Harvey v. City of St. Petersburg

• Decision Date: 16 June 1939
• Citation: 138 Fla. 597,189 So. 861
• Parties: HARVEY v. CITY OF ST. PETERSBURG et al.
• Court: Florida Supreme Court

189 So. 861

138 Fla. 597

HARVEY v. CITY OF ST. PETERSBURG et al.

Florida Supreme Court

June 16, 1939

Suit by the City of St. Petersburg, a municipal corporation, for the use of Glenn V. Leland, as Receiver of the Certificate Sinking Fund of the City of St. Petersburg, Florida, against Lucille Harvey, an unmarried woman, to foreclose public improvement assessment lien against property of defendant. From an order granting plaintiff's motion to strike certain portions of defendant's answer, the defendant appeals, and plaintiff files a cross-assignment of errors.

Decree in so far as it denied motion to strike designated parts of answer reversed, and in all other respects affirmed, and cause remanded for further proceedings. Appeal from Circuit Court, Pinellas County John I. Viney, judge.

COUNSEL

Carey &amp Harrison, of St. Petersburg, for appellant.

Askew &amp Kiernan, of St. Petersburg, for appellee.

OPINION

PER CURIAM.

Sometime prior to February 14, 1927, the City of St. Petersburg pursuant to Section 108, Chapter 6772, Special Acts of 1913, Laws of Florida, caused certain sidewalks to be laid in front of and abutting certain property owned by appellant Lucille Harvey. Under date of April 5, 1927, the City of St. Petersburg issued its certificates of indebtedness against appellant's property for the purpose of charging her real estate with the costs of the sidewalks which had been laid in proportion to the frontage of said property on the improvement and the benefit that said property derived from said improvement.

Pursuant to Section 3016, C.G.L. of 1927, and Section 108, Chapter 6772, supra, the City sold said certificates in order to get money to make the improvement and guaranteed the payment thereof. When these certificates fell due the City was not able to pay them so the City officials entered into an agreement with the holders of the various certificates, under the terms of which agreement refunding bonds were issued by the City and delivered to the certificate holders, and the certificates were thus taken up by the City. The agreement between the City and the holders provided that: 'The Director of Finance of the City of St. Petersburg and his successors in office shall be created and constituted as Trustee for the purpose of carrying out the provisions of the sinking fund herein established.' State v. City of St. Petersburg, 117 Fla. 300, 306, 157 So. 641, 643. It was also provided that if the Trustee shall fail to collect sufficient sums within a certain time specified in the agreement, '* * * the holders of Refunding Bonds shall have the right to foreclose any and all of said certificates remaining in said fund in the name of the City of St. Petersburg, for the benefit of all the outstanding delinquent interest certificate holders and shall have the right to continue said foreclosure and enforcement of said certificates in the name of the City until the said delinquent interest certificates are fully satisfied.' State v. City of St. Petersburg, supra.

No effort was made by the trustee to enforce collection by suit or otherwise, so the holders of delinquent interest certificates elected to proceed under that provision of the contract which gave them the right to foreclose said certificates of indebtedness in the name of the City.

In November, 1935, certain holders of delinquent interest certificates brought a suit in the Circuit Court asking that a Receiver be appointed to take charge of all the improvement lien certificates and to enforce their collection. The Court appointed Glenn V. Leland as Receiver and ordered him to take from the Director of Finance of the City of St. Petersburg (who was the same Glenn V. Leland) all improvement liens held by said Director of Finance, as Trustee. The Receiver was further directed to proceed with the collection of the improvement liens by the bringing of actions at law or in equity.

Accordingly, the Receiver on June 1, 1938, filed a bill for the purpose of foreclosing the liens. This bill was brought under the provisions of Chapter 15038, Acts of 1931, Laws of Florida. An answer was filed by appellant alleging that the laying of the sidewalks for which the public improvement lien certificates were issued was not a proper exercise of a municipal function, that the issuing of the public improvement certificates against the property of appellant was illegal and not in accordance with the provisions of the law in such cases made and provided, and that the liens were not valid obligations.

An order of severance was entered, since the owners of a large portion of the property proceeded against filed no defensive pleadings. Glenn V. Leland, as Receiver, filed a motion to strike certain portions of the answer thus filed by appellant. An order was entered granting the motion in part, from which Lucille Harvey appealed. Cross assignment of errors was filed by appellee based on the denial of parts of the motion to strike.

The first question presented for our consideration by appellant reads as follows:

'The City of St. Petersburg issued certain delinquent interest certificates, and it was provided that they should be paid from the proceeds of the collection of certain special assessment improvement liens. Has the Circuit Court of Pinellas County, Florida, jurisdiction, at the instance of holders of these delinquent interest certificates, to appoint a receiver for the express purpose of collecting by suit the special assessment improvement liens which had been issued by the City of St. Petersburg?'

It is true, as contended by appellant, that in the absence of legislative authority so to do, a Court Receiver has no authority whatsoever to enforce the collection of taxes or public improvement assessment liens issued by a municipality. State ex rel. Lynch, et al. v. District Court of McKinley County, 41 N.M. 658, 73 P.2d 333, 113 A.L.R. 746; Annotation, 113 A.L.R. 755. See, also, Meriwether v. Garrett, 102 U.S. 472, 26 L.Ed. 197; Thompson v. Allen County, 115 U.S. 550, 6 S.Ct. 140, 29 L.Ed. 472.

However, Sec. 108, Chapter 6772, Special Acts of 1913, Laws of Florida (Charter of City of St. Petersburg), provides:

'In all the cases mentioned in this Act where the City of St. Petersburg has acquired or may hereafter acquire, liens for improvements, such liens or any of them may be enforced in the following manner by the said City or in the name of said City by the holders; first by a bill in equity; second, by a suit at law.' (Emphasis supplied)

The City guaranteed the payment of the certificates involved herein, but did not pay the same upon default. Instead, the City proposed to issue refunding bonds, or a renewal obligation in payment of the principal of the certificates of indebtedness, and to create a trust fund by placing all of the certificates of indebtedness in a common fund which was to be administered by a trustee, and to pay the accrued interest due the holders of said certificates of indebtedness out of the trust fund thus created. In order to facilitate the operation of the plan, the City issued to the holders of said certificates of indebtedness noninterest bearing delinquent interest certificates evidencing the amount of delinquent interest which each holder of the certificates of indebtedness was entitled to receive. The holders of said certificates could not look to the general revenues of the City for the payment of their obligations. There was but one source of payment and that was the trust fund created by the collection of these certificates of indebtedness.

The law is well settled that courts of equity have jurisdiction to appoint a receiver of trust estates or trust funds. 23 R.C.L., Receivers, Sec. 30, p. 32; Holbrook v. Fyffe, 164 Ky. 435, 175 S.W. 977; Rousseau v. Call, 169 N.C. 173, 85 S.E. 414; Calhoun v. King, 5 Ala. 523. This court has held that if a trustee refuses a trust a receiver may be appointed to protect the interest of all parties interested in the estate, Wilson v. Russ and Merritt, 17 Fla. 691, and that a Chancellor's findings regarding the propriety of a receivership for trust property will not ordinarily be disturbed, Smith v. Fleetwood Building Corp., 120 Fla. 481, 163 So. 293.

Furthermore, the case at bar is not one in which the appeal has been taken from an order appointing a receiver, but is a collateral attack upon the order of appointment, which recites:

'* * * the court having heard oral testimony in support of the allegations of the bill of complaint, and being of the opinion that a receiver is necessary to protect the trust fund and the rights of all of the parties entitled thereto, and no sufficient cause being made to appear why a receiver should not be appointed:

'It is thereupon considered, ordered, adjudged, and decreed that Glen V. Leland be, and he is hereby, appointed as receiver of this court in this cause.'

It is clear from an inspection of the decree that the Court had jurisdiction of the subject matter (a trust fund) and that the Court heard oral testimony from which he concluded it was necessary for the appointment of a receiver to protect said trust fund and the rights of the parties interested therein.

Under these circumstances we are of the opinion that the lower court had jurisdiction to appoint Glenn V. Leland as receiver for the express purpose of collecting by suit the special assessment improvement liens issued by the City of St. Petersburg and there was no error in its ruling on this question.

The second question presented by appellant reads as follows:

'Can a valid enforcible agreement be made between the holders of improvement lien certificates duly issued by the City of St Petersburg, and said City, providing that the holders of delinquent interest certificates issued by the...