Court Opinion

ID: 3389421
Source: CourtListenerOpinion
Date Created: 2016-07-05 18:48:20.209697+00
Date Added: 2024-06-11T09:25:58.356016
License: Public Domain

Eight questions are argued for adjudication on this appeal. They have been very thoroughly presented pro and con. A record of more than seven hundred pages and briefs of two hundred fifty pages have been lodged in this Court for the purpose of exemplifying the views of counsel on the questions raised.
The record and the briefs have been carefully analyzed and considered, but in so far as we can discern, every question turns out that whether or not the opinion of this Court in State, etal., v. Town of Bellair, 125 Fla. 669, 170 So. 434, should be modified or receded from. We are confronted here with different parties, but with a factual situation very similar to that in the latter case.
State, et al., v. Town of Bellair, supra, was a refunding bond validation suit in which taxpayers were permitted to intervene and file answers challenging the validity of the *Page 223 
validating decree on the ground that the proceeds of the bonds brought in question were not used for a public purpose, but were used to promote private enterprises contrary to Section 7 of Article IX of the Constitution of Florida.
On final disposition, we found that the proceeds of the original bonds were used to construct streets and highways in a private real estate development and to improve the water front of a private hotel corporation's property and that having been so used, they were under Section 7 of Article IX of the Constitution void in so far as they constituted a charge against the municipality.
After the rendition of this judgment, the instant suit was instituted by certain property owners and taxpayers in the Town of Bellair in behalf of themselves and all other owners of real and personal property in the town. The bill of complaint prays that the officials of the town be enjoined from attempting to assess or collect any tax to pay principal or interest on said bonds and that it be decreed that said bonds were issued for the benefit of private corporations contrary to Section 7 of Article IX of the Constitution. The bill did not pray for relief against the bondholders, some of whom were made parties defendant to the suit with the officers of the town.
On final hearing, after answers were filed and testimony taken, the chancellor entered a final decree permanently restraining the town and its officers from levying any tax upon the properties of the plaintiffs, or any of them, or upon any other properties in the Town of Bellair for the purpose of paying principal or interest or any part thereof, evidenced by the said bonds. This appeal is from the final decree so entered.
The decisive question may be stated as follows: Do the facts presented bring this case within the rule enunciated in State, etal., v. Town of Bellair, supra, but whether so or *Page 224 
not, are the plaintiffs as taxpayers estopped by the validation decree or recital in the face of the bonds from denying that they were issued and the proceeds thereof used for a public purpose?
There are some immaterial variations in the evidence, but we find nothing to relieve this case from the rule announced in State, et al., v. Town of Bellair, supra. The chancellor in his opinion found "that the primary object of these issues and the appropriation of the proceeds of these issues was to benefit the property of either Bellair Estates, Inc., or Bellvue-Griswold Hotel Company or both, each being a chartered company of the State or a corporation." The appropriation of the proceeds of the bonds was the gist of the transaction and is determinative of this phase of the case. The chancellor's decree finds ample support in the record; in fact, we find little or nothing to contradict it.
As to whether or not taxpayers in the Town are estopped by the validation decrees or by recitals in the bonds from denying that they were issued and the proceeds used for a public purpose appellants contend that this question should be answered in the affirmative and rely on State, ex rel. Conn, v. Board of County Commissioners of Hillsborough County, decided November 23, 1937; Board of Public Instruction of Dade County v. Tanger Inv. Co.,121 Fla. 703, 164 So. 697; State, ex rel. Havana State Bank, v. Rodes, 115 Fla. 259, 151 So. 289; State,  ex rel. Nuveen, v. Greer, 88 Fla. 249, 102 So. 739; State, ex rel. Rogers, v. Walthall, et al., 125 Fla. 425, 170 So. 115; Weinberger v. Board of Public Instruction, 93 Fla. 470, 112 So. 253; Thompson v. Town of Frostproof, 89 Fla. 92, 103 So. 118; City of Fort Myers v. State, 95 Fla. 704, 117 So. 97; Whitney v. Hillsborough County,99 Fla. 628, 127 So. 486; Crawford v. State, ex rel. Klemmer,110 Fla. 301, 149 So. 340; State *Page 225 
v. Citrus County, 116 Fla. 676, 15 So. 4; Hillsborough County v. Keefe, 82 F.2d 127, and other cases of like import to support their contention.
With the exception of State, ex rel. Conn, v. Board of County Commissioners of Hillsborough County, every one of these cases was examined and considered in connection with our decision in State, et al., v. Town of Bellair, and we do not consider that what we said in any of them is in conflict with what was said in the latter case. Neither do we consider State, et al., v. Town of Bellair in conflict with State, ex rel. Conn, v. Board of County Commissioners of Hillsorough County. In our opinion in the latter case, we held in terms that it was differentiated from the Bellair case. It is quite true that the question of estoppel by reason of both the validation decree and the recitals in the bonds was raised in both these cases, but in the Hillsborough County case it was raised by the county which issued the bonds, while in the Bellair case, it was raised by a taxpayer. In so far as the instant case is concerned, this was the distinguishing difference between them. We held the defense good as to the taxpayer, but unavailing to the county and nothing in this case convinces us of error in that judgment.
We will not labor this opinion with a review of all these cases, suffice it to say that in them as in others, we hold that matters affecting the power of a municipality to issue bonds, their regularity or legality both as to law and fact, may be put in repose by validation proceedings. We have also held that this rule may extend to constitutional rights designed solely for the benefit of the individual or which he may waive, but we have never held that validation proceedings precluded those directly affected from raising constitutional defects that were not directly raised and settled in the validation suit. In fact, we have repeatedly held *Page 226 
that such defenses may be later invoked if not raised and settled by validation.
Section 7 of Article IX of the Constitution is a positive direct inhibition against imposing any tax for the benefit of any chartered company of the State or for paying interest on any bonds issued by such chartered companies, or by counties, or by corporations, for these purposes. The chancellor found without qualification that the primary object of these issues of bonds and the proceeds of the bonds in question were used primarily for the benefit of chartered companies of the State in clear violation of this provision of the Constitution and we hold that no tax can be imposed by the municipality to pay them.
It would hardly seem necessary to say more as to what the validating decree puts in repose. As to whether or not recitals in the bonds will estop the taxpayer and preclude him from raising the question of their validity in a case of this kind, what we said in State, et al., v. Town of Bellair, supra, is conclusive on that point. In fact, all the material questions raised in this case are concluded by what we said in the latter case. This is not a holding that the bonds are invalid. It is nothing more than a holding that a tax cannot be imposed to pay them.
Neither the Legislature or the citizen can contract against constitutional mandate, and even if the bonds in question recited that they were issued in compliance with Section 7 of Article IX, when in fact they were not, no estoppel would arise in favor of the bona fide purchase. In order that recitals in bonds may protect the bona fide holder, they must be made by officers authorized to pass on and determine the existence of the facts recited and to make them conclusive. County of Dixon v. Marshall Field, 111 U.S. 83, 28 L. Ed. 360; Crawford v. State, 110 Fla. 301, *Page 227 149 So. 340; Havana State Bank v. Rodes, et al., 115 Fla. 259;151 So. 289.
The bonds in question contain no recital or suggestion as to conditions condemned by Section 7 of Article IX. The City Commissioners were without authority to issue them for the purposes condemned therein and the burden was on the purchaser to ascertain that they were issued and the proceeds thereof expended for a lawful purpose even if it requires a judicial determination to do so. Shelby County, Texas, v. Provident Savings Bank and Trust Co., 54 F.2d 602; Independent School District, etal., v. Joel Stone, 106 U.S. 183, 27 L. Ed. 90; Hedges v. Dixon County, 150 U.S. 182, 14 Sup. Ct. Rep. 71.
Appellants have said much about the evil consequences resulting if this view becomes the law, the bonds having passed into the hands of innocent purchasers. We appreciate the force of this argument, but as heretofore said, the purchasers were on notice of Section 7 of Article IX of the Constitution, the fact that its provisions could not be waived and the fact that the courts were without power to relieve under such circumstances. It may be that this holding will impose on the purchaser of the bonds the duty of ascertaining how their proceeds were used, but this will be no more onerous than some of the other duties imposed on him.
This Court has repeatedly commended a high standard of municipal integrity in matters of this kind, but the equities here are not all on the side of the bondholder. Section 7 of Article IX was written in the Constitution to protect the taxpayer, the bond purchaser was on notice of it, and its mandatory character, and could have protected himself. He has recourse against the improved property, but he can claim nothing against the city. The taxpayer has recourse against no one. We are urged to approve one of the most *Page 228 
flagrant violations of this provision of the Constitution that has been called to our attention. The manner in which it was done is immaterial so far as the taxpayer is concerned. If it can be circumvented by a species of legal circumlocution in the manner contended, it is obsolete and had as well be written off the book.
It is also urged that the instant suit cannot be maintained as a class suit and that, consequently, the decree does not affect those taxpayers not made parties to the cause.
Section 14 of the 1931 Chancery Act provides that when the question involved is one of common or general interest to many persons, constituting a class so numerous as to make it impracticable to bring them before the court, one or more may sue or defend for the whole. The allegations of the bill are sufficient to bring it within this rule, so the objection is without merit. Supreme Tribe of Ben Hur v. Cauble, 255 U.S. 356.
Other assignments of error have been examined, but reversible error does not appear.
ELLIS, C.J., and CHAPMAN, J., concur.