1. Where with knowledge of the requirement of the charter for five days' publication before adoption of a city ordinance, one insists that the council adopt an ordinance giving him a franchise without advertisement in order that he may present such franchise to an agency of the Federal government to induce that agency to render a decision favorable to himself, he thereby acquires unclean hands that will forever bar him from obtaining equitable relief against the city to uphold that franchise.
2. Irrespective of the amount of expenditures the holder of such franchise and his transferee might have spent in connection therewith, no equitable estoppel will arise against the city barring it from challenging the validity of the franchise, since there was evidence to show such expenses were incurred with knowledge of the invalidity of the franchise and therefore good faith was wholly lacking.
3. The evidence was sufficient to authorize the finding, and the court did not err in denying the motion for new trial.
Mid-Georgia Natural Gas Company (the plaintiff in error) filed a petition for injunctive relief in Newton Superior Court against the City of Covington and certain of its named officials (the defendants in error), seeking to enjoin them from interfering with the petitioner's attempted installation of a natural gas system pursuant to the terms of a certain franchise issued by the city to one Calloway, the original holder of the franchise which was later transferred to the petitioner. The petition alleges that large sums had been expended in making the arrangements for the proposed distribution system in Covington, and that now the defendants were preventing it from installing the system. The defendants filed an answer, denying, in the main, the allegations of the petition and the validity of the franchise under which the petitioner purported to act, and also filed a cross-action seeking a decision on the validity of the franchise. Certain stipulations were entered into, and the case proceeded to trial before the judge without the intervention of a jury. A finding was made in favor of the defendants, declaring the franchise to be invalid and the evidence insufficient to show estoppel of the defendants from asserting the invalidity thereof. The prayers of the petition were denied and the franchise was declared to be invalid. Thereafter the petitioner filed a motion for new trial which was denied, and the exception here is to that judgment.
1. The charter of the City of Covington is mandatory in its requirement, as a condition precedent to the adoption of an ordinance, that after being read the ordinance "shall be published in full in the official county newspaper and shall not come up for passage until five days after such publication." Ga. L. 1937, pp. 1718, 1722. This requirement accords with the general rule on the subject. 37 Am. Jur. 763, 151. Very clearly this requirement of publication is designed to protect the citizens of the city and as a restriction upon the actions of the mayor and council. The procurer of the ordinance granting the franchise in this case is charged with knowledge of this law, and its limitation upon the power of the council to adopt ordinances. The evidence in the record discloses that the original ordinance franchise, after an amendment had been added thereto, was, at his urging, adopted without even a pretense of complying with the law requiring publication. This conduct of his--procuring public officials to knowingly exceed their lawful power in order to give him possession of a document purporting to be a franchise for his use before an agency of the Federal government, for the purpose of deceiving that agency and thereby procuring its action in accord with his wishes--constitutes "unclean hands" and is an insuperable bar to his obtaining relief in equity. Tanner v. Wilson, 193 Ga. 211
(17 S. E. 2d 581); McKinney v. Atkinson, 209 Ga. 49
(70 S. E. 2d 769).
2. But counsel for the alleged transferee of the franchise, having completely overlooked the foregoing rule on "unclean hands," seek to invoke in their behalf the rule of equitable estoppel. In support of this position, they cite and rely mainly upon City of Summerville v. Georgia Power Co., 205 Ga. 843 (55 S. E. 2d 540); City of Atlanta v. Gate City Gas Light Co., 71 Ga. 106; Langley v. City Council of Augusta, 118 Ga. 590 (45 S. E. 486, 98 Am. St. R. 133). While in the cases thus relied upon it was held that, since the actions of the cities were within their powers, and the complaint was solely because of an incorrect exercise of an admitted power, and in relying, in the utmost good faith, upon the validity of the action of the cities, great expenses, as in the first case cited, had been incurred over a period of more than twenty years, it would be unjust, inequitable, and unfair to allow the city to resort to its failure to conform to the law in the first instance, and, to prevent this, equity would interpose an estoppel against the city.
It would seem that the most casual reading of those decisions with the facts in the present case in mind would plainly show the glaring difference in the vital facts, and, therefore, the inapplicability of those decisions here. The defendant proved that the original grantee of the franchise, who is an officer of the petitioner corporation, and his alleged present successor knew the invalidity of the franchise, and however much money they might have expended, it was done without believing they held a legal and valid franchise. Under these facts in this record, an equitable estoppel can not be justified to deny the invalidity of the alleged franchise. Consequently, the finding refusing to enjoin the city was authorized by the evidence, and the court did not err in denying the motion for new trial.