Wright v. Hardwick

Citation109 S.E. 903,152 Ga. 302
Decision Date02 December 1921
Docket Number(No. 2822.)
PartiesWRIGHT, Comptroller General. v. HARDWICK, Governor.
CourtSupreme Court of Georgia

(Syllabus by the Court.)

Hill, J., and Beck, P. J., dissenting.

Error from Superior Court, Fulton County; J. T. Pendleton, Judge.

Mandamus on petition of the Governor, T. W. Hardwick, against W. A. Wright, Comptroller General. Judgment in favor of the petitioner, and defendant brings error. Affirmed.

The General Assembly passed an act, approved by the Governor August 5, 1921 (Laws 1921, p. 230), which reads as follows:

"An act to authorize the Governor, from time to time, to set apart the rental of the Western & Atlantic Railroad, for limited periods, as a special fund, and to authorize the Governor to draw warrants against said special fund, to discount the same, and to place the proceeds in the treasury for the purpose of meeting the obligations of the state then created and incurred by law, and for other purposes.

"Section 1. Be it enacted by the General Assembly of the state of Georgia, and it is hereby enacted by the authority of the same, that the Governor of the state is hereby authorized and fully empowered to assign and set aside not exceeding five years of the rental aris ing from the existing lease of the Western & Atlantic Railroad, as a special fund to be used exclusively for the purpose of paying warrants drawn against the same as hereinafter provided, provided that $100,000 set aside as public school fund be paid out of the general fund.

"Sec. 2. Be it further enacted, that in order to enable the state to meet its obligations then already created and incurred by law, and where revenue from other sources is, in the opinion of the Governor, not sufficient, the Governor of the state is hereby duly authorized and fully empowered, from time to time, to draw his warrant or warrants against the special fund created by section 1 of this act, so held as a special fund in the treasury, for such sum or sums as may be required to meet appropriations duly made by law, and the Governor is further authorized and empowered to discount said warrants so drawn against said special fund, and to place the proceeds arising therefrom in the treasury for the purpose of meeting and discharging the obligations of the state then created and incurred, as aforesaid, for which appropriations have been made by law. Said warrants shall be duly countersigned by the comptroller general. The holders of said warrants shall further have all the rights and privileges which the original obligees of said then incurred obligations might have had against the state.

"Sec. 3. Be it further enacted, that all laws and parts of laws in conflict with this act be, and the same are, hereby repealed."

On September 9, 1921, the Governor, acting under the authority of this act, issued an order assigning and setting aside, as a special fund to be used exclusively for the purposes mentioned in the act, all the rentals arising from the existing lease of the Western & Atlantic Railroad accruing between the date of the order and August 4, 1926, and further ordering that such fund—

"shall, as it shall from time to time be paid into the treasury of this state by the lessees of the Western & Atlantic Railroad in pursuance of the existing lease thereof, be held as a specific fund in the treasury of the state of Georgia for the purpose of paying warrants drawn against the same by the Governor, duly countersigned by the comptroller general, as provided in said act."

On the same date the executive order was issued the Governor, in pursuance of it and of the provisions of the act of the General Assembly, drew his warrant upon the state treasurer, reciting that as Governor he had sold and assigned to the Bank of Tifton of the rentals arising from the lease of the Western & Atlantic Railroad, and to be due and payable to the state of Georgia, under said lease, for the month of August, 1923, the sum of $10,000, and that the Bank of Tifton had paid to the state of Georgia the full purchase price thereof, and therefore ordered and directed the treasurer of the state to pay to the Bank of Tifton, or order, the sum of $10,000 out of the special fund setaside in the treasury of the state by the executive order, in pursuance of the act, the same to be payable out of the rentals to be derived from said lease of the Western & Atlantic Railroad for the month of August, 1923, this warrant to be due and payable on August 1, 1923.

When the warrant, as the law requires, was presented to the comptroller general to be countersigned by him, he declined to countersign it, on the ground that he was advised that the warrant was illegal and void because issued under the authority of an act of the General Assembly which is unconstitutional.

The Governor thereupon filed in the superior court of Fulton county a petition for mandamus against the comptroller general, upon which a rule was issued requiring the comptroller general to countersign such warrant, unless he showed good cause to the contrary. The petition set forth the facts as above stated, and further that—

"Under the existing lease of the Western & Atlantic Railroad the rentals are $540,000 per annum, payable monthly in advance into the treasury of the state by the lessees on the 1st day of each month; and no other assignment of the rental for the month of August, 1923, had been made, except the one stated above as being made to the Bank of Tifton."

To this petition the comptroller general filed a response admitting all the allegations of fact which the petition contained, but setting up various grounds why the warrant is illegal and void and should not be countersigned.

On the hearing of the rule the judge of the superior court overruled the grounds set up in the response of the comptroller general, and entered a judgment making the rule absolute. To this judgment the comptroller general excepted.

Anderson, Rountree & Crenshaw and Clifford L. Anderson, all of Atlanta, for plaintiff in error.

Geo. M. Napier, Atty. Gen., A. G. Powell and Little, Powell, Smith & Goldstein, all of Atlanta, and Seward M. Smith, Asst. Atty. Gen., for defendant in error.

FISH, C. J. (after stating the facts as above). [1] 1. One ground set up in response to the mandamus nisi, and urged as cause why it should not be made absolute, is that the act of the General Assembly under which the petitioner, the Governor of the state of Georgia, claims the right to draw said warrant, is unconstitutional and therefore void, in that such warrant when drawn and countersigned becomes a debt contracted by and on behalf of the state, contrary to the provisions of article 7, § 3, par. 1 (Code § 655S), of the Constitution of the state of Georgia, reading as follows:

"No debt shall be contracted by or on behalf of the state, except to supply casual deficiencies of revenue, to repel invasion, suppress insurrection, and defend the state in time of war, or to pay the existing public debt; but the debt created to supply deficiencies in revenue shall not exceed, in the aggregate, two hundred thousand dollars."

The brief filed here for the plaintiff in error says on this point:

"The question is not whether the warrants by themselves are binding contracts, but whether the act which authorizes their issuance undertakes by its own terms to authorize the making of a debt. The contractual relation which creates the debt grows, not out of the warrants alone, but out of the legislative enactment setting aside a certain specified fund to pay the warrants and undertaking to subrogate the holders of the warrants to the rights of other persons in the event that particular fund should fail. It is the act which undertakes to create the debt, not the warrant."

And counsel argue that—

"Upon failure of the rentals to materialize, the state will be under the same obligation to the holders of these warrants as it was to the persons whose obligations were paid with the money derived from their discount."

An executive warrant drawn in accordance with the plan of the legislative act here under review is quite different in character from the ordinary warrant drawn by the Governor on the Treasurer. This act authorizes the Governor to assign and set aside not exceeding five years of the rental arising from the existing lease of the Western & Atlantic Railroad, as a special fund to be used exclusively for the purpose of paying warrants drawn by the Governor against it in discharging obligations of the state already created and incurred by law. The Governor is authorized to discount these warrants, and he is directed to place the proceeds arising therefrom in the treasury of the state for the purpose of meeting and discharging the obligations of the state already created and incurred, and for which appropriations have been made by law, the warrants to be duly countersigned by the comptroller general. It is plain that thus far the act does not undertake to provide for the contracting of a debt by or on behalf of the state; for the scheme manifestly is to provide an undertaking for the payment of debts of the state by discounting, without recourse as it were, its warrants payable exclusively out of a special and specified fund. The act, however, further provides that—

"The holders of said warrants shall further have all the rights and privileges which the original obligees of said then incurred obligations might have had against the state." Section 2:

From this last provision, when considered in connection with the plan of the act, does there arise a contractual relation betweenthe state and a purchaser who discounts a warrant that creates or results in a debt against the state?

(1) After due consideration of this important question we have arrived at the conclusion that no debt by or in behalf of the state is so created. The warrants in pursuance of the act are drawn against a certain specified fund which it is anticipated will be in the treasury to meet them at the time...

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    ... ... , either legally or morally, to assume; the mortgage attaches to no property owned by or purchased with the revenues of the state." In Wright v. Hardwick, 152 Ga. 302, 109 S. E. 903, 906, it was held that obligations of the state of Georgia, payable exclusively out of the rentals of a ... ...
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