139 Fla. 179 | Fla. | 1939
The record in this case shows that the *180 City of Jacksonville, Florida, and the Town of Green Cove Springs, Florida, on the 27th day of February, 1939, signed a written contract whereby the City of Jacksonville agreed to construct an electrical transmission line from its substation at Orange Park to the Town of Green Cove Springs and connect it with the generating plant of the Town of Green Cove Springs and supply electrical energy of approximately 13200 volts pressure. The contract was to continue in force for a period of ten years, and under the schedule of rates charged the net minimum charge or obligation to be paid by the Town of Green Cove Springs to the City of Jacksonville was the monthly sum of $500.00. The City of Jacksonville is hereinafter referred to as the "city" and the Town of Green Cove Springs as the "town."
The pertinent and material portions of the contract necessary for a decision of this case are, viz.:
"The City proposes to install the aforesaid transmission line along the existing route of State Highway No. 3 from its existing substation in the Town of Orange Park to the Town of Green Cove Springs and along such streets as may be mutually agreed upon in said Town of Green Cove Springs to the existing generating plant of said Town; at which point the City will furnish and install the necessary disconnecting switches and circuit breakers, meter and metering equipment, and substation and substation equipment, and substation transformers of a nominal capacity of 300 KVA for reducing the transmission pressure of thirteen thousand two hundred (13,200) volts to the required distribution pressure of two thousand two hundred (2,200) volts and extend necessary 2,200 volt feeder lines from aforesaid transformers to the Town's main switchboard in its aforesaid generating plant.
"The Town agrees that it will provide all necessary rights of way along and through its streets, and will furnish all *181 necessary housing for City's transformers, metering and other substation equipment, at its existing generating station, without cost to the City.
"The Town also agrees that if at any time during the life of this contract it is found that its increased demands require a susbtation transformer capacity greater than the nominal transformer capacity of 300 KVA to be furnished by the City as hereinabove provided, then in that event the Town agrees that it will furnish, install and maintain such additional substation transformers as may be required, without cost to the City.
"In the event of any interruption of or curtailment of service, the Town shall be entitled to a pro rata reduction for the time being in the monthly minimum charge provided for herein, and in the event that such interruption or curtailment continues for a period of one (1) month or more, the date of expiration of this agreement as set forth in Article III hereof shall, if the Town so desires, be extended by the full period covered by such interruption or curtailment.
"The Town also agrees that it will not, during the life of this contract, grant to any other person, firm or corporation any right, franchise or permission to furnish, distribute, supply or sell electrical energy for light, heat or power to any other person, firm or corporation within the corporate limits of said Town. *184
"The Town hereby agrees to pay to the City for all electrical energy taken or used at the rates per kilowatt hour stated in the following schedule:
"One and one-half cents ($.015) per kilowatt hour for the next twenty thousand (20,000) kilowatt hours per month.
"One and one-fourth cents (.0125) per kilowatt hour for the next twenty-five thousand (25,000) kilowatt hours per month.
"One cent ($.01) per kilowatt hour for the next thirty-five thousand (35,000) kilowatt hours per month.
"Nine-tenths of one cent ($.009) per kilowatt hour for all kilowatt hours per month in excess of one hundred thousand (100,000).
"The foregoing are not energy rates without demand charges and without discounts.
"No allowance shall be made on any bill on account of claim for inaccuracy of measurement, unless the Town shall, in writing, request such allowance within thirty (30) days from the date on which such bill is rendered, and shall apply for proper test or recalibration of the meter. If it shall be shown by test that the meter is inaccurate to the extent of 2% or more, proper allowance, as shown by the test to be necessary, shall be made to the party entitled thereto, but not for a longer period than that covered by the bill on account of which allowance is claimed.
"The Town shall not open the meter, nor interfere with the City's apparatus or equipment, nor permit any unauthorized person to do so. *186
"The meter installed by the City under this agreement shall be only the recording watt hour meter required for determining the charges for electric service hereunder.
"The Town hereby agrees that it will put its works in order and will accept delivery and proceed with the use of the City's electric service at such time, within six (6) months after the execution of this agreement, when the City shall notify the Town of its readiness to commence delivery to the Town of electrical energy, under the terms and conditions of this agreement. *188
"In the event of such default followed by such suspension of service or such cancellation, such action shall not deprive the City of any other rights which it may have in these premises.
"No dispute with reference to the amount due for electric service hereunder shall excuse the Town from paying when due the amount stated by the City to be due, but any amount which the Town may have so paid in excess of the amount *189 actually found upon investigation to be due shall be promptly refunded by the City.
"If the City shall make default in the performance of any obligation under this agreement except from causes not reasonably within its control, and such default shall continue for a period of thirty (30) days after notice from and written demand by Town on City, the Town at its option may cancel this agreement in the event of any such default and its continuance as aforesaid. No delay by the Town in enforcing any of its rights hereunder shall be deemed a waiver of such rights, nor shall a waiver by the Town of one of the City's defaults be deemed a waiver of any other or subsequent default. In the event of such default, followed by such cancellation, such action shall not deprive the Town of any other rights which it may have in these premises.
The appellant here, Margaret Neff, exhibited in the Circuit Court of Duval County, Florida, her bill of complaint alleging that she was a citizen, resident and taxpayer of the Town and a customer of its municipal plant and that the Town did not have to its credit sufficient funds as required by its charter on February 27, 1939, authorizing it to enter into the alleged contract; that the charter of the Town required an election and approval of the voters of the Town prior to the granting of a franchise and that the alleged contract in law was a franchise or its equivalent; that the performance of the contract was tantamount to or meant an abandonment of the Town's light plant which rendered it worthless and a complete loss to the Town that the contract was a general obligation of the Town which could not be entered into without an approval of a majority vote of the freeholder electors of the Town as required by amended Section 6 of Article IX of the Constitution of Florida as required by amended Section 6 of Article IX of the Constitution of Florida adopted at the general election held in Florida on November 4, 1930. The bill of complaint prayed for a temporary injunction or restraining order from the performance of the contract by the City and the Town.
The City and the Town each filed answers and motions to dismiss the bill of complaint and on a hearing the motions of defendants to dismiss were denied; the motion of the plaintiff for a final decree on bill and answers likewise was denied and the equities of the cause were decreed to be with the defendants below, and appellees here, and the cause was dismissed. From this decree an appeal has been perfected and several assignments presented and argued for a reversal.
It is admitted by counsel for the respective parties, and *191 we think correctly so, that the City of Jacksonville has the power to enter into and fully perform the terms and provisions of the contract now before the court, while counsel for the City and Town contend that the Town of Green Cove Springs has the charter power not only to enter into the Contract, but to fully perform each of its terms and provisions, not because of its governmental authority, but because the performance thereof was incidental to its corporate existence. Counsel for the taxpayer contend that the contract is void for the reasons, viz.: (a) the contract is a bond within the meaning of amended Section 6 of Article IX; (b) the legal effect of the contract is to grant to the City a franchise without an election as provided or required by Section 2 of Article 6 of Chapter 6350, laws of Florida, Acts of 1911, being the Charter of the Town of Green Cove Springs; (c) Section 5 of Article 10 of Chapter 6350, supra, the charter of the Town provides that the Commission shall not have the authority to incur any indebtedness or obligation whatsoever unless the funds shall be in hand to pay the same. The record shows that the Town had on deposit less than $500.00 on November 16, 1938.
In the case of State and Diver v. City of Miami,
Where a municipality owns a utility in a corporate or proprietary capacity and from which it derives annual net revenues and desires to repair, enlarge or extend said utility, it may do so by pledging the net revenues of the utility and not create or establish a direct or indirect pledge or obligation on the part of the municipality's taxing power and this may be accomplished under the authorities cited above without a vote of the freeholders of the municipality as contemplated by Section 6 of Article IX of the Constitution as amended. While it is admitted here that the Town owns in a proprietary capacity an electric plant and has supplied electric energy to the citizens of the Town, and the appellant *193 here is admitted to be one of its customers, it has not been made to appear that the plant has a net annual revenue or that the Town desires to extend, improve or enlarge the same or to pledge the net revenues arising therefrom so as to supply the inhabitants thereof with electric energy; neither does it affirmatively appear on this record that the obligation,supra, will not pledge or obligate the taxing power of the Town within the next ten years. It is admitted that an election has not been called or the freeholders of the Town allowed to vote thereon as required by Section 6 of Article IX, Constitution of Florida.
It is to be observed that the contract, supra, provided for a net minimum monthly charge of $500.00 against the Town. The contract is to be binding as between the Town and the City for a period of ten years and the total of the minimum payment is the sum of $60,000.00. The plan of monthly payments by the Town to the City for this electrical energy is not clearly expressed by the terms of the agreement. It is possible that these monthly obligations may be retired by the charges made for and money received for electricity consumed by the inhabitants of the Town, but this fund or resource of revenue is not pledged by the terms of the contract. We are at a loss to understand how the monthly payments stated in the contract can be made by the Town without directly or indirectly resorting to its governmental taxing power. If the Town assumes an obligation which contingently places a duty on it to exercise the governmental power of taxing the property and the people of the Town, then the same is inhibited by Section 6 of Article IX as amended. We think the obligation here may directly or indirectly or contingently place a debt or liability upon the property, or people of the Town which may require a discharge by the exercise of its governmental power of taxation. Any instrument evidencing a county, district or municipal *194
indebtedness for providing a new project or to be paid by a tax levy or by assessment or charges or the pledge of property or a tax resource of the subordinate governmental unit, may in effect be a bond and require an approval of the freeholder electors as provided by Section 6 of Article IX of the Constitution before the said instrument may be legally issued. See Kathleen Citrus Land Co. v. City of Lakeland,
Having reached the conclusion that the instrument before us is in legal effect a bond and the freeholder electors of the Town have not had an opportunity to vote or otherwise express their views thereon, as contemplated by Section 6 of Article IX of the Constitution of Florida as amended, it is necessary to decide the other questions raised by this appeal but it becomes our duty to reverse the decree appealed from. The decree appealed from is reversed for further proceedings in the lower court not inconsistent with this opinion.
It is so ordered.
WHITFIELD, P. J., and BROWN, J., concur.
BUFORD, J., concurs in opinion and judgment.
Justices TERRELL and THOMAS not participating as authorized by Section 4687, Compiled General Laws of 1927, and Rule 21-A of the Rules of this Court. *195