Brumby v. Board of Lights & Waterworks , 147 Ga. 592 ( 1918 )

Hill, J.

(After stating the foregoing facts.)

1. The third ground of the demurrer of Niller, trustee, raises the question whether the plaintiff has such an interest in the subject-matter of this suit as entitles him to bring this action, or to any of the relief prayed for. The petition alleges that the plaintiff is -a citizen and taxpayer of the City of Marietta, and sets out in detail the grounds for the relief sought. Taking as true the facts alleged, as we must on demurrer, the plaintiff has such an interest in the subject-matter of the suit as entitles him to bring it. He is a taxpayer of the city, and as such has an interest in the funds arising, from municipal taxation. If such funds are being used, or are about to be used, for the purpose of paying an illegal debt created by the corporation, or an illegal contract has been executed by the corporation which would eventuate in payments under the illegal contract by the corporation, then the plaintiff would have such interest in the subject-matter of the suit, having for its purpose the canceling of the contract and the enjoining of payment of money pursuant thereto, as to authorize him to bring and maintain the action. Renfroe v. Atlanta, 140 Ga. 81 (4), 82 (78 S. E. 449, 45 L. R. A. (N. S.) 1173).

2. Was the contract illegal? The corporation has no authority except such as is conferred on it by law. The statute creating it must be strictly construed. “Municipal corporations shall not incur any debt until provision therefor shall have been made by the municipal government.” Constitution, art. 7, sec. 10, par. 1 (Civil Code, § 6567). The hoard of lights and waterworks was created by an act of the General Assembly, approved August 20, 1906 (Acts 1906, pp. 846, 848, sec. 5). By this act it is provided that the board “shall make all contracts for the lights and water supply for the City of Marietta, shall have power to regulate the water and light rates in the city, and .shall supply the people of said city with water at a fair and equitable rate. They shall have power to make any and all contracts with any other company supplying water to the city, and to do any and all things necessary to the carrying out of the objects of this bill. Said board of lights and waterworks shall take the proceeds of any bonds sold for the purpose of erecting a system of waterworks and build and erect such waterworks to the best advantage of the city, and to this end, if they think best and proper, can purchase and acquire any property now owned and operated by*any other company.” This act also provides for an election by the qualified voters of Marietta to determine whether bonds shall be issued and sold for the purpose of “purchasing, establishing, maintaining, building, and acquiring” a system of waterworks for the City of Marietta, etc. By the act of 1906 (supra) the authority of the board was limited to the purposes set out above; and when they contracted to pay the Kennesaw Paper Company to “quit operating its electric-light plant” in the City of Marietta as a competing company — not for the purpose of operating it as a waterworks or electric-light plant, but merely to remove a competitor in business, themselves receiving nothing in the way of plant, poles, wire, or other property of any kind, from the Kennesaw Paper Company, the board exceeded their powers, and their act was ultra vires. This Kennesaw Company was a competitor of the system created by the City of Marietta; and while the board was authorized by the act of 1906 to make contracts for the light and water supply for the City of Marietta, they had no authority of law to pay a competing electric plant to cease business, and to create a debt therefor, simply for the purpose of getting rid of it as a competitor. This being true, the contract was an illegal one, and the court erred in sustaining the demurrer and dismissing the petition.

3. Another ground of the'.demurrer is that “the petition is multifarious in that it contains a misjoinder of actions and of parties.” It is argued that it is not proper to join in one action a suit to enjoin the payment of the notes made to Niller, and a suit to enjoin the payment of the note made to Dobbs. We do not think this contention is sound. The whole transaction here was part of a common purpose of the defendants to pay the Kennesaw Paper Company to quit business on the one hand, and of the company to accept payment therefor on the other. There is a common nexus in the whole transaction. The one common right sought to be established is a decree that the board of lights and waterworks was without legal authority to create a debt of the character set out in the petition; and in such case equity will determine the whole matter in one action. Civil Code- (1910), § 5419; East Atlanta Land Co. v. Mower, 138 Ga. 380 (3), 384 (75 S. E. 418); Portwood v. Huntress, 113 Ga. 815 (39 S. E. 399).

. Judgment reversed.

All the Justices concur, except Athinson, J., dissenting.