Fleeman v. City of Jacksonville

• Decision Date: 10 November 1939
• Citation: 140 Fla. 478,191 So. 840
• Parties: FLEEMAN v. CITY OF JACKSONVILLE et al.
• Court: Florida Supreme Court

191 So. 840

140 Fla. 478

FLEEMAN v. CITY OF JACKSONVILLE et al.

Florida Supreme Court

November 10, 1939

Action to validate an issue of refunding bonds by the City of Jacksonville, a municipal corporation, against State of Florida, wherein H. T. Fleeman was permitted to intervene. From a judgment for the plaintiff, intervener appeals.

Affirmed. Appeal from Circuit Court, Duval County; Miles W. Lewis, judge.

COUNSEL

Sears &amp Shea, of Jacksonville, for appellant.

Austin Miller and Eli Finkelstein, both of Jacksonville, for appellee.

OPINION

TERRELL Chief Justice.

The City of Jacksonville filed its petition in the Circuit Court to validate an issue of refunding bonds to take the place of or redeem outstanding bonds maturing January 1st, January 15th, and February 15th, 1940. A rule to show cause and notice to citizens and taxpayers was duly promulgated. Proof of publication was shown and the State's Attorney on behalf of the State answered the rule to show cause. Appellant was also permitted to intervene and answer the rule to show cause. A motion to strike portions of the intervenor's answer was granted, a final decree validating the refunding bonds was entered and the intervenor appealed.

It is first contended that the refunding bonds violate Section Six of Article Nine of the Constitution in that they extend the maturity of the outstanding bonds and the payment of interest thereon.

If this contention possessed merit, it would be impossible for a taxing unit to refund and bonds because the refunding bond must necessarily extend both principal and interest of the old bond. This Court has repeatedly recognized that the limitations contained in Section Six, Article Nine of the Constitution do not apply to refunding bonds used exclusively to refund bonds outstanding or the interest thereon. Boatright v. City of Jacksonville, 117 Fla 477, 158 So. 42.

It is next contended that the refunding bonds are violative of Section Six, Article Nine of the Constitution, because the petition for validation shows on its face that petitioner proposes to issue the refunding bonds without provision for simultaneous cancellation of the bonds sought to be refunded.

To support this contention, appellant relies on City of Miami v. State, Fla., 190 So. 774. The opposite language of the opinion in this case admits of no such interpretation. It is quite true that we therein held that the Constitution contemplated that the old bonds should be 'promptly' cancelled and forever withdrawn from sale but this is quite different from saying that they must be 'simultaneously' cancelled as the refunding bonds are issued.

In the very nature of the transaction, it would generally be impracticable to provide for cancellation of the outstanding bonds simultaneously with the issue of the refunding bonds. The outstanding bonds mature on fixed dates and the law contemplates that the proceeds of the refunding will be at the place of payment to take the place of principal and interest of the outstanding bonds when they mature. All this should be done as expeditiously as circumstances will permit but the fact that there is a reasonable lapse between the maturity of the outstanding bonds and the issue of the refunding bonds in no sense increases the indebtedness or makes outstanding both sets of bonds at the same time. In a business transaction of this kind and running over the period required, it is hardly reasonable to expect that every element in chronology will synchronize.

In the case at bar, the resolution for the issue of the refunding bonds provided that the City Commissioners might dispose of 'all or any part' of the refunding bonds for not less than par and accrued interest and that as soon as the proceeds of the bonds are received by the City Commissioners they shall be deposited with the City Treasurer and kept in a separate account to be used only and...