Court Opinion

ID: 3398637
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:08:55.476527+00
Date Added: 2024-06-11T14:03:00.437748
License: Public Domain

Appellant brought suit against appellees to enjoin the collection of ad valorem taxes on Lot 4, Block 37, Hart's Map of Jacksonville. The trial court dismissed the bill of complaint, and, on appeal, this court reversed that judgment in a divided opinion filed January 15, 1946, wherein a full statement of the *Page 560 
salient facts is detailed. A rehearing was granted to review that decision.
The opinion of January 15 was grounded on two postulates: (1) The property in question was immune from state taxation under federal law; (2) the property in question was exempt from state taxation under the Florida statutes. Since this opinion was filed, the Supreme Court of the United States, in S. R. A. Inc. v. State of Minnesota, decided March 25, 1946, has settled the first question contrary to our holding. It held that when the vendee enters into possession of the real estate under contract of purchase it becomes subject to the jurisdiction of the state for tax purposes.
So the only question that we are required to review on rehearing is whether or not the property in question is exempt from taxation for state and municipal purposes under the Florida statutes. Counsel for appellant insists that this question requires a negative answer because the tax imposed is, in effect, a tax on an interest in land which is not authorized under Florida law.
Considerable space in the briefs is devoted to the effect of Sections 6.04 and 192.06, Florida Statutes 1941, as applied to the question raised. The former section has to do with the question of jurisdiction over lands acquired from the state by the United States. The latter section has to do solely with the question of exemption from taxation, as authorized by Section 1, Article IX of the Constitution. We will say more about these statutes later, but, as to their history and effect and whether or not they involve a "separate interest," a "bare legal title," an "equitable fee," or some other interest in land, we do not deem it necessary to labor our views by a lengthy treatment. To do so would liken the discussion to the fable of the old fox exhausting his bag of tricks in an effort to distract the hounds from the main issue.
A brief analysis of the factual picture will be helpful. It is admitted that the lands in question were purchased by the United States in 1888 and that they were used as a post office and court house by the Federal Government until 1940, when they were sold to private parties and, through mesne conveyances, acquired by appellant. The contract of sale *Page 561 
provided for immediate delivery to the purchaser and the payment of a consideration of $350,129, one-fifth of which was payable in cash and the balance in five equal annual installments with interest on deferred payments. The contract also provided that the seller execute a quitclaim deed to the purchaser and retain title until the contract was fully performed. The purchaser took possession at once and constructed a five-story department store on the premises, which he is now leasing for that purpose. The Federal Government released all control and dominion to the purchaser and is not a party to this litigation.
In 1941, the City of Jacksonville imposed an assessment on the property in the sum of $85,000. In 1942, this assessment was raised to $215,000, because of the erection of the five-story department store, which was alleged to have cost one-half million dollars. Appellant filed suit in equity to enjoin collection of the tax, on the theory that the property was immune from taxation under federal law and was exempt from taxation under state law because title was still vested in the United States, all installments not having been paid.
Under this state of facts, is the property in question exempt from the payment of state and municipal taxes under state law? As we stated in the forepart of this opinion, the question of immunity under federal law was foreclosed by S. R. A. Inc. v. State of Minnesota, decided by the Supreme Court of the United States, March 25, 1946, not yet reported. In our view, the question of exemption, like that of immunity, requires a negative answer.
Counsel have complicated the question by approaching it through a labyrinth of technical dialectics, attempting to demonstrate that the tax imposed was a "separate interest" in the rem, or some other interest in the rem, rather than on the rem, itself. S. R. A. Inc. v. Minnesota is a complete answer to this contention, but we approach the question on other and what appears to us irrefutable grounds. We approach it on the premise that this is a democracy in which every parcel of property is expected to bear its due portion of the burden of government, unless exempted by the Legislature in the manner provided by Section 1, Article IX of the *Page 562 
Constitution. Courts have no more important function than to direct the current of the law in harmony with sound democratic theory.
Exemptions from taxation are authorized for the purposes enumerated in Section 192.06, Florida Statutes 1941, the pertinent part of which is as follows:
"(1) All property, real and personal, of the United States and of this State . . ."
Is the property in question property of the United States, entitled to exemption from state and municipal taxes under this provision of law? The theory on which lands are exempted from taxation is that they are held and used for municipal, educational, scientific, literary, religious, or charitable purposes. Not one of these elements can be attached to the use of the lands in question. The United States sold and transferred them to appellant, and they are being used in private enterprise. True, they were sold under executory contract, but the United States executed its quitclaim deed to them, it released dominion over them, it claims no interest whatever in them, and it has turned them over to appellant, who has had complete use and occupancy of them from the date the contract was executed. They are enjoying police protection and every other service the city furnishes; the appellant or its assigns is using them in legitimate business surrounded by and in competition with other businesses which are bearing their part of the burden of government; the United States is not a party to this suit, is not here complainant, and has completely abandoned the property. Under this state of facts, we find no basis in law or reason why the lands in question should enjoy exemption from taxation.
Appellant rests its thesis on a literal interpretation of the quoted statute defining exemptions, but this court is not limited to that. It is authorized to look through form to fact and substance to answer the question of tax exemption or tax liability. 5 Am. Jur. Sec. 409. If the positive law (constitution or statute) does not give a direct answer to the question, the court is at liberty on the factual basis to indulge the rule of reason to reach a result consonant with law and justice. *Page 563 
If I abandon my homestead, it loses its right of exemption from taxation as soon as abandoned. We think the rule is general; that property dedicated to municipal, educational, religious, or other purposes that exempt it from taxation, reverts to its original status and becomes subject to state and municipal taxes as soon as it is abandoned for the purpose that fixes its exemption status. We think what we have said concludes the question, but Section 6.04 is also persuasive. This statute deals with the question of jurisdiction on the part of the state and federal governments over lands acquired by the latter for needful federal purposes and concludes with this limitation exempting "said lands from any taxation under the authority of this state while the same shall continue to be owned, held, used, and occupied by the United States for the purposes above expressed and intended and not otherwise." The statute does not list "post office" sites, but the statute listing the lands that may be acquired (Section 6.02) has the omnibus clause, "other needful buildings," so we would strain no rule of interpretation to hold that they were included. At any rate, every rule of interpretation cuts off the right of tax exemption as soon as it is abandoned for the use that warrants it.
In S. R. A. v. State of Minnesota, the Supreme Court of the United States held, in terms that the equity of a purchaser under an executory contract of sale is, in fact, the realty and that such legal title as the United States held was held only as security. This holding is consistent with the holding of this court in Porter v. Carrol, 84 Fla. 62, 92 So. 809, and Dean v. State, 74 Fla. 277, 77 So. 107, wherein it was held that the one who holds the equitable interest is the owner for taxing purposes.
This reasoning is supported by City of New Brunswick v. U.S. et al., 276 U.S. 547, 72 Law Ed. 693, where it was held, in effect, that when the vendee takes possession of lands purchased from the United States under an executory contract and nothing remains to be done on the part of the vendor but execute and deliver the deed, the lands are then subject to state and municipal taxes. Miami Bond and Mortgage Co. v. Bell,101 Fla. 1291, 133 So. 547; Kenn Realty *Page 564 
Company v. Johnson, 138 F.2d 809. Such is the rule between individual vendors and vendees, and we are shown no reason why it should be different if the government happens to be the vendor.
The real question here is the application of the quoted exemption statute to the facts recited. We never decide such questions in isolation, but we lay the statute beside the facts and deduce what appears to be the rational result. If a court is not permitted to look through the letter of the statute and apply it to facts as they exist, then the legislative declaration of a falsehood may, in many cases, amount to the judicial declaration of a truth. In this case it amounts to selecting one taxpayer in one of the most desirable business areas in Jacksonville and placing him in a privileged class. To so interpret the exemption statute does not square with reason or justice.
We, therefore, conclude that appellant is the owner of the taxable interest in the property in question, that the United States has abandoned such use of it as gave it an exemption status, and that it is now amenable to taxation under the law of Florida. It follows that our former opinion is receded from, and the judgment appealed from is affirmed.
CHAPMAN, C. J., BUFORD and ADAMS, JJ., concur.
BROWN, THOMAS and SEBRING, JJ., dissent.