State v. City of Sanford

Decision Date03 May 1937
Citation128 Fla. 171,174 So. 339
PartiesSTATE v. CITY OF SANFORD.
CourtFlorida Supreme Court

Statutory proceeding by the City of Sanford, etc., against the State of Florida to validate refunding bonds. From decrees, the State appeals.

Affirmed. Appeal from Circuit Court, Seminole County; M B. Smith, judge.

COUNSEL

Murray W. Overstreet, State Atty., of Kissimmee, for the State.

Fred R Wilson, of Sanford, for appellee.

OPINION

BUFORD Justice.

The appeal is from final decree validating refunding bonds of the City of Sanford in the aggregate sum of $5,900,000 in two series, A and B, Series A in the principal sum of $5,274,000 and Series B in the principal sum of $626,000. Series A is to be exchanged for all the outstanding bonds and certificates of indebtedness of the City of Sanford except two issues designated 'Public Utility Bonds' dated January 1 1924, and 'Improvement Bonds Series CC' dated July 1, 1926. On the latter bonds and certificates of indebtedness outstanding judgments have been obtained in the principal sum of $470,000.

The bonds and certificates of indebtedness to be refunded by Series A constitute the general obligations of the city and are not supported by special assessments or other revenue than general taxes. The special assessment bonds and certificates of indebtedness for the payment of which special assessments for public improvements are pledged, as well as the full faith and credit of the municipality, are to be refunded by Series B. Therefore, all of the bonds sought to be refunded are the general obligation of the appellee municipal corporation for which its full faith and credit is pledged.

There is no question raised about the sufficiency of the resolution or the procedure involved in the issuing of the refunding bonds. The municipality proposes to pledge for the payment of the refunding bonds Series A the delinquent taxes heretofore levied for debt service and all special assessments heretofore imposed by the city.

Both series of bonds are to be issued as general obligations of the municipality.

Appellant filed answer to the petition in which it objected to the issuance of refunding bonds in such manner as to raise the questions hereinafter referred to. The matter came on for hearing after proper notice to taxpayers and citizens and after taking testimony the lower court rendered a decree validating and confirming the refunding bonds. The testimony showed in effect the amount of the outstanding indebtedness and the character thereof, default in payments, failure to collect special assessments in season to pay the special assessments bonds, and insufficiency of the net income, revenue and profits of its water plant to pay interest on the public utility bonds.

The first question presented by appellant is as follows:

'Is the approval by the qualified electors of the appellee, City of Sanford, Florida, necessary to the issuance of refunding bonds as general obligations of the municipality, for the payment of which delinquent taxes theretofore levied for debt service and special assessments theretofore imposed are pledged the appellant contending that such bonds are not merely an extension of time of payment at a reduced rate of interest of the bonds to be refunded, but that a new and additional source of revenue is pledged for the payment of the refunding bonds?'
'Special Assessment Serial Bonds' sought to be refunded and which were identified in the record as street improvement bonds for the payment of which special assessments against abutting property were pledged, were issued under the provisions of sections 106 and 107 of chapter 9897, Sp. Acts of 1923, and sections 3 and 4 of chapter 9898, Sp.Acts of 1923, and sections 11 and 12 of chapter 9298, Acts of 1923. The certificates of indebtedness of July 1, 1927, were issued under the provisions of chapter 13391, Sp.Acts of 1927. Bonds known as 'bulkhead bonds' were issued under section 119 of chapter 9897, Sp.Acts of 1923, as amended by chapter 11719, Acts of 1925, Ex.Sess. The statutes all expressly provide that in the issuance of such bonds the full faith and credit of the city shall be pledged for their payment and that they shall be the general obligation of the municipality. Therefore, that the refunding bonds are the general obligation of the municipality does not give them an additional resource or higher dignity than that incident to the original bonds.

The question presented has heretofore been decided by us adversely to the contention of the appellant. See State v. City of Clearwater (Fla.) 169 So. 602; State v. City of Miami, 116 Fla. 517, 157 So. 13. The pledging of the special assessments which have been made and have not been collected does not impose an additional burden on the taxpayer generally but simply provides the manner in which the City may use that resource which it already has if and when it is made available. There is no pledge of the taxing power involved other than that taxing power which attached to the original bonds. So long as the refunding bonds create no additional or increased liability on the part of the obligor, there is no necessity for submitting the question of the issuance to the electorate. State v. City of Okeechobee, 99 Fla. 617, 127 So. 339.

The second and third questions may be considered together, they are:

'2. May the appellee, City of Sanford, Florida, issue, without the approval of the qualified electors thereof, refunding bonds as general obligations of the appellee to be paid primarily out of a levy of taxes and to be exchanged for special assessment bonds, which are general obligations of appellee, for the payment of which special assessments are pledged, but which special assessments have not been collected in season to pay said special assessment bonds?'

'3. May the appellee, City of Sanford, Florida, issue, without the approval of the qualified electors thereof, refunding bonds as general obligations of appellee, to be paid primarily out of a levy of taxes and to be exchanged for certain Public Utility Bonds which are general obligations of the appellee, for the payment of which the net income, revenue and profits of the utility are pledged but which net income, revenue and profits are not sufficient to pay said Public Utility Bonds?'

It appears to be the contention of the appellant that the municipality may not issue refunding bonds in lieu of special assessment bonds and certificates of indebtedness and public utility bonds, which refunding bonds pledge the full faith and credit of the municipality because the original bonds pledged also special assessments and net revenue from the water plant.

In Klemm v. Davenport et al., 100 Fla. 627, 129 So. 904, 905, 70 A.L.R. 156, it was held:

'The principle is well established in this country that in addition to his proportion of a laid tax a taxpayer may be required to pay an additional amount to make up deficiencies caused by the neglect or inability of other taxpayers to pay their assessments, and that such additional impositions do not violate constitutional inhibitions against double taxation nor requirements of equality and uniformity, nor do they amount to the taking of one's property without due process of law.

'An ad valorem tax and a special assessment may be imposed on the same property at the same time, and in addition to the primary imposition in either case the taxpayer may be required to pay an additional amount to make up deficiencies caused by neglect or inability of other taxpayers to pay their assessments, and such requirements will not impinge on constitutional inhibitions against double taxation, the requirement of equality and uniformity, nor do they amount to the taking of property without due process.

'The ultimate test of the liability of a municipality for local improvements must be gleaned from the terms of the statute or contract authorizing them.

'Under the terms of chapter 9298, Acts 1923, Laws of Florida, when bonds are issued the city is the sole and only obligator to the bondholder, who is not concerned with the means used by the city to pay the bonds, and special assessments imposed thereunder do not constitute the only fund for the discharge of said bonds.'

The primary obligation of all the bonds involved in this litigation is that to pay the bond, or to pay the bond in cash, Rountree v. State, 102 Fla. 246, 135 So. 888. See, also, State v. Baskin, 102 Fla. 329, 136 So. 262; State v. City of St. Petersburg, 117 Fla. 300, 157 So. 641.

The fourth question presented is:

'4. Are homesteads in the present territorial limits of the appellee, City of Sanford, Florida, assessable for taxes for the payment of the refunding bonds proposed to be issued by said City, notwithstanding the provisions of section 7, article 10 of the Constitution of the state of Florida and chapter 17060, Laws of Florida, Acts of 1935, specifically exempting homesteads up to the valuation of $5,000.00 from taxation?'

This question has so often been determined adversely to appellant's contention by the controlling opinions of this court that it appears hardly worthwhile to cite the authorities. However we do so. Folks v. County of Marion, 121 Fla. 17, 163 So. 298, 102 A.L.R. 659; State v. City of Pensacola, 123 Fla. 331, 166 So. 851; State v. City of Orlando (Fla.) 170 So. 887; State v. City of St. Petersburg (Fla.) 173 So. 434, opinion filed March 23, 1937.

The fifth question is as follows:

'May the appellee, City of Sanford, Florida, legally obligate itself by section 7 of the Resolution providing for the issuance of the refunding bonds in question, to collect the taxes to be levied for the payment of said refunding bonds at the same time and in the same manner as other taxes...

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