McCrary Co. v. City of Glennville , 149 Ga. 431 ( 1919 )

Gilbert, J.

1. Where a contractor enters into a contract with a municipal corporation for the construction and equipment of a light and water plant under a written agreement whereby some of the contract price is to be paid in instalments through a series of years after the contract is completed, the effect of such contract is to create a debt within the meaning of article 7,' section 7, paragraph 1, of the constitution of this State (Civil Code, § 6563), which limits the power of municipalities to contract debt, and is prohibited by that provision of the constitution. Renfroe v. Atlanta, 140 Ga. 81 (78 S. E. 449, 45 L. R. A. (N. S.) 1173).

2. Where the contract also provides for retention of title in the contractor until the contract price is fully paid, for delivery of the plant after its completion to the municipality as lessee, and for a rental of one dollar per annum until all the deferred payments for the contract price have been made, which when done shall cause title to the property to vest immediately in the municipality, the contract is one of conditional sale as distinguished from a mere.lease. Hays v. Jordan, 85 Ga. 741 (11 S. E. 833, 9 L. R. A. 373); Ross v. McDuffie, 91 Ga. 120 (16 S. E. 648); North v. Goebel, 138 Ga. 739 (76 S. E. 46).

3. Under former decisions of this court, where a contractor constructed and installed a light and water plant in pursuance of an executory conditional contract of sale as described in the preceding notes, and delivered physical possession to the municipality, his right of action to recover the property or to enforce the payment of the contract price by the city was necessarily dependent upon the agreement by which title was reserved in him; and that agreement, being contrary to the express provisions of the constitution, was illegal and not enforceable in law or equity. Abbott Furniture Co. v. Mobley, 141 Ga. 456 (81 S. E. 196); Sewell v. Norris, 128 Ga. 824 (58 S. E. 637, 13 L. R. A. (N. S.) 1118); Bugg v. Towner, 41 Ga. 315; Thompson v. Cummings, 68 Ga. 124 (2); Watkins v. Nugen, 118 Ga. 372 (45 S. E. 262); Butts County v. Jackson Bkg. Co., 129 Ga. 801, 811 (60 S. E. 149, 15 L. R. A. (N. S. 567, 121 Am. St. R. 244); Garrison v. Perkins, 137 Ga. 744 (3) (74 S. E. 541).

(a) A contrary result was reached in the cases of Chapman v. Douglas County, 107 U. S. 348 (2 Sup. Ct. 62, 27 L. ed. 378); City of Bardwell v. Southern Engine Boiler Works (Ky.), 113 S. W. 97; and cases in other jurisdictions; but they are not controlling.

4. Applying the principles above announced, there was no error in dismissing the petition on general demurrer.

Judgment affirmed.

All the Justices concur.

The petition was demurred to upon the grounds: (1) no cause of action is set forth; (2) under the facts stated the plaintiff is not entitled to any relief; (3) so much of the petition as seeks the appointment of a receiver is specially demurred to, because the facts stated do not authorize the same; (4) the petition does not show that the claim or demand was presented to the governing authorities of the city before bringing suit. The demurrer was sustained and the petition dismissed. The plaintiff excepted.

Little, Powell, Smith & Goldstein, for plaintiff. James K. Hines, for defendant.