Flint v. Duval County

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 20 [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 21 In a bill of complaint brought by Hollis Flint, a resident taxpayer of Duval County, it is alleged: "II. That the Legislature of the State of Florida, at its regular session in 1935 enacted Chapter 17246 of the Laws of Florida authorizing and providing for the construction of a bridge across the St. Johns River in the City of Jacksonville to a terminus on the south side of the river in that part of said city formerly known as South Jacksonville (hereinafter called the Main Street Bridge); that said Chapter was approved at a special election which was held on the fifth day of November, A.D. 1935, by a majority of the qualified electors participating in said election; that 8020 votes were in favor of the approval of said Chapter and 1481 votes were against the approval thereof. "III. That said Chapter 17246 refers to Chapter 17534 of the Laws of Florida enacted in 1935, and Chapter 7462 of the Laws of Florida enacted in 1917, both of which are essential to the proper construction of Chapter 17246. "IV. That the Legislature of the State of Florida, at its regular session in 1917, enacted Chapter 7462 of the Laws of Florida authorizing Duval County to construct a bridge across the St. Johns River (hereinafter called the Broad Street Bridge), providing for an election to determine whether said bridge should be a free bridge or a toll bridge and prescribing how tolls and charges should be fixed in the event a majority of the qualified electors in said county should vote for a toll bridge; that an election was held *Page 22 under the provisions of said Act, bonds were issued by said county for the construction of said bridge in the sum of $950,000.00, said bonds bearing interest at the rate of five per cent. per annum, payable semi-annually, dated January 1, 1918, and due January 1, 1948, and it was determined at said election that said bridge should be a toll bridge; that the Legislature of the State of Florida at its regular session in 1921 authorized the issuance of six per cent. bonds by said county in the sum of $25,000.00, the proceeds to be used for the payment of part of the cost of said bridge; that said bridge was constructed and the entire cost thereof was paid from the proceeds derived from the sale of said bonds and said bridge was opened for traffic on July 4, 1921, and is now and since then has been continuously operated by Duval County as a toll bridge. "V. That from July 4, 1921, to July 21, 1936, the total receipts collected as tolls and charges for the use of the Broad Street Bridge amounts to $3,543,542.14; that the total expenditures for said period for the operation, maintenance and repair of said bridge amount to $949,606.49; that the sum of $2,587,435.65 of said tolls and charges has been turned over to the trustees for said bonds and the County Commissioners retain for the operation, maintenance and repair of said bridge the sum of $16,500.00. "VI. That from the tolls collected for the use of said bridge, all of the said second issue of bonds and all of the said first issue, except $71,000.00, had prior to August 1, 1936, been paid and cancelled. That from said tolls, the trustees for said bonds in pursuance of Chapter 16400 of the Laws of Florida, assigned to the State Board of Administration 318,000 bonds of Duval County, Florida, other than said bridge bonds to be used by said Board of Administration as a sinking fund for certain road bonds of said *Page 23 county, and had purchased and cancelled other bonds of said county not pertaining to said bridge in the sum of $361,000.00. That after providing said sinking fund and purchasing bonds as aforesaid, said county, on August 1, 1936, had net cash on hand, after paying all costs of operation, maintenance and repair of said bridge, derived from the tolls thereon the sum of $360,283.52. "VII. That Chapter 17534 of the Laws of Florida (Senate Bill No. 771) provided that an election be held on October 8, 1935, to determine whether the Broad Street Bridge should remain a toll bridge or whether it should be a free bridge after January 1, 1936. That said election was enjoined by the Circuit Court of Duval County, Florida, in the case of Jennings, et al., v. Duval County, et al.; that the case was appealed to the Supreme Court of the State of Florida and affirmed as appears in 164 So. 356; that said Chapter 17534 was in said case held unconstitutional by the Supreme Court of the State of Florida. "VIII. That on the 20th day of July, 1935, Duval County and the State Road Department entered into a contract for carrying into effect the provisions of Chapter 17246 of the Laws of Florida, a copy of which contract is hereto attached marked Exhibit `A,' and made a part hereof to the same extent as if fully set out herein. "IX. That in pursuance of said contract, the said State Road Department has caused a preliminary survey and plans and specifications to be made for the Main Street Bridge and approaches thereto, and has caused an estimate to be prepared of the cost of the materials and construction of the said bridge and approaches, and has filed with the Board of County Commissioners of Duval County a copy of such plans and specifications and estimated costs. *Page 24 "X. That the Board of County Commissioners of Duval County has fixed the location of said bridge, and the same has been approved by the State Road Department. "XI. That on the 10th day of October, A.D. 1936, the Board of County Commissioners of Duval County, Florida, adopted a resolution authorizing the issuance of debentures in the sum of $1,100,000.00 as authorized by Chapter 17246, which together with the grant expected to be made by the United States of America, will be sufficient to pay for the cost of the construction of the Main Street Bridge, to-wit, $1,429,000.00, exclusive of lands, easements, rights of way, franchises, riparian rights and real and personal property and rights and interests of every description necessary to provide a right of way for said bridge. A true and correct copy of said resolution is hereto attached and marked Exhibit `B' and made a part hereof to the same extent as if fully set out herein. "XII. That Chapter 17246 is unconstitutional and said resolution passed in pursuance thereof, is illegal and void for the following reasons: "1. Chapter 17246 embraces two subjects, to-wit: Broad Street Bridge and Main Street Bridge. "2. Sections 4 and 6 of Chapter 17246 provide a different method for fixing tolls from that provided in Section 5 of Chapter 7462 of the Laws of Florida. "3. The use of moneys derived from the operation of the Broad Street Bridge for acquiring rights of way, franchises and other property for the Main Street Bridge and approaches thereto, and in constructing the necessary roads and streets leading to said bridge, and in paying interest as provided in Section 13 of said Act, is in contravention of the opinion in the case of Jennings,et al., v. Duval County, et al., supra. *Page 25 Said debentures are in effect bonds and cannot be legally issued without an election in Duval County, as provided in Section 6 of Article 9 of the Constitution of Florida, as amended in 1930. "5. Chapter 17246 requires that a mortgage or trustee be placed on the bridge and the approaches thereto, which is abandoned by the resolution, and the resolution is therefore in violation of the terms of said Chapter. "6. The operation of the Broad Street Bridge as a toll bridge in the same manner as is required of the Main Street Bridge by Chapter 17246 of the Laws of Florida is contingent on the election required by Section 11 of Chapter 17246. Said election was enjoined as aforesaid, and therefore all provisions relating to the operation of the Broad Street Bridge for the benefit of the Main Street Bridge are unauthorized by law. "7. Under Section 16 of Chapter 17246, the Broad Street Bridge cannot be operated as a toll bridge after January 1, 1948, or at an earlier date if said bonds for the Broad Street Bridge are paid, or adequate provision shall have been made for their payment prior to that date. "8. The use of all of the proceeds from said bridges, as provided in said resolution, is in contravention of Kathleen Citrus Land Company v. City of Lakeland, reported in 169 So. 356. "XIII. That the defendants, unless enjoined and restrained from so doing, will carry out the terms and provisions of Chapter 17246 of the Laws of Florida, and said resolution passed in pursuance thereof, contrary to the Constitution and Laws of the State of Florida to the irreparable injury of the plaintiff. "XIV. That the plaintiff is without remedy except in a *Page 26 court of equity. The plaintiff therefore respectfully prays as follows: "That the defendants be required to answer this bill of complaint, but not under oath, the answer under oath being hereby specifically waived. That the Court grant the plaintiff an order temporarily enjoining and restraining the defendants from executing and delivering to the State Road Department said debentures as provided in said resolution, and that the defendants be temporarily enjoined and restrained from expending any of the moneys derived from the operation of the Broad Street Bridge for the purposes specified in Sections 13 and 14 of Chapter 17246, and that on final hearing, said injunction be made permanent." The defendants' answer contains the following: "MOTION TO DISMISS "The defendants move the court to dismiss the bill of complaint herein upon the following grounds: "1. There is no equity in the bill of complaint. "2. The plaintiff is not entitled to the relief prayed for in the bill of complaint. "3. Chapter 17246 does not violate the Constitution of the State of Florida. "4. Said resolution is not in contravention of the Constitution of the State of Florida. "5. Said resolution does not violate any of the provisions of Chapter 17246 of the Laws of Florida. "6. Said resolution does not violate any of the provisions of Chapter 17534 or Chapter 7462 of the Laws of Florida. "7. Said resolution is in accordance with the principles announced by the Supreme Court of the State of Florida *Page 27 in regard to the issuance of evidences of indebtedness without requiring the same to be submitted to the freeholders of a county for approval, as provided in Section 6 of Article9 of the Constitution of Florida, as amended in 1930." Decree was rendered as follows: "This cause came on this day to be heard upon application for temporary restraining order upon the bill of complaint, and the motion of the defendants to dismiss the bill of complaint, and the same having been argued by counsel for all parties, upon consideration thereof. "IT IS ORDERED, ADJUDGED AND DECREED that said application for temporary restraining order be, and the same is, hereby denied; and that the motion to dismiss the bill of complaint be, and the same is hereby granted. "And the plaintiff expressing the desire not to further amend the bill of complaint, and the Court considering the bill without equity, the bill of complaint is hereby dismissed. "DONE AND ORDERED at Chambers, Jacksonville, Florida, this 13th day of October, A.D. 1936. "BAYARD B. SHIELDS, "Judge." Plaintiff appealed and assigned as errors the refusal of a temporary injunction and the dismissal of the bill of complaint. Resolutions adopted by the County Commissioners contain the following: "SECTION 4. To aid in financing the cost of the materials and the construction of the Project, there are hereby authorized to be issued revenue debentures of Duval County, herein called `Debentures,' each to be known as `Duval County Four Per Cent Bridge Revenue Debenture of 1936,' in the aggregate principal sum of $1,100.000. *Page 28 "The Debentures shall be dated August 1, 1936, shall be in the denomination of $1,000.00 each, shall be numbered in order of their maturity from 1 to 1100, both inclusive, shall bear interest at the rate of four per cent. per annum, payable semi-annually, on February 1st and August 1st in each year, from the date thereof until maturity; shall be payable as to both principal and interest at the office of the Treasurer of the State of Florida at Tallahassee, Florida, or at the option of the holder, at the __________ New York City, New York, in such coin or currency as is, on the respective dates of payment of the principal thereof and interest thereon, legal tender for the payment of public and private debts; shall be in coupon form, shall be registerable as to the principal only at the option of the holder, and shall mature serially on August 1st in the years and amounts as follows: "Year Amount Year Amount 1939 $31,000 1950 $47,000 1940 32,000 1951 48,000 1941 33,000 1952 50,000 1942 34,000 1053 52,000 1943 35,000 1954 54,000 1944 37,000 1955 56,000 1945 38,000 1956 58,000 1946 40,000 1957 60,000 1947 42,000 1958 63,000 1948 44,000 1959 65,000 1949 45,000 1960 67,000 1961 69,000 The Debentures shall be executed in behalf of Duval County by the signature of the Chairman of the Board of County Commissioners, shall be sealed by the corporate seal *Page 29 of said Board and shall be attested by the Clerk of said Board, and the interest coupons thereto attached shall be executed by the facsimile signature of said Chairman and said Clerk. "SECTION 5. The Debentures and coupons attached thereto shall be substantially in the following form, to-wit: "No. __________ $1,000 UNITED STATES OF AMERICA STATE OF FLORIDA "DUVAL COUNTY 4% BRIDGE REVENUE DEBENTURES OF 1936. Duval County, a political division of the State of Florida, for value received, hereby promises to pay to bearer, or, if this Debenture be registered, to the registered owner hereof solely from the net revenues and income pledged to the payment hereof, and not otherwise, the principal amount of One Thousand Dollars ($1,000) on August 1, 19__, (unless redeemed prior thereto as hereinafter provided) and to pay interest on said principal sum solely from said net revenues and income, and not otherwise, from the date hereof at the rate of four per centum (4%) per annum, payable semi-annually on February 1 and August 1st in each year, upon the presentation and surrender of the interest coupons attached hereto as they severally become due, until the maturity of this Debenture. Both the principal of and interest on this debenture are payable at the office of the Treasurer of the State of Florida in Tallahassee, Florida, or, at the option of the holder at the __________, New York City, New York, in such coin or currency as is, on the respective dates of payment thereof, legal tender for the payment of public and private debts. *Page 30 "This Debenture is one of a duly authorized issue of Debentures, limited to an aggregate principal amount of $1,100,000.00 of like date, tenor and effect except as to number and maturity, issued pursuant to and in full compliance with the Constitution and Statutes of the State of Florida, particularly Chapter 17246, Laws of Florida for 1935, approved by the qualified electors of Duval County, Florida, at the special election held on November 5, 1935, and by virtue of a Resolution entitled,`A RESOLUTION PROVIDING FOR THE ISSUANCE OF $1,100,000.00 OF REVENUE DEBENTURES OF DUVAL COUNTY, FLORIDA, TO AID IN FINANCING THE COST OF THE MATERIALS AND THE CONSTRUCTION OF A BRIDGE ACROSS THE ST. JOHNS RIVER AND APPROACHES THERETO, EXTENDING FROM MAIN STREET TO GIBSON STREET IN THE CITY OF JACKSONVILLE' duly adoted by the Board of County Commissioners of Duval County, Florida, on the ________ day of __________, 1936. "This Debenture is issued to aid in financing the cost of the materials and the construction of said bridge and approaches thereto, and is payable from a Debenture Fund into which there shall be set aside in approximately equal monthly installments, out of the net revenues and income derived from said bridge and out of net revenues and income derived from the operation of the existing bridge across the St. Johns River, heretofore constructed pursuant to Chapter 7462 of the Laws of Florida for 1917, after all bonds issued to finance the construction of said last mentioned bridge have been paid, and after provision has been made for the payment of all costs of maintenance, repairs, operation of said last mentioned bridge, such sums as shall be sufficient after provision for the payment of all costs of maintenance, repairs and operation of the bridge for the financing of which this Debenture is issued, for *Page 31 the payment of the principal of and interest on the Debentures of the issue of which this Debenture is one as the same respectively shall become due. This debenture together with all other Debentures of the issue of which this Debenture is one is secured by an exclusive first lien upon all revenues and income derived from the operation of the bridge for the financing of which this Debenture is issued, after deduction only of the reasonable costs of operation, maintenance and repairs of said bridge and by a further exclusive lien upon all revenues and income derived from the operation of the existing bridge across the St. Johns River constructed pursuant to Chapter 7462 of the Laws of Florida for 1917, after all bonds issued to finance the construction of said last mentioned bridge have been paid, and after deduction only of the reasonable costs of operation, maintenance and repairs of said last mentioned bridge. "This Debenture is not a general obligation of Duval County or a charge upon the taxable property of said County, and is not payable from or a charge upon any other funds than those pledged to the payment thereof, nor is it a charge upon any property of Duval County, other than the net revenues and income hereinabove specified, nor shall said County be subject to any pecuniary liability hereon. No holder or owner of this Debenture shall ever have the right to compel any exercise of the taxing power of the State of Florida or Duval County to pay this Debenture or the interest hereon nor to enforce payment hereof against any property of said County, nor shall this Debenture constitute a charge, lien, or encumbrance, legal or equitable, upon any property of said County, other than the net revenues and income aforesaid. "This Debenture and the coupons attached hereto are *Page 32 issued upon the following terms and conditions, to all of which each holder and owner hereof consents and agrees: "(a) Title to this Debenture, unless this Debenture be registered as herein provided, and to the coupons attached hereto, may be transferred by delivery in the same manner as a negotiable instrument payable to bearer; and "(b) Any person in possession of this Debenture, unless this Debenture be registered as herein provided, or of the coupons attached hereto, regardless of the manner in which he shall have acquired possession, is hereby authorized to represent himself as the absolute owner thereof, and is hereby granted power to transfer absolute title thereto by delivery thereof to a bonafide purchaser, that is to say any one who shall purchase the same for value (present or antecedent) without notice of prior defenses or equities or claims of ownership enforceable against his transferor; every prior holder or owner of this Debenture, unless this Debenture be registered as herein provided, and of the coupons attached hereto, waives and renounces all of his equities or rights therein in favor of every such bona fide purchaser, and every such bona fide purchaser shall acquire absolute title thereto and to all rights represented thereby; and "(c) Duval County may treat the bearer of this Debenture, unless this Debenture be registered as herein provided, or of the coupons attached hereto, as the absolute owner thereof for all purposes without being affected by any notice to the contrary. "Duval County reserves the right to redeem and pay from any funds that may be available therefor all or any part of the issue of Debentures, of which this Debenture is one, which may be outstanding, on any interest payment date after the expiration of five years from the date of the *Page 33 issuance thereof, the Debentures to be redeemed in reverse order of maturity (selections as between Debentures of the same maturity to be by lot) at a price per Debenture equal to the principal amount thereof, plus a premium of one-fourth (1/4) of one per cent. of the principal amount for each year, or fraction thereof, from the redemption date to the stated date of maturity. In the event of redemption of all or any part of this issue of Debentures, notice shall be given by registered mail to the registered owners of the Debentures to be redeemed at their addresses appearing on the Debenture register at least thirty days prior to the redemption date, and, unless all of the Debentures to be redeemed are registered Debentures, also by publication, once a week for four consecutive weeks prior to the redemption date in a financial newspaper published daily in the Borough of Manhattan, City and State of New York, the first publication to be not more than forty-five nor less than thirty days prior to the redemption date, all as more fully provided in said resolution. If this Debenture be called for redemption, interest shall cease to accrue hereon from and after the date fixed for redemption, unless default shall be made in the payment of the redemption price upon presentation hereof prior to the sixtieth day following the redemption date, all as more fully provided in said resolution. "The rights and duties of the County and of the holders of the Debentures and coupons, and the terms and provisions of the resolution, may be modified or altered in any respect by resolution of said Board of County Commissioners, with consent of the holder or holders of seventy-five per centum (75%) in principal amount of all the Debentures then outstanding, such consent to be evidenced by an instrument or instruments executed by such holder or holders and duly acknowledged or proved in the manner of a *Page 34 deed to be recorded, and such instrument or instruments shall be filed in the office of the Clerk of the Board of County Commissioners, and shall be a public record, provided that no change of maturity date or interest rate shall be made on any Debenture without the consent of the holder thereof. "This Debenture shall pass by delivery as hereinabove provided, but it may be registered as to principal in the name of the holder on the books of the Treasurer of the State of Florida, such registration being noted on the back hereof, after which no transfer shall be valid unless made on said books by the registered owner and similarly noted on the back hereof, but it may be discharged from registry by being transferred to bearer on the books of said Treasurer and thereafter shall be transferable by delivery, but it may be again, from time to time, registered or transferred to bearer as before. No such registration as to principal shall affect the negotiability of the coupons attached, which shall continue to pass by delivery merely. "IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required by the Constitution and statutes of the State of Florida and by the resolutions of the Board of County Commissioners to exist, to happen, and to be performed, precedent to and in the issuance of this Debenture, exist, have happened, and have been performed in due time, form and manner as required by law. "IN WITNESS WHEREOF, the County of Duval, State of Florida, has caused this Debenture to be executed in its name by the Chairman of its Board of County Commissioners, and its seal to be hereunto affixed and to be attested by its Clerk, and the interest coupons hereto attached to be executed by said Chairman and said Clerk with their facsimile *Page 35 signatures and this Debenture to be dated the first day of August, 1936. "COUNTY OF DUVAL, STATE OF FLORIDA, "(SEAL) "By _______________________________ "Chairman of its Board of County "Attest: Commissioners. __________________________________ "Clerk of said Board." * * * "(FORM OF COUPON) "No. __________ $20.00 "On the first day of __________, 19__, unless the Debenture herein mentioned shall have been called for previous redemption, the County of Duval, State of Florida, will pay to bearer, solely from the net revenues and income pledged to the payment hereof, and not otherwise, at the office of the Treasurer of the State of Florida in Tallahassee, Florida, or, at the option of the holder, at the __________, New York City, New York, upon surrender of this coupon, Twenty Dollars ($20.00) in such coin or currency as is, on the date of payment hereof, legal tender for the payment of public and private debts, being six months' interest on its Revenue Bridge Debentures of 1936 dated August 1, 1936, and numbered __________. "_______________________________ "Chairman of Board of County Commissioners. "_______________________________ "Clerk of said Board."