Montgomery v. City of Atlanta

134 S.E. 152, 162 Ga. 534, 47 A.L.R. 233, 1926 Ga. LEXIS 235

• Court: Supreme Court of Georgia
• Decided: July 15, 1926
• Docket: Nos. 5230, 5231
• Status: Published

Opinions

Hines, J.

(After stating.the foregoing facts.)

The paving involved in this case was done under' “An act to amend an act establishing a new charter for the City of Atlanta, approved February 28, 1874, and the several acts amendatory thereof, and for other purposes,” approved August 19, 1919. Ga. Laws 1919, p. 821. By par. (b) of section 1 of this act it is provided that “No resolution or ordinance seeking to pave, repave, or improve a street or public place as herein authorized shall be passed unless petitioned in writing by the owners of more than fifty per cent, of the property abutting on the street or portion of street proposed to be paved or repaved.” The first attack upon the ordinances and the contract providing for the paving of a portion of this street, and the ordinance levying assessments against the owners of property abutting thereon for the payment of their shares of the cost of laying the pavement, is that the petition for the paving of this street was not signed by owners of more than fifty per cent, of the frontage of the property abutting on the portion of this street sought to be paved.

Before the city council can pass an ordinance and make a contract for the paving of a street, and before it can pass an ordinance levying an assessment against owners of land abutting on such street or portion of street, for the payment of their shares of the cost of laying such pavement, it must be petitioned in writing by the owners of a majority of the frontage of the land abutting on said street or portion of said street, seeking to have the pavement laid. This fact is jurisdictional. Tlie non-existence of such fact renders ordinances and contracts made for this purpose null and void. In the absence of this jurisdictional fact an ordinance authorizing the pavement, and contract for laying the pavement, and an ordinance levying an assessment against abutting-land owners to pay for such pavement, are utterly void and unenforceable, if they are attacked in proper time. While this is so, the owners of abutting property may be precluded from attacking the validity of such ordinance .and contract on this ground, by their failure to make timely objections thereto. Paragraph (b) of section 1 of this act provides for an advertisement giving notice of the introduction of the resolution or ordinance for the paving, repaving, or improvement of any public street, public place, or portion thereof, under this act. This advertisement shall notify the property-owners or others interested to appear at the meeting of the general council to be held at a time stated in the advertisement, and make any and all objections they may desire to urge to the passage of such resolution or ordinance. It further provides that at the time named in said advertisement any property-owner or other person shall have full opportunity to make objections to the passage of such resolution or ordinance. It further provides that after hearing said objections the general council shall have the full right and power in their discretion to order such pavement, re-pavement or other improvements to be made, or reject said resolution or ordinance. It then provides that, after the passage of such resolution or ordinance, all property-owners subject to be assessed for the cost of the improvement, who do not within fifteen days thereafter commence legal proceedings to prevent said assessment being made, shall be conclusively presumed to have accepted the terms of said ordinance or resolution, and to have agreed that the assessment provide.d for in said act may be made. This act then provides that “Thereupon it shall be the duty of the mayor and general council to forthwith cause said improvements to be made in accordance with the plans and specifications as prepared,” and that “When completed an ordinance shall be passed, assessing the cost of said improvement against the property-owners on each side of the street or portion of the street so paved, repaved, or improved, except that where a street-car company has tracks on said street or portion of street so improved, the company owning or operating same under lease or contract shall be assessed for the costs of paving, repaving, or improving said street or portion of street for the full distance that such tracks extend along said street or public place of such pavement, repavement, or improvement, and for the full width of sixteen feet where they have two tracks thereon and eleven feet where they have one track thereon, and, after deducting the am.ount of this assessment against said company, then the abutting-property owners shall pay the total assessment against the abutting property on each side of the street or portion of street so paved, repaved, or improved.”

What was the purpose and intention of the legislature in enacting the above provisions of this act, and what is the effect of the failure of owners of abutting property to make objections to the passage of the ordinance providing for such pavement, and, in the event their objections to such ordinance are overruled by the general council, they do not within fifteen days thereafter commence legal proceedings to prevent the assessment of their property for" the purpose of paying their pro rata shares of the cost of such improvement? The evident purpose of the legislature was to give property-owners or other persons interested full opportunity to make any objections which they might see fit to make to the passage of an ordinance providing for the pavement or repavement of any street or public place in the City of Atlanta, and to give them an opportunity to be fully heard before the general council. If their objections were overruled by the general council, the purpose of the act was then to give to property-owners the right to commence, within fifteen days after the passage of such ordinance, legal proceedings to prevent any assessment being made upon their property abutting on such street for the purpose of its pavement or repavement. Here ample legal means were provided for these property-owners to attack the ordinance of which they now complain, upon the ground which we are now considering. The petitioners, after being duly notified of the introduction and pendency of this ordinance, failed to make objection to its passage before the general council, and after its passage they failed to take legal proceedings within fifteen days thereafter to prevent the assessment of their property for the payment of their respective shares of the cost of the pavement therein provided. What is the effect of their failure so to do? The statute declares that they “shall be conclusively presumed to have accepted the terms of said resolution or ordinance, and shall have agreed that the assessment” in said act “provided for may be made.” Clearly the purpose of the legislature was to make the averments of the petition conclusive upon the property-owners, and especially to conclude them from denying the jurisdiction of the general council to pass the ordinance, if they made no objection to the passage of the ordinance before the general council, and took no legal proceedings within fifteen days thereafter to attack its validity and to resist the contemplated assessment upon their property for the payment of their proportionate shares of the cost of the improvement. The act furnishes a method for the judicial determination of the validity of the ordinance and of the contemplated assessment against the owners of abutting property; and this satisfies the constitutional requirement of due process of law. Lanham Co. v. Rome, 136 Ga. 398 (71 S. E. 770).

. So in City of Mariettta v. Dobbins, 150 Ga. 422 (104 S. E. 444), this court, in construing a statute similar to the one under consideration, held that the provision that abutting-land owners could begin proceedings to prevent the assessment being made against their property for paving within fifteen days after the passage of the ordinance, and that upon their failure to do so they were to be conclusively presumed to have accepted the terms of the ordinance and to have agreed that the assessment provided for might be made, was in its nature a statute of limitation which would bar such owners from attacking the ordinance and assessment, if legal proceedings were not taken within fifteen days after the passage of the ordinance for such purpose. In view of the importance of having the jurisdictional fact ascertained that persons owning a majority of the frontage on a street or portion of a street sought to be paved had signed a petition for that purpose, we think the legislature intended to provide a method for the determination of this question, and to fix a period of limitation in which legal proceedings raising the question of the existence of such jurisdictional fact could be brought. By the act of August 1, 1921 (Acts 1921, p. 212), the certificate of the chief of construction, that the petition was signed by owners of more than fifty per cent, of the property abutting on the street or portion of the street sought to be paved, is made prima facie evidence of this fact. The act of 1919 makes this prima facie presumption conclusive, if the owners do not file objections to the passage of the preliminary ordinance providing for the pavement. The purpose of the legislature was to prevent the city and contractors from having this jurisdictional fact questioned after they had incurred large expenditures in making these street improvements. So we are of the opinion that when the general council published notice of the introduction and pendency of the preliminary resolution and its terms, providing for the pavement of a portion of this street, and notifying owners of property abutting thereon and other persons interested therein to appear at the meeting of the general council to be held at a time therein stated and to make any and all objections they might desire to urge to the passage of such resolution or ordinance, and where said property-owners failed to so ap pear and to make objections to the passage of such ordinance, and further failed within fifteen days after the passage of such ordinance to 3 commence legal proceedings to prevent an assessment being made against their property for the payment of the cost of such pavement, they were barred, after fifteen days from the passage of such ordinance, from instituting legal proceedings to attack the ordinance upon the ground that the owners of a majority of the property fronting on said street had not signed the petition asking for its pavement or repavement. On this question see Bickel v. Warner-Quinlan Asphalt Company, 70 Okla. 138 (174 Pac. 537).

Is the contract between the city and construction company for the laying of this pavement void ? The plaintiffs contend that the contract is void under section 100 of the charter of Atlanta, because Inman was a member of the city council and a large stockholder in the construction company at the time the contract was made. On the other hand, the city and the construction company maintain that the contract is not void, because (a) the above section of the city charter is not applicable under the facts of this case; (b) because Inman did not vote for the preliminary ordinance providing for this pavement, for the ordinance accepting the bid of his company for this work, and for the ordinance accepting the pavement after it was finished, and did not use his influence to induce members of council to vote for them, nor take any part in securing the execution of the contract; (c) because the contract is fair and free from fraud; and (d) that after this controversy aróse Inman resigned from the council, which thereafter passed an ordinance or resolution ratifying and confirming the ordinances aforesaid, and the contract, and the acceptance of the pavement laid thereunder by the city.

By the common law and independently of statute, this contract is contrary to public policy and illegal. One who is entrusted with the business of others will not be allowed to make out of the same a pecuniary profit to himself. This doctrine is based upon principles of reason, morality, and public policy. No public agent shall have the opportunity or be led into the temptation to make profit out of the public business entrusted to his care, by contracting with himself, directly or indirectly, in respect to such business. Mayor &c. of Macon v. Huff, 60 Ga. 221; Hardy v. Gainesville,. 121 Ga. 327 (48 S. E. 921); Byrd v. Cook, 146 Ga. 657 (92 S. E. 61); Twiggs v. Wingfield, 147 Ga. 790 (95 S. E. 711, L. R. A. 1918E, 757); Turner v. Atlanta, 160 Ga. 216 (127 S. E. 652); Burkett v. Athens, Tenn. Ch. App., 59 S. W. 667. It does not alter the case that Inman did not vote for the ordinances relating to the laying of this pavement, and that he did not use his influence to induce other members of the general council to vote therefor. The fact that he did not take any part in securing this contract for his corporation does not change the situation. ' The City of Atlanta and its citizens were entitled to have this councilman exercise his administrative and executive ability in securing the best contract that could be had for the laying of this pavement, and to see that the pavement came up to the plans and specifications under which it was laid, and that the terms of the contract were faithfully performed. This he could not do if he were a party at interest under the contract. Inaction on the part of the councilman in this respect amounted to a violation of his duty to the public. Ensley v. Hollingsworth, 170 Ala. 396 (54 So. 95, Ann. Cas. 1912D, 652); Bay v. Davidson, 133 Iowa, 688 (111 N. W. 25, 9 L. R. A. (N. S.) 1014, 119 Am. St. R. 650). This principle applies, although the contract is fair and free from fraud. Public policy will not uphold it. Macon v. Huff, supra. The contract will not be upheld by reason of the fact that the public has received a benefit thereunder. Horkan v. City of Moultrie, 136 Ga. 561 (2) (71 S. E. 785). It is insisted that Inman resigned from the city council, that the city council thereafter by ordinance ratified and confirmed all that had been done by it in making the contract with the construction company for the laying of this pavement and the acceptance of the work of the city after the paving had been completed, and that for this reason the contract between the city and the construction company had been ratified and confirmed, thus relieving the contract of its illegality and criminality. A contract malum in se or against public policy, or which is made illegal or criminal by statute, can not be made valid by ratification ; and especially can this not be done by the same council which entered into the illegal and criminal contract. Macon v. Huff, supra; Dorsett v. Garrard, 85 Ga. 734 (11 S. E. 768); Hardy v. Gainesville, supra; Horkan v. Moultrie, supra; 13 C. J. 506, § 452 b.

But, independently of this common-law principle, this contract is illegal under the charter of the City of Atlanta. Section 100 of that charter declares that “It shall not be lawful for any member of the general council to be interested, either directly or indirectly, in any contract with the City of Atlanta, the mayor and general council, or any one or more of them, having for its object the public improvement of the city, or any part thereof, or the expenditures of its moneys. Any violation of this section by any member of the general council shall, on conviction thereof, be punished- as prescribed in section 4310 of the Code of this State,” being section 1065 of the Penal Code of 1910. Ga. L. 1874, p. 120, § 18. But it is insisted that this section of the charter should be construed in connection with section 709 of the Code of 1895, now embraced in section 855(aa) of Park’s Code; and that, so construing it, section 100 of the charter of Atlanta only applies to contracts for the performance of work which is to be paid for out of the treasury, and that inasmuch as payment for this pavement is not to be paid for out of the treasury of the city but from assessments against owners of property abutting upon this street, said section of the charter is not applicable to the facts of this case. We do not think that this contention is well founded. The section of the charter of the city is broader than the section of the Code. Contracts which come within the provisions of the last-mentioned section are those for the performance of work for which payment is to be made out of the city treasury. By the above section of the charter of the city it is made unlawful for any member of the general council to be interested, either directly or indirectly, in any contract with the City of Atlanta, the mayor and general council, or any one or more of them, having for its object the public improvement of the city, or the expenditures of its moneys. This is a wholesome statute, and it should not be emasculated by judicial construction. Under this charter provision the contract for this pavement between the city and the construction company is illegal by reason of the fact that a large stockholder of the construction company was a member of the city council at the time the contract was entered into. In view of this fact, no action would lie thereon in favor of the construction company against the city.

In Sanders v. Gainesville, 141 Ga. 441 (81 S. E. 215), this court held that If a contract for the construction of a public improvement has been let, and an assessment levied to pay such contract price, the validity of such contract is essential to the validity of the assessment; since otherwise the assessment would be levied to pay a claim not legally due against the city.” ’A feature of the present ease is different from that of the case cited. In the case cited the city would have been liable for a portion of the cost of the pavement, if the contract had been valid. In the instant case the city is not liable for any part of the cost of the payment; but the entire cost thereof would have to be borne by owners of abutting property and the street-railway company. We do not think that this distinguishing feature of the present case alters the principle announced in the case cited. So we are of the opinion that, to make valid an assessment against the owners of property abutting upon a street which is paved under the act of 1919, there must be a valid contract between the city and the contractor. If there is no such valid contract, the assessment is invalid and unenforceable against the property-owners. It follows from our ruling that the contract for this pavement is invalid, that the assessment is invalid. Neither a court of law .nor a court of equity will assist a party in whose favor such assessment is levied to enforce the same.

While we hold that the contract under which this pavement was laid, and the assessment levied for the payment of the costs of this improvement, are- invalid and void, are the plaintiffs -entitled to the relief sought under the facts of this case? They are in a court of equity. They are seeking affirmative equitable relief. They are seeking to have said contract and assessment declared illegal and void. They are seeking to restrain the City of Atlanta from carrying on proceedings to validate a proposed issue of bonds for the payment of the cost of said improvement, and from selling and disposing of the same; and they are seeking to enjoin the construction company from taking any legal proceedings, or other steps of any character whatsoever, to enforce the collection of its claim against the City of Atlanta for such payment, from undertaking to procure an assessment by the city against the property-owners for the work done under this contract, and from altering the status between the construction company and the city and the property-owners. They are not defensively setting up the invalidity of this contract and this assessment. The relief which the plaintiffs seek is equitable relief. Campbell v. Murray, 62 Ga. 86, 96. They are seeking the writ of injunction. They thus ask for extraordinary equitable relief. “He who would have equity must do equity, and give effect to all equitable rights in the other party respecting the subject-matter of the suit.” Civil Code (1910), § 4521. This principle is applicable where one in an equity suit seeks both legal and equitable relief. One who avails himself of a remedy in a court of equity is as much bound by this principle as one who is asserting in such a court a purely equitable right. C. & W. C. Ry. Co. v. Hughes, 105 Ga. 1 (3) (30 S. E. 972, 70 Am. St. R. 17). In Frick v. Moore, 82 Ga. 159 (8 S. E. 80), the plaintiff filed her bill to enjoin the defendants from disposing of certain notes which she alleged' she had given to them for the purpose of suppressing a criminal prosecution against her son for larceny after trust; and she asked that these notes be surrendered and cancelled. Compounding such a crime is itself a felony. Penal Code (1910), § 328. This court held, that, while such a crime is forbidden by the law, the plaintiff, who had received from the defendants a certain account and notes under the agreement, must have tendered to the defendants the same before she could have the equitable relief sought. In this case the agreement was both illegal and criminal; and yet this court applied the principle with which we are now dealing. In Macon v. Huff, supra, this court was dealing with a contract made between the City of Macon and its mayor, which a majority of the aldermen of the city brought a bill to annul and set aside. This court held: “Equity, however, requires every litigant who seeks her aid to do equity; and inasmuch as the defendant has expended large sums of money in fencing, leveling, draining, and ornamenting the park, of which the city has received the benefit, equity will not interpose in behalf of the claimant to annul and set aside the contract, though thus illegal, unless the complainant shall first do equity, and to do equity the city must pay the defendant the money so expended and interest thereon, and thus restore him, as far as practicable, to his status quo, in the absence of actual fraud on his part.” The only difference between the case cited and the one at bar is, in the former case the contract was prohibited by law but not made criminal, while the contract in this case is both prohibited and penalized. This difference does not make the ruling in the case cited inapplicable to the case which we have under consideration. Many of the plaintiffs in this case petitioned to have this street improvement made, and all of them knew, or by the exercise of ordinary diligence could have known of the existence of the facts which render this ordinance and contract invalid, and could have taken legal proceedings to prevent the performance of the contract and the expenditure of a large sum of money thereunder in making these improvements. In these circumstances it would be inequitable to permit them to enjoin the city and the construction company from enforcing the assessment levied upon their property for the purpose of paying for this improvement, and thus saddle upon the construction company the loss of a large sum expended by it in doing this work. Seeking equitable relief in the premises, they must do equity. They must pay for the benefits which they are receiving from this improvement, before they can have the contract under which it was made and the assessment levied to defray the cost of the work declared null and void.

In the contract between the city and the construction company, the city agreed to issue bonds to cover the total cost of this street improvement, and thereupon to promptly dispose of these bonds and pay the contractor such sum as might be due it for the paving of this street. These bonds were to be issued under the provision of the constitution which permits the city to issue bonds for street improvements without the approval of a popular vote. Acts 1930, p. 35. The legislature has provided the terms and conditions upon which this right can be exercised. Acts 1931, p. 313. The trial judge enjoined the city from paying to the contractor any money other than that received from the property-owners, and from paying the contractor any money from its public treasury. To this portion of the judgment the city and contractor except. The city was permitted to file proceedings to validate the bonds proposed to be issued by the city in order to raise the money with which to pay for this street improvement; but the trial judge in his judgment enjoined the hearing of the proceedings to validate these bonds, pending the final decision of this case, to which order the defendants except. The court did not err in holding that the contract between the city and the construction company was invalid, and did not -err in holding that the same had not been legally ratified and adopted by the city council after Inman had resigned as a member thereof. But in view of the principle announced in dealing with the assignments of error complained of in the main bill of exceptions, that parties who seek equity must do equity, the court erred in enjoining the city, at the instance of the plaintiffs, in the respects complained of in the cross-bill of exceptions. Nothing herein ruled shall be held to preclude the plaintiffs or others from setting up any legal defenses which they may have to the validation of said bonds.

Judgment on the main bill of exceptions affirmed, and on the cross-bill of exceptions reversed.

All the Justices concur, except Atkinson and Hill, JJ., disqualified.