Boatright v. City of Jacksonville

Decision Date01 December 1934
Citation158 So. 42,117 Fla. 477
PartiesBOATRIGHT v. CITY OF JACKSONVILLE et al.
CourtFlorida Supreme Court

En Banc.

Suit by the City of Jacksonville and the State of Florida against Jesse Boatright. Decree for complainants, and defendant appeals.

Affirmed.

ELLIS J., dissenting, and BROWN, J., dissenting in part. Appeal from Circuit Court, Duval County; Miles W. Lewis judge.

COUNSEL

Lawrence A. Truett and Walter C. Shea, both of Jacksonville, for appellant.

Austin Miller and John W. Harrell, both of Jacksonville, for appellees.

Hull Landis & Whitehair, of DeLand, and Winder H. Surrency, of Sarasota, amici curiae.

OPINION

DAVIS Chief Justice.

In the present case the city of Jacksonville, acting under the authority of chapter 15772, Acts 1931 (Ex. Sess.), Laws of Florida, and section 6 of article 9 of the Constitution of Florida, as amended in 1930, proposed to extend and continue the obligation of certain of its outstanding bonded indebtedness by the issuance of a series of refunding bonds described as 'City of Jacksonville Refunding Bonds, Third Issue of 1934,' which it designed to be sold and the proceeds used to retire the outstanding indebtedness or, at the option of the existing bondholders, taken in exchange for the bonds to be refunded. To that end it adopted the necessary resolutions and took the required steps to have the proposed bonds judicially validated as lawful obligations of the city of Jacksonville in the premises. It also undertook to have adjudicated in the validation proceeding the nature scope, character, and extent of the city's obligation thereby proposed to be created or evidenced by the bonds in the form and based on the proceedings by which they are intended to be issued.

Upon appropriate proceedings in the circuit court wherein the appellant was allowed to intervene and contest the validation of the proposed bonds because of his status as a taxpayer and resident citizen owner of a homestead situate in the city of Jacksonville, the chancellor decreed the proposed bonds to be valid, legal, and binding obligations of the city of Jacksonville.

Also in said proceeding the chancellor entered, as a part of his validation decree and incorporated therein, his declaratory judgment to the effect that the proposed refunding bonds are proper obligations of the character described as refunding bonds within the purview of section 6 of article 9 of the State Constitution, as amended in 1930; that said refunding bonds do not, in view of section 18 of chapter 7659, Special Acts of 1917, and in consideration of section 1 of chapter 15255, Special Acts of 1931, enlarge upon the obligations of the original bonds, nor irrevocably pledge as a means for their payment any unauthorized additional sources of revenue to supplement or add to the renewed obligation of the bonds proposed to be refunded; that under the old bonds proposed to be refunded the same revenues of the same municipal electric light plant as are obligated by the bonds here in controversy were, under the provisions of the hereinbefore cited acts, pledged to secure the original bonds in like force and effect as they are in this proceeding pledged to secure the proposed refunding bonds; that the proposed bonds are in law and in fact true and lawful refunding bonds within the purview and meaning of chapter 15772, Acts 1931 (Ex. Sess.), and the Constitution of Florida; that the refunding bonds herein sought to be validated are of such character that they are not only obligations in themselves for what they purport to be on their face as well as under the statutes pursuant to which they are proposed to be issued, but are lawfully authorized extensions and continuations of the original obligation represented by the bonds that are refunded by them; that the original obligation of the earlier bonds is not extinguished by the refunding bonds herein proposed to be validated; but is merged into the proposed refunding bonds with like force and effect as if the original bonds had remained unrefunded by the issuance of said refunding bonds; that said proposed refunding bonds are therefore liens upon all and singular the taxable property within the corporate limits of the city of Jacksonville upon which the original bonds hereby sought to be refunded were lawful liens, and that therefore this issue of refunding bonds would constitute a mere continuance under the refunding bonds of the preexisting lien of the old bonds hitherto imposed on homestead property as well as other taxable property situate within the city of Jacksonville; that this would be true notwithstanding the ratification by the electors at the general election held on November 6, 1934, of the proposed amendment to the State Constitution known as additional section 7 of article 10 providing for a $5,000 tax exemption on homesteads owned by heads of families who are citizens of, and reside in, the state of Florida.

Boatright, the intervener, has appealed from the validation decree, assigning as error (1) that the court erred in finding and holding that the proposed refunding bonds are in law and in fact proper refunding bonds within the purview and meaning of chapter 15772, Acts of 1931 (Ex. Sess.); (2) that the court erred in holding that the proposed refunding bonds are authorized extensions and continuations of the obligations represented by the original bonds that are refunded by them, including the extension and continuation under the refunding bonds of the lien of the old bonds on homesteads as well as on other taxable property upon which the old bonds were liens; (3) that the court erred in striking intervener's answer; (4) that the court erred in validating and confirming the bonds described in the validation proceeding; (5) that the court erred in holding that the bonds sought to be validated are refunding bonds; (6) that the court erred in finding that, if the said bonds are refunding bonds, they constitute a valid continuation and extension of the pre-existing tax lien on homesteads in so far as homesteads are concerned which are entitled to the $5,000 tax exemption provided for by additional section 7 to article 10 of the Constitution ratified at the general election held November 6, 1934, which was the day before the validation decree in this case was entered herein on November 7, 1934.

All matters directly brought into controversy pertaining to, or declaratory of, the validity, nature, character, extent, or scope of the legal obligation proposed to be evidenced or created by a projected series of bonds or similar securities proposed to be issued by cities, counties, districts, and municipalities, are proper subjects for judicial inquiry, investigation, and adjudication in statutory bond validation proceedings instituted and carried out under section 5106 et seq., Comp. Gen. Laws, § 3296 et seq., Rev. Gen. St., et seq., as we have held in the following cases decided by this court: State v. City of Miami, 113 Fla. 280, 152 So. 6; State v. County of Citrus (Fla.) 157 So. 4 (opinion filed September 27, 1934); State v. County of Sarasota (Fla.) 157 So. 21 (opinion filed October, 1934); Bay County v. State (Fla.) 157 So. 1, Id., 157 So. 12 (opinions filed September 26 and 27, 1934).

And in so far as a judicial decree may specially settle and decide particular issues relating simply to the nature, character, or extent of the exact contractual obligation created by a particular issue of bonds after such matters shall have been properly brought into controversy, and thereafter actually considered by the court in the course of its judicial inquiry and investigation of such issues as are duly raised by appropriate pleadings, the decree rendered in such statutory validation proceedings is as conclusive in its declaratory findings as it is in its direct effect as a judgment granting or denying the petition for validation itself. This is so because the purpose of the validation statute was a remedial one. It was designed to have interjected and decided in a single judicial proceeding had in advance of the issuance and sale of proposed bonds, whether such bonds, if issued, would be valid for any purpose, and, if that question be put in issue, what the exact contractual obligation created thereby will be adjudged by the courts to be, in the event the bonds are actually issued and pass as negotiable instruments into the hands of bona fide holders pursuant to a negotiation and sale thereof by the petitioner obligor.

In this case the city of Jacksonville is undertaking to issue $445,000 of funding bonds to replace and retire an equal amount of presently outstanding bonded indebtedness that was made and that constitutes a general liability against the taxable property within the city. The object of the refunding proposal is the substitution of refunding bonds for divers previous issues of bonds authorized and outstanding against the city, creating no new debt, but merely evidencing an extension or renewal, in a new form, of the original existing indebtedness, the obligation of which is limited to a renewal of the original obligation, accompanied by an agreed extension and continuation of the former pledge of the taxing power as a means of security for payment.

At the time the bonds to be refunded were issued, the charter and ordinances of the city pledged for the payment of each and every, all and singular, the said bonds, both principal and interest, the entire taxable property of the city of Jacksonville, to discharge which pledge it was made the legal as well as contractual duty of the mayor and city council of the city of Jacksonville to levy and to collect annually a special tax upon all of the taxable property within the corporate limits of the said city as might be...

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