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State v. Florida State Improvement Commission

Supreme Court of Florida, Special Division B
Apr 24, 1951
52 So. 2d 277 (Fla. 1951)

Opinion

April 24, 1951.

Appeal from the Circuit Court for Pinellas County, John Dickinson, J.

Chester B. McMullen, Clearwater, for appellants.

J. Turner Butler, Jacksonville, and Ford L. Thompson, Tallahassee, for appellees.


This is an appeal by the State of Florida from a final decree entered by the Circuit Court of Pinellas County, Florida, validating Florida State Improvement Commission Lower Tampa Bay Bridge Revenue Bonds in the aggregate sum of $21,250,000 in denominations of $1,000 each, dated October 1, 1950, and each maturing on or before October 1, 1980. The proceeds of the sale of the aforesaid revenue bonds are to be used for the construction of a bridge to be located in Pinellas, Hillsborough and Manatee Counties. The proposed bridge is described viz: "the bridges and causeway from Maximo Point in the City of St. Petersburg, Pinellas County, Florida, southeasterly across Tampa Bay to Terra Ceia Island; thence across Terra Ceia Island and Terra Ceia Bay easterly and southeasterly to a connection on the mainland with U.S. Highway No. 541 North of the City of Palmetto in Manatee County, Florida, a distance of approximately fifteen (15) miles, together with such fills, roads or highways, approaches and avenues of access necessary or pertinent thereto, * * *."

It appears by the record that the St. Petersburg Port Authority, a public body created by Chapter 22464, Special Acts of 1943, had previously undertaken the construction of a bridge across Lower Tampa Bay and had expended moneys for the acquisition of ferries with which to transport, temporarily, traffic and persons across the Bay. The St. Petersburg Port Authority issued revenue certificates to finance the aforesaid purposes and at the present there is outstanding and payable on the certificates so issued the sum of $440,000, and said outstanding certificates in the sum of $440,000 are to be retired or paid out of the proceeds of the sale of the revenue certificates to be issued in the sum of $21,250,000. See Chapter 26164, Special Acts of 1949, Laws of Florida. The plan of payment or retiring the revenue certificates in the sum of $21,250,000, and interest, is the anticipated earnings from the bridge in the form of tolls, fares and charges made to the general public desiring to travel the area from time to time. The authority to own and operate ferries and to charge and collect rentals and tolls is granted by the provisions of Chapter 25009, Acts of 1949, Laws of Florida, F.S.A. § 420.121.

The record reflects that the City of St. Petersburg, on April 5, 1949, adopted a resolution by the terms of which it consented to assign and transfer all the assets of the St. Petersburg Port Authority to the Florida State Improvement Commission, and further agreed to release the Port Authority from any and all debts or obligations then owed, due or payable by the Port Authority to the City of St. Petersburg. On May 26, 1949, the State Improvement Commission adopted a resolution authorizing the acceptance and delivery of certain written documents transferring, assigning and conveying described real estate, personal property, leases, franchises and other assets to it by the St. Petersburg Port Authority, subject to the conditions appearing in said resolution. The terms and conditions of the aforesaid resolution were adopted by the St. Petersburg Port Authority on May 27, 1949, and all written documents necessary to transfer or convey the described property to the State Improvement Commission were then delivered.

The resolutions, supra, referred to as Exhibits 1, 2 and 3 were each adopted pursuant to Chapter 26164, Special Acts of 1949, and Chapter 420, F.S.A. The resolutions, supra, assigned and transferred to the Florida State Improvement Commission the assets, real estate, rights, franchises, privileges, monies, books and records formerly owned and possessed by the St. Petersburg Port Authority, subject however to the conditions set out in the resolutions. As successor to all the assets and property formerly owned and possessed by the St. Petersburg Port Authority, the Florida State Improvement Commission, pursuant to the provisions of Chapter 420, F.S.A., entered into a Lease Purchase Agreement with the State Road Department of Florida, under date of September 19, 1950, and the resolution so adopted by the two agencies of Government with reference to the construction of the bridge across the "Lower Tampa Bay" is identified as Exhibit 6. The State Road Department, pursuant to statutory authority, designated and declared the route of the "Lower Tampa Bay Bridge", with its approaches, causeways and connecting links, from Maximo Point to a connection on the mainland with U.S. Highway No. 541, to be a State Road in the State Road System of Florida.

The Lease-Purchase Agreement between the Florida State Improvement Commission and the State Road Department of Florida (Tr. 80 to 107) makes the State Road Department of Florida the agent of the Florida Improvement Commission in the actual construction of the bridge, and, after the completion thereof, the State Road Department agrees to pay as rentals and purchase payments for the bridge such sums of money as shall equal the gross tolls derived from the operation of the bridge. The tolls collected by the Road Department shall be deposited daily in a fund to be known as the "Bridge Revenue Fund". The bridge shall be operated by the State Road Department and shall have the power to fix and establish tolls, rates and charges. If in the operation of the bridge the net tolls received in any one year shall be less than the amount each year from 1953 to 1980, inclusive (Tr. 92), then the annual deficit, if any, shall be added to the indebtedness of the following year. Section 9.05 of the Agreement authorizes additional funds for debt payment. The parties covenant to complete the construction of the bridge. Section 9.02 of the Lease-Purchase Agreement. The tolls and charges to the public for the use of the bridge shall remain in force until all the costs of construction thereof, with interest, have been fully liquidated.

The costs of the construction of the bridge across the "Lower Tampa Bay", as estimated by the engineers, approximate the sum of $21,250,000. The Florida State Improvement Commission, pursuant to Chapter 420, F.S.A., on September 19, 1950, adopted a resolution authorizing and directing the issuance of $21,250,000 of negotiable bonds to be designated as Florida State Improvement Commission Lower Tampa Bay Bridge Revenue Bonds. The Bridge Revenue Bonds are to be dated October 1, 1950, in the sum of $1,000 each and numbered from 1 to 22,250, and shall mature annually between dates from 1953 to 1980. Interest is to be paid semi-annually on April 1st and October 1st and at a sum not in excess of 6% per annum. The Bridge Revenue Bonds are to be retired or paid from the tolls and charges made to the general public for the use of the bridge. The general taxing powers of the Counties of Pinellas, Hillsborough and Manatee are in no manner pledged or obligated to pay the Bridge Revenue Bonds, nor any installment of interest maturing thereon, but the same shall be paid out of the tolls and receipts for the use of the bridge.

The Florida State Improvement Commission, an agency of the State of Florida, pursuant to Chapter 75, F.S.A., on October 16, 1950, filed its petition in the Circuit Court of Pinellas County, Florida, praying for an order of validation of the $21,250,000 worth of Florida State Improvement Commission Lower Tampa Bay Bridge Revenue Bonds. The rule nisi issued and orders to appear were entered and duly published. Answers were filed on the part of the State of Florida by Chester B. McMullen, State Attorney for the Sixth Judicial Circuit of Pinellas County; J. Rex Farrior, State Attorney for the Thirteenth Judicial Circuit of Hillsborough County; and William M. Smiley, State Attorney for the Twelfth Judicial Circuit of Manatee County, and of the State of Florida. The three answers were similar and pose the same questions.

The answers set out that the petition for validation was defective and insufficient and the proposed Bridge Revenue Bonds were unauthorized and illegal for the following reasons:

"1. That the agreement of the State Road Department in said Lease-Purchase Agreement to pay the cost of maintenance and repair of said bridge from funds other than tolls derived from said bridge even though said State Road Department is to be reimbursed from said tolls for the cost of repair and maintenance after payment of said revenue bonds in the manner provided in said Lease-Purchase Agreement, is not authorized by law and is illegal and void.

"2. That the agreement of the State Road Department in said Lease-Purchase Agreement to complete the construction of said bridge from funds other than tolls derived from said bridge in the event the proceeds of said revenue bonds to be issued are insufficient for said purpose is not authorized by law and is illegal and void.

"3. That the provisions of said Lease-Purchase Agreement providing for the payment by the State Road Department of the cost of repair and maintenance of said bridge and the completion of the construction of said bridge out of funds other than tolls derived from said bridge in the manner provided in said Lease Purchase Agreement are in violation of Section 6 of Article IX of the Constitution of Florida, [F.S.A.] and are illegal and void.

"4. That the agreement between the State Road Department and the Florida State Improvement Commission in said Lease-Purchase Agreement that such Lease-Purchase Agreement shall be irrevocable is not authorized by law and is illegal and void.

"5. That there is no authority of law for the appointment of a receiver as provided by Section 7.01 of Article 7 of the said Lease-Purchase Agreement.

"6. That said State Improvement Commission is without authority in law to issue its Revenue Bonds to pay and retire Ferry Revenue Certificates heretofore issued by St. Petersburg Port Authority in the manner provided in said Lease-Purchase Agreement.

"7. The provisions of the Lease-Purchase Agreement as to the payment of premiums upon collecting or refunding the bonds as provided by Section 2.02 (a) and (b) are invalid."

The Chancellor below made certain findings, which are numbered from One to Twenty-three, inclusive, and set out in the final decree challenged on this appeal. Pertinent thereof are viz:

"Seventh: That said revenue bonds to be issued by petitioner will not be or constitute a debt of the State of Florida, or of the Counties of Pinellas, Manatee or Hillsborough, or of any political subdivision of the State of Florida within the meaning of any constitutional or statutory provision, nor will said revenue bonds constitute a charge, lien or encumbrance upon any property of the State of Florida, the Counties of Pinellas, Manatee or Hillsborough, or any other political subdivision in the State of Florida, or petitioner, or the State Road Department of Florida, or any other agency or instrumentality of the State of Florida, but will be payable solely from and secured by a lien on the rentals to be derived by petitioner from said Lease-Purchase Agreement referred to in paragraph Sixth above.

"Eighth: That said revenue bonds to be issued by petitioner will not constitute `bonds' of the State of Florida, the Counties of Pinellas, Manatee or Hillsborough, or any political subdivision of the State of Florida, within the meaning of Section 6 of Article IX of the Constitution of Florida.

"Ninth: That the issuance of said revenue bonds by petitioner was not required by any of the provisions of the Constitution or Statutes of Florida to be approved by the qualified electors who are freeholders, or by the qualified electors, of the State of Florida, the Counties of Pinellas, Manatee or Hillsborough, or of any other political subdivision of the State of Florida."

"Eighteenth: That the petitioner and the State Road Department had valid and legal power to agree to the appointment of a Receiver of said Lower Tampa Bay Bridge in the event of default in the manner and under the terms and conditions provided in said Lease-Purchase agreement and said covenant constitutes a valid and legally enforceable covenant.

"Twenty-First: That all of the provisions of the resolution authorizing said revenue bonds and of said Lease-Purchase Agreement are authorized by law and said Lease-Purchase Agreement constitutes a valid and legally enforceable agreement between petitioner and the State Road Department with the terms thereof."

The first question presented on this appeal is viz: "Does the State Road Department have the authority to obligate itself by a Lease-Purchase Agreement in connection with a bridge construction together with approaches and connecting links, to pay the cost of maintenance and repair of such project over a long period of years in the future, when such Lease-Purchase Agreement is to remain in effect until the bonds to finance the construction thereof are paid?"

The State Road Department, by statute, has the power and authority to designate and declare that the "Lower Tampa Bay Bridge", with its approaches, causeways and connecting links to be a State Road in the State Road System of Florida. Likewise, it has the statutory power to expend moneys for the purpose of maintaining in a high state of repair the State Road System of Florida of which the "Lower Tampa Bay Bridge" is an integral part.

It is contended that the Florida State Improvement Commission, a state agency, as well as the State Road Department, were each without power and authority to enter into a lease for a long period of years of the bridge which is upon the Lower Tampa Bay. Our answer to the contention is found in the following decisions of this Court: State of Florida v. Escambia County, 153 Fla. 282, 14 So.2d 576; State of Florida v. State Board of Administration, 157 Fla. 360, 25 So.2d 880; State of Florida v. Florida State Improvement Comm., 160 Fla. 230, 34 So.2d 443; State of Florida v. Florida State Improvement Comm., Fla., 47 So.2d 601, and similar cases.

The next question posed is viz: "Is a provision in Lease-Purchase Agreement between the Florida State Improvement Commission and the State Road Department for the appointment of a receiver over a state highway project consisting of several bridges, approaches, roads, and causeways, a legal and valid provision?"

It is true that Sections 7.01 and 7.02 of Article VII of the Lease-Purchase Agreement signed by the Florida State Improvement Commission and the Florida State Road Department provide for the appointment of a receiver and trustee of the Lower Tampa Bay Bridge under certain conditions and circumstances. Since the parties to the Agreement, it is contended, are each State Agencies, then this provision is invalid and unenforceable. We fail to find merit in the contention. State v. Florida State Improvement Comm., Fla., 47 So.2d 601; State v. City of Tallahassee, 142 Fla. 476, 195 So. 402; Hopkins v. Baldwin, 123 Fla. 649, 167 So. 677.

We are therefore driven to the conclusion that the Florida State Improvement Commission Lower Tampa Bay Revenue Bonds are lawful and binding obligations to be paid or retired exclusively from tolls and charges to the public for the use of the bridge. It has not been clearly shown that the issuance of these revenue bonds will violate any of our constitutional inhibitions.

Affirmed.

SEBRING, C.J., and TERRELL and ADAMS, JJ., concur.


Summaries of

State v. Florida State Improvement Commission

Supreme Court of Florida, Special Division B
Apr 24, 1951
52 So. 2d 277 (Fla. 1951)
Case details for

State v. Florida State Improvement Commission

Case Details

Full title:STATE ET AL. v. FLORIDA STATE IMPROVEMENT COMMISSION

Court:Supreme Court of Florida, Special Division B

Date published: Apr 24, 1951

Citations

52 So. 2d 277 (Fla. 1951)

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