Court Opinion

ID: 5617508
Source: CourtListenerOpinion
Date Created: 2022-01-11 04:23:21.702952+00
Date Added: 2024-06-11T08:37:17.738055
License: Public Domain

*736ON MOTION FOE REHEARING.
Counsel for plaintiffs in error have filed a motion for a rehearing in this case, insisting that the court overlooked certain portions of the record, and laws and decisions which would enforce a contrary judgment from what has been rendered in the case. We have carefully examined the motion and re-examined the record upon all the points made in the motion; but have reached the conclusion that nothing has been said therein which would- properly cause us to recede from the holding originally made. The record is voluminous and somewhat confusing, but we are of the opinion that those portions about which there can be no doubt or dispute support the ruling made. We did not overlook the contentions of counsel for the plaintiff in error to the effect that the drainage board, being a governmental agency, could not execute its notes in liquidation and settlement for work done for it, which it had the legal power to contract for. Eecognizing that a plaintiff suing a governmental agency must affirmatively and plainly show that the obligation assumed by such agency was within the statutory powers of the agency emphasized by the present motion, we have reviewed the amended petition, to see whether, as tested by the demurrers, it showed that the obligation here assumed was within the statutory powers inhering in this drainage board. Clearly the original petition was subject to the demurrer; but we think the facts essential to the recovery were brought into the plaintiff’s pleadings by the amendment thereto. A fair interpretation of the petition as amended has led us to conclude that the plaintiff has set forth the following essential facts: that Williams was engaged by the district to do certain drainage work in and for the district; that he was to be paid a certain price for his work; that the drainage bonds for the district had not been issued and sold; that the total amount of the work contracted for and done was within the total amounts of the assessments which had been made by the district for drainage purposes; that the consideration for the notes sued upon was work which had actually been done at the time of this execution, and that they had not been paid. We know of no other essential fact required to be alleged in order to fix liability of the district.
But counsel press their contention that a governmental agency has no power under the laws of our State to issue promissory *737notes. The authorities they cite relate to notes given for borrowed money. It might well be that if the notes here sued upon appeared to have been given for borrowed money, unless perhaps to supply a casual deficiency (assuming but not deciding that a drainage district may borrow money to supply a casual deficiency of revenue, as other governmental authorities), the notes would be void ab initio, and that no action upon them could be enforced. In Butts County v. Jackson Banking Co., 129 Ga. 801 (60 S. E. 149, 15 L. R. A. (N. S.) 567, 121 Am. St. R. 244), it was held that in such a case the suit would have to be brought and maintained on quantum meruit for so much of the borrowed money as could be traced to the ultimate use and benefit of the municipal corporation. That much they must pay, not under the terms of the contract,—the notes,—but as an obligation of honor and of conscience. See also Citizens Bank v. Town of Ludowici, 24 Ga. App. 201 (100 S. E. 229); Almand v. Board of Drainage Commissioners, 147 Ga. 532 (94 S. E. 1028), cited by movant. In the instant case, however, the notes sued on were not given for borrowed money or to raise funds with which to carry on the work; but were given to the contractor doing the work, directly and in settlement of the very work which he had done under his contract. They were not given for money borrowed from Williams or anybody else. In accord with our ruling is the case of Mayor &c. of Hogansville v. Planters Bank, 147 Ga. 346 (94 S. E. 310), that where a municipal corporation has bought and received services or material from another, at a price within the total amount of its fiscal resources,. collected or uncollected, and for purposes within the powers of the corporation, and, at the maturity of the obligation, is not able to pay therefor in cash, the giving of a note therefor is not the creation of an illegal debt for the corporation ; and the note is good. It was so determined in that ease, as in others of like effect, because it could not be said that the municipal corporation was giving any note for borrowed money.
As was said in the original opinion in this ease, any disposition of the fiscal funds after the obligation has been assumed, by the making of the drainage contract, would not reflect any invalidity upon the notes given therefor.
It would seem to follow as a matter of course that the holding to *738the effect that the notes were not invalid as against the district itself completely disposes of the contentions of the private sureties on the notes.
Moreover, in the motion for rehearing it was said that this court overlooked the fact that the preliminary agreement which was first made by the sureties with Williams, whereby these individuals agreed to guarantee to him the forthcoming of the money of the district from the sale of bonds, etc., was not attached to the petition so as to be tested by the demurrers aimed at the petition. Suffice it to say that while this may be true, it does not affect the result, for the appending of the preliminary agreement to become a surety was in nowise essential to the binding effect of a suretyship actually assumed by the signing of the notes. A consideration of the preliminary agreement, therefore, was not unfavorable or harmful to the movants; rather was it favorable to them, for the reason that in the preliminary agreement there was a condition operating to their advantage, not embodied in the face of the notes themselves.
The matter which has given us the gravest concern throughout the consideration of this case is this: Were these notes given for the whole of the two projects of drainage, or only in settlement of 90% of both projects? If they were given in settlement of 90% of both projects then, to our minds, our conclusions are certainly correct, for the reason that, under the terms of the contract entered into, there could be no pleading of failure of consideration of the contract when 90% of the work had been approved, under the contract, for payment. There can be no doubt of the fact that the board approved for payment 90% of both projects. In its certificate issued by the board, dated April 23, 1921, 90% of both projects was approved for payment, and settled for in cash or in notes. Furthermore, in that certificate, the board pointed out the only defects claimed with reference to the Big Kettle Creek project; and there was evidence that after the date of the certificate these defects were rectified. The certificate called attention to the fact that when these defects were cured and approved by F. M. Combs, one of the commissioners, “the work on Big Kettle Creek will be fully completed and accepted by us;” and Williams swore that he hired Combs to do this work, and that Combs did it; all of which completed the contract as to Big-Kettle Creek. So that there really is no doubt but that there was *739sufficient evidence of the completion of the Big Kettle Creek project. The only doubt left, therefore, is whether the notes given for Little Kettle Creek covered the whole work or only 90% thereof. If it covered only 90%, for reasons given above, the plea of failure of consideration could not affect full right of recovery thereon. The note for $3400, dated May 27, 1921, states: “This note is given for work done on Little Kettle Creek.” This note, as will be seen, antedated the date of the certificate referred to, in which it was certified that the note enclosed therein, amounting to $1059.40, was for 90% of both projects.' The only other note which is left of the three, antedates both of the others. This evidence thoroughly convinces us 'that, so far as Little Kettle Creek project is concerned, the notes in the series which pertain to that project relate to 90% of the same, and not the whole of the Little Kettle Creek project. Under the contract, when the work is approved for a 90% payment, there can thereafter be no plea of failure of consideration, in so far as that approval and the note given therefor is concerned; and such note is collectible in full, even though the remaining 10% of the work might be attacked, which does not seem to be in the case before us.
We are of the opinion that the recovery is legal and supported by sufficient evidence.

Motion denied.

Stephens and Bell, JJ., concur.