The Mayor v. Inman
| Decision Date | 31 July 1876 |
| Citation | 57 Ga. 370 |
| Parties | The Mayor and Council of the City of Grifein et al, plaintiffs in error. v. Inman, Swann & Company,defendants in error. |
| Court | Georgia Supreme Court |
[COPYRIGHT MATERIAL OMITTED.]
Municipal corporation. Constitutional law. Railroads. Powers. Negotiable securities. Usury. Contracts. Practice in the Superior Court. Charge of court. Before Judge Hall. Spalding Superior Court. August Term, 1875.
Inman, Swann & Company brought assumpsit against the Mayor and Council of the city of Griffin, on forty-three bonds issued by said city to the Griffin, Monticello and Madison Railroad Company, aggregating in amount $21,500 00.
The defendant resisted a recovery, principally, on the following grounds: Said bonds were issued in payment of a subscription to the stock of said railroad company. They were illegally issued in this: By the 14th section of the act of December 13th, 1859, amending the charter of the city of Griffin, authority was given to the mayor and council, on the recommendation of a majority of the citizens, in public meeting or by public election, to subscribe to the stock of railroads, or such other internal improvements, as may be to the interest and advantage of the city of Griffin; to borrow money on the faith and credit of the city to pay the same, and to impose a special tax of not exceeding one-half of one per *cent. in any one year, to meet such debt thus created. On the 23d of May, 1871, said mayor and council passed a resolution authorizing the mayor to submit for the ratification or rejection of the legal voters of the city of Griffin, a proposition att-thorizing and requiring said mayor and council to subscribe $10,000 00 to the capital stock of said road, on such terms as they may deem for the best interest of said city, at a regular election, on a day to be fixed by said mayor, after giving legal notice thereof. James S. Boynton was then president of said railroad company and mayor of said city. As mayor, he ordered an election at the city hall, on the 29th of June, 1871, in which all legal voters of said city were requested to express their desire by casting their ballots at said election. The resolution did not authorize the mayor to submit the question to the citizens of Griffin as required by the charter, but to the legal voters. Under the charter, only such were legal voters as were of the age of twenty-one, and who had duly registered as legal voters. For the year 1871, there were registered as legal voters, three hundred and seventy-eight white voters, and three hundred and three colored voters, making six hundred and eighty-one, and only three hundred and two voters voted for subscription, and thirty-eight against it, making an aggregate of three hundred and forty votes polled at said election. On the 11th day of July, 1871, said mayor and council passed an ordinance authorizing the mayor to subscribe for four hundred shares of the stock of said company, and directing him to issue bonds in payment of the same in such sums as the directors of the railroad company may desire, payable one-eighth, respectively, in six, twelve, fifteen, twenty, twenty-three, twenty-five, twenty-seven and twenty-nine years, with interest at the rate of seven per cent., provided said bonds be received at their par value, and to be delivered to said company only on the following conditions:
1st. That all the shops and machinery of said railroad should be located in the said city of Griffin. 2d. That the construction of said road should begin at Griffin and proceed *eastward, and that the said mayor and council would issue $2,000 00 in bonds for every mile graded and made ready for the iron, till said stock was paid for. 3d. That the city of Griffin should be the western terminus of said road. 4th. That said road should be so operated as to give the citizens of Griffin cheap and through freights. 5th. That none of the bonds should be delivered until the council should be satisfied that the road would be built.
The railroad enterprise did not command the confidence of the capitalists of said city, and said company became embarrassed for want of means and on account of a failure to collect subscriptions, and under these unfavorable circumstances, a resolution was offered in council authorizing the issuing of bonds of said city in payment of said subscription, utterly ignoring and disregarding all the conditions upon which said subscription was made by a former council, which passed by a vote of four yeas to three nays. G. A. Cunningham and T. J. Brooks, who were members of said council, voted yea; they were creditors of said road to a large extent and thereby disqualified to vote.
None of the conditions were complied with except that the work was commenced at the city of Griffin, but it was removed to the other end of the road soon after the bonds were delivered to the railroad company.
It was insisted on the part of defendant, 1st, that the amendment of 1859 to the charter was repealed by the provision in the constitution of 1868, recited in the first head-note; 2d. That if such repeal did not take place, then the submission should have been to the citizens, and not to the legal voters; 3d. That a majority of the legal voters did not vote at said election; 4th. That whilst the defendant may have had the power to subscribe to such stock, it had no authority to issue negotiable securities in payment therefor; 5th. That said bonds were delivered to the railroad company before the various conditions upon which the subscription to the stock was made, were complied with; 6th. That James S. Boynton was acting, at the time the subscription to the stock was made *and the bonds were issued, in the dual capacity of president of the railroad company and as mayor of the city.
No notice to the plaintiffs of any of the above alleged defects in the bonds was traced.
All the aforesaid defenses were overruled and the defendant excepted.
Fifty bonds were issued on February 20th, 1872. On March 20th, thereafter, the following resolution was passed by the mayor and council:
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