State v. City of Orlando
| Decision Date | 19 October 1955 |
| Citation | 82 So.2d 874 |
| Parties | The STATE of Florida et al., Appellant, v. CITY OF ORLANDO, Florida, Appellee. |
| Court | Florida Supreme Court |
Murray W. Overstreet, Kissimmee, for appellant.
John G. Baker, Orlando, for appellee.
The Judge of the Circuit Court of the Ninth Judicial Circuit rendered a decree validating and confirming 'Sewer Revenue Bonds' of the City of Orlando of the approximate aggregate principal of five and one-half million dollars, and the State of Florida appealed.
All the bonds are payable from the revenues of the system, monies to be advanced by the Orlando Utilities Commission and the service taxes from utilities, and the holders are expressly precluded from the right to compel the levy of ad valorem taxes to meet payments of principal and interest.
The bonds will be issued in two series. The proceeds of Series A, in the sum of $2,938,000, will be used to refund and refinance outstanding 'Sewer Bonds' of an equal amount maturing in the years 1956 to 1978; the proceeds of Series B will be spent in construction and in the extension and improvement of the present system.
The only question presented by the state in this appeal involves all the bonds of Series A that are actually sold, instead of being exchanged for outstanding bonds. The ordinance authorizing the issuance of the bonds contained the provision that all monies received from the sale of bonds in this series 'shall be deposited in an irrevocable Trust for the sole purpose of refunding or refinancing said Outstanding Sewer Revenue Bonds and for payment of interest to and including April 1, 1958 and call premiums on said Outstanding Bonds.'
The state contends that such selfimposed restraint in impounding the fund amounts to unsound fiscal management and will 'result in 2 1/2 years of double indebtedness for a single purpose.' We cannot agree. The trust fund may be invested in obligations of the United States which would, of course, yield interest and, besides, there was testimony before the judge that all the bonds could be sold at a lower rate of interest because by the whole plan all of them would at once be secured by a first lien and any question of relative dignity between the old bonds and the new would be eliminated.
We find nothing in the arrangement which clashes with our pronouncements in City of Miami v. State, 139 Fla. 598, 190 So. 774, and State v. City of Miami, 155 Fla. 6, 19 So.2d 410, unless we over-emphasize...
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