These are consolidated appeals from a final decree of the trial court validating and confirming $160,000,000 of Turnpike Revenue Bonds, Series of 1961. The appeals were taken by William D. Hopkins, State's Attorney for the Second Judicial Circuit (hereafter referred to as the State), Thomas B. Grizzard, C.H. Pitts and A.W. Smith
Before proceeding with the determination of the merits of this appeal, it is necessary to dispose of certain procedural matters occurring at the time of and following the hearing held on the rule nisi in the cause and presented at the oral argument before the Bar of this Court. Prior to the return day, the Engineers filed their motion to dismiss the petition to validate "for the reason that it shows upon its face that the petitioner is attempting to pledge taxes for the payment of the proposed bonds which are illegal and unlawful and cannot be pledged therefor." On the day and at the hour fixed in the rule nisi, the attorney for the Engineers was not present. The trial court announced at the time that he had received a request from the attorney for a continuance because of a previous engagement out of the State. Such continuance was opposed by the Turnpike Authority. After hearing argument, the trial judge denied the request.
The law and the rules of this Court are designed to expedite the disposition of proceedings for the validation of bonds.
The court thereupon proceeded with the hearing on the issues presented by the petition to validate and the various answers filed thereto.
Subsequent to the entry of the decree validating the bonds, the Engineers applied by telegram to the trial court for leave to file an answer and for a rehearing.
Finding no reason to disturb any of the actions of the trial court with respect to matters of procedure, we now direct our attention to the reasons assigned by the various appellants in support of their respective arguments that the decree validating the bonds is erroneous. To simplify and clarify the discussions of the various contentions which will follow, a brief resume of what is proposed to be done by the Turnpike
The original act creating the Turnpike Authority
In order to finance the construction of said additional project, the Authority adopted a resolution authorizing the issuance of $185,000,000 of Turnpike Revenue Bonds, Series of 1956. A decree of the Circuit Court validating these bonds was approved by this Court in the second turnpike case.
On July 24, 1961, as a result of extensive feasibility studies conducted by the engineers and financial advisors of the Authority, a resolution was adopted by it reciting the construction of the first turnpike project and the issuance of the $74,000,000 of revenue bonds pursuant to the terms of the 1955 Trust Agreement to finance such project and reciting that $64,119,000, principal amount of the 1955 bonds, were outstanding. The resolution further determined that it was necessary and suitable to forthwith construct as a part of the turnpike project authorized by the legislative act an additional portion of the authorized project (designated as Turnpike Project No. 2) along the following route to the termini therein stated:
The resolution further determined and found it to be necessary and desirable to
Another provision contained in the Indenture and to which reference will now be made because it also is the subject of an assignment of error by appellants is Section 7.16, reading as follows:
The resolution further fixed the designation of said bonds as "Turnpike Revenue Bonds, Series of 1961", provided for an interest rate of not to exceed 5% (the maximum rate fixed in the authorizing act) and that such bonds should mature, subject to the right of prior redemption, on November 1, 2001. Other details with reference to the mechanics of handling and provisions of said bonds not necessary to this discussion were set forth in the resolution. The resolution specifically provided:
The resolution further provided that such bonds should be issued under and secured by a Trust Indenture, all of the terms and provisions of which were authorized in and approved by said resolution and, according to the terms of said resolution, were made a part thereof.
The Grizzard group argues that the Authority does not have the legal authority to construct Project No. 2 along the route and with the termini described either separately or in combination with turnpike Project No. 1. These appellants argue that the continuance of the project from a point in Lake County west-north-west or thereabouts into Sumter County to connect with Interstate 75 instead of northerly in Lake County to and then through Marion County constitutes a material departure from the legislatively designated route and, therefore, is a gross abuse of the discretion vested in the Turnpike Authority. In the second turnpike case the route established and approved by the trial court and this Court as being in substantial compliance with the legislative act also extended into Sumter County for some distance before continuing northerly in and through Marion County slightly east of the City of Ocala. The present route extends further west in Sumter County but the difference is inconsequential insofar as it relates to the question of whether there has been shown a gross abuse of power by the Authority. In the second turnpike case, this Court expressly held that the route there approved was in compliance with the legislative mandate which fixed generally the route to be followed but authorized the Authority to fix the exact location and termini. This point is obviously without merit.
The Grizzard group next argues that the finding of the lower court in the final decree that Interstate 95 from the Georgia line to Daytona Beach is not in the same traffic corridor as the turnpike project is not supported by substantial competent evidence. This contention arises out of a resolution adopted by the Authority on September 13, 1961 that "for the purpose of 7.16 of the Trust Indenture that portion of Interstate Route 95 as presently proposed * * * and the portion of Interstate Route 4 as presently proposed * * * are not within the same traffic corridor as existing Turnpike Project No. 1 and Turnpike Project No. 2 as now authorized." The controversy about Section 7.16 is not germane to the question of the validity of the proposed issue of revenue bonds. The obvious purpose of Section 7.16 is to prevent the Authority from cooperating in the construction of a competing road. This resolution was adopted prior to the sale of any bonds proposed to be issued under the resolution and Trust Indenture and the rights of any person who purchased such bonds would be controlled by the findings of the resolution. This section of the Trust Indenture does not and cannot constitute any contract between the State of Florida or any of its political subdivisions or agencies (with the possible exception of the Turnpike Authority) and the holders of any obligations issued pursuant thereto. It does not and cannot in any way prevent the State Road Department, the Federal government or any county or political subdivision of this State from constructing highways in any location that shall be deemed to be in the interest of the general welfare whether in the corridor of the turnpike project or not.
The fact that Arvida Corporation financed the original construction and will benefit from it does not destroy the public nature of the project itself.
It is next contended by the Grizzard group that the proposed turnpike project plans are not financially and economically feasible and are not basically sound. The testimony of the chairman of the Authority, the testimony and exhibits of the traffic engineers and the consulting engineers and the testimony of the investment bankers who appeared before the trial judge for the purpose of establishing the feasibility of the project from a business, financial and engineering standpoint establishes without contradiction the feasibility of Turnpike Project No. 2. There is no contrary evidence, nor is there any showing in this record of any such abuse of discretion on the part of the Authority as would warrant this Court in interfering. Whether the building of toll roads is a sound policy to be followed is one over which this Court has no control. The Legislature in its wisdom has authorized such project and this record shows that the Authority created by the Legislature to carry out such plan has exercised its authority within the law. Moreover, the question of the fiscal soundness or advisability of refunding the $64,000,000 of 3 1/4% bonds with bonds bearing an interest rate of close to 5% is also a matter involving the exercise of business judgment and this Court is without any authority to substitute our opinion in the matter for that of the Authority. In the Gate City Garage case (footnote 16 supra), in commenting upon the attack as to feasibility of the bond issue there before us, this Court said:
This decision is in line with many other decisions of this Court on the same point,
The last point made by the Grizzard group is that the financing and constructing of the proposed turnpike project violates the rights and privileges of the citizens of Florida guaranteed them by the Fourteenth Amendment of the Constitution of the United States and Section 12 of the Declaration of Rights of the Constitution of the State of Florida, F.S.A. This question is obviously premature. The bonds have not been sold, the proceeds are not yet available and the record fails to disclose that any person's vested rights have been or inevitably will be violated in the construction of this project. It must be assumed that, in the construction of this project, the requirements of the organic law and of the statutes of this State will be observed by this public Authority. When and if the rights of individuals under the Constitution and laws are violated, the processes of the law will be available to any injured parties.
The two other points raised by the Grizzard group have been carefully examined and are either without merit or have been disposed of in the discussion of the other points above.
The State presents four points. The first point which argues that the bonds proposed to be issued require the prior approval of the freeholders at an election under Section 6 of Article IX of the Florida Constitution, F.S.A., was raised and disposed of contrary to appellants' contention in the first turnpike case. This Court there held that such constitutional provision was inapplicable to revenue bonds issued by this Authority payable, as here, solely from tolls and other revenues. We reject this argument here for the same reasons we rejected it there.
The State argues in its second point that the outstanding Turnpike Revenue Bonds, Series of 1955, cannot lawfully be refunded prior to April 1, 1962, their first redemption date. The proposed Trust Indenture for the 1961 bonds contains a provision, as we have heretofore stated, that a portion of the proceeds derived from the sale of the bonds shall be used to redeem some $64,000,000 of outstanding 1955 bonds. The first redemption date is April 1, 1962. To accomplish this refunding so that the holders of this 1961 issue will have a first lien on the pledge of the revenues of the entire turnpike system, the Authority must have funds available by April 1, 1962 to pay off these old obligations. To accomplish this, the Trust Indenture requires a deposit with the 1955 Trustee of an amount in cash sufficient to retire the remaining outstanding bonds of such issue with accrued interest and expenses to April 1, 1962. The Act (Section 340.17) gives the Authority the power to issue revenue bonds for the purpose of such refunding and paying the cost of an additional project and the Trust Indenture provides that if the redemption premiums and accrued interest to the date of the redemption are irrevocably held by the Trustees "such bonds shall cease to be entitled to any lien, benefit or security under this Trust Agreement and the holders * * * of such bonds * * * shall have no right in respect thereof except to receive payment of the redemption price thereof." It is, therefore, obviously necessary to have the funds necessary to redeem the 1955 issue in the hands of the
The State next argues that the Authority cannot legally combine Project No. 1 and Project No. 2 into one consolidated turnpike project. This question again concerns the exercise of business judgment and discretion on the part of the Authority. We think the most conclusive answer to this argument is found in the language of the act creating the Authority. While this act authorizes the Authority to build the turnpike in different segments, a careful study of the act reveals the legislative intent that, when the project is completed, it shall be operated as one project. Good business and common sense require such conclusion. On other occasions this Court has approved the combination of several related projects into one operation.
The last contention of the State is that the Authority is not authorized to construct a part only of the turnpike project authorized to be constructed from the northern terminus of Project No. 1 to a point in Duval County. This point does not require extended discussion. Like the preceding point, the answer is found in the language of the legislative act itself. Moreover, in the first and second turnpike cases this Court had before it this same question and rejected it.
The Engineers argue that the Authority abused its inherent discretion by determining to extend the turnpike through Lake County. We approved the route through Lake County in the second turnpike case so that matter has long since been set at rest. Moreover, as we have heretofore stated, in this and the other cases, the exact location of the highway is one within the discretion of the Authority. The second contention of the Engineers is:
It is obvious on the face of the above contention that the question is founded on a false premise. Moreover, it is not properly a matter for adjudication in these proceedings to validate an issue of revenue bonds.
We conclude this opinion by repeating the observation made by Mr. Justice Thomas
We hold that on the record here the Authority has lawfully acted within the power granted it by the Legislature of this State.
The decree of the Circuit Court is therefore
ROBERTS, C.J., and TERRELL, THOMAS and THORNAL, JJ., concur.
"* * * In the face of the Rule to Show Cause and in view of the fact that the hearing has been set for several weeks, as is reflected by the publication of the several notices to show cause, the Court is constrained to sustain the objection to a continuance and proceed with the hearing. The Motion to Dismiss on the part of Mr. Warren, of course, will be regarded as a protest against validation and will be regarded as an Answer setting up the matters with respect to which he has interposed Complaint. * * *."
"Section 7.16 of the Trust Indenture attempts nothing more than to limit the Authority's ability to give its consent to the construction of a competing road in the same traffic corridor with the Turnpike System. This section can not obligate the State Road Department nor can it commit the Bureau of Public Roads of the Federal Government to any course of action. Neither the Florida Statutes nor the Federal law requires the State Road Department or the Bureau of Public Roads to obtain the consent of the Turnpike Authority before building any state road or any Interstate Highway, competing or otherwise with the Turnpike System. This section is intended as a covenant to protect the bondholders against an indiscriminate act on the part of the Authority if, as and when its consent in a certain regard is sought by another public body."