Case Name: STATE of Florida, Appellant, v. SUWANNEE COUNTY DEVELOPMENT AUTHORITY OF SUWANNEE COUNTY, Florida, Appellee
Court: Florida Supreme Court
Jurisdiction: Florida
Decision Date: 1960-07-20
Citations: 122 So. 2d 190
Docket Number: 
Parties: STATE of Florida, Appellant, v. SUWANNEE COUNTY DEVELOPMENT AUTHORITY OF SUWANNEE COUNTY, Florida, Appellee.
Judges: THOMAS, C. J., and HOBSON and DREW, JJ., concur.
Reporter: Southern Reporter, Second Series
Volume: 122
Pages: 190–198

Head Matter:
STATE of Florida, Appellant, v. SUWANNEE COUNTY DEVELOPMENT AUTHORITY OF SUWANNEE COUNTY, Florida, Appellee.
Supreme Court of Florida.
July 20, 1960.
William Randall Slaughter, Live Oak, for appellant.
Alfred A. Airth, Live Oak and Patterson, Freeman, Richardson & Watson, Jacksonville, for appellee.

Opinion:
O'CONNELL, Justice.
This is an appeal by the State from a final decree validating "revenue-anticipation" certificates in amount of $100,000 proposed to be issued by the Suwannee County Development Authority, hereinafter referred to as the Authority.
The Authority, a body corporate and politic, was created by ch. 59-1903, Laws of Fla., Special Acts of 1959 "for the purpose of performing such acts as shall be necessary for the sound planning for, and development of Suwannee County." The creating statute empowered the Authority to acquire real property, to construct "projects" on such property, "and to lease or make contracts with respect to the use or disposition of same in any manner the authority deems to its best advantage."
"Project" is defined in the creating statute to mean and include the acquisition of lands, properties and improvements for development, expansion and promotion of industry, commerce, agriculture, natural resources and vocational training and the construction of buildings and plants for the purpose of selling, leasing or renting such structures to private persons, firms or corporations.
The Authority is given the power to issue "revenue-anticipation" certificates for the purpose of paying all or any part of the cost of any project of the Authority. It is also given authority to accept grants, contributions, and loans from the state, county, or cities in the county.
The same Legislature which created the Authority established a revolving fund to be called the Suwannee County Development Authority Fund and directed the Board of County Commissioners of that county to pay into said fund from the county's share of the race track funds distributed to the counties by the State $30,000 per year for three years and $10,000 per year thereafter, said monies to be used by the Authority in carrying out its functions as prescribed by law. Ch. 59-727, Laws of Fla., Special Acts of 1959.
The State opposed the validation of the certificates by the trial court principally on the ground that the proceeds thereof are to be used for purchasing real estate and constructing a building or buildings thereon, which buildings will be leased to a private business. This, said the State, would violate Section 10, Article IX, Florida Constitution, F.S.A.
The State takes the same position on this, appeal.
On the other hand the Authority contends-that the use of the proceeds of the certificates for purchase of land and construction-of buildings for use by private enterprise-is not a violation of Section 10, Article IX, Florida Constitution, since this purchase, construction, and leasing is only a first step in a much larger overall "project" or development. The Authority reasons that since the overall project is a valid public-purpose incidental benefits to or use of a portion of the project by private interests does not destroy the public nature of the whole project. It relies heavily on State ex rel. Ervin v. Cotney, Fla.1958, 104 So.2d 346 for support of its position.
For the reasons set forth below we must agree with the State that the certificates should not be validated because the-proposed use thereof would violate Section 10, Article IX, Florida Constitution.
The evidence in this cause, particularly the testimony of the members of the Authority, shows that insofar as these certificates are concerned the only plan or program envisioned by the Authority at the time of the proceedings in the trial court was the purchase of land and construction thereon of a building or buildings for lease to a private industry which the Authority hoped to bring into the county. The testimony showed clearly that the only definite plan made by the Authority was to use all,, or certainly the major portion, of the proceeds of the certificates for the purchase of land and construction of such buildings,, although there were no definite plans as to-what land would be purchased, what buildings would be constructed, or to what firm or person they would be leased. The testimony was to the effect that the Authority felt it could not make plans or devise a program until it knew whether the funds from the proposed certificates' would be available. The evidence shows that the Authority had not yet devised any broad program or "project."
In fine it becomes quite clear that insofar as the issue of certificates involved here is concerned it is intended that they be used not for a public purpose, but for a private one, i. e. the purchase of land and erection of improvements for lease to a private enterprise.
In the Cotney case relied upon by the Authority this Court made clear that public funds may not be used in this manner, saying at page 348 of 104 So.2d:
" It must, however, be taken as settled law under the Adams decision and the previous decision of this court in State v. Town of North Miami, Fla.1952, 59 So.2d 779, that a public body cannot use its power and its funds to acquire property, either by purchase or by the exercise of the power of eminent domain, for the sole purpose of making such property available to private enterprises for private use."
As we see it the Authority can, because of the difference in factual situations, draw no comfort whatsoever from the Cotney case or any others known to us.
In the Cotney case it is important to note that there was no proposed issue of revenue certificates before this Court. In that case the Clay County Development Authority, which was created by a special act of the Legislature almost indentical to that which created the Authority here involved, had already acquired a large tract of surplus land from the federal government. It proposed to develop that land as one project to include an airport and golf course with the remainder to be leased or sold to private enterprise for commercial use. This Court held that there was nothing in the record to show that the leasing or selling to private enterprise for private use of a portion of the lands was the primary purpose for the acquisition of the lands. Rather the court held the private use was only an incident thereto. The record in this case conclusively shows that private use is the primary purpose for the acquisition of the lands and construction to be accomplished with the proceeds of the certificates here involved.
The basic question involved in the Cot-ney case was the validity of that part of ch. 57-1226 Special Acts of Florida, 1957, which empowered the Clay County Development Authority to purchase lands and construct improvements thereon for sale or lease to private interests for private use. This Court answered that question in light of the facts of that case, only, saying at page 349 of 104 So.2d:
" When construed as authorizing the sale or lease for industrial and commercial purposes of a portion, only, of a tract of land acquired as a singe project encompassing recognized public purposes as the primary object of the acquisition; or as authorizing the construction of improvements on such property for utilization by private enterprises as an incident to and in furtherance of a primary and recognized public purpose, we find no constitutional infirmities in the Act."
Thus it is obvious that although the Court approved the validity of an act granting such an Authority the power to purchase, construct, and lease to private enterprise it severely restricted such authorization to those instances where the private use was only incidental to a public purpose and public use of the remaining greater portion of the lands involved.
The- record in this cause moves us to comment on another aspect of validation proceedings, generally.
In the petition for validation of the certificates in this cause the Authority in essence alleged that it was empowered to issue revenue certificates, that, the Board of County Commissioners had passed a resolution pledging a portion of .the race track funds to the payment of the principal and interest of the proposed certificates, and that the Authority had adopted a resolution providing for the issuance of the certificates "to finance the cost of acquiring, erecting and constructing a portion of the program of the Authority."
The Order to Show Cause or Rule Nisi published in usual form required the public to show cause why the certificates should not be validated.
Yet it would be difficult, if not impossible, for a member of the public to show cause why the petition for validation in this cause should not be validated on the ground that the Authority was not empowered to use the proceeds of the certificates in the manner contemplated since the intended use of the funds was stated to be "to finance the cost of acquiring, erecting and constructing a portion of the program of the Authority", with no description being given of the program or portion thereof to be financed by the certificates.
Ch. 75, F.S.A., the statute prescribing the procedures in validation cases such as this, apparently does not require either the authorizing resolution or the petition for validation to set out specifically the purpose for which the proceeds of bonds or revenue certificates are to be expended.
Stated generally, the purpose of validation proceedings is primarily to test the power of the issuing agency to issue the bonds or certificates or to incur the proposed debt. State v. City of Tampa, Fla., 1957, 95 So.2d 409. When the object or purpose for which the proceeds of bonds are to be used is valid, validation proceedings may not be used to test the propriety or regularity of a proposed disbursement. West v. Town of Lake Placid, 1938, 97 Fla. 127, 120 So. 361.
But the fact that the issuing agency is empowered to issue revenue certificates or bonds does not authorize the issuance of certificates for a purpose for which it cannot lawfully expend monies. See City of Ottawa v. Carey, 1883, 108 U.S. 110, 2 S.Ct. 361, 27 L.Ed. 669.
Therefore, validation proceedings involve a determination not only of the authority of an agency to issue bonds or revenue certificates, but also whether the agency may lawfully expend the proceeds for the contemplated purpose.
Thus, common sense impels the conclusion that the issuing governmental agency should set forth in the petition for validation of bonds or revenue certificates a description of the purpose for which the proceeds are to be used, which description should be sufficiently detailed to enable a member of the public and the state to determine whether the issuing agency can lawfully expend public monies therefor.
Without this interpretation of the allegations required in a petition for validation the provisions of Sections 75.05 and 75.06, F.S.A. requiring that a rule nisi be issued, served upon the state attorney, and published, falls far short of the intended purpose, which is to enable the state and the citizens involved to determine whether the issuing agency has not only the authority to issue the bonds or certificates but also the authority to expend the proceeds for the purpose contemplated.
What we have said concerning the sufficiency of a petition for validation is not intended to and must not be taken to reflect in anywise upon able counsel for the Authority. The petition here involved follows the customary form used generally in such proceedings in this state. Under existing practice and statutes it must be said to be legally sufficient and we do not hold it to be insufficient.
What we do say is that in the future, particularly where the authority of the issuing agency is as broad as in this case and more particularly where it is authorized to do acts which, depending upon the manner in which done, could be held to be invalid, petitions for validation of bonds and revenue certificates should set forth in reasonable detail the purpose or purposes which will be accomplished with the proceeds.
This discussion of the contents of a petition for validation does not control our decision in this cause and is intended only as a guide to the bench and bar in future cases.
For the reason that the proceeds of the revenue anticipation certificates involved herein are proposed to be used for private and not a public use we hold that their issuance is in violation of Section 10, Article IX, Florida Constitution, and for this reason the final decree validating them is reversed.
THOMAS, C. J., and HOBSON and DREW, JJ., concur.
THORNAL, J., concurs specially.
TERRELL, J., dissents.
ROBERTS, J., heard the argument but did not participate in the decision.