Wilkins v. City of Waynesboro

• Decision Date: 09 August 1902
• Citation: 42 S.E. 767,116 Ga. 359
• Parties: WILKINS et al. v. CITY OF WAYNESBORO et al.
• Court: Georgia Supreme Court

42 S.E. 767

116 Ga. 359

WILKINS et al. v. CITY OF WAYNESBORO et al.

Supreme Court of Georgia

August 9, 1902

Syllabus by the Court.

1. The maturity of the principal and interest of bonds issued by a municipal corporation may, under our constitutional provision relating thereto, be fixed at any time or times, within the period of 30 years from the date of issue; but, without regard to the time fixed, an annual tax sufficient to pay both principal and interest when due must be provided for before or at the time of issue. No plan or scheme for raising the necessary revenue can lawfully be substituted for the assessment and collection of such tax.

2. By statutory enactment to carry into effect constitutional provisions in relation to the issue of bonds by municipal corporations, the notice calling the election must specify certain named particulars in reference to the bonds. If it fails to specify all of such particulars, or varies from the plan contemplated by the constitution for paying the bonds the notice does not have the effect of calling a valid election. If it be given under an ordinance prescribing the same terms, both the ordinance and notice are void and of no effect.

3. The method of determining whether two-thirds of the qualified voters have voted for the issuance of bonds is by reference to the list of registered voters, if a system of registration has by legislative enactment been provided for the municipality desiring to make the issue; if not, then by reference to the tally sheets of the last general election held for such municipality.

4. A special act of the general assembly which directs that the proceeds arising from the sale of certain bonds, which it authorizes a municipal corporation to issue after the requisite number of qualified voters have assented thereto shall be applied to the equipment of waterworks and electric light plants, and "to other purposes," is not in harmony with the general law, which requires that the purposes for which such proceeds are to be applied must be specified. And so much of said act as, after prescribing that an annual tax sufficient to pay the interest on the bonds further provides for a sinking fund to pay the principal of the bonds, and does not contemplate the collection by annual tax of an amount sufficient to pay such principal when due, is in conflict with the provisions of the constitution, and is void.

5. Applying what is laid down above to the facts appearing in the record, the court erred in passing the order validating and confirming the bonds.

Error from superior court, Burke county; E. L. Brinson, Judge.

Petition by the city of Waynesboro for an order validating a certain bond issue, in which W. A. Wilkins and others, as taxpayers, intervened. From an order granting the petition, interveners bring error. Reversed.

F. L. Scales and J. R. Lamar, for plaintiffs in error.

J. S. Reynolds, Sol. Gen., Phil P. Johnston, and E. H. Callaway, for defendant in error.

LITTLE J.

A petition was filed in the superior court of Burke county, in which it was prayed that certain bonds sought to be issued by the city of Waynesboro should be validated, and the legality of the issue established. Certain citizens residing in that municipality intervened, were made parties to the proceeding, and filed objections to the grant of the order which was sought. The hearing resulted in a judgment confirming and validating the bonds. The interveners excepted, and, as plaintiffs in error here, contend that for many reasons the grant of the order was erroneous. It appears that in 1901 the general assembly passed a special act which by its terms authorized the municipal authorities of Waynesboro to issue bonds, and an ordinance was adopted by the mayor and council, calling an election to ascertain whether the qualified voters of the city would assent to the issue. This ordinance prescribed the number and amount of the bonds sought to be issued, the time of maturity, and the manner in which funds necessary for the payment of the principal and interest should be raised. A notice calling an election, which set out in substance the terms of the ordinance, was duly published. An election was held, which, it is claimed, resulted in favor of the issue. The published notice calling the election followed the ordinance, and set out the number of bonds to be 60, each of the denomination of $500, specified the rate of interest as 5 per cent. per annum, payable semi-annually, and fixed the date of the maturity of the principal on January 1, 1932. In relation to the disposition of the proceeds arising from the sale of such bonds, it was therein declared that not less than $7,000, nor more than $10,000, shall be applied to the construction of an electric light plant, and not less than $20,000, nor more than $23,000, to a waterworks plant, with the following proviso: "That should the maximum amount appropriated to either project be not issued, the overplus may, in the discretion of the mayor and council, be appropriated to the other object named and to other purposes incident thereto; but if not so used, the said overplus shall become a part of the sinking fund provided for the redemption of said bonds." The notice also specified the sum of $1,500 as the annual interest to be paid on the bonds for the years 1903 to 1931, inclusive, and recited, "The amount of principal to be paid (that is, collected as a part of the sinking fund provided for the redemption of said bonds) annually, for the years 1903 to 1932, inclusive, to be $517.25"; and, as a plan devised for the redemption of the bonds at maturity, the notice also declared that "the sinking fund provided by ordinance for the redemption of the bonds should, with its accumulation, be amply sufficient for that purpose, but in the event of unfavorable casualty, or failure to make the fund pay interest equal to the estimate, to wit, 5 per cent., compounded annually, the mayor and council will, on proper authority, from time to time, as the exigencies of the case may require, supplement said fund by an additional ad valorem tax, or with such fund as may be in the treasury at the time, not otherwise appropriated, so as to insure a sufficient amount to pay the bonds in full at maturity." The objections presented by the interveners at the hearing to a judgment of validation, and urged here as reasons for setting aside that judgment, are, substantially, that the ordinance and notice under which the election was held are invalid, because they are contrary to the constitution and laws of the state; that no provision is made for an annual payment of the principal of the bonds, nor for the annual tax required by law to be levied to meet the sum when due. It is claimed, on the contrary, that the ordinance, notice, and election were each regular, valid, authorized by the constitution and laws of the state, and by the terms of a special act approved November 15, 1901, and that no error was committed in rendering the judgment of validation. A determination of all the issues raised can be reached by a consideration--First, of the nature and scope of the constitutional provisions relating to the issue of bonds by a municipal corporation; second, of the requirements of the statute as to notice of the election, and the method by which it shall be determined whether a sufficient number of voters have sanctioned the issue; and, third, of the legal effect to be given the special act which is relied on in part as authorizing the plan of payments set out in the ordinance and notice.

1. Before proceeding to a consideration of the constitutional provisions which relate to the issuance of bonds by a municipal corporation, it may not be amiss to remark that at the time of the adoption of the constitution, and for some years prior thereto, there were but few solvent municipal corporations in the state; that is to say, that payment of the principal and interest of the bonded debt of such corporations could not be met by the imposition of a reasonable tax on property situated and contained within the corporate limits; that municipal taxes had, as a rule, grown to be not only onerous, but burdensome; that this condition of affairs was the result of the improvident exercise by municipal authorities of the power conferred to create debts. The mischief which was believed to exist was the indiscriminate use of that easily to be acquired power, so that a high rate of taxation was found to be insufficient to meet current expenses and pay outstanding obligations. The stringent provisions found in our constitution are the remedies which the people sought to apply to the existing evil, and indicate a settled public policy, applicable alike to all municipal corporations in this state. The framers of the constitution made, and intended to make, the creation of a new debt by a municipality a matter not altogether easy of accomplishment, by placing upon the citizens residing within the limits of such municipality the...