State Ex Rel. Elston Bank & Trust Co. v. Sholtz

Buford, J. The appeal in this case brings for review a judgment quashing and dismissing alternative writ of mandamus. The record shows that the State Board of Administration holds securities resulting from investment of surplus moneys accumulating in the sinking fund under statutory authority. That $37,000.00 invested in those securities was of the sinking fund from which $5,000.00 of relator’s bonds were entitled to be paid at maturity and that such bonds have matured. That by reason of the failure to collect sufficient moneys to replenish the fund after the accumulated surplus was invested in the securities there is not sufficient money on hand with which to pay off and discharge relator’s $5,000.00 in bonds. The purpose of the writ was to coerce the'Respondents as holders of the trust fund to sell the above mentioned securities, thereby converting them into cash with which to meet the obligations due to be paid out of the sinking fund and thereupon to pay the relator’s bonds now past due in the sum of $5,000.00. The return shows (and the motion to quash admits) that the securities held by the Board of Administration consist of the class of bonds in which the surplus sinking fund involved could be lawfully invested and that the funds were so invested in good faith. That most of the bonds in which *335 the fund was so invested have now matured, but that no adequate provision has been made for the payment of the bonds and that all of the same now stand in default. That for the Board of Administration to be required to sell the bonds under existing conditions would result in a great sacrifice to the trust fund; that the bonds of the par value of $37,000.00 constituting this trust fund which it pledged not only for the payment of relator’s $5,000.00 of bonds, but for the payment of other like bonds far in excess of the value of $37,000.00 could be sold under present conditions for not in excess of $7,500.00. So the question for our determination, as stated by the plaintiff in error, is: “When collections affected upon ad valorem taxes levied for the payment of outstanding bonds of a special road and bridge district, have been paid over to the original bond trustees, who have invested the same by purchasing securities which thereupon became a part of the sinking fund for the payment of such bonds, and the securities by reason of the Board of Administration Act, have been transmitted to the State Treasurer as District Treasurer ex-officio to be held as a part of such sinking fund under the jurisdiction and control of the Board of Administration, but there is not in the sinking fund sufficient cash to pay any one of the District’s matured bonds, does a holder of the latter have the legal right, by mandamus, to compel the Board of Administration to obtain money for the sinking fund by selling such securities, and to then pay such bondholder’s matured bonds with the money so obtained, notwithstanding the attempted defense that ‘under the present distressed conditions the sale of any of. said securities would be disastrous and result in loss to the sinking fund?” Now, clearly,, it is the duty of the statutory trustee to, as *336 soon as practicable, convert the securities in the trust fund into cash and to apply the proceeds to the payment of matured obligations' due to be paid from that fund, but the determination of the manner and procedure by which this is to be accomplished is a matter involving the exercise of sound administrative discretion. In the exercise of this discretion it is the duty of the Trustee to determine whether the issuing units should be coerced to levy a tax to produce a fund with which to pay off and discharge the obligations represented by the securities or should sell them on the market regardless of the necessary sacrifice incident thereto. The showing made by the record establishes the fact that other bondholders not parties to' these proceedings have a vested interest in the trust fund and will have an interest in the proceeds to be derived from the securities held in that fund. As long as this condition exists, that is as long as it appears that others, known or unknown, have a vested interest in,, or vested rights in, the trust fund, it would not be within the province of a law court exercising jurisdiction in mandamus to compel the- Trustee to sacrifice a large portion of the fund, that one having a right in the fund may be paid in full. If the Board of Administration is not inclined to act in the premises the relator may proceed in a court of chancery where it may bring in all others like situated and there procure an adjudication of the rights of all interested parties and have the benefit of the process of that court accordingly. Aside from this, the matter of granting a writ of mandamus is largely discretionary in the court of original jurisdiction. It not appearing that the relators had the clear legal right to have the alleged legal duty performed or that it was the clear legal duty of the respondents to perform the alleged *337 legal duty sought to be coerced, the judgment should be affirmed. It is so ordered. Affirmed. Whitfield, C. J., and Terrell and Brown, J. J., concur. Davis, J., concurs specially. Ellis, P. J., dissents.