Findley v. City of Vidalia

Where all of the substantial relief sought by the plaintiff in an action for declaratory judgment may be obtained in a court of law, jurisdiction of the cause on appeal is not vested in the Supreme Court merely because the trial court granted a temporary restraining order "to maintain the status pending the adjudication of the questions."

No. 16316. SEPTEMBER 14, 1948. C. W. Findley and others, alleging themselves to be citizens and taxpayers of the City of Vidalia, brought an action against the City of Vidalia and J. B. McCrary Company Inc., it being alleged that: The municipality and the defendant corporation entered into a contract for extensions and improvements to the waterworks system of the City of Vidalia, a copy of the contract being attached as an exhibit to the petition. The ordinance or resolution authorizing the contract was not published as required by the charter provisions of the city; the city did not have in its treasury sufficient money to discharge liability incurred under the contract, and could not raise such sum during the current year. The city entered into the contract with the defendant corporation without asking for or receiving competitive bids on the construction; the contract was contrary to public policy, in that the municipality surrendered to the defendant corporation its authority to make contracts on behalf of the municipality. No work has been done under the contract, but if the defendant municipality is permitted to carry out the contract, it will incur illegal debts and expend sums illegally to the detriment of the petitioners, who have no adequate remedy at law. This is a proper case for the courts to declare the rights and liabilities of the defendant municipality with respect to the contract. The defendants should be enjoined and restrained from performing and carrying out any of the provisions of the contract until the legality or illegality of the contract is declared. The petition is brought (under the Declaratory Judgments Act, Ga. L. 1945, p. 137) for the purpose of settling the controversy and affording relief from uncertainty and insecurity with respect to the rights of the petitioners as taxpayers.

The prayers of the petition were: "(a) That this court declare the aforesaid contract between the defendant municipality and the defendant corporation null, void and ultra vires. (b) That the defendant municipality and the defendant corporation be restrained and enjoined from carrying out any of the provisions of said contract or performing any acts pursuant thereto until there is a final adjudication as to the validity or invalidity of said contract. (c) That the defendant municipality be restrained and enjoined from paying any money to the defendant corporation or doing any other things looking to the performance of said contract by it. (d) That process do issue directed to each of the defendants, requiring them to be and appear before this court at a time to be designated by order of this court not earlier than twenty days after service hereof, and that second original process be issued for service upon the defendant corporation in Fulton County, Georgia. (e) For such other and further relief as may seem meet to the court."

By amendment, it was alleged that the contract is null and void because the defendant, J. B. McCrary Company Inc., has a dual interest, since it receives for supervision a fee of 15% of guaranteed estimates of cost of construction, and at the same time receives payment for certain equipment used by it, and payment for salaried, supervisory personnel. The contract, providing for a dual interest by McCrary Company, is contrary to public policy and null and void. The contract is null and void because there is no fixed or certain maximum liability of the City of Vidalia, in that guaranteed cost is determined by final measurements multiplied by the unit price, and whether such liability will exceed the sum which the city may lawfully expend for such purpose can not be determined.

A temporary restraining order was granted, and the defendants were ordered to show cause why the temporary restraining order should not be continued until the final adjudication of the cause. The general demurrers of the defendants were sustained, and the exception is to this judgment. In all cases where it may appear that jurisdiction of a writ of error is in doubt, it is the duty of the Supreme Court to determine the question of its jurisdiction.Dade County v. State of Ga., 201 Ga. 241 (39 S.E.2d 473). The jurisdiction of this court is fixed by the Constitution, art. 6, sec. 2, par. 4 (Code, Ann. Supp., § 2-3704); and jurisdiction not specifically fixed by the Constitution upon the Supreme Court is conferred upon the Court of Appeals. City of Trenton v. Dade County, 201 Ga. 189 (39 S.E.2d 473).

The real issue involved in this case is the attack made upon the contract (and resolution providing for its execution) between the City of Vidalia and J. B. McCrary Company Inc. The plaintiffs' petition is not one in equity for the cancellation of a contract under the Code, § 37-207. Whether or not the contract between the City of Vidalia and J. B. McCrary Company is ultra vires (in excess or beyond charter powers of the City of Vidalia), and is therefore null and void, is a question of law within the jurisdiction of the Court of Appeals.

The bill of exceptions of the plaintiffs in error states: "The Supreme Court has jurisdiction of this writ of error, in that extraordinary relief, to wit, an injunction, was sought in connection with the declaratory judgment." A temporary restraining order was granted pending a hearing. At the hearing the trial court sustained general demurrers to the petition. No application was made for a supersedeas and none was granted. It is unnecessary for this court to determine whether the only equitable feature of the case (injunction) was eliminated from it by the failure to make application for a supersedeas, in which event the record should be transferred to the Court of Appeals under the rule that, where the equitable features of litigation are eliminated and only questions of law remain, jurisdiction is vested in that court. See Brightwell v. Oglethorpe TelephoneCo., 176 Ga. 65 (166 S.E. 646); Mills Lumber Co. v.Milam, 184 Ga. 455 (192 S.E. 35); Bartlett v. Walker, 189 Ga. 154 (5 S.E.2d 373); Gilbert Hotel v. Black, 192 Ga. 641, 643 (16 S.E.2d 435). In this case, the only substantial relief sought (declaratory judgment as to the validity of a contract) is allowable in a court of law. Under the Declaratory Judgments Act (Ga. L. 1945, p. 137, Code, Ann. Supp., § 110-1102), it is provided: "The court, in order to maintain the status pending the adjudication of the questions or to preserve equitable rights, may grant injunction and other interlocutory extraordinary relief, in substantially the manner and under the same rules as apply in equity cases." From this provision of the Declaratory Judgments Act there can be no doubt but that it was the legislative intent to confer upon courts of law the right to maintain the status pending a declaration of the rights of the parties, and that is exactly what occurred in this case. An attack involving only questions of law was made as to the validity of a contract, and the restraining order sought was to maintain the status pending a determination of the validity of such contract. See Milwaukee Mechanics Ins. Co. v. Davis,204 Ga. 67 (48 S.E.2d 876).

It is conceded by counsel for the plaintiffs in error that the temporary restraining order granted by the trial court was purely ancillary. In a reply brief, in response to a motion to dismiss, counsel for the plaintiffs in error state: "The motion to dismiss is fatally deficient for two reasons: (1) the prayer for interlocutory injunction was merely ancillary to the petition for a declaratory judgment, seeking to declare that the contract between the city and McCrary was null and void." Counsel for the plaintiffs in error correctly stated the effect of the temporary restraining order. This not being an equitable case, or one containing equitable features under the Declaratory Judgments Act, jurisdiction is vested in the Court of Appeals and not in the Supreme Court.

Transferred to the Court of Appeals. All the Justices concur,except Bell., J., absent on account of illness.