Case Title: Hollywood, Inc. v. Broward County

Citation: 90 So. 2d 47

Docket Number: 

State: florida

Court: Florida Supreme Court

Date: 1956-09-12T00:00:00Z

Document:
90 So. 2d 47 (1956)
HOLLYWOOD, INC., a Florida corporation, Appellant,
v.
BROWARD COUNTY, a political subdivision of the State of Florida, et al., Appellees.

Supreme Court of Florida. Special Division A.
September 12, 1956.
Rehearing Denied November 8, 1956.
Stanley M. Beckerman, Ellis & Spencer, Hollywood, and Sibley & Davis, Miami Beach, for appellant.
John U. Lloyd and John B. Gregory, Jr., Fort Lauderdale, for Broward County and J.H. Burke, H.J. Driggers, R.T. Gallion, Tony Salvino and H. Vivian Saxon, as members of and constituting the Board of County Commissioners of Broward County, Florida and Broward Public Recreation Assn.
Smathers, Thompson, Maxwell & Dyer, Miami, for Florida Land Holding Corp. and J & J Realty Co. Dale, Scott & Singer, and C. Shelby Dale, Fort Lauderdale, for Fort Lauderdale Board of Realtors, Inc., and Fort Lauderdale Beach Improvement Assn.
CARROLL, Associate Justice.
Appellant filed a taxpayer's class suit for declaratory decree, seeking to invalidate and undo a $1,600,000 land acquisition by Broward County, charging that the payment plan ignored requirements of Section 6 of Article IX of the Constitution, F.S.A.
On the granting of defendants' motions to dismiss in the lower court plaintiff declined to amend, and a dismissal followed.
This appeal is from the order of dismissal, and from an earlier order sustaining objections to the taking of certain depositions by plaintiff.
On the latter point, the order preventing the depositions was within the discretion of the Court under 30 F.S.A., Rule 1.24(b) of the 1954 Florida Rules of Civil Procedure. The depositions were noticed while motions to dismiss were pending. The granting of those motions and dismissal of the cause, within a few days after *48 the ruling on the depositions, rendered that question unsubstantial if not moot.
To support its contention that the complaint was sufficient, appellant argues that the purchase of land by the County without an approving vote of freeholders, subject to a mortgage for a large amount, payable over a number of years, amounts to a coercive requirement for payment of the mortgage by the County equivalent to its personal undertaking, interdicted by the Constitution, Article IX, Section 6.
The complaint contained these allegations:
By those allegations the complaint presented the following ultimate facts: that Broward County undertook to purchase certain lands for improvement and operation as a beach park recreational area, under enabling legislation which included permission to issue bonds for that purpose up to $2,500,000 provided they were supported by an approving vote as required by Article IX, Section 6, of the State Constitution; that the County's proposal to issue the bonds received an adverse vote of the people; that the County then proceeded to purchase the property in question from the *51 defendant owners at a price of $1,600,000, the terms being $160,000 cash and subject to a mortgage for the balance payable over a period of years with interest; that the cash payment was raised by the County by borrowing $40,000 from each of the four defendant banks and for the repayment of which certain cash resources of the County for the ensuing fiscal year were pledged; that the property passed through certain dummy corporations, one of which executed the mortgage to the sellers for $1,440,000; that the County made the cash payment of $160,000, and the property was conveyed to the County subject to the mortgage; and that the County did not assume the mortgage or become expressly obligated thereon.
Thus it is made to appear by the complaint that the plan of financing by which the County intended to make deferred payments for the property was one which necessarily involved pledging the general credit of the County for a continuing obligation with interest thereon over a period of future years. This is so, because when the County acquired the property the mortgage to which it was subject became a charge against the property, and the County was placed in a position of being coerced to meet the annual requirements for interest and maturing principal under the mortgage. The alternative would be to lose the property by foreclosure. The County can be expected to expend substantial sums for development of the property and to equip it for the public purposes for which it was acquired. That added investment would increase the loss to the County if the mortgage should be foreclosed, and it stimulates the coercive effect of the mortgage, compelling its payment by the County.
A scheme of financing which directly or indirectly obligates a taxing unit such as a county to pay a sum with interest extending over a period of years is in effect an attempt to create a binding, continuing interest-bearing contract obligation to pay money in the future, which violates the intent of the provision of Section 6 of Article IX of the Constitution granting power to issue bonds other than refunding bonds "only after the same shall have been approved by a majority of the votes cast in an election in which a majority of the freeholders who are qualified electors residing in such Counties, * * * shall participate". In re Advisory Opinion to Governor, 94 Fla. 967, 114 So. 850; State ex rel. Davis v. Green, 95 Fla. 117, 116 So. 66; Sholtz v. McCord, 112 Fla. 248, 150 So. 234; Herbert v. Thursby, 112 Fla. 826, 151 So. 385; Boykin v. Town of River Junction, 121 Fla. 902, 164 So. 558; Brash v. State Tuberculosis Board, 124 Fla. 167, 167 So. 827; Kathleen Citrus Land Co. v. City of Lakeland, 124 Fla. 659, 169 So. 356; State v. Calhoun County, 125 Fla. 263, 169 So. 673; State v. Calhoun County, 127 Fla. 304, 170 So. 883; Broward County Port Authority v. State, 129 Fla. 73, 175 So. 796; State v. Florida State Imp. Commission, Fla. 1950, 47 So. 2d 627.
Appellant's contention that in checking this transaction against the Constitution, the compelling necessity for the County to levy taxes to pay off such mortgage is regarded as the equivalent of an express obligation to do so, finds support in three of the cases just cited, Brash v. State Tuberculosis Board, supra, Kathleen Citrus Land Co. v. City of Lakeland, supra, and Broward County Port Authority v. State, supra.
If the case made out by the complaint were less clear, and it was necessary to resort to a rule of construction, Kathleen Citrus Land Co. v. City of Lakeland, supra, tells us that in testing any scheme of financing, doubts as to its transgression of the constitutional limitation should be resolved against the public officials and in favor of the people.
The County was given express authority and power to purchase the lands. The propriety of the purchase and the desirability *52 of the particular property for the public purposes and uses intended for it were questions for the administrative determination of the County Commission. It is not the acquisition of the property, but the plan chosen to pay for it, which is claimed to infringe a constitutional requirement.
It was error to dismiss the suit. The complaint presents a cause of action to compel a rescission, unless and until the present deferred payment plan has been approved under the provisions of Section 6 of Article IX of the Constitution, or unless some other payment plan is arranged, and approved under the Constitution.
Reversed, and remanded for further proceedings.
DREW, C.J., and TERRELL and THORNAL, JJ., concur.