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Lawskills.com Georgia Caselaw
STEPHENSON v. STATE OF GEORGIA et al.
22344.
DUCKWORTH, Chief Justice.
Validation of revenue bonds, etc. Bibb Superior Court. Before Judge Long.
1. After careful examination and deliberate consideration, this court put at rest most of the questions as to constitutional debt limitations raised here in Sheffield v. State School Building Authority, 208 Ga. 575 (68 SE2d 590), and we will not rehash those matters but simply say they are decided against the plaintiff in error.
2. While the Act (Ga. L. 1963, p. 2250) is confusing in providing in Section 10 that all taxes within the limit are liable for the rent, and then says all revenue from whatever source is liable therefor, and that the rentals shall be a first claim thereon, the judgment--without expressly mentioning such provisions of the Act--expressly provides that the rent claims shall not impair existing obligations of the city and that the claim for rent shall only be a first claim against the funds allocated in the budget for that purpose. We construe this judgment to mean that the provisions in the Act giving a first claim for the rent due on all revenue of the city from whatever source derived is invalid. We concur in this. The primary reason for chartering the city is the maintenance of health and safety, and this can not be subordinated to any other activities.
3. There are no allegations that the obligations of the city to pay rentals in equal amounts over a period of 30 years constitute a debt which requires a vote of the people under Code Ann. 2-6001, and there is a total absence of facts essential to a finding that the lease offends this clause of the Constitution.
4. The allegations of inadequacy of the facilities, the nonfeasibility of the validation of the bonds due to the economic position of the city, and the alleged reliance upon other governmental authorities to take over and render certain obligations of the city, being mere conclusions of the pleader with insufficient allegations of ultimate fact in the intervention, the court did not err in refusing to consider these objections.
5. The bonds do not violate the law (Code Ann. 87-807, Ga. L. 1937, pp. 761, 766; or Code Ann. 2-6001, Const. of 1945) as to liability of the municipality or in compelling the power of taxation by the city.
6. The lease agreement is authorized by the Constitution, Art. VII, Sec. VI, Par. I (Code Ann. 2-5901) for the rental of the facilities by the city, and it is not unconstitutional for any of the reasons assigned, nor violative of the general law of this State. McLucas v. State Bridge Building Authority, 210 Ga. 1 (77 SE2d 531).
7. Since the law is not subject to any of the constitutional attacks thus made, and the lease agreement and the bonds are in conformity with the law of this State and not unconstitutional for any of the reasons assigned, the judgment complained of, confirming and validating the revenue bonds and holding that the lease agreement is valid and binding, is affirmed.
This case is one brought by the Solicitor General of the Macon Judicial Circuit to validate certain revenue bonds issued by the Middle Georgia Coliseum Authority (created by Ga. L. 1963, p. 2250 et seq.) and to adjudicate the validity and binding effect of a lease contract entered into by and between the authority and the City of Macon. The payment of the principal and interest on the bonds was and is to be secured by the rental revenue to the authority arising by virtue of the lease contract with the city. An answer was filed by the city and the authority, and thereafter a citizen and taxpayer filed an intervention, which was thereafter amended, alleging the Act creating the authority and the bonds issued in conformity therewith and the lease are unconstitutional, null and void for the numerous and varied reasons set forth, i.e., in substance, (1) Section 10 of the law, supra, impairs the obligations of contracts (Code 1-134 and Code Ann. 2-302); creates a general obligation debt of the city without it being assented to by the majority of the qualified voters (Code Ann. 2-6001); is special legislation attempting to do by indirection that which it can not do directly, that is, make the revenue bonds issued by the authority a pecuniary liability of the city (Code Ann. 2-401); (2) the law is in conflict with the charter of the City of Macon by attempting to usurp the power of the municipal authorities to appropriate revenue and discretion to levy taxes as provided by said charter (Code Ann. 2-1908, 2-1915); (3) the bonds are to be sold with the lease agreement as security, providing the full faith and credit of the city acting as a general obligation of the taxpayers without the vote of the majority (Code Ann. 2-6001); and (4) the bonds are unconstitutional on their face since they violate the law (Code Ann. 87-807 and Code Ann. 2-6001) in that they empower court action for the compelling of the power of taxation by the city. The lease contract is further alleged to be violative of the general law in that it requires the enforcement of nonpayment by the right of taxation in violation of Code 87-807, supra, and made not only for the benefit of the lessor but for the holder of the authority's bonds, having all the rights of the lessors in violation of the statute under attack. It also alleges that the facilities proposed are inadequate and it is not feasible to validate the bonds due to the economic position of the city and the proposed reliance upon the County Commissioner of Bibb County to take over certain governmental obligations of the city. The intervenor prayed that the Act and the lease agreement be declared unconstitutional, and the validation of the bonds be denied. General and special demurrers were filed to the intervention, and a motion was made to dismiss it. However, a judgment was granted, in effect, denying the prayers of the intervention and overruling the objections therein, by declaring the authority was legally created and authorized to issue the bonds, to pledge all the revenues from the lease contract to the payment of the principal and interest on the bonds, and to charge and collect rent from the lease of its public coliseum and
related facilities, the bonds not to be payable from or a charge upon any funds or property other than the revenue pledged to the payment thereof; the city had full legal authority to enter into the lease contract with the authority, and the terms thereof are valid, legal and binding, and the rental revenue to the authority is adjudged to be security for the payment of the principal and interest on the bonds, and the city authorized to covenant therein that it would make available and use for payment any and all money received or entitled to be received by virtue of its power of taxation and within any millage limitation, and the allotment payment of same would constitute a first charge on all the tax revenues of the City of Macon within any millage limitation thereof; the said bonds are not a debt of the city or of the State of Georgia; all other general obligations of the city, being payable from the taxes levied on all the taxable property within the city without limitation as to rate or amount shall in nowise be affected by said lease and no part of said lease contract shall in anywise impair the obligation of any lawfully existing contract of the city; and the said bonds being issued pursuant to the Constitution and laws of the State are therefore confirmed and validated. The exception is to this judgment.
Buckner F. Melton, Jack T. Gautier, Oliver & Maner, Edwin Maner, Jr., contra.
Robert L. Osteen, Jr., Abe Crosby, Jr., for plaintiff in error.
ARGUED JANUARY 14, 1964 -- DECIDED FEBRUARY 6, 1964.
Friday May 22 21:55 EDT


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