Opinion
No. 33035.
February 14, 1938.
1. COUNTIES.
The clear intent of statute relating to validation of proposed bond issues of political subdivisions of state is that proposed issue shall not be permitted if there is a valid objection thereto (Code 1930, section 313).
2. COUNTIES.
Under statute relating to validation of proposed bond issue by county, taxpayer may amend objections to issuance of bonds at any time prior to final hearing as to their validity (Code 1930, sections 313, 391).
3. COUNTIES.
Proposed county bonds to take up outstanding county obligations were "funding" and not "refunding" bonds, hence were not withdrawn from operation of statute limiting county's bonded indebtedness to 10 per cent. of assessed value of taxable property in county, by the statute providing that no limitations in the act shall apply to issuance of refunding bonds (Code 1930, section 5977; section 5986, as amended by Laws 1932, chapter 167; Laws 1932, chapter 235, sections 3, 7).
4. COUNTIES.
A "refunding bond," within statutes relating to issuance of bonds by political subdivisions, is a bond issued to pay off an older issue, and before a debt can be "refunded" it must have been first funded; to "refund a debt" meaning to fund it again or anew; the word "fund" in this connection meaning to convert into a more or less permanent debt bearing regular interest, to put into form of bonds, stocks or other securities bearing regular interest, and to provide or appropriate a fund or permanent revenue for the payment thereof (Code 1930, section 5977; section 5986, as amended by Laws 1932, chapter 167; Laws 1932, chapter 235, sections 3, 7).
5. COUNTIES.
County supervisors must find as a jurisdictional fact that proposed funding bonds when added to county's outstanding bonded indebtedness shall not exceed 10 per cent. of assessed valuation of taxable property within county, and set forth such fact in its order before bonds can validly be issued or validated (Code 1930, sections 313, 5977; section 5986, as amended by Laws 1932, chapter 167; Laws 1932, chapter 235, sections 3, 7).
APPEAL from the chancery court of Hancock county. HON. D.M. RUSSELL, Chancellor.
Edward I. Jones, of Bay St. Louis, for appellants.
The transcript of the proceedings of the board of supervisors in the case at bar does not show a full compliance with the law governing the issuance of bonds and the existence of jurisdictional facts necessary to be shown in its proceedings.
The board of supervisors of Hancock County is a court of special and limited jurisdiction when proceeding to borrow money and issue bonds, pledging the full faith and credit of the county, and the record of the proceedings of a court of special and limited jurisdiction must affirmatively show the existence of every jurisdictional fact necessary to authorize it to act; otherwise its proceedings and judgment are void.
Gordon v. Smith, 122 So. 762; City of Pascagoula v. Krebs, 118 So. 286; Henderson Molpus Co. v. Gammill, 115 So. 716; Bd. of Suprs. v. Ottley, 146 Miss. 118, 112 So. 466; Aden v. Bd. of Suprs., 142 Miss. 696, 107 So. 753; Smythe v. Whitehead, 133 Miss. 184, 97 So. 529; Monroe County v. Minga, 127 Miss. 702, 90 So. 443; Robertson v. Bank, 115 Miss. 840, 76 So. 689; Henry v. Board of Supervisors, 111 Miss. 434, 71 So. 742; Robb v. Tel. Co., 104 Miss. 165, 61 So. 170, 977; Adams v. Bank, 103 Miss. 744, 60 So. 770; Hinton v. Perry County, 84 Miss. 536, 36 So. 565; Bolivar County v. Coleman, 71 Miss. 836, 15 So. 107; Marks v. McElroy, 67 Miss. 545, 7 So. 408.
The legislature in the year 1932 by enacting House Bill No. 218, which is now known as Chapter 104 of the Laws of 1932 of the State of Mississippi, provides for the limitation upon the levies of ad valorem taxes after the expiration of the fiscal year ending September 30, 1932, and under said law the county of Hancock was limited to a levy of eight mills for revenue to be used for all general county purposes and to a levy not to exceed seven mills for the maintenance and construction of roads and bridges in said county.
The Board of Supervisors of Hancock County made levies for the general fund and for the road and bridge fund of Hancock County to the maximum levy allowed by said act for these particular funds and all the money collected by the imposition of these levies was expended and in addition the board of supervisors expended a large amount, allowances for which were made by the board of supervisors and the proceeding herein is an attempt to issue bonds to pay the deficit and would in effect circumvent the limitations fixed by said Chapter 104 of the Laws of 1932.
The objections do not complain against the allowance of any specific claim or against the allowance or payment of the combined total of all of the claims, but do strenuously object to the floatation of a bond issue, with which to raise the money to pay them, especially in view of the fact that the county at the present time has an outstanding bonded indebtedness of over 25 per cent of the last completed assessment, and Chapter 235 of the Laws of 1932 specifically limits counties to issue bonds not to exceed more than 10 per cent of the last completed assessment of said county, and surely there is no merit to the contention that the objections herein set out are collateral attacks upon the judicial acts of the board of supervisors when the claims or allowances are not contested nor the payment thereof, but these are invited objections filed at the hearing wherein the taxpayers were notified to file objections, and the objections filed herein are direct attacks.
J.F. Galloway, of Gulfport, amicus curiae.
Proponents of the bond issue, it seems, have filed no answer to the objections by taxpayers, but have rested their cause upon the proposition that under the provisions of Section 5977 of the Code of 1930, where the board has adjudicated the fact that there were "outstanding, undisputed, valid and legal obligations of the county" that the board of supervisors, if there was no money in the county treasury with which to pay the said claims lawfully, to issue bonds in a sufficient amount to pay the same, without any notice to the taxpayers, or giving the taxpayers a chance to express themselves at an election to be held therefor.
If that position be true, then the board of supervisors may disregard the budget laws, Chapter 91 of the Code of 1930; disregard the provisions of Chapter 232 of the Acts of 1932; disregard the provisions of Chapter 235 of the Acts of 1932; Chapter 197 of the Acts of 1932; Chapter 198 of the Acts of 1932 and Chapter 204 of the Acts of 1932; as well as all of the other code provisions appearing in the Code of 1930 governing and restricting the issuance of bonds by board of supervisors, and other public authorities having jurisdiction over such matters, which so clearly announce the intention, purpose and fixed policy of the legislature, for the protection of the taxpayers, to require such authorities to conduct their fiscal affairs on a cash basis as is so fully and clearly stated in Chapter 235 of the Acts of 1932.
It is believed that the proponents of the bond issue have overlooked the fact that Chapter 235 has modified, limited, and rendered invalid, the provisions of Section 5977, which for a brief period of time, appeared to give to the public authorities, the power now here contended for.
The obligations sought to be paid are alleged in the order to be valid legal obligations of the county, but so far as the record shows there is no way the taxpayers or anyone else can know whether this be true or not. No notice was given to the taxpayers giving them an opportunity to appear and contest the alleged obligation, or to show cause why so large an amount of bonds should be issued.
The board in effect has announced to the taxpayers of Hancock County that it is none of their business except to shell out the cash after the bonds are sold.
It is submitted that even under the provisions of Section 5977 of the Code of 1930, the public authorities were required to serve notice by publication, at least upon the taxpayers, that they had incurred legal obligations, beyond their budgets, beyond the legal limits of bond issues, and contrary to the provisions of the budget laws, all mandatory in their requirements, that no such condition should exist.
This court also has recognized the wisdom of giving the taxpayers some say in the matter of bond issues.
Madison County v. Howard, 80 So. 524, 119 Miss. 133.
It is submitted that if the public boards have the authority to issue bonds to pay for claims incurred beyond the revenues of the several years, and where it is not shown that an emergency has existed, that acts of Providence have intervened, or that the taxpayers were not notified of the purpose to issue said bonds, pay such claims, and an opportunity given at a day certain to be heard in opposition to said claim, testing their validity and legality, and also the issuance of such bonds, then the budget laws of the state may as well never have been enacted, and Chapters 232 and 235 of the Acts of 1932 are mere waste of printers ink upon our law books.
Gex Gex and E.J. Gex, all of Bay St. Louis, for appellee.
The minutes stated that there were existing, outstanding, undisputed, valid and legal indebtednesses and obligations of the county amounting to $65,000, with insufficient funds with which to pay same, and that pursuant to the requirements of Section 5977 of the Code of 1930, and the mandatory requirements thereof, the bonds would be issued. This is all that is required, under the provisions of Section 5977.
But counsel for appellants contends that that section has no application, because it has been repealed by Chapter 235 of the Laws of 1932, which in section 3 thereof limits the amount of bonds which a county may issue to 10% of the assessed value of the county. If he were right in stating that Chapter 235 repealed Section 5977, we would concede that the minutes of the board would have to reflect the facts which he claims were requirements before the issue of bonds could be made; however, Chapter 235 of the Laws of 1932 was never intended to affect Section 5977 of the Code of 1930. In fact, the Code of 1930, Section 5986, provides that no county shall issue bonds in excess of 15% of the assessed valuation of the county, "except to pay outstanding obligations as herein provided." This section as well as Section 5977 are included in Chapter 152 of the Code of 1930, which also includes Section 5979.
Choctaw County v. Tennison, 134 So. 900.
Each of the statutes must be read in conjunction with the others, and where possible to do so, all the various sections of the code must be harmonized.
Harvey v. Covington County, 138 So. 403; Green v. Hutson, 139 Miss. 471; Borroum v. Purdy Road Dist., 131 Miss. 778; Johnson v. Yazoo County, 113 Miss. 435.
No attempt at any time was made by the objectors to question the validity or legality of the claims sought to be paid by the bond issue in question, nor the facts adjudicated by the board as appear from the minutes, which were that there were $65,000 of outstanding, legal and valid claims with insufficient funds from which to pay same, and that therefore by virtue of Section 5977 of 1930 Code a bond issue was required to be floated for the payment of those claims. If the objectors had filed such a claim, then under the plain rule announced by the Supreme Court of the state, in the case last above cited, the objections would have constituted a purely collateral attack upon the procedure of the board, which could not be considered in a case of this sort. However, objectors did not press that question and do not now insist upon it either in their assignment of errors or in their brief, electing to stand on the proposition solely that the board had no right to order bonds issued at all, except after an election, and then not to a greater amount than 10% of the assessed value of the county.
The only proposition left as we see it then is as to whether Section 5977 has been repealed, as contended for by counsel for appellants. If it has, then the bond issue is invalid, because the board undertook to act solely by virtue of the mandatory directions of that section. If it has not been repealed, then under the authority of the cases cited hereinabove, the appeal must be dismissed as being without merit.
If the strict construction which counsel contends for could be placed upon that statute, it would have the effect of deleting from the statute books every other provision therein, which has been enacted for the purpose of enabling the county to pay its debts.
Telephone Co. v. State, 99 Miss. 1; Greaves v. Hinds County, 145 So. 900.
Argued orally by Edward I. Jones, for appellant, and by W.J. Gex, Jr., for appellee.
This is a proceeding under section 313, Code 1930, for the validation of a proposed issue of bonds by Hancock county. The bonds were approved by the state bond attorney, and September 27, 1937, was set for the hearing of objections thereto by the chancellor. Objections to the issuance of the bonds were then filed, and the chancellor, pursuant to the statute, set the case over for Friday, October 8, 1937, on which day it was again set over to October 14, 1937. On October 7, 1937, some of the objectors filed an amendment to their former objections, setting forth new grounds therefor.
A motion was made to strike the amendment to the objections from the record. No ruling was made on this motion except that which appears in a final decree which recites, "that the motion to strike the objections of the taxpayers who had filed same be sustained and said objections dismissed." This ruling, it will be observed, is addressed to the objections as a whole, and not to the amendments thereto. The decree then proceeded to adjudge, "that all such objections to the validation of said bonds are not well taken because all of same are attempted collateral attacks upon lawful orders and proceedings of the Board of Supervisors of Hancock county, Mississippi, in the matter of the issuance of and validation of said bonds. The transcript shows that the proposed issue of $65,000 of bonds of Hancock county, Mississippi, was duly and legally ordered issued and validated at the regular August, 1937, meeting of the board. The transcript shows that all the proceedings of the board in the matter of the issuance of said bonds were in strict accordance with the Constitution and laws of the state of Mississippi, including section 5977 of the Mississippi Code of 1930, and pursuant to lawful resolutions, order and proceedings of the board." After some recitals not necessary here to set forth, the decree proceeds: "As to form, denominations, interest rate, maturities, and otherwise, said bonds are in strict accordance with law and the amount thereof does not exceed any legal limitation. . . . It is, therefore, ordered, adjudged and decreed that said bonds be and the same are hereby approved, confirmed and validated."
The appellee says that the court below should have stricken the amended objections from the record, for the reason that the statute contemplates that all objections thereto should be filed on or before the date first set for the hearing thereof. With this we are unable to agree. The clear intent of section 313 of the Code of 1930 is that a proposed issue of bonds by a political subdivision of the state shall not be permitted if there is a valid objection thereto. This intent might be nullified if a taxpayer is not permitted to amend his objections to the issuance of bonds prior to the final hearing as to their validity. Section 391, Code 1930, in the chapter on chancery courts, provides that "amendments shall be allowed in the pleadings and proceedings, on liberal terms, to prevent delay and injustice." This section is pertinent here, although the proceeding is before the chancellor in vacation.
This brings us to the only other question here presented that it will be necessary for us to decide. The order of the board of supervisors providing for the issuance of the bonds, after reciting that they are to be issued under section 5977, Code 1930, continues: "Whereas it appears that there is now outstanding the sum of $65,000.00 of outstanding, undisputed, valid and legal obligations of Hancock county, and that it is now necessary, pursuant to said law, to issue bonds to take up said outstanding obligations, Now, Therefore, be it resolved by the Board of Supervisors of Hancock county, Mississippi, that for the purpose of paying said outstanding, undisputed, valid and legal obligations, that the bonds of Hancock county be issued in the amount of $65,000.00," etc. It will be observed that this order does not adjudicate that the bonds proposed to be issued, when added to the outstanding bonded indebtedness of the company, will not exceed 10 per centum of the assessed value of the taxable property within the county, according to the last completed assessment for taxation. Section 5977, Code 1930, is as follows: "Every municipality and every county in this state which has or may hereafter have legal and undisputed outstanding warrants or other obligations, and insufficient funds in the treasury to pay them or any of them, is empowered and required to at once prepare for, and take up such warrants and other obligations from the proceeds of serial bonds which shall be issued for such purpose, as is provided by law for issuance of bonds for the payment of outstanding obligations. Such bonds to pay such outstanding obligations shall be issued regardless of the amount thereof, and no election shall be held on the question of the issuance of such bonds for the payment of such obligations, but the prompt issuance of sufficient bonds to pay all of such legal and undisputed warrants or other obligations is made mandatory on such counties and municipalities."
The appellant says: (1) That this section was repealed by chapter 235, Laws 1932; and (2) if not, was amended thereby so as to eliminate therefrom the words, "such bonds to pay such outstanding obligations shall be issued regardless of the amount thereof;" and to prohibit the issuance of bonds if, when they are "added to the outstanding bonded indebtedness of said county, shall exceed ten per centum of the assessed value of the taxable property within said county, according to the last completed assessment for taxation." Section 3.
Chapter 235 does not expressly repeal or amend section 5977 of the Code; but does provide, "That all laws and parts of laws in conflict with this act be and the same are hereby repealed, insofar as they conflict with the provisions of this act." The only section therein which clearly conflicts with section 5977 of the Code is section 3, which reads as follows: "That no county shall issue bonds for the purposes authorized by law to an amount which, added to the outstanding bonded indebtedness of said county, shall exceed ten per centum of the assessed value of the taxable property within said county, according to the last completed assessment for taxation."
This section applies to all issues of bonds authorized by law, and therefore to bonds here under consideration, unless they are withdrawn therefrom by section 7 of the act, which is as follows: "That no limitations or provisions contained in this act shall in any way apply to the issuance of bonds for the purpose of refunding any legal obligations heretofore or hereafter outstanding." The issuance of refunding bonds is covered by section 5986 of the Code, as amended by Laws 1932, c. 167, and not by section 5977. But aside from that, the bonds here under consideration are not refunding bonds. To refund a debt is "to fund it again or anew," Webster's New International Dictionary; "to replace by a new funded loan," Funk Wagnall's New Standard Dictionary; Long Beach v. Lisenby, 180 Cal. 52, 179 P. 198; a refunding bond "is a bond issued to pay off an older issue," Webster, op. cit.; before a debt can be refunded, it must, of course, have been first funded. The word "fund," in this connection, means "to convert into a more or less permanent debt bearing regular interest; as to fund the floating debt," Webster, op. cit.; Funk Wagnall's opcit.; "to put into the form of bonds, stocks, or other securities, bearing regular interest, and to provide or appropriate a fund or permanent revenue for the payment thereof." Black's Law Dictionary (3 Ed.); Merrill v. Monticello, C.C., 22 F. 589, 596. The bonds here proposed to be issued are, therefore, funding, and not refunding, bonds, and consequently are not withdrawn by section 3 of chapter 235, Laws 1932, or by section 7 thereof; from which it follows that whether the bonds proposed to be issued, when added to the outstanding bonded indebtedness of the county, shall exceed 10 per centum of the assessed value of the taxable property within said county, according to the last completed assessment for taxation, is a jurisdictional fact which should have been found by the board of supervisors and set forth in its order providing for the issuance of these bonds. This was not done; consequently the board is without power to issue the bonds.
Tucker Printing Co. v. Attala County, 171 Miss. 608, 158 So. 336, is not in conflict herewith, for the question here under consideration was not there presented to the court, nor referred to it in its opinion. The only question there presented and determined was whether the county was under any obligation to pay the debt for the discharge of which an issuance of bonds was sought.
The decree of the court below will be reversed, and the decree which it should have rendered, holding the proposed issue of bonds invalid, will be rendered here.
Reversed and decree here.
ON SUGGESTION OF ERROR.
Responding to the suggestion of error in this case, we deem it sufficient to say that the language used in the former opinion to the effect that "The decree of the court below will be reversed, and the decree which it should have rendered, holding the proposed issue of bonds invalid, will be rendered here," was intended to apply, and does apply, only to the proceedings relating to the proposed validation of the bonds in question on the record now before the court.
Suggestion of error overruled.