Bay County v. State

• Citation: 116 Fla. 656,157 So. 1
• Court: United States State Supreme Court of Florida
• Decision Date: 26 September 1934
• Parties: BAY COUNTY et al. v. STATE.

157 So. 1

116 Fla. 656

BAY COUNTY et al. v. STATE.

Florida Supreme Court

September 26, 1934

En Banc.

Statutory proceeding by County of Bay and others against the State of Florida to validate refunding bonds. From a decree for defendant, complainants appeal.

Reversed and remanded, with directions.

See also, State v. Citrus County, 157 So. 4; Bay County v. State, 157 So. 12. Appeal from Circuit Court, Bay County; Ira A. Hutchinson, judge.

COUNSEL

Joseph W. Bailey, of Panama City, and E. J. L'Engle and J. W Shands, both of Jacksonville, for appellants.

C. R Mathis, State Atty., of Panama City, and J. H. Clancy, for the State.

OPINION

PER CURIAM.

A statutory proceeding under section 5106(3296), Comp. Gen. Laws, and sections 3 and 30, chapter 15772, Acts of 1931 (Ex Sess.), sections 2383(3), 2383(29), Cum. Supp. Comp. Gen. Laws 1934, was brought by Bay county to have validated by judicial decree refunding bonds proposed to be issued by the county under the statute in lieu of bonds heretofore issued by the county, known as courthouse and jail bonds. Section 2309 (1531) et seq., Comp. Gen. Laws. An appeal was taken by the county from a decree of the circuit court denying the petition for validating the bonds.

Chapter 15772, Acts of 1931 (Ex. Sess.), Comp. Gen. Laws Supp. 1934 § 2383(1) et seq., authorizes refunding bonds to be issued by the county pursuant to resolutions adopted by the county commissioners in which they:

'Shall determine the rate or rates of interest to be paid, not exceeding six per centum per annum, payable annually or at shorter intervals, and the maturity or maturities of the bonds which shall be at a time or times not exceeding sixty years from the date of the bonds (except that in the issuance of bonds of taxing districts where the maturities are fixed under the Constitution, then such maturities shall be in accordance with the maturities fixed in the constitutional provision), as well as determine the medium of payment and the place or places in Florida or any other State at which the principal and interest shall be payable. * * * The right to redeem all or any of the bonds at par before maturity may be reserved upon terms and conditions to be fixed by resolution.' Section 2383(3).

Counties have no inherent right or power to issue bonds to be paid by taxation; and bonds issued by counties under delegated authority should in every material particular comport with the authority conferred; otherwise they may not be of binding validity.

The statute authorizes refunding bonds to be issued pursuant to resolutions of the governing body of the taxing unit; and such resolutions should be in accord with the controlling provisions of law regulating the issue and payment of the bonds.

Refunding bonds are not only obligations in themselves for what they purport to be on their face and under the statutes pursuant to which they are issued, but are authorized extensions and continuations of the obligations represented by the bonds that are refunded. State v. Sholtz (Fla.) 155 So. 738, 739

The court decreed that the refunding bonds should not be validated because (1) section 10 of the resolutions adopted by the county commissioners purports to pledge to the payment of the bonds the annual revenues of the county derived from race track receipts under chapter 14832, Acts of 1931; (2) because section 15 of the resolutions adopted by the county commissioners provides that, 'in so far as it is legally possible, the officials of Bay County, Florida, shall require that delinquent taxes for the years 1930 and subsequent thereto, and that the taxes herein levied or hereafter to be levied, for the payment of the interest and principal of the Court House and Jail Refunding Bonds hereby authorized to be issued, shall be paid in lawful money of the United States of America, and that said County officials shall not accept nor authorize the acceptance of bonds and/or interest coupons in payment of delinquent taxes heretofore levied for the payment of the indebtedness refunded hereby, or delinquent taxes hereby levied or to be levied for the payment of such Courthouse and Jail Refunding Bonds herein authorized'; (3) because section 18 of the resolutions provides that 'in case of default by the County in the performance of any agreements or obligations to the holders of the bonds herein authorized expressed in the bonds themselves or in the resolution authorizing their issuance, the County shall be permitted during a period of twelve months after the happening of such default or defaults to correct the same, and upon the inability or refusal of the county to make good such default or defaults within that period and upon declaration in writing filed with the County Clerk by the holders of at least twenty-five per cent (25%) in principal amount of the Refunding Bonds then outstanding, all of said Refunding Bonds shall at the option of the respective holders revert to the original maturity date and interest rate of the securities for which said Refunding Bonds were originally issued, but such reversion shall only be effective from the date of the exercise of said option and Bay County agrees to substitute for such defaulted bonds or interest coupons, new bonds and coupons bearing such rate of interest and maturity.'

The disposition of the revenues received by the county from race track receipts under chapter 14832, Acts of 1931, is regulated by the statute which authorized the county commissioners to use such revenues for lawful funds when the moneys have been transmitted to the county commissioners, which is required to be done each year. The statute does not contemplate that such race track receipts shall be pledged in the manner provided in the resolution of the board of county commissioners, and such resolution is inoperative for the purpose designed. See State v. County of Citrus (Fla.) 157 So. 4, this day filed as to the obligation and county refunding bonds under amended Art. 9,§ 6, Constitution.

Section 17, chapter 15772, Acts of 1931 (Ex. Sess.), Comp. Gen. Laws Supp. 1934, § 2383(17), provides that:

'The resolution authorizing refunding bonds may assign, pledge, or set aside as a trust for the payment of principal or interest of refunding bonds or for a sinking fund for the bonds subject to prior liens or contract obligations, and on, or subject to, such terms and conditions as may be stated, any...