#### BOARD OF PUBLIC INSTRUCTION, COUNTY OF PUTNAM, Florida, a public corporation, Appellant, v. Ed. C. WRIGHT, Appellee.

Supreme Court of Florida. En Banc.

Jan. 7, 1955.

Rehearing Denied Feb. 22, 1955.

Patterson, Freeman, Richardson & Watson, Jacksonville, and Dowda & Millican, Palatka, for appellant.

Joseph C. Young, Orlando, and Raymond & Wilson, Daytona Beach, for appellee.

PER CURIAM.

Affirmed.

ROBERTS, C. J., and DREW, J., concur.

SEBRING and HOBSON, JJ., concur specially.

TERRELL, THOMAS and MATHEWS, JJ., dissent

SEBRING, Justice

(concurring specially).

This is an appeal by the defendant, Board of Public Instruction of Putnam County, Florida, from a judgment rendered in favor of the plaintiff in a suit brought to recover *771principal and interest on the following obligations :

(1) Seven Funding Bonds of the Board (par value $7,000) issued July 1, 1925, under the authority of Chapter 11073, Laws of Florida 1925, bearing interest as represented by past due coupons that matured on said •bonds July 1, 1932, and each six months thereafter to the date of the respective maturities of said bonds, and for interest on said past due bonds and coupons since their respective maturities.

(2) Twenty-four High School Bonds of the Board (par value $24,000) issued July 1, 1925, under the authority of Chapter 11074, Laws of Florida 1925, bearing interest as represented by past due coupons that matured on said bonds July 1, 1932, and each six months thereafter to the date of the respective maturities of said bonds, and for interest on said past due bonds and coupons since their respective maturities.

(3) Nineteen “Tax Anticipation Notes” ($19,000) dated July 15, 1929,, all of which matured July 15, 1930, and for interest thereon from the date of their maturities to the date of judgment. (There are no past due coupons attached to those notes.) The notes bear endorsements showing that semi-annual interest was paid to July 15, 1932. They recite that they were issued under the authority of section 458 of the Revised General Statutes of 1920.

To the complaint in the suit the Board filed its answer and amendments thereto, containing the following allegations: that plaintiff acquired the obligations in question, with the interest coupons attached thereto, after default thereon and under such circumstances that he is not a holder in due course; that the alleged issuance and validation of refunding bonds to replace other tax anticipation notes of the issue sued on does not constitute a judicial determination that they are valid and enforcible claims; that the instruments sued on are non-negotiable and plaintiff is charged with knowledge of the limitations of the authority for issuing and paying same; that plaintiff did not accept a refunding proposal made to bondholders in 1937, and did not present any of the instruments or coupons in question for payment either at maturity or thereafter until just prior to this suit; that the instruments and coupons do not include any obligation to pay interest after maturity, and plaintiff is not entitled to recover therefor. A request for jury trial was included in the answer.

On February 8, 1952, the matter came on to be heard on plaintiff’s motion for summary judgment, and the trial court entered an order that “the amount of principal on the bonds and * * * notes * * * in the sum of $50,000.00, be and the same is hereby found to be due,” and “that the case shall now proceed on the question of the right to recover interest * * Pursuant to this order the Board deposited the sum of $50,000 into the registry of the court on February 13, 1952.

Subsequently, on May 1, 1953, a further hearing was had before the trial court “on the plaintiff’s motion for summary judgment as to interest on the securities herein sued upon.” At the conclusion of the hearing the trial court entered a final summary judgment for the plaintiff in the total amount of $129,393.57, representing the face value of the obligations described; the face value of past due coupons attached to the bonds; the interest (not represented by coupons) on the principal of the bonds and notes from their respective maturities at 6 per cent, per annum; and interest on all past due coupons, attached to the bonds, from the date of their respective maturities to the date of judgment at the rate of 8 per cent, per annum on those maturing prior to the enactment of Chapter 22745, Laws of Florida, on May 29, 1945, F.S.A. § 687.01, and 6 per cent, on those maturing after that date.

The questions raised by the Board on this appeal relate *only*to the lower court’s denial of a jury trial to the Board on the issue of whether or not the plaintiff should be awarded interest after the respective maturity dates of the various underlying obligations and interest coupons sued on; the court’s determination that, as a matter of law, interest should be allowed on the *772interest coupons attached to the bonds after maturity; and the court’s ruling that interest was allowable on the “Tax Anticipation Notes” after their maturity.

We think it may be stated, as a general proposition, that bonds of the character here involved are governed by the rule that “contracts for the payment of money bear interest after maturity, though silent on the subject, unless there is an express stipulation to the contrary.” Myrick v. Battle, 5 Fla. 345; Jefferson County v. B. C. Lewis & Sons, 20 Fla. 980; Jefferson County v. Hawkins, 23 Fla. 223, 2 So. 362; Treadway v. Terrell, 117 Fla. 838, 158 So. 512. The Board contends on this appeal that even assuming this general proposition to be applicable, there exists no absolute right to interest so as to make its ascertainment a mere matter for mathematical calculation by the court, but that it is an item that is allowable only as an element of damages, which, like all other elements of damages, must be ascertained by the jury and assessed by the jury in its verdict.

Whatever the rule may be in other circumstances, we think it is immaterial, *upon the record in this*cause, whether interest should be allowed as a true incident of the contract claim or as an item of damages necessitating an assessment by the jury. We have reached this conclusion for the reason that even if interest after maturity may be technically called damages, the Board completely failed, in its answer to the complaint, to allege, by way of a valid defense, any facts that would warrant the withholding of post-maturity interest by either a jury or the court. Therefore, it failed to observe the rule of law that requires of an obligor, who seeks to defeat such a claim, that he allege and prove continued readiness and willingness to pay the sums due on and after the maturity date of the obligation. Greeley v. Whitehead, 35 Fla. 523, 17 So. 643, 28 L.R.A. 286; Panama City v. Free, Fla., 52 So.2d 133; compare Board of Public Instruction for Brevard County v. Osburn, 5 Cir., 101 F.2d 919, a case wherein the defendant properly pleaded the issue. In the absence of proper allegations in the answer, there can be no basis for the introduction of evidence as to readiness to pay, or of laches, lack of diligence or any other factor which might lawfully influence a jury to deny the claim. See Jumper Creek Drainage Dist. v. State ex rel. Davis, 155 Fla. 669, 21 So.2d 459. Consequently there can be nothing on a factual basis to submit to a jury.

The second question to be decided is whether the trial court committed reversible error in allowing interest on the interest coupons attached to the funding bonds and the high school bonds after their respective maturity dates.

By the great weight of authority, and under the Florida decisions relating to interest on interest coupons attached to bonds, interest is allowed after the respective maturity dates of the coupons. Jefferson County v. Hawkins, supra; Trustees of Internal Improvement Fund v. Lewis, 34 Fla. 424, 16 So. 325, 26 L.R.A. 743; Panama City v. Free, supra. While in this regard the rule applicable to such coupons constitutes an apparent exception to the general rule against “interest on interest,” it is applied on the theory that each matured coupon is a separate promise and gives rise to a separate cause of action. It is designed to be severed from the bond and sold by itself. It is intended to pass from hand to hand as an independent obligation. Each coupon provides for the payment of a specific sum constituting accrued interest before the principal debt becomes due. Each coupon contains an independent agreement to pay an *exactly*stated sum at a specifically designated time. Consequently, the promise to pay each coupon is as distinct from that to pay the bond as though the two promises were written in different instruments upon separate paper. Philadelphia & Reading R. Co. v. Smith, 105 Pa. 195; Nesbit v. Independent District of Riverside, 144 U.S. 610, 12 S.Ct. 746, 36 L.Ed 562. Jones on Bonds and Bond Securities, 4th Ed., Vol. II, section 735.

The Board makes some contention that the high school bonds involved in this litigation are non-negotiable and that consequently the foregoing reasoning to support *773the conclusion that coupons attached to negotiable bonds are independent obligations, upon which interest runs after maturity, is not applicable in the case of the nonnegotiable coupons in question.

We find some support for the view taken by the Board, that interest on interest coupons attached to non-negotiable bonds will not run after maturity, but our examination of the authorities fails to reveal to us any persuasive reasoning or wide-spread rule on the subject. Mississippi Valley Trust Co. v. Oklahoma Ry. Co., 10 Cir., 156 F. 2d 283, citing United States Mortgage Co. v. Sperry, 138 U.S. 313, 11 S.Ct. 321, 34 L.Ed. 969. But however that may be, we are not persuaded that the bonds in question are non-negotiable.

In support of its contention it is first argued by the Board that the high school bonds are non-negotiable because Chapter 11074, Laws of Florida 1925, the statute under which their issuance was authorized, contains no express declaration that the bonds shall be negotiable.

In respect to this argument, we have the view that the negotiability of any instrument such as is here involved is determined by the presence, or absence, of the legal elements of negotiability rather than by any declaration as to its nature. Section 674.02, Florida Statutes 1951, F.S.A.; Brannan’s NIL, 6th Ed., p. 113; Williston Neg.Instr. (Am.Inst. Banking, 1931) p. 11. Furthermore, as a general rule, “in order to exclude the power to issue bonds invested with the character of negotiability, there must be an express exclusion * * * [otherwise] authority to issue negotiable bonds will be inferred and construed.” Jones, supra, Vol. I, section 286; Board of County Commissioners of City and County of Denver v. Home Savings Bank, 236 U.S. 101, 35 S.Ct. 265, 59 L.Ed. 485.

In further support of their contention it is argued by the Board that the high school bonds issued under Chapter 11074, supra, are non-negotiable because they are payable from a particular fund.

While it is the rule that an order or promise to pay an instrument only out of a particular fund renders the instrument non-negotiable, it is equally the rule that a mere “indication of a particular fund out of which reimbursement is to be made” does not affect negotiability. Section 674.-04, Florida Statutes 1951, F.S.A.

Chapter 11074, Laws of Florida 1925, provides only that “it shall be the duty of the Board * * * to levy annually a tax * * * [which] shall be a part of the tax provided for by Section 8 of Article 12 of the Constitution of the State of Florida, said tax to be levied for the purpose of paying the interest when due and creating a sinking fund * * * said fund shall be subject to the control of the County Board of Public Instruction * * * for the sole purpose of paying the interest due on said bonds and retiring the same at their maturity.”

We are of the opinion that the foregoing language plainly comes within the rule that a statutory authorization for levy of a tax and the creation of a sinking fund, in order to provide an orderly system for the repayment of bonds, does not constitute a mandatory restriction on the source of payment and does not render the bonds nonnegotiable if they are issued as general obligations of the maker. 43 Am.Jur., Public Securities and Obligations, section 163; Keck v. Yakima Savings & Loan Ass’n, 160 Wash. 430, 295 P. 483, and other cases in annotation 42 A.L.R. at page 1031; see also section 674.04, Florida Statutes 1951, F.S.A.

The pertinent clause of the high school bonds issued pursuant to Chapter 11074 is that “for the prompt payment hereof, both principal and interest * * * the full faith, credit and resources of the Board of Public Instruction * * * are hereby irrevocably pledged * * This pledge is valid and effective to make the instruments general obligations of the Board, and effectively disposes of any contention that the promise is conditional because payment of the bonds is to be made only out of a particular fund. State v. *774Citrus County, 116 Fla. 676, 157 So. 4, 97 A.L.R. 431.

The final point raised by the Board on this appeal is that the “Tax Anticipation Notes” sued on are, in fact, nothing more than time warrants, which do not draw interest after maturity, because they are payable only when, and if, there is sufficient money in the particular fund on which they are drawn. See Marshall v. State ex rel. Sartain, 88 Fla. 329, 102 So. 650; National Bank of Jacksonville v. Duval County, 45 Fla. 496, 34 So. 894.

As appears on their face, the obligations in question were issued under the authority of section 458, Revised General Statutes of 1920, which provides as follows: “That when there is no money in the county school fund applicable to the payment of outstanding school warrants issued by any county board of public instruction in this state, [said] county boards * * * are hereby authorized and empowered to borrow money at a rate of interest not to exceed eight per cent, per annum, for the purpose of paying all such outstanding warrants * *

It is clear that, except for the limitation as to the rate of interest, the statute contains no limitation on the character of the obligation authorized or the particular fund from which it is to be paid. The “Tax Anticipation Notes” in this case irrevocably pledge for the payment of the principal and the interest thereon at the rate of six per cent, per annum not only the anticipated tax receipts for the year 1929, including all funds derived from gasoline taxes, but also “all other resources of the said Board * * * *»*

Under our former decisions, such obligations have been held lawful and interest has been allowed after maturity. Board of Public Instruction for Bay County v. Barefoot, 140 Fla. 429, 193 So. 823; Board of Public Instruction for LaFayette County v. First National Bank of Gainesville, 111 Fla. 4, 143 So. 738, 149 So. 213. In the face of these decisions, it cannot be successfully contended that the said obligations are mere time warrants upon which interest is not recoverable.

From the conclusions reached it follows that the judgment appealed from should be affirmed.

ROBERTS, C. J., agrees to conclusion.

HOBSON and DREW, J J., concur.

HOBSON, Justice

(concurring specially)-

I> thoroughly concur in the opinion of Mr. Justice SEBRING in the present case and I should like only to add a few considerations which seem apposite to the case at bar.

The opinion prepared by Mr. Justice MATHEWS would deny all interest on defaulted bonds and defaulted coupons, thus removing all incentive on the part of the issuing unit to meet the specified maturity dates and leaving the bondholder to his remedies in court.

Insofar as said opinion apparently would hold that such payment is prohibited by the direction of Section 9 of Article XII of the F.S.A.Constitution that the funds therein provided for shall be used “solely for the support and maintenance of public free schools”, it seems to me to be just as logical to read this section as prohibiting the use of any money at all by a Board of Public Instruction for debt service, which woulii amount to a legalized fraud on the bondholders. But such interpretation was foreclosed by this court in State v. Board of Public Instruction for Dade County, 126 Fla. 142, 170 So. 602, wherein we adhered to our former holdings that county school funds provided for by Section 8 of Article XII of the F.S.A.Constitution, under which the bonds before us were issued, could be used to service obligations sold to finance past debts lawfully incurred — i. e., that the Constitutional provision invoked did not force the school authorities to operate solely on a cash basis. Note that in that case, in validating the bonds, we laid some emphasis upon the fact that it was not shown that any budgetary requirements would be violated by the issuance of the bonds. In the case *775before us no contention is made by the Board that it cannot pay because insufficient money is available to it for debt service.

In Chapters 11073 and 11074, Laws of 1925, the legislature provided that the interest and sinking funds should be used “for the sole purpose of paying the interest due on said bonds * * * and retiring the same at their maturity”. I cannot read into this much-employed statutory language anything deeper than a direction that the funds will be used only for lawful debt service, for the same reasons expressed in my opinion in Board of Public Instruction of Sumter County v. Wright, Fla., 76 So.2d 863. I can find no indication in any of the acts under which the bonds were issued of a disposition on the part of the legislature to remove either bonds or coupons from the operation of the law merchant. In Board of Public Instruction for Dade County v. State ex rel. Tanger Inv. Co., 121 Fla. 703, 164 So. 697, 698, we said that special tax school district bonds are “in all respects analogous to ordinary municipal bonds”. No distinction of substance can be made in the case before us.

Nor have we ever applied to obligations of this type the principle that a county is not liable for interest in the absence of statute or express agreement, announced in Duval County v. Charleston Engineering & Contracting Co., 101 Fla. 341, 134 So. 509, and National Bank of Jacksonville v. Duval County, 45 Fla. 496, 34 So. 894. In the Charleston Engineering case we held that the county was not liable for interest on an engineering contract which did not provide, for the payment of any interest. In the National Bank case we held that an ordinary county warrant, given in payment of an obligation, in the manner of a check, did not bear interest. The case of Jefferson County v. Hawkins, 23 Fla. 223, 2 So. 362, which holds that defaulted coupons bear interest, was distinguished in the opinion, the court stating that in the Hawkins case “[t]he question relating to interest upon county warrants was not involved or decided, and, in view of the essential differences in the nature of coupons and warrants, they do not necessarily rest upon the same basis”. 34 So. 894, 895. For an illuminating discussion by this court, speaking through Mr. Justice Terrell, of the difference between warrants and bonds see Marshall v. State ex rel. Sartain, 88 Fla. 329, 102 So. 650.

Finally, I find it necessary to consider briefly the subject of negotiability. Appellant allows in its brief that the bonds issued under Chapter 11073, supra, are negotiable because the act declares that they shall be, but contends that the bonds issued under Chapter 11074 are not negotiable because that chapter does not contain the same declaration, and since they are payable from a “limited fund” their defaulted coupons do not bear interest.

Declarations as to negotiability or the lack thereof are generally ineffective. See Chase v. City of Sanford, Fla., 54 So.2d 370. The acid test of negotiability is the declaration on the face of the instrument. To be negotiable an instrument must contain, on its face an unconditional promise to pay, and a promise to pay out of a particular fund, and only out of that fund, is not unconditional because it does not pledge the general credit of the maker.

Both series of bonds here in suit, issued under Chapters 11073 and 11074, contained upon their faces the declaration appearing in the opinion of Mr. Justice Sebring, i. e., that for their payment *"the full faith, credit and resources*of the Board of Public Instruction for the County of Putnam *are hereby irrevocably pledged”.*(Emphasis added.) They also declared their statutory authority and that they had been ratified by a majority vote of the freeholders. The “tax anticipation notes” sued upon declared on their faces that they were issued “under the authority of and in full compliance with Section 458 of the Revised General Statutes of Florida of 1920, in anticipation of the receipt of taxes for the said year, [referring to the scholastic year beginning July 1, 1929] which said taxes *and all other revenues,*including all funds derived from gasoline taxes, *and all other resources of the said Board*of Public Instruction *are hereby irrevocably pledged to the payment**776*hereof’.*(Emphasis added.) Certainly this was and is a pledge of the general credit of the Board.

The bonds issued under Chapters 11073 and 11074 and the “tax anticipation notes” are to be distinguished from revenue bonds, which are made payable solely from a special fund and do not pledge general credit. Compare State v. Dade County, Fla., 70 So.2d 837 (bonds for enlargement of airport, payable from revenues therefrom); Chase v. City of Sanford, supra, Fla., 54 So.2d 370 (bonds to build and maintain port terminal, payable from revenues therefrom and from parking meter revenues); City of Orlando v. State, Fla., 67 So.2d 673 (street improvement certificates, payable from proceeds of special assessments against improved property); Gate City Garage, Inc. v. City of Jacksonville, Fla., 66 So.2d 653 (bonds for acquisition of off-street parking facilities, payable from revenues therefrom and parking meter revenues).

In Chase v. City of Sanford, supra, the bonds “did not contain a promise to pay unconditionally and at all events * * 54 So.2d at page 373. In Gate City Garage v. City of Jacksonville, supra [66 So.2d 662], the bonds contained the following declaration :

> “ *‘Neither the Bonds nor coupons shall be or constitute an indebtedness of the city of Jacksonville, within the meaming of any constitutional, statutory or charter limitation of indebtedness, but shall be payable solely from the revenues of the Parking System,*including both off-street parking facilities and metered on-street parking facilities, as herein provided. No holder or holders of any Bond issued hereunder, or of any coupon appertaining thereto, shall ever have the right to compel the exercise of the ad valorem taxing power of the City, or taxation in any form of any real or personal property therein to pay said Bonds or the interest thereon.’ ” (Emphasis added.)

Clearly these “special fund” cases are distinguishable from the case before us.

Other “special fund” cases are cited in the annotation, “Negotiability of municipal bonds as affected by reference to fund from which they are to be paid”, 42 A.L.R. 1027, 1030. The annotator continues on page 1031, however, as follows:

> “But it is not to be adduced from any of the cases above, that the mere fact that the enabling act provides for the payment out of a particular fund renders .bonds issued under it non-negotiable. For, if they are the general and unrestricted obligations of the body corporate issuing them, and not payable solely out of a particular fund, although a particular fund is provided by the enabling act for their payment, they do not come within the description of the Negotiable Instrument Act as non-negotiable paper, for, as said by a learned court, that act ‘especially provides that “an unqualified order or promise to pay is unconditional within the meaning of this chapter, though coupled with (1) an indication of a particular fund out of which reimbursement is to be made, or a particular account to be debited with the amount.”’ Commissioners of Cleveland County v. Citizens’ Nat. Bank of Gastonia, 1911, 157 N.C. 191, 72 S.E. 996.”

As for the contention of appellant that the fund from which payment is to be made is “special” or “limited” because current school operating expenses have a claim against it paramount to debt service, it would be a novel principle indeed if we were to hold that an instrument is not negotiable, although on its face it pledges the maker’s general credit, because some obligee other than the bondholder may exert a prior claim upon the funds of the maker. Of course funds cannot be diverted from the purposes specified by constitutional mandate, and if the monies available for debt service are insufficient to satisfy the outstanding obligations of the Board, this is a matter to be pleaded and proved in a proper case. Moreover, equities growing out of circumstances surrounding the acquisition of a negotiable instrument may be *777pleaded and proved, to call into question the status of the holder thereof as a bona fide purchaser, but no issue which may thus be created has been held to threaten the negotiability of the instrument itself. At the most, it can only make available to the issuing unit certain defenses against the particular holder which could not otherwise be raised.

To be sure, creditors are held to notice of constitutional and statutory limitations, State v. Board of Public Instruction for Levy County, 143 Fla. 212, 196 So. 452. But even this rule is not to be taken without qualification. In the Levy County case, the validation of refunding bonds was refused, when it was made to appear conclusively to the court that the proposed levy for debt service would not leave enough for current school operation. In that case, as in most validation cases, the court had all the facts of the Board’s financial standing before it, along with the facts of the proposed issue. In Weinberger v. Board of Public Instruction, 93 Fla. 470, 112 So. 253, the bonds were enjoined before they were sold, even though they had been validated, because they showed *on their face*that they were unconstitutional. With these cases compare Board of Public Instruction for Dade County v. State ex rel. Tanger Inv. Co., supra, 121 Fla. 703, 164 So. 697, where, after validation and sale, mandamus was issued against the Board over its contention that no election was held in accordance with the Constitutional requirement. On the same point, compare the cases of Gunnison County Commissioners v. E. H. Rollins & Sons, 173 U.S. 255, 19 S.Ct. 390, 43 L.Ed. 689, and Chaffee County Commissioners v. Potter, 142 U.S. 355, 12 S.Ct. 216, 35 L.Ed. 1040, with the Weinberger case, supra. But I do not consider this subject properly before us because, as aforesaid, the Board does not even now contend that payment would violate the Constitutional or statutory mandate, under which it functions, because of insufficiency of funds to meet its obligations.

SEBRING, J., concurs.

MATHEWS, Justice

(dissenting).

This appeal involves the question of the right to collect interest on interest or interest alleged to be due on interest coupons of obligations issued by the Board of Public Instruction of Putnam County, Florida, after the maturity of such coupons and also interest on the bonds or obligations after the maturity thereof.

Although the payment of principal of the obligations and interest on such obligations until the date of the maturity thereof and the payment of the face of the interest coupons is not questioned, it is necessary to refer to them and the authority under which they were issued in order to determine the main question involved.

The declaration alleges three causes of action. Each cause of action is based upon a specialty and is not based upon the common counts.

The first cause of action involves certain bonds referred to as “County of Putnam Board of Public Instruction Funding Bond”, issued under the authority of Chapter 11073, Laws of Florida 1925.

The second cause of action related to high school bonds, dated July 1, 1925, issued under the authority of Chapter 11074, Laws of Florida 1925.

The third cause of action was with reference to Tax Anticipation Notes, dated July 15, 1929, and maturing on July 15, 1930. These notes contained a recital that they were issued under Section 458 of the Revised General Statutes of Florida of 1920.

Each cause of action demanded judgment for the principal amount of the obligations and the face of the interest coupons or interest on the obligation to the date of the maturity thereof and then added, “together with interest thereon at the legal rate from the maturity of said bonds and coupons, to the date of the rendition of this judgment.”

Chapters 11073 and 11074, Laws of Florida 1925, were local laws and related only to the Board of Public Instruction of Put*778nam County. Each act authorized the Board to borrow money, in accordance with the terms of the act, to be repaid from the proceeds of a tax levied for that purpose and which tax shall be a part of the tax provided for by Section 8 of Article XII of the F.S.A. Constitution of the State. This provision of the Constitution contains a positive limitation upon the power of the Legislature and the Boards of Public Instruction, and under such limitation the amount of the tax shall not exceed 10 mills, and is appropriated by the Constitution for the support of the public free schools in the County.

Section 458, Revised General Statutes of 1920, authorized the Board of Public Instruction to borrow money and pay interest thereon for the purposes expressly stated in the statute. The notes involved in this case provide that they were issued in compliance with Section 458, and “in anticipation of the receipt of taxes for the said year [meaning the year beginning July 1, 1929]”.

The Board admitted that it was due $50,-000 on account of the principal of the obligations and deposited said sum in the registry of the Court pursuant to the Court’s order of February 8, 1952.

It was provided that the Board should be relieved of the payment of interest, if there be any due, on account of the bonds from the date of the deposit of the $50,000 in the registry of the Court and that the case proceed “on the question of the right [of the plaintiff] to recover interest on the bonds and coupons sued upon”. In a final summary judgment the Court said:

> “ * * * After argument by counsel for the respective parties, the Court is of the opinion that the bonds and tax anticipation notes bear interest after maturity at the rate specified in said securities, to-wit: six per cent (6%); that the defendant is liable for the face amount of the interest coupons herein sued upon, together with interest thereon at eight per cent (8%) per annum from their respective maturities, and further, the Court is of the opinion that there is no material issue of fact or law undisposed of and that the plaintiff is entitled to the entry of a summary judgment as to the defendant’s liability for the interest coupons and interest after maturity [$50,000 principal and $79,393.57 interest].”

It is apparent from a reading of the final judgment and the order of the Court that interest after maturity was allowed and included in the final judgment. Among other assignments of error the appellant included the following:

> “2. The Court erred in said final judgment in holding that the bonds and tax anticipation notes sued upon bear interest after maturity.

> “3. The Court erred in holding that the interest coupons sued upon bear interest after maturity.

> “4. The Court erred in holding that said interest coupons bear interest after their respective maturities at the rate of eight per cent per annum.

> “5. The Court erred in its final judgment in assessing damages in favor of the plaintiff in the principal sum of $79,393.57.”

The measure of the legal responsibility of the appellant to pay interest after maturity on the coupons or on the main obligations must be determined by the Constitution and statutes in existence at that time. Wright v. Board of Public Instruction of Sumter County, Fla., 48 So.2d 912.

The county school fund provided for in Section 8 of Article XII of the State Constitution, F.S.A., has been referred to as a “sacred fund”. Its purpose, use and disposition is limited by the Constitution. Even the Legislature cannot authorize the expenditure of any portion of this fund in direct violation of the limitation of the Constitution.

Many cases have been cited with reference to municipal corporations or county bonds and others which are not limited and controlled by the same provisions of the Constitution and laws as county school funds.

*779Even a county is not authorized to pay interest in the absence of a statute or an express agreement. In the case of Duval County v. Charleston Engineering & Contracting Co., 101 Fla. 341, 134 So. 509, 518, it was held:

> “Interests on the amounts found to he due should not be allowed in the absence of an express provision in the contract on the part of the county agreeing to pay interest, since the obligation of a county to pay interest must rest in contract or on a statute.

> “It is a general rule that, in the absence of statute or express contract, the county is not liable for interest on its obligations. National Bank of Jacksonville v. Duval County, 45 Fla. 496, 34 So. 894, 3 Ann.Cas. 457; 7 R.C.L. page 922.”

In the case of Board of Public Instruction of Okaloosa County v. Kennedy, 109 Fla. 153, 147 So. 250, 254, the Court held that public school funds are a sacred trust, and then said:

> “In the judgment rendered in the present case there was included interest on the item of $127 sued on. The allowance of interest prior to judgment, on an ordinary unpaid school claim of the character here dealt with, can only be justified when specially provided for by statute (Duval County v. Charleston Engineering & Contracting Co., 101 Fla. 341, 134 So. 509) or where the contract at its inception had included in it an authorized stipulation agreeing to pay interest on deferred payments required to be made under the contract. No such stipulation appeared in the contract sued on, nor was an agreement to pay interest authorized to be made by the school board after the service had been completely rendered and the contract fully executed, since there was no valid consideration for any such an undertaking.”

There is a material difference between county school funds provided for in Sections 8 and 9 of Article XII of the State-Constitution, F.S.A., and funds' provided for by Section 17 of Article XII. This* distinction was pointed out in the case of State v. Board of Public Instruction of Dade County, 126 Fla. 142, 170 So. 602 Section 9 of Article XII of the Constitution is a definite limitation upon the power of the Legislature and directs that the Board of Public Instruction shall use the funds therein provided for “solely for the support and maintenance of public free schools”. At least a part of that fund is derived from the interest on the “sacred” state school fund. There is more reason to guard with care and caution the county school fund against dissipation by the payment of unauthorized interest than there is for any other fund because it is a sacred fund. Even if it be admitted that under Sections 8 and 9 of Article XII of the State Constitution, F.S.A., the Legislature had the power and authority to provide for the payment of interest on an obligation after the maturity of such' obligation or to pay interest on an interest coupon after the date of the maturity of such interest coupon, Chapters 11073 and 11074, Laws of Florida 1925, and Section 458, Revised General Statutes of 1920, do not expressly or impliedly authorize such payment. We have examined with great care the obligations and the interest coupons and we do not find, any express agreement on the part of the Board to pay the interest on the obligations in question after the date of their maturity or to pay interest on the interest coupons after the date of the maturity of such coupons.

The case of Jefferson County v. Hawkins, 23 Fla. 223, 2 So. 362, has been cited for the authority that interest should be paid on past-due coupons. This case arose from obligations issued by the County Commissioners of Jefferson County in 1858 when the Constitution of the State specifically authorized counties to subscribe for stock in railroad companies under certain conditions. That case and other cases of similar nature are not controlling on the question of school obligations and interest thereon involved in this case. The expert*780ence of the counties, the loss to the taxpayers of the State, and the general abuses under the Constitution as it then existed was responsible for the elimination of that provision of the Constitution which authorized counties to subscribe to stock in railroad companies and for the inclusion of Section 7 of Article IX of our present Constitution, F.S.A., which provides:

> “No tax shall be levied for the benefit of any chartered company of the State, nor for paying interest on any bonds issued by such chartered companies, or by counties, or by corporations, for the above-mentioned purpose.”

As a further revolutionary change in the public policy of the State, Section 10 of Article IX was inserted in our present Constitution, F.S.A., which reads as follows:

> “The credit of the State shall not be pledged or loaned to any individual, company, corporation or association; nor shall the State become a joint owner or stock-holder in any company, association or corporation, The Legislature shall not authorize any county, city, borough, township or incorporated district to become a stock holder in any company, association or corporation, or to obtain or appropriate money for, or to loan its credit to, any corporation, association, institution or individual.”

It was held in Jefferson County v. Hawkins, supra, that it was clearly settled that a county did not have the power to issue bonds unless the power is conferred upon it by the Legislature and then every essential requirement of the statute must be followed. In view of the present limitations of our Constitution, bonds cannot be issued unless authority is clearly conferred.

It is next argued that interest on interest, or interest on the coupons after the maturity date of the coupons, or interest on the principal obligation after the maturity date of such obligation, should be paid by the school board and constituted obligations of the school board because there is no direct prohibition against such payments. This argument ignores completely the principle of statutory and constitutional construction long required and adopted in this State that “when a Constitution directs how a thing shall be done that is in effect the prohibition of its being done in any other way”. Without Sections 8 and 9 of Article XII of our Constitution, F.S.A., there would have been nothing to prevent the Legislature- from authorizing county boards of public instruction to issue bonds without limit and impose taxes without limit for the payment of such bonds and interest thereon, not only until maturity but also after maturity.

The Legislature may be all-powerful in taking an action with reference to any subject unless in violation of the United States Constitution or it is restrained and limited by provisions of the State Constitution. Sections 8 and 9 of Article XII are positive limitations upon the power of the Legislature.

In the case of Thomas v. State ex rel. Cobb, Fla., 58 So.2d 173, 177, we stated:

> “We are not unmindful of the fact that under our State Constitution it is not necessary that the Constitution contain specific grants of power to the Legislature; that the Constitution is a limitation upon power rather than a grant of power. For example, had there been absolutely nothing in the Constitution with reference to the payment of the salaries of county officers, the Legislature would have been all-powerful in respect to this subject; but when the Constitution made specific provisions with reference to this matter, it amounted in effect to a prohibition in the exercise of the power in any other way. This is made clear in the case of State ex rel. Murphy v. Barnes, 24 Fla. 29, 3 So. 433, wherein it is said, on page 434 of the text:

> “ ‘The suggestion that this section contains nothing to prohibit the legislature from passing a law putting the payment of the salaries of county of-*781fleers on the state is quite untenable. When a constitution directs how a thing shall be done, that is in effect a prohibition to its being done in any other way.’ ”

See also the cases therein cited of: State ex rel. Church v. Yeats, 74 Fla. 509, 77 So. 262; Weinberger v. Board of Public Instruction of St. Johns County, 93 Fla. 470, 112 So. 253; State ex rel. Davis v. Love, 99 Fla. 333, 126 So. 374, and Amos v. Mathews, 99 Fla. 1, 126 So. 308.

It is next argued that it is the obligation of the school board to pay interest on the coupons after maturity and interest on the face of the bonds after maturity because under the law merchant and the negotiable instrument law of Florida, interest is payable after the due date of the obligation without any specific obligation or promise to pay such interest. The fallacy of this argument lies in the fact that the instruments in question are not negotiable instruments except in a limited sense. They may be called negotiable instruments but they are obligations of the school board and the authority for their issuance is recited on the face of the obligation. Everyone dealing in such securities is on notice of the provisions of Sections 8 and 9 of Article XII of the State Constitution, F.S.A., and the laws in question enacted pursuant to said sections of the Constitution.

In this particular case we should bear in mind that the obligations in question are school obligations and not municipal bonds. The Legislature has more latitude with reference to municipal bonds. It has plenary control over municipalities. In 42 A.L.R. in the annotation on Municipal Bonds-Negotiability, on page 1030, the author cites the cases of Morrison v. Austin State Bank, 213 Ill. 472, 72 N.E. 1109, 104 Am.St.Rep. 225, and Northern Trust Co. v. Village of Wilmette, 220 Ill. 417, 77 N.E. 169, 5 Ann.Cas. 193, and then said:

> “In this case it was held that where a municipality issues bonds under a statute authorizing it only to issue bonds payable out of a special fund, the bonds are not negotiable, though made payable to bearer; * * *.”

In the case of Mississippi Valley Trust Co. v. Oklahoma Ry. Co., 156 F.2d 283, 286, the Circuit Court of Appeals, Tenth Circuit, said:

> “ * * * the coupons were nonnegotiable and a nonnegotiable coupon does not bear interest after maturity in the absence of an express provision therein for the payment of interest after maturity.”

The obligations in this case are payable from a special fund. The fact that an act may declare bonds or interest coupons to be negotiable does not make them so if payment is limited to a particular fund. F.S. Section 674.02, F.S.A. declares that in order for an instrument to be negotiable it must “contain an unconditional promise or order to pay a certain sum in money”, and F.S. Section 674.04, F.S.A. declares that “an order or promise to pay out of a particular fund is not unconditional”.

Section 8 of Article XII of the Constitution, F.S.A., limits the rate of the tax to ten mills and limits the use of the funds resulting therefrom to “the support of the public free schools [of the County]”.

In Board of Public Instruction of Okaloosa County v. Kennedy, supra, this Court held that such a board could pay legal debts incurred in previous years out of this fund provided the board made provision first for the current support of the county schools.

In the case of State v. Board of Public Instruction for Levy County, 143 Fla. 212, 196 So. 452, 454, this Court refused to validate an issue of refunding bonds because the amounts required annually to pay the debt service would not leave enough for the operation of the schools. The Court said:

> “Refunding bonds cannot be paid from any county school funds included in section 9, Article XII, except a reasonable part of the funds that may be derived from levies under section 8, *782Article XII. See Bryan v. Board of Public Instruction [142 Fla. 691], 195 So. 697, filed April 30, 1940.

> ‡ *%*# *%*‡ *%*

> “ * * * The constitution does not contemplate that the county school funds derived from the ad valorem tax levied under section 8, Article XII, constitution, that may under authorized conditions be used to pay indebtedness legally incurred for public free school purposes, shall be so pledged or disbursed as to unduly reduce the funds raised under Section 8, Article XII, for the current support and maintenance of public free schools, see State v. Board of Public Instruction of Dade County, 126 Fla. 142, text page 152, 170 So. 602, and creditors who are to — paid from tax levies under section 8, Article XII, are held to notice of the intendments and limitations of the constitution as to such tax levies.”

It is clear that the obligations are to be paid from a special fund which is limited. This fund must be used, first, for the current operation of the schools and the payment of its debts. The operation of schools constituted the prior claim against the fund and this left uncertain the amount remaining available for the payment of bonds and coupons.

In discussing and passing upon the negotiability of bonds in the case of Gate City Garage, Inc., v. City of Jacksonville, Fla., 66 So.2d 653, on page 663 of the text, this Court said:

> “The bond form in the Miami Beach case declared, ‘This bond is fully negotiable for all purposes.’ The language in that case was much stronger than the language in the bond form now before the Court. The bond form in this case recites that it has all of the ‘qualities and incidents’ of a negotiable instrument. When it is declared that a bond has all of the ‘qualities and incidents’ of a negotiable instrument and further declares that it is payable solely from a particular fund, then the ‘qualities and incidents’ of the bond are limited by the further provision that notwithstanding the ‘qualities and incidents’ of negotiability, it is limited to the extent that payment can be made only from the special fund and although the bond may be negotiated as a negotiable instrument, the bondholder and all other persons dealing in such bonds are put on actual notice of such limitation.

> “F.S. § 181.06, F.S.A., is with reference to the terms of refunding bonds of towns and cities, but is persuasive on this question. This section reads, in part, as follows:

> “ ‘ * * * Notwithstanding the form or tenor thereof, and in the absence of an express recital on the face thereof that the bond is nonnegotiable, all refunding bonds shall at all times be, and shall be treated as, negotiable instruments for all purposes.’

> “Notwithstanding the fact that the bonds in this case may have all of the ‘qualities and incidents’ of negotiable instruments, the payment of the principal and interest thereof is specifically limited to a special fund set forth in the bond itself and this limitation is binding upon the bondholders and all others dealing in such bonds.”

See also Chase v. City of Sanford, Fla., 54 So.2d 370.

I would hold that it was not an obligation of the School Board of Putnam County to pay interest on the principal of the obligations after the maturity thereof or to pay interest on the interest coupons after the due date of such coupons.

I would affirm in part and reverse in part for further proceedings in accordance with this opinion.