Sparks v. Ewing

This appeal is from a decree enjoining taxation for payment of municipal bonds which are alleged to be invalid. The facts are fully stated in the opinion prepared by Mr. Presiding Justice ELLIS.

The question presented is not the validity of, but a construction of, the statute under which municipal bonds were issued after they had been validated by a judicial decree that is res adjudicata. This is not a direct proceeding to test the validity of the bonds before their issue, but it is in the nature of a collateral attack upon the validity of the bonds after they have been judicially decreed to be valid and have been issued and sold.

The main contention is that in issuing the bonds under the special municipal charter statute by ordinances adopted for that purpose, and without an approving vote of the electors, a general statute requiring such an approving vote should not have been ignored because, it is argued, the special statute authorizing bonds to be issued upon ordinances adopted, is not inconsistent with the general law requiring an approving vote of the electors, and that under Section 24, Article III, of the Constitution, both the special charter statute and the general statute should have been applied in issuing the bonds, which statutes taken together required the adoption of ordinances and also an approving vote of the electors of the city before municipal bonds are issued.

But even if a judicial construction of the statutes required an approving vote of the electors before the bonds could be properly issued under the statutes, that question is not *Page 522 now an open one, as to bonds that have been validated by a judicial decree which is res adjudicata, no appeal having been taken therefrom. Even if the construction put upon the statutes by the validating decree now res adjudicata, be overruled by the appellate court in this or any suit, the bonds issued under a validating decree that has become res adjudicata are not thereby affected, since the decree not appealed from made them valid, at least where the bonds do not violate an express provision of the Constitution as was the case in Weinberger v. Board Pub. Ins., 93 Fla. 740, 112 So.2d 253.

Sections 5106 (3296) et seq. C. G. L. prescribe the procedure by which a county, municipality or other taxing district may by suit in the Circuit Court, with appeal to the Supreme Court, have judicially determined "its authority to incur bonded debt and the legality of all proceedings had or taken in connection therewith," and enacts, Section 5109 (3299):

"In the event no appeal is taken within the time prescribed herein, or if taken, and the decree validating said bonds or certificates is affirmed by the Supreme Court, the decree of the Circuit Court validating and confirming the issuance of the bonds or certificates shall be forever conclusive as to the validity of said bonds or certificates against the county, municipality, taxing district, or other political district or subdivision issuing them, and against all taxpayers and citizens thereof; and the validity of said bonds or certificates shall never be called in question in any court in this State."

This Court has held that:

"Any matter or thing affecting the power or authority of the several political subdivisions mentioned in Section 3296, Rev. Gen. Stats. 1920, to issue bonds or the regularity or *Page 523 legality of their issue, including questions of both law and fact, insofar as those matters or things could be lawfully prescribed, regulated, limited, or dispensed with by the Legislature in the first instance, or subsequently cured by a validating Act, may be put in repose by a decree rendered pursuant to Section 3296, et seq., Rev. Gen Stats. 1920. So, also, may constitutional rights or privileges which are designed solely for the protection of property rights of the individual concerned, and which he may waive, or with reference to which he may estop himself, or as to which the Legislature may lawfully limit the period of time within which such right or privilege may be exercised." Weinberger v. Bd. Pub. Inst.,93 Fla. 470, 112 So.2d 253.

Concurring Opinion:

"Bonds to be paid by taxation can be issued only as authorized by law, and when the issue of such bonds is regulated by specific provisions of the Constitution, such provisions cannot be waived; and bonds issued in violation of the organic commands can have no authorized existence, and are necessarily void, if the Constitution controls.

"Where the Constitution contains provisions regulating the issue of bonds by governmental subdivisions or agencies of the State, such provisions are the controlling law. Bonds issued in violation of such organic provisions are unauthorized and void, and cannot be authorized or rendered valid by legislative enactment; and the same rule applies to judicial validations of bond issues when the organic provisions are not duly adjudicated. But where the validation is by competent judicial procedure, and the particular organic provisions were duly adjudicated to have not been violated by the particular bond issue, such bonds, if sold and delivered to innocent parties for fair value upon the faith of the adjudication for validity, and otherwise valid, *Page 524 may be protected as property by the Constitution (State, exrel. Nuveen, v. Greer, 88 Fla. 249, 102 So.2d 739, 37 A.L.R. 1298; Pennington v. Van, 48 S.D. 277, 204 N.W. 17, text 19), though the adjudication, if found to be erroneous, may not be binding as a precedent in future adjudications on the same organic provisions. The previous decision may be overruled, but that would not affect rights duly acquired while the prior decision was effective. Christopher v. Mungen, 61 Fla. 513,55 So.2d 273; State, ex rel. Nuveen, v. Greer, 88 Fla. 249,102 So. 739, 37 A.L.R. 1298.

"Statutes validating governmental bond issues may cure statutory or administrative procedural defects (Givens v. Hillsborough County, 46 Fla. 502, 35 So.2d 88, 110 Am. St. Rep. 104; Rogers v. City of Keokuk, 154 U.S. 546, 14 S.Ct. 1162,18 L.Ed. 74; Grenada County Sup'rs v. Brogden, 112 U.S. 261,5 S.Ct. 125, 28 L.Ed. 704; 15 C. J. 627; Charlotte Harbor N. R. Co. v. Welles, 260 U.S. 8, 43 S.Ct. 3, 67 L.Ed. 100); and statutory judicial proceedings validating bond issues may, if so provided by statute or valid rule of procedure, operate to estop the same parties from further litigation as to all matters, organic or otherwise, that were duly adjudicated in the validating proceedings, as well as all statutory or other non-organic procedural defects and irregularities that reasonably should have been litigated in the validation proceedings. Thompson v. Frostproof, 89 Fla. 92, 103 So.2d 118; Lyle v. State, ex rel. Caldwell, 69 Fla. 97, 67 So.2d 547. See also Peacock v. Feaster, 52 Fla. 565, 42 So.2d 889; 34 C. J. 818; Floresheim v. Board of Com'rs of Harding County, 28 N.M. 330,212 P. 451; Bartlesville v. Holm, 40 Okla. 467, 139 P. 273, 9 A.L.R. 627; Cromwell v. Sac. County, 94 U.S. 351, 24 L.Ed. 195; Southern Pac. R. Co. v. U.S., 168 U.S. 1, 18 S.Ct. 18, *Page 525 42 L.Ed. 355; 34 C. J. 874. But such validating statutes cannot make valid bonds that are void because issued in violation of the specific commands or requirements of the Constitution; and any provision of a statute to the effect that bonds which have been judicially validated shall be conclusively valid and not subject to judicial controversy, cannot preclude or estop proper parties from invoking appropriate judicial inquiries as to whether the bonds violate definitely applicable provisions of the controlling organic law, when the constitutional question has not been adjudicated. Likewise the validity of bonds as against definite organic requirements is not conclusively established by judicial adjudications when the organic provisions alleged to have been violated were not considered and duly adjudicated in the judicial proceedings. Otherwise the Constitution would not be the dominant law, and by indirection the controlling organic law would be rendered impotent and circumvented by legislative or judicial action, when both the legislative and the judicial power are subject to the Constitution as the supreme law that must be made effective, notwithstanding any enactment or adjudication to the contrary." Weinberger v. Bd. Pub. Inst., 93 Fla. 470, text 491,112 So.2d 253, text 260.

In this case the Constitution does not regulate the method of issuing bonds as in Section 17, Article XII, adopted in 1924; Weinberger v. Bd. Pub. Inst., 93 Fla. 470, 112 So.2d 253. Nor does the Constitution impliedly forbid the issue of bonds by the municipality for the intended purpose as in State, ex rel., v. L'Engle, 40 Fla. 392, 24 So.2d 539; Brown v. City of Lakeland,61 Fla. 508, 54 So.2d 716; Munroe v. Reeves, 71 Fla. 612,71 So. 922. Nor was there, when the bonds were issued in 1926, any organic provision which expressly or impliedly forbids the issue of municipal bonds *Page 526 without the approving vote of the electors, though Section 6, Article IX, was subsequently amended in 1930, forbidding counties, districts and municipalities to issue original bonds except upon a prescribed vote of described electors. See City of Jacksonville v. Renfroe, 102 Fla. 512, 136 So.2d 254.

The Constitution does provide that:

"The Legislature shall establish a uniform system of county and municipal government, which shall be applicable, except in cases where local or special laws are provided by the Legislature that may be inconsistent therewith."

This organic provision requires an interpretation of statutes to determine which of them controls a statutory matter, but it is not an express or an implied regulation of matters which may be regulated by statute, further than to require a special law to supersede an inconsistent general law to the extent of inconsistency.

The question which necessarily was determined by the validating decree, is that the provision of the special or local charter statute that bonds may be issued by ordinance, is inconsistent with the requirement of the general statute that municipal bond issues must have the previous approving vote of the described electors of the municipality; and, being inconsistent with the general law, the special Act excludes the operation of the general law and consequently the bond issue here considered, made according to the special law is valid, though no approving vote was taken under the general law.

Even if the decision be erroneous, it cannot now be reversed, since it was not appealed from in due time and is now resadjudicata, making the bonds so validated binding obligations of the municipality, though the validating decision be overruled in the future. The bonds do not violate *Page 527 any express or implied provision of the Constitution in force when the bonds were issued.

In City of Apalachicola v. State, 93 Fla. 921, 112 So.2d 618, the proceeding was to validate bonds which had not yet been issued by the municipality and the construction required by Section 24 of Article III of the Constitution was applied. Here the bonds have been validated and sold, and the validating decree has become res adjudicata. See West v. Town of Lake Placid, 97 Fla. 127, 120 So.2d 361.

In Weinberger v. Board, 93 Fla. 470, 112 So.2d 253, the bonds had been validated by judicial decree, but as the terms of the bonds violated a specific provision of the Constitution, Section 17, Article XII, which expressly regulates the particular subject, the bonds were invalid and could not be validated by statute or by judicial decree, therefore the validating decree did not prevent a decree from enjoining the issue of the bonds before they were sold.

In State, ex rel. Bours, v. L'Engle, 40 Fla. 392, 24 So.2d 539, Brown v. City of Lakeland, 61 Fla. 508, 54 So.2d 716, Munroe v. Reeves, 71 Fla. 612, 71 So.2d 922, the bonds violated implied prohibitions of the Constitution, and had not been validated. See State, ex rel. Nuveen, v. Greer, 88 Fla. 249, 102 So.2d 739, 37 A.L.R. 1298; Nuveen v. City of Quincy, 115 Fla. 510,156 So.2d 153.

The decree is reversed.

TERRELL, BUFORD and DAVIS, J. J., concur.

BROWN, J., concurs in the conclusion.

ELLIS, J., dissents.