State v. Regents of University System of Georgia
| Docket Number | 10365. |
| Decision Date | 28 July 1934 |
| Citation | 175 S.E. 567,179 Ga. 210 |
| Parties | STATE v. REGENTS OF UNIVERSITY SYSTEM OF GEORGIA et al. |
| Court | Georgia Supreme Court |
Syllabus by the Court.
1. The Regents of the University System of Georgia is a distinct corporate entity and is governed by a Board of Regents. Through the board it can exercise any power usually granted to such incorporations, necessary to its usefulness, and not in conflict with the Constitution and laws. An obligation incurred by the corporation, or the Board of Regents, is not a debt of the state, and therefore is not affected by constitutional limitations upon state indebtedness.
2. There is no law, either constitutional or statutory, which prevents the Board of Regents from charging reasonable matriculation, laboratory, hospital, and athletic fees against students attending any of the institutions referred to in this record, and as to which the regents propose to issue bonds secured in part by the income to be derived from such fees.
3. The act of the Legislature changing the corporate name from "Trustees of the University of Georgia" to "Regents of the University System of Georgia" did not violate the constitutional provision stated in the Civil Code 1910, § 6581, as amended in 1920 (Const. art. 8, § 6, as amended in 1920).
4. The regents are authorized in their discretion to purchase land for college purposes, to construct dormitories, gymnasia, and other buildings necessary to usefulness of the several institutions, and to require students to pay reasonable fees for their use.
(a) They may also lease the gymnasia to corporate athletic associations connected respectively with the institutions at which such buildings are located.
(b) No abuse of discretion appears in the proposal to require students to occupy new buildings in preference to existing buildings, in order that fees charged for such use may create an income to retire bonds issued for the purpose of raising funds with which to construct such new buildings.
5. It does not appear that the regents have promised or intend to charge any unreasonable student fees.
6. The loan agreement as made by the corporation and its Board of Regents with the federal government under which bonds will be issued by the regents and purchased by the government for the purpose of providing funds for stated university uses, the bonds to be paid exclusively out of described special funds does not purport to involve any illegal undertaking on the part of the Board of Regents, and is within the powers granted to the corporation and its Board of Regents by the laws of this state. The court properly refused to enjoin the execution of such agreement.
Error from Superior Court, Fulton County; E. D. Thomas, Judge.
Suit for injunction by the State of Georgia against the Regents of the University System of Georgia and another. To review a judgment refusing an interlocutory injunction, plaintiff brings error.
Affirmed.
The state of Georgia, in its sovereign capacity, filed a suit against the Regents of the University System of Georgia, a corporation, and against the members and the secretary of the Board of Regents, to enjoin the execution of a contract negotiated between the defendants and an agency or department of the federal government, under which the defendant corporation proposes to obtain a loan from the federal government in the sum of $2,817,000, upon the terms and conditions fully stated in the petition, to be used by the defendants in the construction of new buildings at different branches of the university system, and in one or two instances the improvement of existing buildings, and in two other instances the purchase of land for college purposes. The judge of the superior court refused an interlocutory injunction, and the state of Georgia excepted. The state attacked the agreement and the proposed loan upon several grounds, contending, among other things, that the execution of the proposed contract would be in violation of certain provisions of the state Constitution, and contrary to the statutes relating to the powers and duties of the Regents of the University System. The nature of the several contentions of the state are more fully indicated in the opinion, infra.
The contract provides that the borrower, the Regents of the University System, will issue, in amounts stated, bonds in fourteen different series, applicable respectively to each of fourteen branches of the university system The government will buy the bonds, and will thus supply money to the defendant corporation for the purposes stated above, and in addition thereto will make a grant of not exceeding 30 per cent. of the cost of the labor and materials employed in the several projects. Each series of the bonds will represent a separate loan for a particular branch of the university system, and will be distinguished by the name applying to that institution. The aggregate amount of each series has been agreed upon, and is fixed according to the estimated needs of each of the corresponding institutions. For instance, one series will be issued in the total sum of $54,000, and will be called the "West Georgia College Bonds," the proceeds of which are to be used at that college, which is located at Carrollton. Another series will aggregate the sum of $676,000, and will be called "University of Georgia Bonds," the proceeds to be used at the university proper, located at Athens. The bonds will bear interest at 4 per cent. per annum, payable semiannually, and will mature in stated amounts in the years 1936 to 1963, inclusive. All of the bonds will be secured by a trust agreement called an "indenture" to be executed by the Regents of the University System to a bank or trust company satisfactory to the agency of the federal government making the loan, such bank or trust company being therein designated as trustee for the bondholder or bondholders. This indenture will contain the following stipulations
3. Rates. The borrower shall fix, maintain, and make every reasonable effort to collect in quarterly installments from all students, faculty members, and others using or served by any of the new buildings at each of the institutions rentals, rates, fees, and charges for the use of such new buildings, which shall at all times, so long as any of the bonds of the series issued for the construction of such new building are outstanding, be in an amount sufficient to provide for: (a) The reasonable cost of maintenance operation, repair, and insurance of such new buildings; and (b) the sums required [by the contract] to be paid into the sinking-fund and the reserve-fund provided for the bonds of the series issued for the construction of such new buildings. Such rentals, rates, fees and charges shall be uniform to all matriculated students and faculty members similarly situated; and no student, faculty member, or other person making use of such new building shall be exempt from the payment thereof. All new buildings shall be required to be used by all students, or, if they are designed for the occupancy of faculty members, by as many faculty members as may be served thereby, at the institution where said new buildings are respectively located, to the maximum extent to which they are capable of serving such students and faculty members. Rentals, rates, fees and charges shall be fixed, maintained, and collected for the use by all students, faculty members, and others using or served by all of the existing buildings at each institution, at the same rates as those fixed for the use of the new buildings at such institution; provided, however, that reasonable differentials based on the condition, type, location, and relative convenience of such buildings may be allowed.
4. Matriculation and Other Student Fees. So long as any of the bonds of any series are outstanding, the borrower and the officers in charge of the institution for the benefit of which the bonds of such series shall have been issued shall fix, maintain, and make every reasonable effort to collect matriculation, hospital, laboratory, athletic, and other student fees, in a total amount sufficient together with other funds available therefor, to maintain and operate such institution and to make the payments required to be made to the trustee for the account of the sinking-fund and the reserve-fund. * * *
8. Restriction on Pledge of Revenues. So long as any of the bonds are outstanding, the borrower shall not pledge, assign, or in any manner encumber the receipts, revenues, and income" pledged by the indenture.
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