Opinion
No. 34415.
December 9, 1940.
HIGHWAYS.
Separate road district, managed by county board of supervisors, was authorized to issue funding bonds to pay judgment against district recovered in suit by state tax collector (Sp. Laws 1926, chap. 922; Code 1930, secs. 5977-5979).
APPEAL from the chancery court of Lee county; HON. JAS. A. FINLEY, Chancellor.
E.L. Joyner and F.G. Thomas, both of Tupelo, for appellants.
There is no statutory authority in this state for the issuance of funding bonds for a supervisor's or road district.
Section 5977, Code of 1930, is the only authority for issuance of funding bonds and this statute provides: "Every municipality and every county in this state which has or may hereafter have legal and undisputed outstanding warrants or other obligations and insufficient funds in the treasury to pay them or any of them is empowered and required to at once prepare for, and take up such warrants and other obligations from the proceeds of serial bonds which shall be issued for such purpose, as is provided by law for issuance of bonds for the payment of outstanding obligations."
It is appellants' contention that this section applies only to county or municipal indebtedness and does not apply to supervisor's district indebtedness or obligation.
Mitchell Clayton, of Tupelo, for appellee.
This court has many times held that Section 314 of Code of 1930 means just what it says — that a decree validating bonds under the provisions of this statute is conclusive and that no objections can afterward be raised as to such bond issue.
Parker v. Grenada County, 125 Miss. 617, 88 So. 172; Love v. Yazoo City, 138 So. 603; Street v. Town of Ripley, 161 So. 859; Town of Decatur v. Brogan, 185 So. 809; Brown v. Simpson County, 187 So. 738.
The Brown v. Simpson County case, 187 So. 738, is authority for paying district indebtedness by issuing funding bonds under the provisions of Section 5977, Code of 1930. And in addition to this decision there is room for argument that the Legislature intended that bonds could be issued under the provisions of Section 5977 to pay district indebtedness as well as county indebtedness. Section 5977, Code of 1930, was Section 1 of Chapter 209, Laws of 1918, and Section 2 of said chapter is brought forward as Section 5978, Code of 1930. In other words, in Section 1 of said Chapter 209, Laws of 1918, it is provided that obligations of county or municipality may be paid by issuing funding bonds; and Section 2 of same act provides that "no interest-bearing debt, except as provided in Section next preceding (5977) shall be incurred in any county, municipality or other taxpaying district unless authorized in an election, etc."
It will be seen that the purpose of the Legislature was by Section 1 of said act (brought forward as Section 5977 of Code 1930) to require every county, municipality or other taxing district to pay all outstanding obligations, although the words, "other taxing district," are not used in said section. This is manifest where Section 2 of same act is considered. The two sections were intended as a complete scheme to require any county having existing obligations to issue bonds to pay same (whether such obligations were incurred by a district or not), but that no other kind of bonds could be issued by a taxing district without an election.
In the case at bar, the Board found affirmatively that the bond issue when added to all other bonded indebtedness of the district did not exceed 10% of the assessed value of the taxable property of the district. Under the Brown v. Simpson County case, this was the only thing necessary to make the bonds valid.
The Third Supervisors District in Lee County is a separate road district of the county, and its existence as such was specifically recognized and declared by Chap. 922, Sp. Laws 1926. In a suit by the State Tax Collector, a judgment was rendered against the district for $14,000; and there being no funds to the credit of the district with which to pay the judgment, the board of supervisors ordered that serial bonds of the district in the amount aforesaid be issued for the purpose of making the payment.
When the proceedings to validate the bonds came on to be heard, appellants objected upon the ground that Section 5977, Code 1930, under which the bonds were ordered does not authorize bonds for the payment of outstanding obligations unless the obligations are of a municipality or a county, — that the statute does not include obligations which are of a separate road district.
In Brown v. Simpson County Sup'rs, 185 Miss. 216, 187 So. 738, the Court held that funding bonds for a supervisor's district may be issued under Section 5977, Code 1930, and in Edmondson v. Calhoun County Sup'rs, 185 Miss. 645, 187 So. 538, it was held that Section 5979, Code 1930, applies to road districts although that section also speaks only of counties or municipalities. It is true that in those two cases the point appears not to have been made that since the cited sections speak only of municipalities and counties, there is no inclusion of districts; but had the point been made, the same result would have followed.
Sections 5977, 5978, and 5979, Code 1930, are associated sections and were designed to avoid the evils of the credit system in municipal and county fiscal management. Many of the counties work and maintain their roads as a countywide endeavor, and most of these require that the expenditures of the several supervisors' districts shall be set up on the county books in such a manner that what each district is getting from these funds may be at any time readily ascertained. In re Validation of Lincoln County Funding Bonds, 187 Miss. 392, 401, 193 So. 26. In such a case no question could well arise but that funding bonds are issuable under Section 5977, Code 1930. It is equally within the purposes of the statute, and within the evils sought to be avoided by the three cited sections, that separate road districts, managed as they are by the county boards of supervisors, shall be included in those sections, and we so hold.
The other objections raised by appellants have been examined but are not of such moment as to require discussion.
Affirmed.