Opinion
18451.
SUBMITTED JANUARY 12, 1954.
DECIDED MARCH 8, 1954.
Petition for injunction. Before Judge Mundy. Haralson Superior Court. October 10, 1953.
Brantley Edwards, for plaintiffs in error.
William J. Wiggins, Murphy Murphy, Claude V. Driver, Shirley C. Boykin, contra.
The petition stated a cause of action, and it was error to sustain the general demurrers.
SUBMITTED JANUARY 12, 1954 — DECIDED MARCH 8, 1954.
W. J. Walker and others, as citizens and taxpayers, filed an action against the Mayor and Council and the City of Bremen, Commercial Exchange Bank of Bremen, and J. H. Threet. The petition alleged: Pursuant to an election, bonds have been duly and legally validated, issued, and sold, for the purpose of "constructing and equipping a city hall." A resolution has been adopted by the Mayor and Council of the City of Bremen to use the proceeds from the sale of the bonds for the purchase of a tract of land and a building erected thereon, and the proceeds from the sale of the bonds have been delivered to J. H. Threet, and a deed has been procured from him for described property to the City of Bremen. The purchase of the property was a misapplication of the bond funds, and the grantor in the deed had notice that the funds were trust funds for the purpose of constructing and equipping a city hall. The city has not taken physical possession of the property, and its status has not changed since the date of the delivery of the deed. The plaintiffs, as citizens and taxpayers, can and should be placed in status quo with regard to the illegal purchase of the property. The sale should be rescinded, the deed should be delivered up and canceled, and the funds returned to the City of Bremen, to be held in trust for use in constructing and equipping a city hall.
The petitioners prayed that the deed of conveyance be delivered up, set aside and canceled; the grantor in the deed be required to pay back the sum of $30,000, with interest at 7 percent; for temporary and permanent injunction; for rule nisi, and other relief.
General demurrers to the petition were sustained, and the exception is to that judgment.
The petition alleged that the bonds approved by the voters of the City of Bremen were validated, issued, and sold for the purpose of "constructing and equipping a city hall." It is further alleged that a resolution has been adopted by the mayor and council of the city to use the proceeds from the sale of the bonds for the purchase of a tract of land with a building thereon, and that a deed has been procured from one of the defendants to described property. For the purpose of reviewing the ruling sustaining the general demurrers, these allegations of the petition must be taken as true.
Generally persons suing as taxpayers and citizens, in order to obtain the relief sought, must show danger of injury through loss of public funds or property. Stegall v. Southwest Ga. Housing Authority, 197 Ga. 571 ( 30 S.E.2d 196). This general rule does not apply where the action is to prevent a diversion of trust funds arising from the sale of bonds.
In Marks v. Richmond County, 165 Ga. 316 ( 140 S.E. 880), it was held: "When bonds are authorized by popular vote for a particular purpose, the proceeds thereof constitute a trust fund which can not be diverted from such purpose and applied to some other purpose." Marks and others, as citizens and taxpayers, sought to enjoin the paving of a relocated highway. Their prayers for injunction were denied, and this judgment was reversed by this court. In the opinion it was said in part: "These bonds having been voted for the purpose of paving stretches of State highways which were then in existence and which then traversed the County of Richmond, the funds arising from their sale could not be diverted from that purpose and applied to the laying out or paving of new State highways which the State Highway Board might determine to establish, nor to paving stretches of a relocated State highway the location of which was determined upon after the election, . . ."
In the present case, the bonds might have been voted for the purpose of "constructing or acquiring" a city hall. This was not done. The bonds were voted for the purpose of "constructing and equipping a city hall," and any other use of the bond funds would be a diversion unauthorized by law and beyond the discretionary powers of the mayor and council.
For other cases holding that bond funds must be used strictly in accordance with the purposes for which the bonds were voted, see: Dubberly v. Morris, 163 Ga. 144 ( 135 S.E. 718); City of Fayetteville v. Huddleston, 165 Ga. 899 ( 142 S.E. 280); Allen v. City of Atlanta, 166 Ga. 28 ( 142 S.E. 262); City of Cornelia v. Wells, 181 Ga. 554 ( 183 S.E. 66); Board of Education of Paulding County v. Gray, 203 Ga. 583 ( 47 S.E.2d 508).
The petition made a case for rescission of the alleged contract of purchase, and it was error to sustain the general demurrers and dismiss the petition.
Judgment reversed. All the Justices concur.