Appendix — City of Winter Haven v. Meredith

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APPENDIX A

‘Alter having enjoyed the benelit of the reduced inter-

est rates for more than seven vears, the City now asserts

that the deferred interest coupons, and the provisions for

their payment, eicher in whole or in part, are invalid, an |

that it is not obligated to pay any part of the deferred in-

terest. This position should not be sustained, The contract

wis undoubtedly made in good faith, and the parties to it

must have thoueht it was wise and beneticial, otherwise

if Would not have been entered into. Its legal effect was

merely to provide that instead of paying 6% interest each

year, the City should pay the lesser rates from January 1,

18+ to January 1, 144, and that the difference should be

paid at the maturity of the bonds now outstanding, unless

the latter should be ealled for redemption on or before

January 1, 1944, in which event only one-half of the differ-

ence should be paid, or should they be called for redemption

after that day, but on or before January 1, 1954, only three-

fourths of the difference should be paid.

The State is not aware of any constitutional provision

or statute which prohibited the making of that contract.

To the contrary, the case of State vs. Sarasota County, 1s

Fla. 629, 159 So. 797, indicates that the contract is valid.

Argument of Fifth Question

If the redemption provisions requiring the payment of

the deferred interest COUPONS, in whole or in part, are

invalid, they are not severable from the other redemption

provisions in the outstanding bonds, and the latter cannot

he called for redemption in advance of their maturity.

The provisions concerning the manner in which the out-

standing bonds may be ealled for redemption, are entire

and indivisible. To eall them for redemption on or before

Jannary 1, 1944, three things must be done: 1) the prin-

15

cipal must be paid; 2) acerued interest to the redemption

date must be paid; 3) one-half of the deferred interest must

he paid. The performance of each of these eonditions is

dependent on the performance of the other two, It is certain

that the parties to the contract evidenced by the outstand

ing honds, did not intend that the third condition should be

breached at the time of performance of the first and second.

As previously pointed out, the position of the State is that

the provisions for the payment of the deferred interest are

valid. However, if they are invalid, they nevertheless con-

stitute an integral part of the provisions for calling the

outstanding bonds for redemption—that is, they constitute

one of three conditions subsequent which must be performed

to bring about a valid call for redemption. If any one of

the three conditions subsequent is invalid, the other two

must fall with it, thereby invalidating all of the provisions

purporting to authorize the calling for redemption of the

outstanding bonds. In this situation, there is no method or

means whereby they may be called for redemption in ad-

vance of their maturity.

It follows that if the provisions for the payment of the

deferred interest, in whole or in part, are invalid, the out-

standing bonds have not been and cannot be validly called

for redemption, and therefore that the issuance of the pro-

posed refunding bonds for the purpose of calling the out-

standing bonds, is unauthorized and illegal.”’

Sa ait AR

SERIE ARM ERE ES

pied

Sone!

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APPENDIX B

‘‘Argument of Fourth Question

The validity of the deferred interest coupons appurtenant

to the bonds proposed to be refunded,

Argument of this question is unnecessary. I feel confident

that this Court will follow its most recent decisions on this

point, namely:

Outman vs. Cone, 141 Fla. 196, 192 So. 611

Taylor vs. Williams, 142 Fla. 402, 195 So. 175

State vs. Special Tax School District No, 3, 143 Fla,

557, 197 So. 127.

Andrews vs. City of Winter Haven, (Fla.) Opinion

Filed September 13, 1941, not yet reported

Argument of Fifth Question

The provisions for the payment of the deferred interest

coupons, in whole or in part, are severable from the other

redemption provisions in the outstanding bonds, and the

latter can be called for redemption in advance of their

maturity.

This point was directly presented and expressly decided

by this Court in Andrews vs. City of Winter Haven, supra.

It was there held that similar deferred interest coupons

were unauthorized and void, but that the provisions for

their payment, either in whole or in part, were severable

from the other provisions for the calling of the outstanding

bonds for redemption, and when severed from such other

provisions, that the outstanding bonds were callable for

redemption, at par plus accrued unpaid interest to the date

fixed for redemption, as if the deferred interest coupons

had never been annexed thereto.

In the instant case, the resolution authorizing the issuance

of the proposed refunding bonds is directly founded on,

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and strictly adheres, in all respects, to the procedure ap

proved in the cited case. The latter is full and complete

authority by this Court for calling the outstanding bonds

for redemption on January 1, 1942, at par plus accrued

unpaid interest to that date, and establishes, beyond all

shadow of doubt, that the City has validly ealled the out-

standing bonds for redemption on January 1, 1942.’’

TABLE OF CASES

Andrews vs. Winter Haven,

148 Fla. 144, 3 So. (2d) 805..........

Bradford County vs. Nuveen,

153 Wek CO) WO vos cs vans

Hall vs. Coppell,

eer race ney wre

McMullen vs. Hoffman,

re. OOD ray ie esa e mes

Meredith vs. Winter Haven,

134 Fed. (2d) 202, 320 U.S. 228 ......

Qutman vs. Cone,

141 Fig, 196, 192 Boe. Gid...........5.

State vs. City New Smyrna Beach,

148 Fla. 482, 4 So. (2d) 660 ..........

State vs. Sarasota,

118 Fla. 629, 159 So. 797...........5.

State vs. Spee. Tax School Dist. No. 3,

143 Fla. 557, 197 So. 127.............

Taylor vs. Williams

. b]

142 Fla, 402, 195 So. 175.............

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