Crummer v. City of Fort Pierce

• Decision Date: 01 August 1932
• Citation: 2 F. Supp. 737
• Court: U.S. District Court — Southern District of Florida
• Parties: CRUMMER et al. v. CITY OF FORT PIERCE et al. (GEORGIA BOND & MORTGAGE CO., Intervener).

2 F. Supp. 737

CRUMMER et al. v. CITY OF FORT PIERCE et al. (GEORGIA BOND & MORTGAGE CO., Intervener).

District Court, S. D. Florida.

August 1, 1932.

Giles J. Patterson, of Jacksonville, Fla., for complainants.

L'Engle & Shands, of Jacksonville, Fla., for intervener.

Nottingham & Denison, of Fort Pierce, Fla., for defendants.

Before BRYAN and SIBLEY, Circuit Judges, and RITTER, District Judge.

BRYAN, Circuit Judge.

This is a suit brought and joined in by owners of bonds of the city of Fort Pierce, Fla., to enjoin that city from accepting such of its bonds and interest coupons as have matured in payment of taxes levied by it for the special purpose of retiring its bonded indebtedness as the same falls due.

It comes before us on an application for interlocutory injunction, pursuant to 28 US CA § 380. In support of that application, it is contended that the city is without authority to accept anything except money in the payment of the taxes involved, and that a state statute, chapter 15810, enacted in 1931 (Sp. Acts), after the bonds were issued, which purports to empower the city to accept settlement of its taxes in the manner complained of, is unconstitutional, in that it attempts to impair the obligation of a contract and deprives complainants of their property without due process of law, in violation of section 10 of article 1, and the Fourteenth Amendment of the Constitution of the United States, as well as of similar provisions of the Constitution of Florida (Declaration of Rights, §§ 17, 12).

According to averments of the bills of complaint, which, not having been denied, are accepted for purposes of this hearing as true, complainants are residents of states other than Florida, own no property subject to taxation by the city, but severally own bonds of the city aggregating $459,000. The bonds held by each of at least two of the complainants exceed in value the amount necessary to confer jurisdiction on this court. The city has outstanding $3,500,000 of bonds, including those held by complainants. It has been in default for two years, and now owes $400,000 principal and interest past due. It has little or no money with which to pay the amount now in default, and its levy on account of its bonded indebtedness for the current year will not raise enough revenue to pay even current interest on its bonds; and so the prospect is that the amount in default, instead of being paid off or reduced, will become greater with the passage of time. To make a bad situation worse, the city has been accepting, and, unless enjoined, will continue to accept, bonds and coupons in payment of taxes. All the bonds and coupons of the city, including those held by complainants, were issued prior to the year 1931, and were payable in money only. Chapter 15810, enacted in 1931 (Sp. Acts), purports to make the city's outstanding bonds and matured interest coupons, in...