Town of Climax v. Burnside

Fish, C. J.

(After stating the foregoing'facts.)

1. In view of the evidence and the law applicable thereto, the verdict in favor of the plaintiff was demanded for principal and interest due on the coupon, and that mandamus proceedings be had against the defendant. If a municipal corporation, having-general authority to issue bonds for specified purposes, puts forth a negotiable municipal bond issued for such lawful purpose, and therein recites, through its duly authorized proper officials, whose province and duty it is to ascertain and peculiarly to know the facts, compliance with the specific provisions of the law essential to the issuance of the bond, the municipality is, as against a bona fide holder of the bond, purchasing for value and on faith of the recitals, estopped to deny the truthfulness of the recitals. 19 R. C. L. 1004, 1009, §§ 298, 303, and cases cited; 28 Cyc. 1603; 2 Dill. Mun. Corp. § 928. The rule has been recognized in this State. In City of Dawson v. Dawson Waterworks Co., 106 Ga. 606, 734 (32 S. E. 907), it was said: “Where a municipal corporation lias the power to incur a debt, and the debt is incurred in an irregular way, it is settled law that the innocent holder of a negotiable instrument issued by the authorities of such city, and which recites a compliance with the law in regard to the incurring of the debt, will be entitled to prevail in a suit to enforce the collection of such instrument, notwithstanding a defense setting up the irregularities in the manner in which the debt was incurred.” What was said in Town of Wadley v. Lancaster, 124 Ga. 354 (52 S. E. 335), is not in conflict with the ruling here made, nor is the ruling contrary to the provisions of the Civil Code (1910), § 303, which reads: “Powers of all public officers are defined by law, and all persons must take notice thereof. The public can not be estopped by the acts of any officer done in the exercise of a power not conferred. ” It follows that the Town of Climax was estopped from setting up any of the defenses pleaded.

2. The verdict finding for the plaintiff attorney’s fees and expenses of litigation was not authorized.- The Civil Code (1910), § 4392, declares: “The expenses of litigation are not generally allowed as a part of the damages; but if the defendant has acted in bad faith, or has been stubbornly litigious, or has caused the plaintiff unnecessary trouble and expense, the jury may allow them.” Conceding, for the point, that this section is applicable to the case at bar, th'ere is no evidence that the contract here involved was entered into by the defendant in bad faith, or procured by fraud or deceit, nor does it appear from the evidence that the defendant was stubbornly litigious, or had caused the plaintiff unnecessary trouble and expense. The defendant had refused to pay the coupon sued on, and to provide by levying a tax to meet the payment of other coupons subsequently maturing, and to ultimately meet the principal of the bonds at maturity. “Where there is no bad faith, there must be something more than being put to the expense of a suit, to authorize the plaintiff to claim attorney’s fees as part of his damages.” Pferdmenges v. Buller, 117 Ga. 400 (43 S. E. 695).

Direction is given that the verdict and judgment be amended by striking from" each the amount specified as expenses of litigation. Costs are taxed against defendant in error.

Judgment affirmed, with- direction.

All the Justices concur.