State v. City of Coral Gables

• Decision Date: 21 March 1934
• Citation: 114 Fla. 326,154 So. 234
• Parties: STATE v. CITY OF CORAL GABLES.
• Court: Florida Supreme Court

154 So. 234

114 Fla. 326

STATE v. CITY OF CORAL GABLES.

Florida Supreme Court

March 21, 1934

Petition by the City of Coral Gables against the State for the validation of refunding bonds to be issued by the municipality. From a validating decree, the State appeals.

Affirmed. Appeal from Circuit Court, Dade County; H. F Atkinson, judge.

COUNSEL

Vernon Hawthorne, State Atty., and Henry M. Jones, Asst. State Atty., both of Miami, for the State.

E. L Semple and Morton B. Adams, both of Miami, for appellee.

With a view to a refunding of the bonded and other indebtedness of the city of Coral Gables, Dade county, Fla the following statute was enacted and approved May 8, 1931:

'Chapter 15132--(No. 494).

'An Act to Authorize the Refunding of the Bonded and Other Indebtedness of the City of Coral Gables; Authorizing the Commission of Said City to Enter into Agreements With the Holders of Its Outstanding Bonds and/or Other Obligations; Providing for the Appointment of a Special Depositary for the Proceeds of Taxes, Special Assessments or Other Revenues or Assets Pledged for the Payment of Such Bonds and/or Other Obligations, and Prescribing the Powers and Duties for Such Depositary; Authorizing the Appointment of a Comptroller of Bond Revenues and Funds in the Event of Default on the Part of Said City in the Performance of Obligations Incurred Hereunder, and Providing for the Validation of Bonds Issued Under the Provisions of This Act and Providing for a Referendum Election Upon the Issuance of Such Bonds.

'Be It Enacted by the Legislature of the State of Florida:

'Section 1. The City of Coral Gables is hereby authorized to issue refunding bonds in the manner herein provided for the purpose of refunding its outstanding bonded and other indebtedness and the interest thereon, now due and payable or hereafter maturing, at or after the maturity of such bonds or other obligations, or the interest thereof, or prior to the maturity thereof, pursuant to an agreement made with the holders of such bonds or interest coupons.

'Section 2. Such Refunding Bonds may be of one or both of the following classes: Class A, to consist of bonds constituting definite obligations of the City maturing not more than fifty years from their date and bearing interest at a rate not to exceed six per cent, payable semi-annually and Class B, to consist of obligations which may be designated as Corporate Stock, without fixed maturities and bearing interest at a rate not to exceed seven per cent, the principal and interest of which shall be payable, out of the funds realized from the earnings and/or the sale of assets and/or other revenues which may be pledged therefor, upon such contingencies as may be stipulated in said bonds or in the proceedings authorizing their issuance. All bonds issued under this Act shall constitute negotiable instruments.

'Section 3. The Commission of the City of Coral Gables is hereby empowered to enter into agreements with the holder or holders of any outstanding bond or bonds, coupon or coupons, or other obligations heretofore issued or now owing by said City regardless of whether such bonds or coupons or other obligations are then due and payable, providing for the refunding of the indebtedness represented by such bonds, and/or coupons and/or other obligations. Such agreement may provide for the exchange of refunding bonds of Class A, and/or Class B, in payment and satisfaction of said outstanding bonds and/or coupons, and/or other obligations upon such terms and conditions as may be agreed upon.

'Section 4. An agreement for the refunding of the outstanding indebtedness of the City, pursuant to the provisions of this Act, may provide for any or all of the following:

'(a) For the issuance, in retirement of said outstanding bonds and/or coupons and/or other obligations of Class A, Refunding Bonds and Class B, Refunding Bonds in such proportions as may be agreed upon;

'(b) For the levy of ad valorem taxes upon all taxable property in the City, without limitation of rate or amount, for the payment of the principal and interest of Class A Refunding Bonds;

'(c) For the pledging for the payment of the Class B Refunding Bonds, or any portion or series thereof, of delinquent taxes, tax certificates and/or special improvement liens owned by the City, property owned by the City, and the income derived therefrom, and any public utilities owned by the City and/or the income derived therefrom, and to charge the assets so pledged with a lien in favor of the holders of such Class B Refunding Bonds;

'(d) For the levy of a tax of a fixed millage annually until all of the Class A and/or Class B bonds, together with the interest thereon, shall have been paid, at all events, or upon such contingencies as may be agreed upon between the holders of said bonds and the Commission of the City of Coral Gables;

'(e) For the fixing of a definite ratio between the amount of taxes levied for current expenses and the amount of taxes levied for the payment of the principal and interest of bonds issued under the provisions of this Act, and for the maintenance of such ratio until all of the bonds issued under the provisions of this Act and the interest thereon shall have been paid in full;

'(f) For a Depositary or Trustee to receive, hold and administer all revenues, properties or other assets pledged for the payment of Class B Bonds and for the payment of the fees and compensation of such Depositary or Trustee as a current expense of the City;

'(g) For the disposal by the Depositary of the assets pledged for the payment of the Class B Bonds from time to time upon such terms and conditions as shall be prescribed by the holders of such bonds or by their duly constituted agents or attorneys;

'(h) For the foreclosure of the liens for taxes and assessments and for the pledging of properties acquired by the City as a result of such foreclosures for the further securing of bonds issued hereunder;

'(i) For the acceptance by the Commission of the City of Coral Gables in payment of such delinquent taxes or special assessments as may be specified in the agreement, of Class B Bonds upon such terms and conditions as may be defined in the agreement;

'(j) For such other undertakings and covenants on the part of the City of Coral Gables not inconsistent with the Constitution of the State of Florida and this Act, it being intended to confer upon the City of Coral Gables complete power and authority to enter into such arrangements with its creditors as may be necessary or expedient for the purpose of refunding its outstanding bonded indebtedness and other obligations and the interest thereon, and this Act shall be liberally construed to effectuate that intent.

'Section 5. The Depositary or Trustee, appointed to receive, hold and administer revenues, properties or assets pledged for the payment of the Class B Bonds, shall be a bank or trust company within or without the State of Florida authorized to undertake trusts. Such Depositary may also be constituted, by agreement with the holders of bonds issued under the provisions of this Act, custodian of all taxes and/or revenues applicable to the payment or retirement of the principal and interest of the Class A Bonds. All moneys required to be paid to such Depositary under the provisions of any agreement made pursuant to this statute shall, as the same are collected from day to day, be paid directly by the collecting official of the City of Coral Gables to said Depositary, and the Depositary shall give such security therefor as may be stipulated in said agreement. Such Depositary shall be the custodian of all sinking funds accumulated for the payment or retirement of the principal and interest of bonds issued under the provisions of this Act. Funds in the hands of the Depositary, unless otherwise provided by an agreement made under the provisions of this Act, shall be invested in obligations of the United States.

'Section 6. In the event of a default, on the part of the City of Coral Gables, in the payment of any bond or interest coupon issued under the authority of this Act, on the date of its maturity, and such default shall continue for a period of sixty days, or in the event of a default, on the part of said City, in the performance of any covenant or undertaking prescribed by an agreement made with its creditors under the provisions of this Act, and such default shall continue for a period of sixty days, a court of competent jurisdiction, upon the application of any holder of a bond or interest coupon issued under the provisions of this Act, either of Class A or Class B or upon application of the Depositary appointed in pursuance of an agreement made hereunder, may appoint a Comptroller of Bond Revenues and Funds, who shall have the powers of a Receiver in Chancery. Said Comptroller shall be a resident of the State of Florida or some corporation organized under the Laws of Florida and authorized by such laws to act as receiver and shall be entitled to take possession of all assets pledged by the City for payment of any such bonds and to collect all revenues allotted to payment or retirement of such bonds. Such appointment by such court shall not be made except upon sixty days notice of such application for such appointment having been given to the Commission of said City. The revenues collected by the Comptroller shall be applied in the manner specified in any agreement made with the creditors of said City under the provisions of this Act. The Comptroller may be directed to foreclose, in the manner provided by law, the lien of taxes and assessments upon all delinquent properties. Such suits to foreclose the liens of taxes or assessments may be brought by the Comptroller under any st...