State v. City of Jacksonville

• Decision Date: 15 February 1938
• Parties: STATE v. CITY OF JACKSONVILLE.
• Court: Florida Supreme Court

179 So. 172

131 Fla. 163

STATE v. CITY OF JACKSONVILLE.

Florida Supreme Court, Division A.

February 15, 1938

Proceeding by the City of Jacksonville against the State, for the validation of a second issue of municipal revenue certificates to be issued for the improvement of an existing municipal electric plant. From a decree of validation, the State appeals.

Decree affirmed. Appeal from Circuit Court, Duval County; A. D. McNeill, judge.

COUNSEL

William A. Hallowes, III, and James H. Bunch, both of Jacksonville for the State.

Austin Miller and Eli Finkelstein, both of Jacksonville, for appellee.

OPINION

BROWN Justice.

This is an appeal from a final decree of the circuit court for Duval county, validating a second issue of revenue certificates by the City of Jacksonville, secured by the revenues of the city's electric light plant. The ordinance authorizing this second issue of revenue certificates, amounting to $1,000,000, provided that they should be of equal dignity with the first issue; both issues being payable solely out of the revenues of the plant to be improved. The court in its decree of validation held that this second issue of revenue certificates was for the further improvement of the same project for which the first issue was authorized, and that the revenues of the electric plant were more than sufficient to retire both issues.

The petition for validation was filed December 1, 1937, and the proceedings were regular in form. On December 21, 1937, the State through its state attorney, William A. Hallowes, III, filed its answer questioning the right of the petitioner to have said certificates validated upon several grounds. The only ground of objection thus interposed which is insisted upon and argued on this appeal is that the ordinance authorizing the present issue makes the second issue of equal dignity with the first and thereby impairs the obligation of the contract evidenced by the first issue of revenue certificates in contravention of the contract clause of both the State and Federal Constitutions. Const.Fla.Declaration of Rights, § 17; Const.U.S. art. 1, § 10, cl. 1.

All questions raised in the court below, except the one question above posited, have heretofore been definitely adjudicated by this court in the case of Brooks v. City of Jacksonville, 127 Fla. 564, 173 So. 365, wherein the validity of the first, and only outstanding issue of revenue certificates of the petitioner, was adjudicated.

In support of their respective contentions, the appellant cites State v. Milam, 113 Fla. 491, 153 So. 100, 125, 136; State v. Boring, 121 Fla. 781, 164 So. 859; Bardsley v. Sternberg, 18 Wash. 612, 52 P. 251, 524; La France Fire-Engine Company v. Davis, 9 Wash. 600 38 P. 154; 44 C.J. 1174; State v Harris, 119 Fla. 375, 161 So. 374; and the appellee, City of Jacksonville, cites Boatright v. City of Jacksonville, 117 Fla. 477, 158 So. 42; Brockenbrough v. Board of Water Com'rs, etc., 134 N.C. 1, 46 S.E. 28; Brooks v. City of Jacksonville, 127 Fla. 564, 173 So. 365; Howe v. Long Prairie Levee Dist., 187 Ark. 725, 62 S.W.2d 10; Krietmeyer v. Hemphill, 5 Cir., 19 F.2d 513; Sovereign Camp v. Lake Worth Inlet District, 119 Fla. 782, 161 So. 717, 99 A.L.R. 1482.

It appears from the petition that the only outstanding obligation of the petitioner secured solely by the net or gross revenues of the said electric light plant is the $1,250,000 of electric revenue certificates issued May 1, 1937, and maturing serially in the amount of $100,000 per year on May 1st of each year from 1938 to 1948, inclusive; $150,000 maturing in 1949. It further appears that the net revenue of the petitioner from its municipal electric plant amounted to $1,715,543 for the year 1934, $1,756,785 for the year 1935, and $1,980,197.99 for the year 1936. This petition was filed during the year 1937. It is stated in the recently-filed brief for appellee, and not denied, that the net revenue of said plant for the year 1937 amounted to $2,153,551.29. The petition further alleged that the net revenues of the petitioner from said electric plant are greatly in excess of the total bond maturities, both principal and interest, becoming due throughout any year in which maturities shall accrue on said electric certificates, including the maturities of the second of revenue certificates which the court was recently asked to validate. The ordinance authorizing the second issue of revenue certificates provided that the aggregate principal sum of the same shall amount to $1,000,000; that the certificates shall be dated April 1, 1938 in the denomination of $1,000 each; that they shall bear interest at a rate not to exceed 6 per cent. per annum to be definitely fixed by the City Commission, approved by the mayor, and concurred in by the city council of said city; such interest payable semiannually; and that said certificates shall mature serially in numerical order, $100,000 per year for a period of ten years, that is, on April 1st of each year from and including the year 1939 to and including the year 1948.

In the decree of validation the court below, among other things, had this to say:

'And it further appearing to the Court that the electric revenue certificates herein sought to be validated are to be used for the purpose of raising funds necessary in order to finance the cost of construction of extensions and improvements to the municipal electric plant of petitioner, such extensions and improvements to consist of installation of two additional cables between the Main Generating Station and Laura Street Sub-Station, and from Laura Street Sub-Station to Main Street Sub-Station, with switchboards, reactors, switching equipment and other extensions and additions to the underground distribution and overhead transmission systems, necessary to provide operating conditions which will safely guarantee continued service in accordance with the increasing demand on said municipal electric plant and distribution system so as to increase the appliances for the manufacture and distribution of electricity, and necessary for the continued operation of the said electric plant, and that the

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