156 Ga. 500 | Ga. | 1923
This is the second appearance of this case before this court. In Citizens Bank of Moultrie v. Rockdale County, 152 Ga. 711 (supra), this court reviewed the ruling of the trial •court in dismissing the plaintiff’s petition upon the demurrers filed by the defendant, and held that the bank’s petition set forth a good cause of action. It was then held, where suit was brought
In our view, the adjudication of the case depends altogether upon the correctness'of the ruling of the trial court upon the motion to strike the defendant’s answer, and upon the demurrer to the amendment thereto; and it will not be necessary to rule upon the
As appears from the statement of facts when this case was here before (153 Ga. 713-715), the petition as amended, which was held to be good, alleged not only that the loan was made for the purpose of obtaining a temporary loan to supply a casual deficiency of revenue existing at the time of the execution of the note, but that the note was executed pursuant to a resolution passed by the county commissioners certifying that fact, which was attached to the note, as well as a certificate of the attorneys for Rockdale County, certifying that in their opinion the note was a valid and binding obligation of the County of Rockdale, Georgia. And the note itself recited that " each and .every act, condition, and thing required to be done, to have happened, and to be performed precedent to and in the issuance of this note, has been done, has happened, and has been performed in full and strict compliance with the constitution and laws of the State of Georgia, and that this note is within every debt and other limit prescribed by law, and the faith and credit of the County of Rockdale are hereby irrevocably pledged to the punctual payment of the principal and interest of this note, according to its terms.” In the previous adjudication in this case the petition was held to set forth a good rause of action. In the present investigation we are to consider the validity of the answer which the trial judge refused to strike upon the plaintiff’s motion. The answer of the defendant denies
We think that the motion to strike should have been sustained, and that the learned trial judge erred in overruling the motion to strike the answer of the defendant. The paragraphs of the answer in which the general statement is made that the defendant is not indebted in manner and form, etc., set up no defense against the unconditional contract in writing upon which plaintiff’s petition declares. In response to a suit upon such a note there must be stated facts setting up some specific, valid, legal reason why the maker should be relieved from an obligation the execution of which is not denied. As to the statement in the sixth paragraph of the answer, in which the defendant “ avers that said note or instrument in writing, basis of suit, purporting to have been given to supply a casual deficiency, is null, void, and unconstitutional,” this court ruled upon the point when the case was here before, and held that plaintiff’s petition “ was not demurrable upon the ground that the plaintiff as the purchaser of the note had taken it with notice that the note was given in violation of the provisions of the constitution above recited” (art. 7, sec. 7, par. 1; Civil Code of 1910, § 6563). The precise language employed in the ruling upon this point was as follows: “ Where authority to borrow money is conferred upon' certain) political divisions of the State by the constitution, and in pursuance of that authority the proper au
In the Climax case, supra, it was held that “the municipality was estopped to deny ” the recitals in its bonds, or to question the validity of a bond in the hands of a bona fide purchaser and containing recitals similar to those in the note which is the basis of the suit of the plaintiff in this case, and, construing section 303 of the Civil Code, held that the ruling of the court in the Glimax case was not contrary to the provisions of that section. The public cannot be estopped by the acts of any officer done in the exercise of a power not conferred, but the public will be estopped by the improper acts of any officer done in the exercise of a lawful
The question as to whether a political subdivision such as a town, township, or county is estopped from deling recitals embodied in evidences of debt issued by its officers who are clothed with power to create an indebtedness has been frequently adjudicated, and it has been held almost time without number that the application of the doctrine of estoppel in such cases is not different from that affecting individuals. It has further been held that if the recitals of an obligation are comprehensive enough to evidence the power to create the debt in question, a bona fide purchaser of a negotiable evidence of debt of a political subdivision need, look-no further or enquire to what use the funds obtained from the sale of such negotiable instrument were applied. For this reason the question of whether the notes were issued, as alleged in the seventh paragraph of the answer, io pay an old indebtednessrather than to cover a casual deficiency in the revenue,
It is argued by learned counsel for the defendant, that the facts as to the assessed valuation of the property in Eockdale County, and the fact that the resolution provided for a loan of $15,000, were sufficient to put the bank upon such inquiry as to charge it with constructive notice of information which could have been easily ascertained. We deem this position untenable. The answer to the proposition is twofold. In the first place, the recitals of the note and the resolution attached thereto obviated any necessity for any further information than that the county commissioners had power, without a vote of the people, to borrow money to meet a casual deficiency. The fact as to whether there was a casual deficiency or not was established by the certificate of the county commissioners, because they alone could determine whether such a deficiency existed. In the second place, the circumstance to which reference is made by counsel would not indicate that a casual deficiency did not in fact exist. As held by this court in passing upon the demurrer involving the same point as now before us in the consideration of the answer, it cannot be said that any “new debt” was being created by reason of the fact that the assessed valuation of the taxable property of the county was a little more than $2,500,000, coupled with the fact that the loan proposed in the resolution was fixed at $15,000. Any political subdivision of the government can borrow as a temporary loan a sufficient amount to pay an existing debt and to make its operations balance at the end of the fiscal or calendar year, without creating any new debt, provided it either has in its treasury a sufficient amount derived from taxes to pay the temporary loan, or it can raise by
After the court’s rulings upon the motion to strike, the defendant presented several amendments to its answer, as follows: (1) “Defendant shows, by way of further pleading to the second count of said petition, that the note sued on was executed by this defendant on the 3rd day of December, 1918, at the same time and in connection with an execution of two other notes for like amount, said notes aggregating $15,000.00.” (2) “Defendant shows that each of said $5,000.00 notes, aggregating $15,000.00 as aforesaid, were delivered to Frank Scarborough Company in order that the said Frank Scarborough Company might use same in renewal or extension of three notes of like amount, executed by this defendant on the second day of April, 1918, and at the time owned and held by the Citizens Bank of Havre De Grace.” (3) “That instead of using said notes in the manner and for the purpose aforesaid, the said Frank Scarborough Company negotiated one of said notes with the plaintiff herein, another of said notes with Frank Baker, and the remaining note with the Exchange Bank of Fitzgerald, presumably realizing therefor the face value of each of said notes.” (4) “ That the sum of money raised by the Frank Scarborough Company was not applied by the said Frank Scarborough Company to the extinguishment of the three notes dated April 2, 1918, nor was said sum of money delivered to this defendant, nor to any officer of this defendant, nor has defendant ever received or collected any amount of money whatsoever as a consideration for said notes.” (5) “That said notes are and
To this amendment the plaintiff, the Citizens Bank of Moultrie,
Even if the defense attempted to be set up in that part of the answer which denies that the plaintiff was a bona fide purchaser without notice were perfect in form, it could not avail in the face of the admissions of the defendant and the contents of the note, unless it had been expressly denied that the note was delivered to Frank Scarborough Company and by it delivered to the bank before its maturity. It- is not denied that the note was delivered, for a consideration, to the bank before its maturity; and this admission deprived the defendant of setting up the defense set forth in the amendment to it's answer. Heading the answer as a whole, it is plain that the conclusion stated in the plea that the plaintiff was not a bona fide holder is based upon various statements in the paragraphs of the preceding amendment, which the defendant insisted and now insists evidenced notice to the purchaser of the note of its invalidity; and yet none, of the allegations of any of the paragraphs of the answer or the amendment legally establish any foundation upon which the conclusion reached by the pleader can be based. As has already been ruled, granting that (as stated in paragraph 2 of the amendment) two other notes were executed at the same time as the note in question, and that said notes aggregated $15,000, and that these notes were delivered to Frank Scarborough Company in order that Frank Scarborough Company might use them in renewal or extension of three like notes at that time held by the Citizens Bank of Havre De Grace, and that (as alleged in paragraph 3 of the answer) Frank Scarborough Company, instead of rising the’ notes for the purpose set out, negotiated one of them with the plaintiff and another with Frank Baker and another with the Exchange Bank of Fitzgerald and realized the face value of each of said notes, and (as stated in paragraph 4) that Frank Scarborough Company kept all of the money or proceeds and the defendant never received anything for said notes, these facts would neither support a plea of failure, of consideration as alleged in the fifth paragraph of the answer, nor would they import such notice to a purchaser as would affect his
The seventh paragraph of the amendment is worthless for the purpose of laying the foundation for the plea that the bank, as purchaser of the nóte, had notice that the note was illegal and void, because under the rulings in Wilson v. Gaston, Monk v. Moultrie, Wright v. Southern Railway Co., and Mayor &c. of Hogansville v. Planters Bank, supra, and upon the presumption that every officer will perform his duty, the purchasers of these notes would have the right to assume that the county did not intend to create a new debt, but rather to balance its accounts for the year by a temporary loan to be paid from the taxes collectible for the current year. The eighth paragraph of the answer alleged that a recital of a floating indebtedness of $15,000 was attached to each of said notes, which it is alleged should and did put the plaintiff upon notice that the note purchased by it was unconstitutional and void. _ For the reasons already stated, and in view of the prior ruling of this court in this case and especially under the rulings of the Supreme Court of the United States in Knox v. Aspinwall, 62 U. S. 539 (16 L. ed. 208), the purchaser of the note did not receive notice, and was not obliged to take notice of ányÜiing not contained in the recitals upon the face of the note.
The statement of the ninth paragraph of the answer, to the effect that the plaintiff was not a bona fide holder of the note, because it had notice, before purchasing the same, that the note was contrary to article 7, section, 7, paragraph 1, of the n constitution
For the reasons stated in Knox v. Aspinwall, supra, the defense attempted to be set up in the tenth paragraph of the answer to wit, “That said note was not executed for the purpose of supplying a casual deficiency of revenue; that in fact no casual deficiency of revenue existed at the time of the execution of said notes; and said notes were executed for the purpose of extending or renewing a past indebtedness of . . the County of Rockdale during a period of three years from 1913 to 1916, and which indebtedness was evidenced by promissory notes executed in 1916, and which said notes had from time to time been renewed and extended,” is not available.
In the Knox case Mr. Justice Nelson said: “ Another answer to this ground of defence is, that the purchaser of the bonds had a right to assume that the vote of the county, which was made a condition to the grant of' the power, had been obtained, from the fact of the subscription, by the board, to the stock of the railroad company, and the issuing of the bonds.” Paraphrasing this statement, we say a purchaser of this note had a right to assume that the casual deficiency which was made a condition to the grant of the power existed from the fact of the execution of the note. Continuing, Justice Nelson said in the Knox case: “The bonds oh their face ” (in this case the notes) “ import a compliance with the law under which they were issued. £ This bond/ we quote, £ is issued in part payment of a subscription of two hundred thousand dollars, by the said Knox County, the capital stock, &c., by order of the board of commissioners/ in pursuance of the third section of act, &c., passed by the General Assembly of the State of Indiana, and approved 15th January, 1849. The purchaser was not bound to look further for evidence of a compliance with the conditions of the grant of the power. This principle was
The same reason applies to the eleventh paragraph of the answer. TJnder the recitals contained in the note executed by the defendant, the same doctrine of estoppel applies. Common honesty and good morals, as ■ well as law, require that where one ■ of two innocent persons must suffer, he who contributed to occasion the loss must bear the burden. No matter what may be the loss entailed on Boekdale County, inasmuch as it was by the acts of'the
This case was here on demurrer; and this court reversed the judgment of the trial court in- sustaining a general demurrer to the plaintiff’s petition. Citizens Bank of Moultrie v. Rockdale County, 152 Ga. 711 (supra). On the trial of the case a verdict was rendered in favor of the county. The plaintiff moved for a new trial, which motion was overruled; and to the judgment overruling its motion for new trial, to the ruling of the trial court refusing to strike the original answer of the defendant, and to the judgment of the lower court overruling the plaintiff’s demurrer to the answer of the defendant as amended, the plaintiff excepts, and assigns error upon these several rulings in its bill of exceptions.
1. We must first determine the scope of the decision rendered by this court in this ease, when it was brought here on exception to the judgment of the trial court sustaining a demurrer to the plaintiff’s petition. It is earnestly urged by the plaintiff that this court held in that decision that, under the recitals of fact in the note sued upon and under the resolution of the county commissioners attached thereto, the county was estopped (a) from denying the existence of a casual deficiency in the revenue of the
The above is a fair statement of the holdings of this court in the former decision. It is unnecessary to consider any of these holdings except holdings 2, 3, and 7. Holding No. 2 does not bear out the contention of plaintiff. From the facts alleged, it appeared that the county commissioners had passed a resolution authorizing the borrowing of $15,000 to meet a casual deficiency in revenue; and if this authority had been exercised to its full extent, it would have exceeded the constitutional limit. But it appeared from the allegations of the petition that the county had only borrowed $5000 to meet such deficiency. The note recited that this amount was within the limit prescribed by law. These facts appearing, the note sued on did not show on its face that it was in violation of this provision of the constitution. But when the case was here before, it was urged that the $15,000 was borrowed under this resolution, and that this exceeded the constitutional limitation. This court held that the demurrer on this theory was speaking, as it assumed the borrowing of $15,000 to meet a casual deficiency of revenue, when the petition alleged that only $5000 was borrowed for that purpose. This court did not hold, and certainly the writer did not. intend to hold, that if the petition had alleged that $15,000, of which the note sued on represented a part, had been borrowed for this purpose, the petition would not have been subject to demurrer.
■Holding No. 3 does not bear out the contention of plaintiff. The petition alleged that the consideration of the note sued on was for money borrowed by the county to meet a casual deficiency in its revenue. This court held, that, in view of this fact and a recital in the note that it was within the constitutional limit, the knowl
Holding No. 7 does not sustain plaintiff’s contention. The resolution of the county commissioners authorized a loan of $15,000 to meet a casual deficiency in the revenue of the county. This authorized a loan in excess of the constitutional limit. The resolution further recited that a casual deficiency existed. The note recites that the principal thereof is within the constitutional limit. The county commissioners by these recitals would be estopped to deny the existence of a casual deficiency in the county’s revenue. No estoppel can be based upon facts not recited, but which bear upon the legality and constitutionality of a transaction. Estoppels are not favored by law, and will not be enforced beyond the facts upon which they rest. What this court meant to hold when the case was here before, and what it did hold, was that when the county commissioners, having authority to borrow money to meet a casual deficiency in revenue and being proper officers to determine the existence of such deficiency, passed a resolution declaring the existence of such deficiency, the county would after-wards be estopped to deny its existence. When the case was heard in this court, on exception to the judgment sustaining .the demurrer to the petition, two matters were urged by the county to uphold that judgment. One was that the resolution showed upon its face that the money was borrowed to pay current expenses, and not to meet a casual deficiency in the revenue of the county. This court did not so construe this resolution, but construed it to mean that there was such casual deficiency of revenue, and that the allegation that' there Avas “ a casual and temporary need of money to meet the current expenses of the county” did not negative this fact. The casual deficiency might haAe produced the need of
What this court said before must be construed in view of the well-settled law which defines what recitals by public officers, in borrowing money for a county or other political division of the State, bind the county or other political division, and what recitals do not bind the county or other political division. We shall undertake later to point out the distinction between these different classes of recitals. So we are of the opinion that the former decision of this court does not bear out the contention of the plaintiff; and that the county was not estopped from setting up the defense that its officers were undertaking to borrow a sum of money evidenced by a series of notes of which the note sued on was one, the amount of which exceeded the constitutional limit of the power of the county to borrow, and to establish facts showing that the plaintiff had notice of such scheme, or of such facts as made it incumbent upon plaintiff to ascertain whether the county was exceeding the constitutional limit.
2. Art. 7, sec. 7, par. 1, of the constitution of this State is in part as follows: "The debt hereafter incurred by any county, municipal corporation, or political division of this State, except as in this Constitution provided for, shall not exceed seven per centum of the assessed value of all the taxable property therein, and no such county, municipality, or division shall incur any new debt,
In McCord v. City of Jackson, 135 Ga. 176 (69 S. E. 23), this court made this ruling: “Municipal authorities have no authority to contract in behalf of the municipality for a loan of money (not to supply casual deficiencies of revenue) to be used in defraying current expenses, although the general design be to discharge the notes given for such loan from the anticipated revenue of the current year;” citing Butts County v. Jackson Banking Co., and Hall v. County of Greene, supra. In Wright v. Southern Railway Co., 146 Ga. 581 (supra), this court held that a county might incur a liability for a legitimate item of expense, but was without authority to borrow money, without a vote of the people, to anticipate its revenue in the guise of a temporary loan, and referred to Butts County v. Jackson Banking Co., as an authority sustaining that ruling. In City of Marietta v. Dobbins, 150 Ga. 422 (104 S. E. 444), the same principle was held and the Butts County case cited to support the ruling. So we think that it can be affirmed with confidence that this principle is now firmly settled by the decisions of this court; and that no county can borrow money, without the sanction of a popular vote, to pay current expenses.
It is perfectly clear that, under this constitutional provision, a. county can resort to “ a temporary loan or loans to supply casual deficiencies of revenue,” only when such loan or loans do not exceed one fifth of one per centum of the assessed value of taxable
This brings us to consider the most difficult question in this case. Is the county estopped by the recitals in this resolution and this note ? When the case was here before, this court held that the recital in the resolution, that a casual deficiency of revenue existed, was conclusive upon the county and estopped it from denying such recital. This ruling was based upon the doctrine that the county commissioners were officers clothed with power to determine whether a casual deficiency in the revenue of the county existed, and that, when they determined this question and passed a resolution
The county having no authority to borrow money to meet a casual deficiency of revenue in excess of one fifth of one per cent, of the assessed value of the taxable property within its limits, an issue of notes in excess of such limit is void, since the tax-digest of the county will show such assessed valuation. Buchanan v. Litchfield, 102 U. S. 278 (26 L. ed. 138); Lake County v. Graham, supra; Lake County v. Collins, 130 U. S. 662 (9 Sup. Ct. 651, 32 L. ed. 1060); Doon Township v. Commins, 142 U. S. 366 (12 Sup. Ct. 220, 35 L ed. 1044); Nesbit v. Riverside Independent Dist., 144 U. S. 610 (12 Sup. Ct. 746, 36 L. ed. 562); 19 R. C. L. 1019, § 312. This is especially true where the debt limit is fixed by the constitution, because the legislature, having no power to authorize a loan to meet a casual deficiency in excess of such limit, can not do the same thing indirectly by authorizing county commissioners to make recitals which will estop the county from denying that such loan is in excess of such limit. Dixon County v. Field, supra; Lake County v. Graham, supra; Hedges v. Dixon County, 150 U. S. 182 (14 Sup. Ct. 71, 37 L. ed. 1044); McPherson v. Foster, 43 Iowa, 48 (22 Am. R. 215); Decorah Bank v. Doon, 86 Iowa) 339, 53 N. W. 301.
There is nothing to the contrary to what is said above in Town of Climax v. Burnside, 150 Ga. 556 (supra). In that case the bond sued upon "recited that all acts, conditions, and things required to be done precedent to and in the issuing of this bond have been done, happened, and been performed in regular and due form.” The town set up as a defense that the validation of the bonds of the town was void on the ground that the validation proceedings were had in a county other than the one in which the town was. situated, and that there were certain irregularities in the election for authority to issue bonds which rendered the election void. The distinction between that case and this is, that in the former the town attempted to prove certain irregularities in the election authorizing the bond issue, and in this case total want of authority to issue the note was shown.
But it may be said that, if the plaintiff had examined the tax-digest of the county before purchasing the note sued upon, the
3. Applying the above principles, a verdict in behalf of the county was demanded under the pleadings and proof. Errors, if any, committed by the court in the admission of evidence, in refusing to give requests to charge, and in instructions given the jury were harmless, and do not affect the result.
I am authorized to say that Atkinson and Gilbert, JJ., concur in the conclusions above stated.