State v. Special Tax School Dist. No. 5 of Dade County

• Decision Date: 21 October 1932
• Citation: 107 Fla. 93,144 So. 356
• Parties: STATE v. SPECIAL TAX SCHOOL DIST. NO. 5 OF DADE COUNTY.
• Court: Florida Supreme Court

144 So. 356

107 Fla. 93

STATE v. SPECIAL TAX SCHOOL DIST. NO. 5 OF DADE COUNTY.

Florida Supreme Court

October 21, 1932

En Banc.

Action between the State of Florida and the Special Tax School District No. 5 of Dade County. From the judgment, the former appeals.

Affirmed. Appeal from Circuit Court, Dade County; Paul D Barns, Judge.

COUNSEL

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

Shipp Evans & Kline, of Miami, and Masslich & Mitchell, of New York City, for appellee.

OPINION

BROWN J.

This is an appeal from a decree of the circuit court of the Eleventh Judicial Circuit of Florida, in and for the county of Dade validating an issue of $158,000, refunding bonds of Special Tax School District No. 5 of Dade county, which the board of public instruction for said county proposes to issue without an election under the General Refunding Act of 1931, Ex Sess., being chapter 15772 of the Laws of Florida.

The following facts appear from the board's resolution authorizing the proposed refunding bonds, a copy of which resolution is attached to the petition for validation as Exhibit A:

The bonds to be refunded constitute portions of two issues of outstanding bonds which were favorably voted at an election and which mature as required by section 17 of art. 12 of the Constitution as amended in 1924. The bonds of the first issue were issued under date of June 1, 1926, in the aggregate amount of $635,000, consisting of 635 bonds of $1,000 each, numbered 1 to 635, inclusive, and maturing annually, June 1st, in numerical order, lowest numbers first, $22,000, in each of the years 1929 to 1937, and $23,000, in each of the years 1938 to 1956, all inclusive. The bonds of the second issue were issued under date of December 1, 1926, in the aggregate amount of $100,000, consisting of 100 bonds of $1,000 each, numbered 1 to 100, inclusive, and maturing annually, December 1st, in numerical order, lowest numbers first, $3,000, in each of the years 1929 to 1940, and $4,000 in each of the years 1941 to 1956, all inclusive.

All of the bonds of the first issue are now outstanding, except $36,000, of bonds which have been paid, being the $22,000 of bonds, numbered 1 to 22, inclusive, which matured June, 1, 1929, and $14,000, in bonds, numbered 23 to 36, inclusive, which matured June 1, 1930. All of the bonds of the second issue are now outstanding except $6,000 thereof which have been paid, being the $3,000 bonds, numbered 1 to 3, inclusive, which matured December 1, 1929, and the $3,000 bonds, numbered 4 to 6, inclusive, which matured December 1, 1930.

The $158,000 refunding bonds authorized by said resolution to be issued without an election consist of 158 bonds of $1,000 each, numbered 1 to 158, inclusive, are dated June 1, 1932, and mature annually, June 1st, in numerical order, lowest numbers first, $5,000, 1935 to 1937, inclusive, $10,000, 1938, $10,000, 1939, $15,000, 1940 to 1946, inclusive, and $18,000, 1947.

The result of the proposed refunding will be that no bonded debt evidenced by the issue dated June 1, 1926, will mature in any of the years 1932 to 1934, inclusive, and only $5,000 an amount less than 3 per cent. of the issue will mature in each of the years 1935 and 1936, and no bonded debt evidenced by the issue dated December 1, 1926, will mature in any of the years 1932 to 1936, inclusive.

The form of the refunding bonds, as fixed by the authorizing resolution (Tr. 20), contains the following recital, which is a covenant, as to the provision made for sufficient taxes:

'Provision has been made for the levy and collection of a direct annual tax upon all taxable property within said District sufficient to pay the principal and interest of this bond as the same shall fall due.'

Section 6 of the same resolution (Tr. 21) provides for the levy of such taxes.

The bonds appear to be authorized by the General Refunding Act of 1931, above referred to.

Section 17 of article 12 of the Constitution, as amended in 1924, reads as follows:

'Section 17. The Legislature may provide for special tax school districts to issue bonds for the exclusive use of public free schools within any such special tax school district, whenever a majority of the qualified electors thereof who are freeholders shall vote in favor of the issuance of such bonds, but no bonds shall be issued hereunder which shall exceed, together with the existing indebtedness of such special tax school district 20 per cent. of the assessed value of the taxable property of such district according to the last assessment for State and County purposes prior to the issuing of such bonds. Any bonds issued hereunder shall become payable within thirty years from the date of issuance in annual instalments which shall commence not more than three years after the date of issue. Each annual instalment shall be not less than three per cent. of the total amount of the issue. Whenever any such special tax school district has voted in favor of the issuance of such bonds a special tax for the payment of the interest on said bonds and the principal thereof as the same shall become due and payable, shall be levied on the taxable property within the district voting for their issuance in accordance with law, providing for the levy of taxes and such tax shall not be applied to any purpose other than the payment of the principal and interest of said bonds.'

Section 6 of article 9 of the Constitution, as amended in A. D. 1930, provides:

'Section 6: The Legislature shall have power to provide for issuing State bonds only for the purpose of repelling invasion or suppressing insurrection, and the counties, districts or municipalities of the State of Florida shall have power to issue bonds only after the same shall have been approved by a majority of the votes cast in an election in which a majority of the freeholders who are qualified electors residing in such counties, districts, or municipalities shall participate, to be held in the manner to be prescribed by law; but the provisions of this law shall not apply to the refunding of bonds issued exclusively, for the purpose of refunding of the bonds or the interest thereon of such counties, districts, or municipalities.'

Appellant's first contention is that an election is required for the issuance of refunding bonds as well as for the issuance of other bonds of special tax school districts; that the only effect of the 1930 amendment is to require that, at an election on an original issue of bonds, a majority of those who are qualified to vote on the question of issuing bonds shall participate.

In support of this contention, appellant cites the opinion in the case of Davis v. Dixon, 98 Fla. 87, 123 So. 536, 539, decided June 25, 1929, more than a year before the amendment of 1930 was adopted. We do not question the soundness of the opinion rendered in that case as applied to the constitutional and statutory provisions then existing. The opinion written by Mr. Justice Strum was concurred in by all members of this court. It was therein stated that:

'There was an obvious purpose in the adoption of our 1924 amendment. The purpose was not only to prevent the creation or increase of bonded indebtedness by special tax school districts, unless a majority of the freeholders should approve thereof, but also to require that such indebtedness, when contracted, should be discharged within fixed periods and according to a prescribed ratio of serial payments. To that end, the amendment of 1924 provided that the bonds which evidence such indebtedness should become payable serially in the ratio therein prescribed, so that such indebtedness should be paid within the time fixed.'

In the course of the opinion, the following observation, to which appellant has called our attention, was made:

'It may be, and probably is, the case, although it is unnecessary to now decide the point, that, if it is found impossible to pay the original bonds at maturity, new bonds might be issued with which to discharge the original indebtedness by pursuing, ab initio, the entire procedure provided for the original issuance of such bonds, including a submission of the matter to the electorate.'

And that is the course which was followed in authorizing the special tax school district refunding bonds involved in Juvenal v. Dixon, 99 Fla. 936, 128 So. 27, 30.

Both of these cases preceded the adoption by the people of the above-quoted amendment to section 6 of article 9 in November 1930. The object and purposes of this amendment, the conditions which brought it about, and the evils sought to be remedied thereby, were discussed in the case of Sullivan v. City of Tampa, 101 Fla. 298, 134 So. 211, 212. It was held in that case that: 'The constitutional amendment referred to unquestionably authorizes the issuance of refunding bonds without a vote of the people, when issued exclusively for the purpose of refunding the bonds or the interest thereon of counties, districts, or municipalities.' This applies of course to school districts as well as other special taxing districts. The appellant admits that the first part of this amendment, requiring that an election must be held for the authorization of an original issue of bonds, in which a majority of those who are qualified to vote on the question must participate, applies to school districts as well as other districts, but denies the applicability to school districts of the last part of the section, regarding refunding bonds. To this argument we cannot agree. This contention is based upon the words 'the provisions of this act,' that is, of this constitutional amendment, 'shall not apply' to refunding bonds, thus, it is claimed, leaving refunding bonds of school...