State v. City of Fort Myers

• Decision Date: 22 November 1940
• Citation: 198 So. 814,145 Fla. 135
• Parties: STATE v. CITY OF FORT MYERS.
• Court: Florida Supreme Court

198 So. 814

145 Fla. 135

STATE v. CITY OF FORT MYERS.

Florida Supreme Court

November 22, 1940

En Banc.

Proceeding by the City of Fort Myers against the State of Florida for the validation of certain refunding bonds to be issued by the City of Fort Myers. From a decree validating the bonds, the State of Florida appeals.

Decree affirmed.

BROWN J., dissenting in part. Appeal from Circuit Court, Lee County; George W. Whitehurst, judge.

COUNSEL

Clyde H. Wilson, of Sarasota, for appellant.

R. E Kurtz and Parker Holt, both of Fort Myers, for appellee.

OPINION

BUFORD Justice.

Appeal brings for review decree validating certain refunding bonds to be issued by the City of Fort Myers, Florida.

Appellant propounds and appellee concedes the propriety of nine questions for our consideration, viz.:

'1. Can municipal bonds issued pursuant to Charter providing for limited taxes be refunded into unlimited tax bonds where (1) the Legislature after issuance and sale of the bonds amends the Charter and removes the limitation and (2) subsequent to this again amends the Charter so as to again place in the Charter a tax limitation for debt service?

'2. Can a municipality issue refunding bonds and pledge a tax upon all homesteads located within the present territorial limits of the City for the payment of said bonds?

'3. Can a municipality issue refunding bonds and pledge a tax for the payment thereof on lands now lying within its territorial limits but which were not within its territorial limits at the time its bonds were originally issued without an approving vote of qualified electors who are freeholders or owners of such lands?

'4. Can a municipality issue refunding bonds and omit to pledge a tax for the payment thereof upon lands now lying beyond its territorial limits but which were within its territorial limits when the bonds were originally issued?

'5. Can a municipality issue refunding bonds and covenant that the contractual rights and remedies for the enforcement of the indebtedness refunded by said refunding bonds and the taxes securing the same will apply and appertain to said refunding bonds independently of any restrictions or limitations enacted by the Legislature of the State of Florida, or otherwise, taking effect on or after November 6th, 1934?

'6. Can a municipality issue refunding bonds and covenant that upon default by the City the rate of interest of said refunding bonds will be increased without causing said bonds to be indefinite, uncertain and non-negotiable?

'7. In a bond refunding proceeding can a municipality contract to pay its refunding agent for his services out of the interest and sinking fund account established to service the indebtedness, such payment to be made only from surplus monies in said interest and sinking fund account after payment of interest due?

'8. In this municipal refunding proceeding did the Circuit Court have jurisdiction of the subject matter, the parties and of its citizens and taxpayers?

'9. Where certain lands were embraced within the territorial limits of the municipality at the time of the incurring of the bonded indebtedness, and where a portion of the said lands are not now embraced within the said territorial limits of the municipality, will the proposed refunding bonds be violation of Section 6, Article 9, of the Constitution, unless the said bonds contain an authorization to tax the lands which have been excluded together with a guarantee of the exercise of that right?'

In the beginning, let us say that the validity of the bonds involved is not affected by any determination of the answer to question 7. The answer to this question can only affect the contract to pay fiscal agents fees from a particular fund. Unquestionably the Board of City Commissioners may contract to pay reasonable fees for such service as is shown to have been rendered in this case. The propriety of the source of funds from which such fees may be paid may be adjudicated independently of the adjudication of the validity of the bonds. Therefore, we do not now adjudicate that question.

It is admitted by all parties that of the bonds proposed to be refunded the original bonds designated

"Unlimited Tax Bonds Date of Date of Issue Designation Validating decree. -------------------- --------------------------------------- ---------------- 12/1/1927 Refunding Bonds, Series A 12/2/1927 3/20/1929 Refunding Bonds, Series B 3/12/1929 12/1/1924 Street Improvement Bonds, Series B 11/3/1925 11/15/1928 Spl. Assmt. Str. Imprvmt. Bonds, Series 12/26/1928 C 10/15/1929 Spl. Assmt. Str. Imprvmt. Bonds, Series 11/13/1929 D 12/1/1931 Refunding Spl. Assmt. Bonds, Series A. 11/9/1931 9/1/1930 Refunding Bonds, Series C 7/16/1930" are supported by an unlimited tax. Two other issues involved here designated as (c) 3/15/1924 Storm Sewer Bonds ) Sanitary Sewer Bonds ) Water Mains Bonds ) 5/1/1924 Paving Bonds ) Gas Plant and Mains Bonds ) (d) 4/1/1926 Sewerage System Extension Bonds ) Water System Extension Bonds ) Play Grounds and Recreational Bonds ) Gas Extension Bonds ) 5/31/1926 Fire Protection Bonds ) Incinerator Bonds )

were before us in the case of State ex rel. Woman's Catholic Order of Foresters v. City of Fort Myers, Fla., 196 So. 705, and in that case we held these issues to be supported by an unlimited tax.

This leaves only two of the original issues, viz.:

(a) 7/2/1913 Wtr. Wks. and Fire Protection Bonds ) 5/24/1913

Street and Sidewalk Bonds )

(b) 10/1/1919 Wtr. System Extension Bonds )

Street Paving Bonds ) 9/25/1919

Sewerage System Extension Bonds )

open for adjudication as to whether or not they may be refunded by bonds supported by unlimited tax.

It is conceded that question 2 has been definitely settled by this Court, contrary to the contention of appellant, too many times to require citation of cases.

We will now revert to the First question, supra, and here discuss the issues of bonds of July 2, 1913, and of October 1, 1919. In regard to these the Circuit Judge held:

'1. That all of the outstanding bonds proposed to be refunded were issued under the authority of general or special acts which expressly authorize the levy of taxes sufficient to pay the principal thereof and the interest thereon, except the following issues, to-wit:

'Water Works and Fire Protection Bonds, dated July 2, 1913

'Street and sidewalk Bonds, dated July 2, 1913

'Water System Extension Bonds, dated October 1, 1919

'Street Paving Bonds, dated October 1, 1919

'Sewerage System Extension Bonds, dated October 1, 1919.

'That the said bonds of July 2, 1913 and October 1, 1919, were issued under the authority of the Charter of the City of Fort Myers, to-wit, Chapter 5496, Laws of Florida, Acts of 1905, as amended, which limited the rate of taxation for the purpose of servicing the bonds authorized to be issued thereunder to a special tax not exceeding eight mills, but which limited the bonded indebtedness of said City to a total amount not exceeding six per cent. (6%) of the assessed value of the taxable property therein; furthermore, said Act of 1905 was repealed by Chapter 10563, Laws of Florida, Sp.Acts of 1925, which said latter Act was repealed by Chapter 12743, Laws of Florida, Sp.Acts of 1927, which said latter Act of 1927 specifically authorizes the levy of a tax sufficient to pay the interest upon and provide a sinking fund for the retirement of all outstanding bonds or certificates of indebtedness of said City; and said latter Act of 1927, was repealed by Chapter 14052, Laws of Florida, Sp.Acts of 1929, which said latter Act of 1929 also specifically authorized the levy of a tax sufficient to pay the interest upon and principal of all outstanding bonds or certificates of indebtedness of the City; and said Chapter 14052, Laws of 1929, was made effective by approval of a majority of the qualified electors of said City at an election held June 18, 1929, as required by Section 80 thereof; and any attempted restoration of the limited tax provision of the original Charter by Chapter 18532, Laws of Florida, Sp.Acts of 1937, was invalid and inoperative as to bonds theretofore issued, and therefore said issues of July 2, 1913, and October 1, 1919, are supported by an unlimited ad valorem tax liability and may be refunded by the issuance of refunding bonds pledging an ad valorem tax sufficient to pay the interest on and the principal of said Refunding Bonds.'

The record shows that the issuance of the bonds was authorized by a vote of the qualified electors and the record further shows that Chapter 14052, Laws of 1929, was made effective by approval of a majority of the qualified electors of said City at an election held June 18, 1929, as required by Section 80 of the Act.

In the case of City of Fort Myers v. State, 129 Fla. 166, 176 So. 483, the record did not show that the original bonds had been issued pursuant to the affirmative vote of qualified electors and in the case of State v. City of Manatee, 140 Fla. 248, 191 So. 529, 530, Mr. Justice Terrell, speaking for the Court, said:

'In the case at bar, it appears that all the original bonds issued prior to the effective date of Chapter 10891, Special Acts of 1925, were issued by an approving vote of the freeholders, while in the Fort Myers case, it did not appear that the bonds were so issued.'

In that case we also appeared to give effect to the provisions of Chapter 18532, Acts of 1937, as differentiating the bond issues here under consideration from those which were under consideration in the Manatee case. Except for the provisions of Chapter 18532, supra, we would unhesitatingly hold that this case is ruled by the City of Manatee case, supra, which finds support in State v. City of Inverness, 137 Fla. 629; 188 So. 767; ...