Sheffield v. State School Bldg. Authority

• Decision Date: 14 January 1952
• Docket Number: No. 17682,17682
• Citation: 208 Ga. 575,68 S.E.2d 590
• Parties: SHEFFIELD v. STATE SCHOOL BLDG. AUTHORITY et al.
• Court: Georgia Supreme Court

Page 590

68 S.E.2d 590

208 Ga. 575

SHEFFIELD v. STATE SCHOOL BLDG. AUTHORITY et al.

No. 17682.

Supreme Court of Georgia.

Jan. 14, 1952.

Syllabus by the Court.

1. The State School Building Authority Act, Ga.L.1951, pp. 241-246, plainly forbids any attempt thereunder to obligate the State, pledge the State's faith or credit, or donate anything belonging to the State; therefore, neither the act, lease contract executed thereunder, nor the revenue bonds issued pursuant thereto offend constitutional inhibitions against State debts, donations, or pledging the faith and credit of the State.

2. The foregoing act and all proceedings thereunder conform with art. 7, sec. 6, par. 1 of the Constitution of 1945, Code Ann., § 2-5901. Therefore the debt created by the 30-day lease contract--by the terms of which the County Board of Education of Baker County obligates to pay the Authority yearly rentals for the school building--is one expressly authorized by the above clause of the Constitution and accords with art. 7, § 7, par. 1, Code Ann., § 2-6001, of ths same Constitution.

3. Neither section 14 of the foregoing act nor section 11 of the Minimum Foundation Act, Ga.L.1949, pp. 1406, 1412, in vesting the State Board of Education with wide discretion in administering school funds, delegates legislative powers in violation of the Constitution.

4. Section 21 of the act creating the Authority does not offend the constitutional inhibition against donations or gratuities or against the exemption of property from taxation. The property exempt is devoted solely to school purposes, without profit to the owner, and is therefore exempt as the property of an institution of purely public charity.

5. Since membership in the Authority is neither an office to which emoluments are annexed nor a civil office, the appointment of the Speaker of the House of Representatives, Honorable Fred Hand, as a member did not offend the Constitution. Art. 3, § 4, par. 6, Code Ann. § 2-1606.

6. The act, the lease contract executed thereunder, and the revenue bonds issued pursuant thereto conform to the Constitution and are valid, and the judgment sustaining their validity and validating the revenue bonds is affirmed.

To the petition by Paul Webb, Solicitor General of the Atlanta Judicial Circuit, in behalf of the State of Georgia against the State School Building Authority, the State Board of Education, the Fulton County Board of Education, and the Baker County Board of Education, seeking to validate $440,000 (principal amount) of the State School Building Authority 3% Revenue Bonds, all of the defendants filed answers admitting the material allegations of the petition and praying for judgment validating the revenue bonds. The county boards of education in their answers further pray that the court pass upon the validity of their respective lease contracts with the State School Building Authority. The State Board of Education acknowledged receipt by it of copies of the lease contracts made by each of the county boards of education with the Authority, and stated its intention to comply with the terms of those leases and to make payments as therein provided to the Authority of such funds allocated to the respective counties as may be made available for that purpose, arising in virtue of section 14, State School Building Authority Act, Ga.L.1951, p. 252, and section 11, Minimum Foundation Act, Ga.L.1949, p. 1412.

Steve Sheffield, as a resident and taxpayer of Baker County, presented and had allowed by proper order of the court his intervention objecting to the validition of the said revenue bonds. The matter came on for a hearing on Septmeber 24, 1951, and the court entered an order sustaining the validity of the act creating the Authority and the lease made by the Board of Education of Baker County with the authority, as against the attacks made thereon by the intervenor, and validating the revenue bonds as prayed for in the petition on behalf of the State. To this judgment the intervenor excepted.

The full provisions of the State School Building Authority Act are too voluminous to be here stated in detail. See Ga.L.1951, pp. 241, 261. However, we will set forth the salient provisions that are relevant in this case. The act creates an Authority consisting of seven members including the Chairman of the State Board of Education, the State School Superintendent, the Attorney General, the State Auditor, and provides for the appointment of three additional members by the Governor. The Authority is given power to sue and be sued; to make contracts and borrow money; to own, lease, and dispose of property, both real and personal; to construct, maintain, and repair building projects to be located on property owned or leased by the Authority; the costs of such projects to be paid for in whole or in part from proceeds of revenue bonds of the Authority. It is authorized to borrow money for that purpose and to issue negotiable revenue bonds therefor payable from funds pledged solely for that purpose. It is given authority to to issue such bonds in unlimited amounts all of which to be made payable from special funds specified in the act. The bonds are, by the act, expressly declared not to be the debt of the State or a pledge of the faith and credit of the State, but they are to be paid solely from such funds as may be voluntarily appropriated by the legislature of the State or from other sources available to the county boards of education which may be lawfully used for that purpose. The act empowers State officials, entrusted with appropriations to be allocated to the respective county boards of education, to apply funds arising under provisions of section 11 of the Minimum Foundation Act or any other appropriations to be allocated to such county board as are necessary for the payment of the rental obligated by such counties under terms of their lease contract with the Authority. And it is further provided that, if funds available from this source are inadequate, then the county boards may obligate to pay any deficit of such rental contracts from any funds which they have that may be lawfully applied to such obligations. The act provides that the revenue bonds there provided for shall not be direct, indirect, or contingent obligations of the State, nor shall the State be obligated to levy or collect taxes or to make appropriations for the payment of such bonds; and, further, that all bonds issued under the authority of the act shall contain on the fact thereof this complete immunity of the State from obligations thereunder. The Authority is authorized to fix rents for the properties leased to the county school boards or other local school authorities at a rate that will retire the principal and interest of such bonds in full as they mature, and that will also cover all expenses attending the upkeep and maintenance of the properties rented.

The lease contracts here involved obligate the Board of Education of Fulton and Baker Counties for the payment of rent for the school buildings therein leased in the manner provided by the act. And in each of said contracts it is provided that, upon the expiration of the lease and full performance of all obligations thereunder by the county boards of education, the Authority will convey to the respective counties by quitclaim deed title to the entire property thereby leased.

The intervention assails the act in its entirety, upon the ground that it offends the following provisions of the 1945 Constitution: art. 7, § 7, pars. 1, 2; § 3, pars. 1, 2, 4, 5; § 1, par. 2, Code Ann., §§ 2-6001, 2-6002, 2-5601, 2-5602, 2-5604, 2-5605, 2-5402. The intervention attacks the following specific portions of the act: Sections 4, 5, and 27, upon the grounds that they offend the Constitution, art. 1, § 1, par. 3; art. 7, § 7, pars. 1, 2, Code Ann. §§ 2-103, 2-6001, 2-6002; Section 14 upon the grounds that in referring to section 11 of the Minimum Foundation Act it offends the Constitution, art. 1, § 1, par. 23; art. 3, § 1, par. 1; art. 7, § 3, pars. 4, 2, Code Ann. §§ 2-123, 2-1301, 2-5604, 2-5602. The intervention further asserts that the Authority was illegally constituted, in that Honorable Fred Hand, Speaker of the House of Representatives, Georgia General Assembly, was appointed by the Governor, and was by the members elected Chairman, in violation of the Constitution, art. 3, § 4, par. 6, Code Ann. § 2-1606. It is further contended that section 21 of the act, which purports to exempt the properties of the Authority from all taxation, violates the Constitution, art. 7, § 1, pars. 2, 4, Code Ann. §§ 2-5402, 2-5404. The intervention further alleges that the lease contract entered into by the Board of Education of Baker County is void, in that it offends the Constitution. Art. 7, § 7, pars. 1, 2, Code Ann. §§ 2-6001, 2-6002.

The exception here is to the judgment deciding each issue raised by the intervention adversely to the intervenor, and validating the bonds as prayed.

Robt. Culpepper, Jr., Camilla, for plaintiff in error.

Paul Webb, Sol. Gen., Atlanta, G. Arthur Howell, Jr., Elbert Tuttle, Sumter M. Kelley, Atlanta, Eugene Cook, Atty. Gen., M. H. Blackshear, Jr., Deputy Asst. Atty. Gen George E. Sims, Jr., Asst. Atty. Gen., for defendants in error.

DUCKWORTH, Chief Justice.

1, 2. A major attack is here made upon the entire plan including the act, the revenue bonds from the sale of which funds are obtained with which to finance the construction of the school buildings provided for, and the lease contracts by which the Authority leases the buildings to the county boards of education; and the attack is predicated upon debt limitations and inhibitions contained in the clauses of the Constitution specified in the statement of facts. We shall therefore in this division of our opinion, consider the entire field of constitutional references to inhibitions and limitations upon public debt. We observe at the outset that all...