Birmingham Trust & Savings Co. v. Jefferson County

McOLELLAN, o. J.

This bill is exhibited by the Birmingham Trust & Saving's Company against the County of Jefferson and the Jefferson County Sanitary Commission; and this appeal is prosecuted from a decree sustaining a demurrer to the bill. To quote from the brief of appellant’s counsel, “The question raised in the case is whether or not the bonds of Jefferson county authorized to be issued by the Jefferson County Sanitary Commission under the provisions of an act approved February 28th, 1901- — Acts of General Assembly of Alabama, 1900-1901, pages 1722 to 1728 — are the general obligations of the county and payable out of the general funds of the county when due, or whether the payment of the principal of the bonds is not restricted to the surplus fund arising from the special tax authorized to be levied by section 11 of tire act.” The contention of appellant that the principal of these bonds is payable only out of the fund arising from the special levy and that the bonds cannot be paid and therefpre should not in terms be made payable out of the general funds of the county is rested solely upon the language of said section 11 of the act. That section is a.s follows: “That the Board of Revenue of Jefferson County shall for the tax year commencing October 1st, 1900, and ending September 30th, 1901, and each and every tax year thereafter, levy a special tax of one-twentieth of one per cent, on the value of all taxable property in said county as assessed for revenue for the State; the tax so levied and collected to be held exclusively as a sanitary fund to be used and applied exclusively to the payment of the interest on the sanitary bonds herein authorized to be issued, and to keeping in repair of the sanitary system of the county and nrotect the water- supplies and the surplus, if any, to be used by the said board of revenue for the payment of the principal of said bonds.” This section further pro*381vides that no levy in excess of the constitutional rate shall he made. The provisions of this section do not, in our opinion, support appellant’s contention. It is to be taken for granted in respect of all such bonds that the. legislative intention is that the principal is to be paid at some time, though there be no' expression of such intention: That is the prime obligation set down in.the face of them. Other provisions of this act are to the effect that the bonds shall become due and payable as to the principal at a time, to be nominated in them, and that this time shall not be postponed beyond the term of fifty years. It is also provided that they shall bear interest at a rate not exceeding five per cent, per annum, and that they shall not be disposed of by the county at less than their face value. Now, this section 11, upon which appellant’s position is rested, itself clearly evidences a legislative contemplation that the proceeds of the special tax will be or may be entirely appropriated to the payment of interest on the bonds and the expense of maintaining the sanitary system, or at least will be insufficient for those purposes and the payment of the principal; the provision being that if there should he any surplus arising from the special levy after paying interest, and the expense of keeping the system in repair and of protecting the water supply, such surplus should be used in the payment of the principal of said bonds. Thus recognizing the probable, or certainly possible, inadequacy of the special levy to provide funds for the payment of the principal, it would have been from the point of view of the legislature a vain and useless thing to authorize the issuance of these bonds, require their payment at a time certain and interdict their sale below their par value. It is not conceivable that the lawmakers had any such purpose. No such purpose is expressed in or is infer-able from any other part of the act. To the contrary, the bonds provided to be issued are by the terms of the act to be “negotiable bonds of Jefferson county;” and a negotiable bond of Jefferson county can be no more nor less, in. the absence, as here, of words of limitation, than the general obligation of that corporate entity to *382pay at- all events and out of any of its funds necessary to that end tlxe. sum therein stipulated to be paid.

These views lead to our concurrence with the chancellor in his niling upon the demurrer, and the decree in that behalf will lie affirmed.

Affirmed.