Court Opinion

ID: 3243059
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:16:01.320864+00
Date Added: 2024-06-11T13:59:07.435829
License: Public Domain

In view of the clear remedy by mandamus to require the officers and agents in charge to perform the obligation stipulated in the matter of charging, collecting, setting apart, and applying fees to the payment of the bonded debt, and the payment of stipulated rentals from other funds of the institution available for the purpose, I do not see how an occasion could arise for a receivership.
But upon full consideration of the nature of the receivership proposed, if occasion should arise, I am of opinion that with or without such stipulation, the bondholders would be entitled to appropriate equitable remedies, including a receivership of the character contemplated. A receivership to operate these facilities for the benefit of the Institution, not an entering upon and taking possession of state properties for the exclusive benefit of bond-holders, but solely to make effective the obligation which the State Agency undertook to perform, but failed so to do, does not appear to be unwarranted. The authorities cited in the main opinion sustain this view.
The second question upon which an adjudication is sought, is thus stated in brief: "If the State Teachers College at Florence, Alabama, uses office space or other educational facilities furnished it by the project, may the College pay rentals monthly for the use of such facilities so furnished as the service accrues? Such payment to be made from the general fund of the Institution and the Institution to be bound only to pay for such services as it continues to avail itself of the facilities furnished by the project."
In my opinion this inquiry should be answered in the affirmative, but with the added provision: "But no part of such rentals shall be paid out of any moneys appropriated by the State to said Institution."
By the terms of the proposed contract, the bonds are payable from the "rentals" and the fees to be levied as per contract. The property rented is deeded to the State Board of Education. The project is for a school building for special purposes. The rental provision is that if the Institution use this property, for other needed school purposes, a rental shall be paid to the bond-holders. The stipulation is solely to provide security for the bonds in the sum of $100 per month. Otherwise, it is meaningless.
In the absence of the plain limitation in our Enabling Act, such stipulation could be made as in the Kentucky case.
The Legislation Act (Gen.Acts 1935, p. 1064) is the Enabling Act authorizing the issuance of the bonds here contemplated.
This Act authorizes the State Agency "to pledge therefor thefees from students to be levied by the Institution and othermoneys not appropriated by the State to the Institution." Section 2.
"The bonds * * * shall not be an obligation of any nature whatsoever of the State, and shall not be payable out of any moneys provided for or appropriated by the State to the Institution." Section 3.
This is part of the Enabling Act which cannot be stricken by construction.
The Legislature probably considered any contract stipulation calling for the payment of long term bonds out of moneys appropriated by the State from its general funds would be tantamount to the creation of a debt on the part of the State in violation of the Constitution. The Bridge bonds referred to in brief, are payable from rentals expressly authorized by statute from special funds devoted from the beginning to road and bridge construction.
In view of the well known fact that the Institution has other moneys which may be pledged along with student fees, and which will many times exceed the rentals of $100 per month, I cannot see how following and giving effect to the statute with reference to State Appropriations could reasonably stand in the way of this needed improvement.
In any event, this court is concerned with the law of the case, to write it truly. *Page 411