Court Opinion

ID: 6886368
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:29:23.039366+00
Date Added: 2024-06-11T16:05:43.495126
License: Public Domain

SIBLEY, Circuit Judge
(dissenting).
There being a presently acute justiciable controversy, I think we are bound to declare the rights of the parties, though the grant of injunction is discretionary. The Constitution extends the judicial power of the United States to controversies between citizens of different States arising under the laws of a State, just as fully as to controversies arising under the Constitution and laws of the United States.' There is the same power and the same duty to decide both classes of cases. This case involves no invasion of high State functions or policies as to which caution is due, but only a question of how much this City owes these bondholders on calling their bonds for payment before due. Such questions have been decided by federal courts from the beginning.
Under presently prevailing rules of decision we must decide as the State Supreme Court has decided. On bonds of, this same City and of this same issue that court has held that the provision for calling the bonds for payment before due is valid, but that part of the call provision which promises in that event to pay part of the deferred interest is invalid, but separable; so that the bond may be called but no deferred interest need be paid. Andrews v. City of Winterhaven, 148 Fla. 144, 3 So.2d 805. In that litigation in the trial court questions 2 and 6 proposed for declaratory decree related to this exact matter. and were answered as above. The Supreme Court expressly affirmed the decree “in all respects”. The decision was cited and relied on in State v. City of New Smyrna Beach, 148 Fla. 482, 4 So.2d 660. We are compelled to accept it as the law of Florida, though I do not see how the part payment of deferred interest which is the consideration for the City’s privilege of calling the bonds can. be denied effect when that privilege is itself upheld.
Justice can be done, however, in this case, for the resolution which authorized these refunding bonds, and declared itself to be a part of the refunding contract, provides: “If any of the bonds hereby authorized be adjudged illegal or unenforceable in whole or in part, the holders thereof shall be entitled to assume the position of holders of a like amount of the indebtedness hereby provided to be refunded and as such to enforce their claim for payment.” Here a part of the new bond, that párt which promises to pay one-half the deferred interest on call of the bond for payment at this time, is adjudged unenforceable. A just application of the agreement quoted is to remit the disappointed bondholder to his interest rights under the old bonds. Literally applied, it might entitle him to the full high rate up to the date of call, instead of only half of that which was deferred. In case of such a partial failure in effectiveness of the provisions of the new bonds, indemnity only ought to be afforded; that is to say, so much interest promised in the old bond ought to be paid as would make good the loss caused by the partial unenforceability of the new bond. This question is not foreclosed by the decision in the Andrews case because the refunding resolution was not in that record and not considered by the court.