City of Decatur v. Mohns

180 So. 297, 235 Ala. 640, 1938 Ala. LEXIS 290
CourtSupreme Court of Alabama
DecidedMarch 24, 1938
Docket8 Div. 864.
StatusPublished
Cited by6 cases

This text of 180 So. 297 (City of Decatur v. Mohns) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Decatur v. Mohns, 180 So. 297, 235 Ala. 640, 1938 Ala. LEXIS 290 (Ala. 1938).

Opinion

KNIGHT, Justice.

Proceedings for mandamus instituted by F. H. Mohns, appellee here, against the City of Decatur, the mayor and aldermen of said city, the city council- of Decatur, the First National Bank of Birmingham, as the exchange agent of said City of Decatur, Charles F. Zukoski, Jr., as vice president and trust officer of said bank, the Decatur bondholders’ committee, an unincorporated association, and the individual members of said association, to require the said-named respondents to accept from petitioner the 24 bonds of said City of Decatur then owned'by the petitioner, and to deliver to petitioner 24 public improvement refunding bonds, series D, of said city, dated August 1, 1936, in the aggregate principal amount of $24,-000, with all coupons attached, in exchange for petitioner’s said 24 bonds, and to pay petitioner a certain named sum of money, as provided by an ordinance duly adopted by the governing body of said City of Decatur on July,23, 1936.

It appears from the petition for mandamus, and it is not controverted by the answers of the respondents, that the petitioner was and is the owner of 24 improvement refunding bonds, issued by the City of Decatur, and dated January 1, 1930, the principal of each bond being $1,000; that these bonds have been in default since January 1, 1934; that on July 23, 1936, the City of Decatur adopted an ordinance whereby it authorized the issue of bonds of said city, designated as Series D, not exceeding in principal amount $395,-000, to be known as public improvement refunding bonds, bearing interest at 5 per cent, per annum; that said ordinance “provided that said bonds should be issued only for the purpose of refunding, extending and re-arranging the maturity dates of and be only delivered in exchange for a like principal amount of said City of Decatur 6% City Public Improvement Bonds, dated January 1, 1930.” Said ordinance further provided “that every person accepting bonds of Series D in exchange, for an outstanding bond of said issue of the City of Decatur 6% Public Improvement Refunding Bonds dated January 1st, 1930, should be paid by said City the sum of $60.00 for each $1,000.00 bond so exchanged in full settlement of all interest which should have accrued'to August 1, 1936, on the outstanding bonds surrendered for the bonds of said Series D.”

By section 23 of the ordinance, the First National Bank of Birmingham was appointed as “Exchange Agent” for -the *643 purpose of exchanging the bonds authorized to be issued for the outstanding bonds, and for the purpose of making disbursement of interest as provided in sections 9 and 10 of the ordinance. The new bonds, along with the money necessary to pay the stated amount of interest, were delivered to the said exchange agent, with directions by the city to make the exchange, when and if 60 per cent, “in principal amount of the outstanding bonds proposed to be refunded, shall be presented to it for exchange,” etc. The ordinance, in said section, then provided: “No exchange or disbursement shall be made by the Exchange Agent except through the committee now in existence known as the Decatur Bondholder’s Committee.”

It appears that the petitioner’s bonds were of the class and series that were to be refunded under the terms of said ordinance.

It also appears that he duly • accepted the city’s offer to refund the bonds, and offered his bonds for exchange to the said Decatur bondholders’ committee, in all respects as provided in the ordinance. It also appears that this committee would not accept the bonds, and present them to the exchange agent, unless the petitioner would submit to a certain charge made by the committee, in the sum of approximately $600. Petitioner refused to pay, or submit to, the charge, and thereupon offered his bonds for exchange to the exchange agent, but this agent also refused to make the exchange, insisting that the bonds must he presented to him through said committee. The petitioner then presented his bonds to the governing body of the City of Decatur for exchange. This offer was also refused, the said governing body taking the position that this ordinance required the bonds to be presented to the exchange agent through said committee.

It appears from the answer that the Decatur bondholders’ committee was a voluntary association of persons who had been instrumental in working up the plan of refunding the indebtedness of the city. They were not employed by either the City of Decatur or by the petitioner. The ordinance made no provision for any charge for the exchange.

In these circumstances, the petitioner filed his petition in the circuit court of Morgan county, praying for the issuance of a writ of mandamus, to require the respondents to issue to him new bonds, in exchange for the bonds then held by him, and to pay him in cash the $60 on each $1,000 of his old bonds.

After a hearing on the- petition and answer, and facts set forth in the petition and answer, the court granted the mandamus prayed for, and from this decree the respondents bring this appeal.

Counsel for appellants in brief say that the sole question involved in this case is the right of the petitioner to compel the respondents “to make the aforesaid exchange and disbursement on terms other than those set out in the said invitation.”

Counsel for appellee assert that the “sole question involved in this case is the right of the petitioner to compel the respondents to make the aforesaid exchange and disbursement without complying with the wholly unauthorized demand of said Committee that petitioner pay it $600.00, as a condition upon which such exchange may be made.”

It is perfectly clear that the ordinance in question made no provision for any charge to be made against the bondholders for the handling of the bonds by the Decatur bondholders’ committee, or by the First National Bank of Birmingham, as exchange agent. The ordinance provided in the plainest terms that the bondholders should be given the new bonds in exchange for the old bonds, equal in principal amount — -and should also be paid in cash $60 on each $1,000 (principal) of the bonds. The ordinance made no provision for deductions or charges.

The demand or insistence of the Decatur bondholders’ committee that they should be paid any amount by the bondholders, for any service that they had rendered, or might render, in presenting the bonds for exchange to the exchange agent, was wholly beyond the provisions of the ordinance. The petition and answer show no such right in the committee. The exaction of the fee or charge for the presentation of petitioner’s bond for exchange was illegal or unwarranted, and the fact that some large per cent, of the other bondholders had submitted to, or had paid the charge, could not serve to justify or make legal the demand.

It is no doubt true that the petitioner will reap a benefit from the services of this committee,' in the matter of securing the adoption of the ordinance, and the refinancing of the indebtedness, yet this *644 fact ’does not furnish any legal justification for the charge attempted to be made against the petitioner, in the matter of the exchange of the bonds. In all such cases, one who would claim a fee for services must point to some specific provision in the ordinance, or law.

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Bluebook (online)
180 So. 297, 235 Ala. 640, 1938 Ala. LEXIS 290, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-decatur-v-mohns-ala-1938.