Southern Airways Co. v. DeKalb County

118 S.E.2d 234, 102 Ga. App. 850

Opinions

Bell, Judge.

The principal issue raised by this appeal is whether the alleged lease entered into between the parties is valid or void. It may be noted that in one of the two previous appearances of this case before the Supreme Court, the contract was held to be in proper form and prima facie valid. Southern Airways Co. v. Williams, 213 Ga. 38 (96 S. E. 2d 889). The second appearance of the case before the Supreme Court was occasioned by the granting of a writ of certiorari on the application of Southern Airways Co. to review the majority opinion and judgment of this court in Southern Airways Co. v. DeKalb County, 101 Ga. App. 689 (115 S. E. 2d 207), which held in effect that the lease agreement, to become effective upon the happening of an event in the future which might or might not occur within 21 years, no life in being there being involved, violated the rule against perpetuities and was void. In its consideration of the case the Supreme Court held that the lease agreement gave only a usufruct in the premises, not an interest in realty, and consequently, the rule against perpetuities would not apply. Southern Airways Co. v. DeKalb County, 216 Ga. 358 (116 S. E. 2d 602). Thus, the view of this court on the point became quite immaterial, and the judgment of this court is vacated. With the settling of this point by the Supreme Court, the case, following customary procedure, was returned to us for consideration and determination of the several issues remaining in contention.

The first contention of the county to the effect that this lease constituted an invalid effort by the county commissioner then in office to bind himself and his successors in such a way as to prevent free legislation in matters of county government, we think, is not tenable. There is express statutory authority for municipalities, counties, and other political subdivisions to acquire, own, lease, control, occupy, equip, maintain, regulate, etc., airports and landing fields under the provisions of the Uniform Airports Law (Ga. L. 1933, p. 102, et seq.), which is now codified as Chapter 11-2 of the Code. Admittedly, Code § 11-202 provides that any lands thus acquired for these purposes . . shall and are hereby declared to be acquired, owned, leased, controlled, or occupied for public, governmental, and municipal purposes.” There is a cleavage of opinion among the states as to whether the quoted language in the Uniform Act makes the owning, controlling, and operating of airports a governmental function of the political subdivision involved, or whether it is a proprietary or non-governmental function so that the political subdivision does not have- governmental immunity in matters arising under its authority. See the discussion of the problem in 66 A. L. It. 2d 634, et seq., and also 16 A. L. R. 2d 1069, and 101 A. L. R. 1151. In the absence of express-statute, it appears that the general rule in the United States is that political subdivisions operating airports are engaged in a business or proprietary function and not performing an act of government and, therefore, there is no governmental immunity. 66 A. L. R. 2d 636. This court has held that a municipality operating an airport under this statute is engaged in a proprietary function and is liable for the tortious acts of its servants and agents in the operation of an airport from which substantial revenue is derived. Thus: “Section 2 of the Uniform Airports Act (Ga. L. 1933, p. 102; Code § 11-202), which provides that lands acquired, controlled, or occupied as landing fields for the use of aircraft shall be so acquired or controlled for public, governmental, and municipal purposes, was intended to be a declaration on the part of the legislature of the public purpose as to which the authorization was given, and not as a limitation immunizing such municipalities from suit regardless of circumstances.” Caroway v. City of Atlanta, 85 Ga. App. 792 (1c) (70 S. E. 2d 126). This is the majority view as adduced by the courts throughout the United States, and it certainly appears logical that where the Government engages in the operation of a business or business enterprise, it should, as a general rule, forfeit its traditional immunity from liability, and be held to do business on business terms. As this is true in the field of tort liability, it should be true with the greater force in the field of contract law. While Code § 69-202 provides that one council may not bind itself or its successors so as to prevent free legislation “in the matter of municipal government,” it appears clear that this section does not apply to a situation where a political subdivision is operating in a proprietary rather than a governmental capacity. Lawson v. City of Moultrie, 194 Ga. 699, 702 (22 S. E. 2d 592). See also Black v. County of Forsyth, 193 Ga. 571 (19 S. E. 2d 297). We thus hold that where, as here, a county through its proper authority leases property which it owns for use as an airport, it is engaging in a proprietary and not a governmental function. It follows that the county commissioner, the proper authority here, had the power to bind his successors in office by entering into this agreement. This conclusion, it appears to us, is supported further by the provisions of Code § 11-205, which in part provide that “Counties, municipalities, or other political subdivisions which have established . . . airports or landing fields . . . are hereby authorized: . . . (c) To lease such airports or landing fields to private parties for operation or to lease or assign to private parties for operation, space, area, improvements, and equipment on such airports or landing fields ...”

The second contention of the county is that the lease represented an effort to grant exclusive rights to the use of landing areas and air navigational facilities on which Federal funds had been expended in direct violation of the act of Congress forbidding the grant of any exclusive rights. While certain portions of the lease as presented by the record do use terms granting the lessee “the exclusive commercial operation of the entire airport . . . the exclusive right to the use of the first two hangars . . . ”, other parts of the lease expressly provide that the lessor shall at all times have the right to require the lessee to operate the airport and all its facilities and services for the general use and benefit of the public, and to require the lessee to make available all airport facilities without unjust discrimination. Furthermore, other sections of the agreement require the lessee to make all facilities at the airport available to all members of the public, including airline transportation facilities, and expressly negate any grant to the lessee or to any other persons of the exclusive right to the use of any landing area or air navigation facility at the Camp Gordon Airport, while specifically requiring that the landing areas and air navigation facility shall be open to the general public, including airline transportation companies, without discrimination, in accordance with the rules and regulations of the Civil Aeronautics Authority, applicable to municipal airports. Still other portions of the agreement expressly provide that the landing areas and air navigation facilities of the airport shall always be open and available to all airline transportation companies without discrimination.

Accordingly, we conclude that this objection to the validity of the contract is not meritorious.

The third contention of DeKalb County is that the contract is void because, prior to the time it was made, the county, by a resolution which constituted a contract with the holders of revenue anticipation certificates, covenanted and agreed that the gross revenues from the operation of the airport would be applied to the payment of these bonds, and that no lien or other contract superior to the bondholders’ rights would be made with respect to these gross revenues. The record discloses that the validation order issued by the Superior Court of DeKalb County expressly gave the county the right to prescribe, and from time to time to revise, fees and collect charges of the users of the airport, and to that end, might lease all or a portion of the airport and its facilities and collect rent sufficient to pay the cost of operating and maintaining the airport, and to pay the principal and interest of the certificates at their respective maturity dates. The validation proceeding under the second issue of revenue anticipation certificates allegedly was substantially the same. In view of the fact that the validation proceedings expressly provided for the county’s leasing the airport in its discretion, and in view of the provisions of Code § 11-205, which is the statutory authorization for the county’s leasing the airport, and, since there is no showing that the present lease in any way departed from the validation proceedings, we conclude that this objection of the defendant to the validity of the lease is not well taken. See Dawson v. Hospital Authority of City of Augusta, 212 Ga. 146 (91 S. E. 2d 12), and Code § 87-819.

It would appear, if this lease in any manner violated the rights of the certificate holders that they, and not the county, would be the proper parties to raise the issue in an appropriate proceeding.

The next undetermined contention of the county is that Southern Airways Co. is not entitled to judicial enforcement of this agreement because the petition shows that it has not paid the consideration as required under the terms of the contract and that all but $1,000 of the amounts which it had paid have been returned to it and accepted by it. The terms under which the refund of rentals paid under the lease were made are set out in the record as follows:

“At a regular called meeting of the Commissioner of Roads and Revenues of DeKalb County, Georgia, held on the 28th day of December 1954, the following action was taken:

“Whereas, on the 25th day of October 1940 a lease was executed between DeKalb County and Southern Airways Company which provided for a lease of the Camp Gordon Airport, and

“Whereas, the lessee thereunder never obtained possession of the premises because of the fact that the United States required the facilities of said airport for a naval reserve aviation base and has continuously held and occupied said premises as a naval reserve aviation base up to the present time, and

“Whereas, the lessee has deposited with the county the sum of eleven thousand seven hundred ($11,700) dollars as advance rentals, for which no benefit whatever has accrued to the lessee, and

“Whereas, the lessee desires to retain all rights granted by said lease and any modification thereof in the event the property is surrendered by the United States, and is willing to leave on deposit the sum of one thousand ($1,000) dollars as evidence of its good faith and as an initial deposit on any rentals which may accrue,

“Be it resolved that DeKalb County refund and return to said lessee all monies paid by it in rentals except the sum of $1,000.

“Be it further resolved that a copy of this resolution be forwarded to Southern Airways Company and that the terms of any leases heretofore entered be modified in accordance with the terms thereof.

“There being no further business, the meeting adjourned.”

It thus appears from this official action of the then commissioner of roads and revenues that the refund was made for the reason that the lessee had never been able to occupy the premises up to that time, because of the preemption of the leased premises by the United States Government. In usual business procedure there appears to be no legal reason why a party may not voluntarily surrender some of the rentals due under a contract. This was the apparent intent of the county in taking this action. From the language used, it appears that it was clearly the intent of the parties to continue the lease in full and modify the terms only to the extent of surrendering a portion of the rent. It would require a considerable stretch of the imagination to interpret this mutual accord as constituting a rescission of the contract.

The next contention of the county is that the lease is void because of vagueness both as to the property to be covered and as to the duties to be performed by Southern Airways. As we read the lease, there are admittedly some provisions which are not crystal-clear. It also contains language as to the meaning of which the parties might conceivably disagree. To illustrate, article 4 of the agreement provides that the lessee shall offer services and provide such facilities at the airport as will be adequate and appropriate to serve the needs of the public, giving due regard to the size and location of the premises, and that the premises shall be operated and developed by the lessee as a municipal airport to the end that it would be of greatest service, use, and convenience to the public, and that factors of safety shall be of prime importance with respect to the use, operation, and maintenance of the premises. While other clauses in the contract might similarly be considered, nevertheless, reading the agreement as a whole, it is not so indefinite as to be incapable of enforcement, and viewing the time in which it was drawn, it is likely that the contract was drafted as clearly as conditions then existing permitted it to be drawn.

The rules for construction of contracts as expressed in the Code permit this contract to be so interpreted as to give effect to its main purpose. Thus, “The cardinal rule of construction is to ascertain the intention of the parties. If that intention be clear, and it contravenes no rule of law, and sufficient words be used to arrive at the intention, it shall be enforced, irrespective of all technical or arbitrary rules of construction.” Code § 20-702. See also, Hanson v. Stern, 102 Ga. App. 341 (116 S. E. 2d 237). Parol evidence, together with all the attendant and surrounding circumstances, may be proved to explain an ambiguity', latent or patent, in a contract. Ambiguity is defined as “duplicity, indistinctness, an uncertainty of meaning or expression.” Tarbutton v. Duggan, 45 Ga. App. 31 (5) (163 S. E. 298). Furthermore, an offer is not too indefinite if it can be made certain by reference to outside matters. 1 Williston on Contracts, 3d ed., § 47. And even though subsidiary promises in a contract may be indefinite, this will not cause the entire contract to be unenforceable if the main promise is sufficiently clear to be capable of enforcement. Ibid, § 48. There is admittedly a difference between ambiguity and indefiniteness; thus “There is a difference between ambiguity, which imports doubleness and uncertainty of meaning, and that degree of indefiniteness which imports no meaning at all. The former can be explained by parol. The latter cannot be merely explained, but a deficiency must be supplied.” Jones v. Ely, 95 Ga. App. 4, 7 (96 S. E. 2d 536). “Nor is a contract ambiguous within that sense merely because it may be even difficult to construe.” McCann v. Glynn Lumber Co., 199 Ga. 669, 679 (34 S. E. 2d 839). And, “the first and fundamental rule is to ascertain the intention of the parties, and to this end the whole instrument, together with its circumstances, must be considered.” A. C. Alexander Lumber Co. v. Bagley, 184 Ga. 352, 362 (191 S. E. 446). It is an elementary principle of interpretation of contracts that where the main purpose of the contract can be enforced, it will be given effect. Here the main purpose clearly appears to have been the giving of a usufruct of the airport by the defendant to the plaintiff, and while there may be some ambiguity as to collateral undertakings, even if these should be found to be indefinite rather than ambiguous and thus unenforceable, they will not affect the enforceability of the contract, but only that of the collateral agreements.

Another contention asserting invalidity is that the agreement is void as a disposition of county property because there was no antecedent resolution of the county authorities directing a disposition of county property and authorizing its conveyance. By its decision reversing this court (216 Ga. 358, 116 S. E. 2d 602, supra), the Supreme Court has answered this contention by holding that this agreement does not create an estate for years but merely a relationship of landlord and tenant or principal and agent, or grants a lease or a license or a franchise, and that the Southern Airways Co. does not obtain by this contract any interest in the real estate. Thus, there is no conveyance of the county property, and this ground of claimed invalidity is without merit.

In the brief the defendant strenuously attacks item 23 of the lease, which provides in substance that during the period of the lease or any renewal thereof the lessor shall furnish to the lessee such water as may be necessary for use by the airport and such sewerage facilities as may be upon the premises, the water and sewerage facilities to be furnished to the lessee without charge. The comity contends that this portion of the consideration is invalid, citing Horkan v. City of Moultire, 136 Ga. 561 (71 S. E. 785), which held that the council of a municipality cannot make a binding contract by which it undertakes to obligate the municipality to furnish sufficient water free of charge for an indefinite time in the future. In reaching this conclusion, the Supreme Court cited what is now Code § 69-202, which provides that one council may not, by ordinance, bind itself or its successors so as to prevent free legislation in matters of municipal government. The Supreme Court went on to say, “If this could not be done by an ordinance, of course it could not be done by a contract. Power in a municipality of making and changing, by ordinance, water rates from time to time, whenever necessary to protect the city in its revenues and to enable it to furnish to all on equal terms and at reasonable rates, is a legislative or governmental power, and therefore can not be legally bargained or bartered away by one council so as to forever deprive succeeding councils of the right to exercise it.” We agree with the defendant in this contention, and hold that article 23 of the lease violates Code § 69-202. See also City of Warm Springs v. Bulloch, 212 Ga. (91 S. E. 2d 13). If a municipality cannot legally bind itself to furnish water free for such a long period, neither can a county. The same reasoning and legal principles apply with equal effectiveness to the provision for free sewerage facilities. However, the fact that these portions of the consideration which flow from the lessor to the lessee are void does not invalidate the lease for the elemental reason that the consideration in this extensive agreement is severable. Code § 20-305 provides, “If the consideration be good in part and void in part, the promise will be sustained or not, according as it is entire or severable, as hereinafter prescribed. If the consideration be illegal in whole or in part, the whole promise fails.” See also Code § 20-112. Thus, “an obligation supported by an independent consideration will be enforced, though indirectly connected with an illegal transaction . . .” Mechanics Realty &c. Co. v. Leva, 16 Ga. App. 7, 8 (2) (84 S. E. 222). Furthermore, “The rule is that where an agreement consists of a single promise, based on a single consideration, if either is illegal, the whole contract is void. But where the agreement is founded on a legal consideration containing a promise to do several things or to refrain from doing several things, and some only of the promises are illegal, the promises which are not illegal will be held to be valid.” Roberts v. H. C. Whitmer Co., 46 Ga. App. 839 (169 S. E. 385). And see Scott v. Hall, 56 Ga. App. 467, 475 (192 S. E. 920). We hold this contract to be severable within the above rules, and the invalidity of the clauses of the lease providing free water and free sewerage are not fatal to the remaining valid portions.

We now turn our attention to the county’s general demurrer attacking Southern Airways’ petition on the ground that neither as a whole, nor in any of its several parts, does it set out a cause of action or any facts on the basis of which it is in law entitled to the grant of equitable or declaratory relief. This demurrer was overruled by the trial court, and the defendant’s cross-bill of exceptions was taken to this ruling. The contention of the county in its cross-bill is that Southern Airways’ action is substantially equivalent to a suit for specific performance and the pleadings do not show that the plaintiff is entitled to this relief. The prayers of the petition are: (c) That the court enter a judgment in said matter declaring the rights of the petitioner to be that the said 1943 lease, entered into between petitioner and defendant between December 16, 1943, and January 8, 1944, is a valid agreement, binding on both parties; that on surrender of the premises described therein by the Department of the Navy, petitioner is entitled to possession and use of said premises, under the terms of the said 1943 lease, for a period of fifteen (15) years, (d) That the defendant be restrained and enjoined from: 1. Accepting surrender of said premises from the Department of the Navy in such manner or under such circumstances that your petitioner’s estate in said premises will then and there commence running. 2. Entering into any contract or agreement relating to use or possession of said premises, with any other party. 3. Making any physical changes on said premises or buildings or appurtenances thereon. 4. Doing any act affecting your petitioner’s right to full enjoyment of said premises under the provision of said contract, until further order of the court, and that the defendant be required to show cause on a day certain why said restraining order and injunction should not be continued. The defendant, in support of the contention that this is substantially equivalent to a suit for specific performance, cites Harris v. Abney, 208 Ga. 518 (67 S. E. 2d 724), which was an equitable petition brought by the plaintiff against the defendant seeking to enforce a claimed right of renewal of a lease to the plaintiff of land owned by the defendant to be used as an airfield. The present case is not primarily an equitable action, but is one seeking a declaratory judgment praying incidentally for the correlative injunctive relief of an interlocutory nature, and thus is distinguishable from the Hams case.

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

Felton, C. J., Toionsend, P. J., Carlisle, Frankum and Jordan, JJ., concur. Nichols, J., dissents.