SUBMITTED JUNE 12, 1967.
DECIDED JUNE 22, 1967.
Injunction. Richmond Superior Court. Before Judge Kennedy.
Franklin H. Pierce, for appellants.
Cumming, Nixon, Eve, Waller Capers, Joseph B. Cumming, Jay M. Sawilowsky, William C. Reed, for appellees.
1. The contract here showing a scheme to lease and purchase a public building by public officials over a 10-year period creates a debt payable over a term of years without the approval of the voters and binds future governing authorities without their approval to continue the agreement contrary to constitutional and statutory authorities as previously ruled on the first appearance of the case.
2. The petition fails to allege a cause of action for cancellation of a deed to secure debt on the property and for this reason title could not be decreed to be in the county, and the court did not err in striking the portion of the petition and prayer seeking a decree of title in the county.
SUBMITTED JUNE 12, 1967 — DECIDED JUNE 22, 1967.
This is the second appearance of this case in this court. See McElmurray v. Richmond County, 223 Ga. 47 ( 153 S.E.2d 427), where this court held the subject contract void from its inception in that it shows on its face that it created a debt payable each year for 10 years without the approval of the voters and also binds future governing authorities without their approval contrary to constitutional and statutory authorities. The lower court was reversed for denying the plaintiffs' prayers for a temporary injunction.
Thereafter the county and the corporate defendant entered into a lease agreement whereby they rescinded the original agreement and sale contract and agreed to a new agreement whereby the corporation would lease said property to the county for a term of one year with automatic renewal for similar periods for 9 years unless notice is given within 90 days in writing prior to the expiration date of the county's intention not to renew, and providing that after five years the county might pre-pay the rent for a total of 120 payments altogether, and likewise that in the event of condemnation for public purposes any award would first go to the lessor in an amount equal to 120 monthly payments less whatever rent had been paid. Simultaneously therewith the parties entered into a sale contract whereby lessor agreed to sell and buyer to buy the same property within 30 days from the termination of the lease for $10 provided 120 monthly payments had been made thereunder or the county had pre-paid rent pursuant to the lease agreement, but also providing in the last paragraph that "there shall be no obligation upon Richmond County, Georgia, to buy the aforesaid property if it does not want to." The defendants amended their pleas and answers setting forth the aforesaid contracts which now constituted the agreement between the county and the corporation. Thereafter, an additional hearing was held and the lower court ruled that the new agreements created a debt prohibited by law and payable each year for 10 years and restrained the defendants from performing any act or discharging any obligation provided for in either of said agreements. The main appeal is from this judgment.
The court also sustained renewed and additional demurrers of the defendants to that portion of the petition seeking a decree of title vesting the property in dispute in Richmond County and ordered this portion of the petition and prayer stricken and dismissed. On oral motion in the nature of a general demurrer the court also dismissed the petition as to Citizens Southern National Bank. The cross appeal is from these two judgments.
1. On the first appearance it was shown and held that the action of the county authorities and the corporate defendant in entering into an agreement amounting to a purchase plan by creating a debt over a ten-year period amounted to a scheme to circumvent the law in the construction of this public building. Therefore, any future action on their part must be examined in the light of their original attempt to by-pass certain requirements of law in this matter. The new agreement expressly abrogates the old, but it likewise amounts to a contract for 10 years even though it specifically states it is a lease contract for one year with automatic renewal for 9 additional years unless the condition subsequent occurs that if the county desires it can end the contract after any one twelve-month period if it notifies the lessor within 90 days prior to the expiration date of its intention not to renew. It likewise shows a scheme to sell the property to the county at the agreed price on a rental basis by reason of the covenants in the lease that in the event of condemnation the 120 monthly payments of rent are guaranteed to the corporate defendant from the condemnation award and the authorization to pre-pay the rent and to purchase for $10 provided the 120 monthly payments had been made. While it is true that the award might not equal this amount and in that event no provision is made requiring the county to pay the additional sum less than said amount, yet looking at the entire transaction, that is, the lease agreement and the sale contract made simultaneously, it is a lease for 10 years payable monthly and for the purpose of buying the building on the installment plan over the 10-year period; and although "loopholes" are left in the lease and also in the sale contract whereby the county does not have to buy the property if it does not so desire and may rescind the lease if notification is made in writing 90 days before the end of any twelve-month period, if allowed to continue for a number of years public officials would be forced to continue it in effect to avoid moral and pecuniary loss to the public and county government by refusing to continue the agreement, and it would always require affirmative action on their part to prevent it from amounting to a 10-year lease and a debt payable for 10 years in the purchase of a public building without the approval of the voters binding on future governing authorities without their approval contrary to constitutional and statutory authorities as ruled in McElmurray v. Richmond County, 223 Ga. 47, supra. See also Renfroe v. City of Atlanta, 140 Ga. 81, 94-95 ( 78 S.E. 449, 45 LRA (NS) 1173). It is a general rule that one cannot do indirectly that which the law does not allow to be done directly. The same defect existing in the new contract as in the old, the lower court did not err in granting the temporary injunction. Whether or not the monthly sums paid as rent are "reasonable" apparently was not passed upon by the lower court.
2. The cross appeal complains of the ruling striking the part of the petition seeking to decree title in the county as being subject to demurrer and the dismissal of the petition as to the Citizens Southern National Bank. Grounds for such relief are not shown by this petition. The grantee in the security deed to the property, Citizens Southern National Bank, is not shown to have had any knowledge of any of the charges made, and no grounds for cancellation of its deed are alleged. Without such cancellation title could not vest in the county. The court did not err in sustaining these demurrers and in sustaining the motion to dismiss.
Judgment affirmed on the main and cross appeals. All the Justices concur.