Wallace Tiernan Co. v. Williams , 192 Ga. 149 ( 1941 )

1. The first count of the petition being a suit for the writ of mandamus to compel the governing officials of a municipality to levy a tax to pay an alleged indebtedness upon a series of promissory notes, all appearing to have been given in a single transaction, some of them maturing during the year in which they were executed and others during the following year, and there being no allegation of fact to show their consideration or validity, the notes were prima facie invalid under the constitutional provision limiting the authority of counties and municipalities as to incurring indebtedness. The court did not err in sustaining the general demurrer and striking the first count.

2. The second count was based upon the theory that the city was liable to the plaintiff for the value of goods furnished by it to the city and used by the latter for a beneficial purpose. The notes referred to above were introduced in evidence for purpose of proving such value. Held, that the notes were no evidence of value of benefit received by the city; and no other evidence of such value having been introduced, the court did not err in granting a nonsuit.

No. 13639. MAY 15, 1941. Wallace Tiernan Company Incorporated filed a suit against the City of Abbeville and its governing officers, seeking a mandamus absolute. The petition was in two counts. Each count claimed an indebtedness in favor of the plaintiff and against the City of Abbeville, and sought mandamus to compel the defendant officers to levy a tax for the purpose of paying such indebtedness.

In the first count, as amended, the petition contained substantially the following allegations: The City of Abbeville, by and through its duly authorized officers, executed twelve promissory notes payable to the order of petitioner, dated August 25, 1936, payable on the 25th of each succeeding month until all were paid, the last note being due August 25, 1937; eleven of the notes being for the principal sum of $58.33, and one for $58.30; all bearing interest from August 25, 1936, at 6% per annum. Only one note has been paid. All of them constitute valid and binding obligations on the part of the City of Abbeville. While the notes were signed only by the mayor, he was authorized so to do by the mayor and council "at that time." The notes were authorized at a meeting of the mayor and council of July 28, 1936, and were ratified, audited, and approved at a meeting on September 4, 1936. Demand for payment has been refused by the governing authorities. They have also refused a demand that they levy a tax on the taxable property of the city, for the purpose of paying off and discharging such alleged indebtedness. The city has no funds with which to pay the same, nor will the defendants levy a tax for that purpose unless they are compelled by mandamus to do so.

The second count was based on the theory that the municipality had received and used certain goods furnished by the plaintiff, and should pay the reasonable value thereof; the allegations of this count being substantially as follows: The City of Abbeville is indebted to petitioner in the sum of $679.77, including interest at 6 per cent. per annum from date of delivery, upon an account for goods had and received, a copy of the invoice being attached as an exhibit to the petition. The indebtedness was created by the purchase of one chlorinator complete, with other goods, wares, and merchandise as shown by such invoice, to be used in improving the water system of the city, and which was used immediately and continuously after purchase and which is now in the possession and use of the City of Abbeville. The said articles of merchandise and appliance were needed by the city, and were necessary for the health and safety of its citizens in the successful operation of its water system. The plaintiff's claim constitutes a valid and subsisting obligation on the part of the city. The said articles were of the reasonable value charged for the same. The said claim was audited and found correct by the giving of the notes mentioned in the first count of this suit. The other allegations, as to refusal of demand for payment, necessity for levying tax, and refusal of defendants of demand for such levy, were substantially the same as in the first count.

The court sustained a general demurrer to the first count, but overruled a like demurrer to the second count. The defendants filed an answer in which they denied every allegation of each count of the petition which would in any way tend to show liability, except that in answering the allegations of the first count the defendants admitted that one of the notes had been paid as alleged. The first count having been stricken on demurrer, the plaintiff proceeded to trial upon the second count. After the plaintiff had introduced evidence the court awarded a nonsuit. The plaintiff excepted, assigning error on the sustaining of the demurrer to the first count and on the nonsuit. 1. The court did not err in sustaining the general demurrer to the first count of the petition. In this count the plaintiff sought relief solely on the basis of the promissory notes, without disclosing their consideration, and without alleging the circumstances in which they were given, except that their execution by the mayor was authorized by the governing authorities. It appeared from the allegations that the notes all related to a single transaction, and that they were payable monthly, some in the year 1936 and others in the year 1937. Since the allegations thus showed that all the notes were given in a transaction which occurred in the year 1936 and that some of them were payable in the year 1937, they were prima facie invalid under the constitutional provision limiting the authority of municipalities such as the City of Abbeville as to incurring indebtedness. Code, § 2-5501. Whether if the notes had all been made to mature during the year in which they were executed, the petition would have been subject to demurrer, or, on the other hand, would have been sufficient to cast the burden on the defendant of proving their invalidity as a matter of defense, still, since their invalidity prima facie appeared from the petition itself, the defense could be raised by demurrer. Townof Wadley v. Lancaster, 124 Ga. 354 (52 S.E. 335); Town ofWhigham v. Gulf Refining Co., 20 Ga. App. 427 (6) (93 S.E. 238); Galion Iron Works Co. v. Marion County, 23 Ga. App. 57 (2) (97 S.E. 448); Citizens Bank v. Ludowici, 24 Ga. App. 201 (100 S.E. 229). The case differs on its facts fromMonk v. Moultrie, 145 Ga. 843 (90 S.E. 71), where it affirmatively appeared that lawful provision had been made for payment of a note during the year in which it was executed. The same is also true of the following cases: Mayor c. ofHogansville v. Planters Bank, 147 Ga. 346 (94 S.E. 310);Gaines v. Dyer, 128 Ga. 585 (7) (58 S.E. 175); Settle v.Howell, 174 Ga. 792 (164 S.E. 189). Although in CitizensBank of Moultrie v. Rockdate County, 152 Ga. 711 (111 S.E. 434), it appeared that the notes were payable in different years, they contained certain recitals indicating that they were valid. In Mayor c. of Jeffersonville v. Taylor Iron Works c. Co.,154 Ga. 434 (114 S.E. 579), the petition for the writ of mandamus was based upon a Judgment which had previously been obtained against the city. The judgment of course was sufficient to show, prima facie at least, that the claim was valid. The allegation that the notes constituted a valid and subsisting obligation of the city, being a mere conclusion of the pleader, inconsistent with the inferences to be drawn from the specific allegations of fact, did not save the first count from the general demurrer.

2. Did the court err in granting a nonsuit relating to the second count? This count was based upon the theory that since the city accepted the chlorinator and its appurtenances, and used the same for a beneficial purpose, it should pay to the plaintiff the reasonable value of the benefit received. There was, however, no evidence of such value, unless the notes themselves might be considered as evidence on the question, those that remained unpaid having been introduced. The evidence showed "that the original agreement was to pay for the chlorinator in the future by the month, and that the several notes were executed in pursuance of this agreement." It thus appears that the property was purchased on credit, to be paid for in part during the succeeding year, and that the whole transaction was illegal. In the circumstances the plaintiff could not recover except on proof of the actual value of the benefit received by the municipality; and whether the notes, although void, might still have been taken as evidence of market value (Butts County v. Jackson BankingCo., 129 Ga. 801, 60 S.E. 149, 15 L.R.A. (N.S.) 567, 121 Am. St. R. 244), they constituted no evidence of a benefitthereafter actually received by the city, nor did they show that the "claim was audited and found correct" by the municipal authorities. See Barwick v. Roberts, 188 Ga. 655 (3) (4 S.E.2d 664).

The conclusion here reached does not conflict with the rulings in any of the following cases: In Adams v. Weston, 181 Ga. 503 (183 S.E. 69), the suit related to a balance of salary due a town clerk. The claim had been approved for payment by governing authorities, as shown by the minutes. Such approval did not disclose an illegal transaction. Howell v. Bankston,181 Ga. 59 (181 S.E. 761), was a suit by county registrars, whose compensation was fixed by law. It was held that no judgment or other form of liquidation was necessary as condition precedent to a suit for mandamus. The same observation will apply to other cases cited by counsel, relating to official salaries prescribed by law. In City of Abbeville v.Eureka Fire Hose Manufacturing Co., 177 Ga. 204 (170 S.E. 23), the action was based on warrants issued by the city authorities on the city treasury, and not on a series of notes. The warrants were issued several years after the sale, and could be treated as evidence of value. They were not part and parcel of an illegal transaction, as the notes here appeared to be. For similar reason, Board of Education of Candler County v.Southern Michigan National Bank, 184 Ga. 641 (192 S.E. 382), is distinguished by its facts from the present case.

Judgment affirmed. All the Justices concur.