State v. City of Okeechobee

• Decision Date: 22 March 1930
• Citation: 127 So. 339,99 Fla. 617
• Parties: STATE v. CITY OF OKEECHOBEE.
• Court: Florida Supreme Court

127 So. 339

99 Fla. 617

STATE v. CITY OF OKEECHOBEE.

Florida Supreme Court, Division B.

March 22, 1930

Petition by the City of Okeechobee for the purpose of validating an issuance of bonds, wherein the State filed an answer. From the decree, the state appeals.

Affirmed.

Appeal from Circuit Court, Okeechobee County; Elwyn Thomas, judge.

COUNSEL

Angus Sumner, of Ft. Pierce, for the State.

L. W Jennings, of Okeechobee, for appellee.

OPINION

BUFORD J.

The appellee, city of Okeechobee, filed a petition for the purpose of validating the issuance of bonds of the city of Okeechobee in the amount of $110,000, which bonds were sought to be issued under authority of chapter 11855, Laws of Fla. Acts of 1927. The proceedings to validate were brought under chapter 6868, Acts of 1915. The resolution shows that the bonds were proposed to be issued for the purpose of retiring and refunding $78,000 of interest coupons attached to several of the outstanding issues of the city of Okeechobee bonds in the hands of holders in due course, $62,250 of which were past-due and unpaid at the time of the adoption of the resolution, and $15,750 of which would become due and payable on the 13th of December, 1929, and March 1, 1930; and for the further purpose of retiring and refunding $4,260 of past-due interest coupons attached to two outstanding time warrants issued by the city of Okeechobee, and $16,000 of principal of such time warrants past-due and unpaid, and $8,000 of principal of time warrants due April 1, 1930, all in the hands of holders in due course and unpaid, and also to retire two notes of the city of Okeechobee given for permanent fire equipment in the sum of $4,600.

The state, by its state's attorney, filed answer to the petition and set up as a bar to the issuance of the refunding bonds sought to be issued that the issuance of such bonds would cause the total outstanding bonded indebtedness of said city to exceed 25 per cent. of the assessed valuation of real and personal property therein. The answer alleges: 'That said issue of bonds is for the purpose of retiring valid outstanding interest coupons of bonds and time warrants of said City of Okeechobee and valid time warrants and notes thereof, but the issuance thereof for such purposes is not authorized by law, but is prohibited thereby, by reason of the fact that the bonded debt of the City of Okeechobee aforesaid is in excess of the twenty-five per centum of the assessed valuation of the real and personal property therein.'

There is nothing in the answer to show that the original indebtedness when incurred exceeded the limit fixed by the statute creating the municipality or that any part of said indebtedness was for any cause invalid. It is contended that because the total bonded indebtedness will, if these bonds are issued, exceed 25 per cent. of the total assessed valuation as is shown by the assessment roll of the municipality at this time, such bonds must be held to be unauthorized.

In the issuance of these bonds there is no attempt upon the part of the city to create a new indebtedness, or a new or additional tax burden on the taxpayers of the municipality. This court in an able opinion prepared by Mr. Justice Strum, in the case of Davis v. Dixon, opinion filed June 25th, 1929, reported 123 So. 536, 537, say: 'We are aware of the well-nigh universal general rule that, even where a constitutional provision requires a vote of the electors to originally authorize the incurring of an indebtedness, or the original issuance of bonds, no such election is necessary to the issuance of refunding bonds pursuant to statute for the purpose of discharging outstanding bonds originally issued in accordance with the constitutional requirement, so long as the refunding bonds create no additional or increased liability on the part of the obligor, unless, of course, the statutory or other authority under which the refunding bonds are issued requires a resubmission to the electorate. The theory of the cases so holding is that, since the bonds are not the debt itself, but the legal evidence of the existence of the debt, the issuance of refunding bonds for the purpose of discharging an existing legal indebtedness, originally incurred in accordance with the constitutional requirement does not create a new debt or impose any new liability against the taxpayers or their property within the meaning of such constitutional provision, but merely renews and continues in a changed form the original existing indebtedness which was originally created in conformity with the Constitution, and that such constitutional provision therefore does not prohibit the renewal, without a...