al.
Decision Date28 May 1913
CourtSupreme Court of Georgia

(140 Ga. 81)
78 S.E. 449

RENFROE et al.
v.
CITY OF ATLANTA et al.

Supreme Court of Georgia.

May 28, 1913.


[78 S.E. 449]
(Syllabus by the Court.)

1. Municipal Corporations (§ 803*)—Limitation on Indebtedness—Effect.

By article 7, § 7, par. 1, of the Constitution of Georgia (Civ. Code 1910, § 0503), it is declared that no municipality shall incur any new debt, except for a temporary loan or loans to supply casual deficiencies of revenue, not to exceed one-fifth of 1 per cent. of the assessed value of taxable property therein, without the assent of two-thirds of the qualified voters thereof, at an election for that purpose, to be held as may be prescribed by law. It further prescribes a limit upon the amount of indebtedness which can thus be incurred.

[Ed. Note.—For other cases, see Municipal Corporations, Cent. Dig. §§ 1824-1827; Dec. Dig. § 863.*]

2. Municipal Corporations (§ 863*)—Limitation on Indebtedness—Effect.

By article 1, § 4, par. 2, of the Constitution (Civ. Code 1910, § 6392), it is provided that "legislative acts in violation of this Constitution, or the Constitution of the United States, are void, and the judiciary shall so declare them."

[Ed. Note.—For other case, see Municipal Corporation, Cent. Dig. §§ 1824-1827; Dec. Dig. § 863.*]

3. Municipal Corporations (§ 864*)—Limitation on Indebtedness — Construction of Contract—"Creation of Debt."

A contract was entered into by the city of Atlanta and a private corporation, whereby the latter agreed to erect a crematory for the former, for a total price of $376,800, of which it was agreed that an installment of $50,000 should be paid in the year in which the contract was made, and that the balance should be paid in installments of $75,000 each, except the last, extending through a series of years; that the installments to be paid annually should bear interest at the rate of 6 per cent. from the time when they fell due; that the city pledged its good faith for their payment, and the term "good faith" was understood to mean that the city could not bind itself to pay beyond the current year, but the mayor and general council of that year by resolution recommended to the mayor and general council of succeeding years to make appropriations to cover the deferred payments specified in the contract; and that, if a default in the payment by the city of any future installment of the purchase money should be made, this should, without any legal process whatever, transfer the possession of the plant to the contractor company, and that the company should "immediately become vested with the title, possession, and control of said plant, exclusive of the land, as against the city of Atlanta, and said company shall have the right to operate the same free of rent, for its own account, for a period of ten years from the date of such default." Held, that such contract sought to create a debt within the meaning of the constitutional provision on that subject set out in the first headnote, and, being entered into without submitting the question to a preliminary vote of the people, it was invalid.

[Ed. Note.—For other cases, see Municipal Corporations, Cent. Dig. §§ 1828-1835; Dec. Dig. § 864.*]

4. Municipal Corporations (§ 993*) — Illegal Contracts—Injunction—Parties.

Taxpayers of the city have such an interest in the municipal funds arising from taxation that they may enjoin the creation of illegal debts by the corporation, or their payment.

[Ed. Note.—For other cases, see Municipal Corporations, Cent. Dig. §§ 2158-2161; Dec. Dig. § 993.*]

5. Municipal Corporations (§ 867*)—Powers—Creation of Indebtedness.

Nothing in this decision prevents the mayor and council of the city of Atlanta from erecting a crematory in such manner as will not violate the Constitution, or from submitting to the qualified voters the question of whether the city shall incur an indebtedness for the purpose of erecting a crematory, or from incurring such indebtedness if duly authorized by the voters in the manner prescribed by the Constitution. But the city and the contractor must be enjoined from creating a debt on the part of the city without the authority of the qualified voters, and from carrying out a contract entered into without such lawful authority which will have that effect.

[Ed. Note.—For other cases, see Municipal Corporations, Cent. Dig. § 1841; Dec. Dig. § 867.*]

Error from Superior Court, Fulton County; Geo. L Bell, Judge.

Action by J. N. Renfroe and others against the City of Atlanta and others. Judgment for defendants, and plaintiffs bring error. Reversed.

C. P. Goree, of Atlanta, for plaintiffs in error.

J. L. Mayson, W. D. Ellis, and Evans, Spence & Moore, all of Atlanta, for defendants in error.

FISH, C. J. Certain citizens and taxpayers of the city of Atlanta, in behalf of themselves and such others similarly situated as might desire to become parties plaintiff, brought a petition against the city and certain named officers thereof, and the Destructor Company, a corporation, to enjoin the defendants from carrying out a contract entered into between the city and the Destructor Company for the erection of a crematory by the company for the city, on the ground, among others, that the contract was void, for the reason that it was an effort to create a debt against the city without complying with the constitutional provisions requiring the assent of two-thirds of the qualified voters of the city, expressed at an election held for the purpose of determining whether the debt should be created. An interlocutory injunction was refused, and the plaintiffs excepted.

So much of the contract as is necessary to be considered in deciding the case will be hereinafter set forth.

The first section of our Civil Code enumerates the laws of general operation which are of force in this state. After referring to the Constitution of the United States, the laws of the United States passed in pursuance thereof, and treaties made under the authority of the United States, the next item enumerated is with reference to the local laws of the state, and the Constitution

[78 S.E. 450]

of this state is declared to be the supreme law therein next in order. Thus, at the very threshold of the Code of Georgia, the Constitution and its provisions are declared to be the supreme law, to which other laws must yield if they are in conflict therewith. At the close of the Civil Code are placed the Constitution of the state and that of the United States. It is significant that the beginning and the end of the law for the protection of the citizens, as embodied in the Civil Code of the state, are its constitutional provisions; and that at the beginning and at the end—the Alpha and Omega—of the Code, stands the declaration of the supreme law of the Constitution as a safeguard and fundamental guaranty of the rights of person and property. Once let it be understood that the Constitution can be violated or evaded at will, and no law of lesser force can be safe from a similar fate.

By article 7, § 7, par. 1, of the Constitution of this state (Civil Code, § 6563), it is declared: "The debt hereinafter incurred by any county, municipal corporation, or political division of this state, except as in this Constitution provided for, shall not exceed seven per centum of the assessed value of all the taxable property therein, and no such county, municipality, or division shall incur any new debt, except for a temporary loan or loans to supply casual deficiencies of revenue, not to exceed one-fifth of one per centum of the assessed value of taxable property therein, without the assent of two thirds of the qualified voters thereof at an election for that purpose, to be held as may be prescribed by law, " etc. By section 10, par. 1, of the same article (Civil Code, § 6567), it is declared: "Municipal corporations shall not incur any debt until provision therefor shall have been made by the municipal government." In article 1, § 4, par. 2 (Civil Code, § 6392), it is declared: "Legislative acts in violation of this Constitution, or the Constitution of the United States, are void, and the judiciary shall so declare them." Here we have in the fundamental law, where rights and limitations are deliberately declared, not in the heat of political excitement, or the haste of mass meetings, or the like, but in the calm consideration of the people's representatives, formulating fundamental regulations for the protection of their persons and property even against hasty legislation or inconsiderate action by the Legislatures or municipal authorities, a limitation upon municipalities in regard to the creation of debts, and municipal councils are prohibited from creating debts without the consent of the taxpayers duly expressed. This constitutional provision is not a mere arbitrary or technical declaration of a rule of procedure, but it is a substantial protection to the taxpayers of a community against the action of municipal authorities, who are at last but the agents and servants of the people, if they seek to impose indebtedness upon the taxpayers without their consent.

This provision of the Constitution was not hastily declared or based on mere theory, but it grew out of the sad experience of the past, and was intended to prevent a repetition of it in the future. In Walsh v. City Council of Augusta, 67 Ga. 293, Chief Justice Jackson said (page 299): "What was the evil? It was the evil attendant upon all people who handle money not their own. The cities of the state incurred a very heavy indebtedness—some of them became insolvent. To levy taxes enough to pay them would work the ruin of the citizens and blight the prosperity of the city. Not to levy and pay them would be to destroy credit and soil honor. The cities are the arteries of the body politic. With them destroyed or sluggish, the heart, the very life, of the republic would cease to beat, or pulsate with feeble supply of vital fluid. So that in their health is involved that of the entire commonwealth, and...

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