Town of Wadley v. Lancaster

LüMPKIN, J. (After stating the facts.) The constitution declares that no municipality shall incur any new debt, except for a temporary loan or loans to supply casual deficiencies of revenue, without the assent of two thirds of the qualified voters thereof, at an election for that purpose, to be held as may be prescribed by law. Art. 7, sec. 7, par. 1, Civil Code, §5893. To do so is to. violate the constitution and to incure a debt illegally. For a municipal corporation to purchase a fire-engine and apparatus, paying a part of the purchase-money in cash and giving notes for the balance payable in installments extending over several years, amounts to the creation of such a debt, and, if done without the authority of an election, is illegal. City Council of Dawson v. Dawson Waterworks Co., 106 Ca. 696; Hudson v. Marietta, 64 Ga. 286. The cases of Danielly v. Cabaniss, 52 Ga. 211, and Black v. Cohen, 52 Ga. 621, were decided prior to the adoption of the constitution of 1877. The constitution of 1868, which was in force at that time, contained no such provision as that above referred to. Those decisions held, that where a municipal corporation had lawful author [356] ity to issue bonds or negotiable notes, they were binding in the hands of innocent purchasers, notwithstanding irregularity in the manner of the execution of the power. The town of Wadley, however, was not lawfully authorized to create such an indebtedness as is represented by the note sued on. It is urged that the town, having retained and used the property and having 'paid all except the last note, has ratified the acts of its officials in creating the indebtedness, or has estopped- itself from denying the legality of such debt as against the bona fide purchaser of the note. “Powers of all public officers are defined by law, and all persons must take notice thereof. The public can not be es-topped by the acts of any officer done in the exercise of a power not conferred.” Bol. Code, §268. What a municipal corporation was without authority to do its officers could not make lawful by ratification. Dorsett v. Garrard, 85 Ga. 734. In City of Dawson v. Dawson Waterworks Co., 106 Ga. 734, supra, it is said: “Even if a benefit has been received by one of the contracting parties from a contract which is void because prohibited by the constitution, or because contrary to public policy, the receiving of such benefit will not prevent the party receiving it from setting up, against a suit to enforce the contract, the defense that the contract was illegal and void.”. Covington R. Co. v. Athens, 85 Ga. 367. True, in those cases the benefit was not in the form of personal property received and held; but the principle would not be different where the action is at law to enforce the illegal contract. The want of constitutional authority appears on the face of the petition. In the cases of Ford v. Cartersville, 84 Ga. 213, and Lott v. Waycross, Id. 681, the right of a -municipal corporation to make an annual contract for a supply-of'water and lights was considered as .giving the right to recover for gas and water consumed during the year. See also Cartersville etc. Co. v. Cartersville, 89 Ga. 683, 689. It is said that the town can not retain the property under the contract of purchase, and at the same time refuse to pay the balance of the purchase-money on the ground that the contract was illegal; and the plaintiff prays, that the court appoint a receiver or commissioner to take possession of the property, sell it, and apply the proceeds to paying the note held by her. The plaintiff did not sell the property to the defendant; nor has she ever had title to it, or any lien or claim upon it; nor is it alleged that the payees who indorsed to her are not [357] solvent and able to reimburse her. The property was not purchased with money advanced by her to the town, or arising from a sale to her of its note or obligation. The defendant had possession of the property long before the plaintiff obtained the.note. What she acquired from the original payees was simply the transfer of a promissory note which the town had no authority to give. ■ The suit is by her as indorsee. While certain allegations and prayers of the petition appear to have been drawn with a view to obtaining equitable relief, yet the case made at last rests on the validity of the note. The prayers are that a commissioner or receiver sell the property and pay the not’e, principal, interest, and cost, and that a general judgment be rendered on the note. It being illegal, the case based on it and the effort to enforce it as á valid contract must, fail. Judgment reversed. All the Justices concur.