The bill of complaint in effect alleges that bonds of the municipality were issued and sold and the proceeds used, not for public purposes, but for the benefit of private corporations and individuals, in violation of Section 7, Article IX, of the Constitution of Florida; and it is prayed that taxes to pay the bonds be enjoined. The taxes were enjoined and defendants appealed.
The Constitution of Florida contains the following:
"No tax shall be levied for the benefit of any chartered company of the State, nor for paying interest on any bonds issued by such chartered companies, or by counties, or by corporations, for the above-mentioned purpose." Sec. 7, Article IX, Florida Constitution. *Page 229
The organic section forbids taxation for the benefit of anychartered company of the State or for paying interest on any bonds issued by any chartered company of the State or by counties or by corporations for the benefit of any chartered company ofthis State.
The evil sought to be avoided by the organic section is taxation for the benefit of any chartered company of this State, as is illustrated in the issue of bonds by counties and cities to aid in the construction of railroads. See Columbia County v. King, 13 Fla. 451; Canover v. Baker County, 18 Fla. 512; County of Jefferson v. Lewis, 20 Fla. 980; Jefferson County v. Hawkins,23 Fla. 223, 2 So. 362; Sec. 22, Chap. 610, Internal Improvement Fund Act of 1855, approved Jan. 6, 1885; Hawkins v. Mitchell,34 Fla. 405, 16 So. 311; Wilson v. Mitchell, 43 Fla. 107, 30 So. 703; Trustees Internal Improvement Fund v. Bailey, 10 Fla. 112.
Where county or municipal or district bonds are legally issued for public improvements or public facilities, the mere fact that corporations or individuals are benefited by such public improvements or facilities along with or in common with the public generally, does not violate Section 7 of Article IX of the Constitution. Hunter v.. Owens, 80 Fla. 812, 86 So. 839; West v. Town of Lake Placid, 97 Fla. 127, 120 So. 361; Whitney v. Hillsborough County, 99 Fla. 628, 127 So. 486.
Decrees validating municipal bonds duly rendered under the statute are conclusive of the validity of the bonds validated unless there was no legal authority to issue the bonds, or unless the statute or the bonds or the record of the proceedings under which the bonds were issued, show that the bonds violate some command or prohibition of the Constitution relating to the bonds. Commands and prohibitions of the Constitution control over legislative or judicial validations *Page 230 of bonds. Validations cannot supply an entire absence of authority to issue municipal bonds, or cure a patent violation of a command or prohibition of the Constitution. Weinberger v. Bd. Pub. Inst., 93 Fla. 470, text page 492, 112 So. 253.
The tax enjoined in this case is not "levied for the benefit of any chartered company," nor to pay interest on bonds issued by any chartered company or by any county or corporation for the benefit of any chartered company, in violation of any of the provisions of Section 7, Article IX, of the Constitution, which organic provisions are intended for the benefit of taxpayers. The tax enjoined would be levied to pay bonds issued by a municipality for municipal purposes, which purposes wereauthorized by statute and not forbidden by the Constitution.
At least the greater part of the bonds have been validated by judicial decrees under the jurisdiction conferred by the statute, all of "the taxpayers and citizens of the * * * municipality" being, by notice published under this statute, made parties defendant to the validating proceedings. No taxpayer asserted the invalidity of the bonds in the validation suits, and the decrees of validation are conclusive against the "municipality * * * and against all taxpayers and citizens thereof." Sec. 5109 (3299) C.G.L.
No violation of a command or prohibition of the Constitution in issuing the bonds is shown by the statute or by the bonds or by the record for issuing the bonds. Such a violation of organic law, if so shown would be binding notice to purchasers of the bonds. See 44 C.J. 1243. The bonds state the statutory authority under which they were issued and recite a compliance therewith, together with a pledge of full faith and credit of the town for the payment of the bonds. Recitals and covenants contained in the bonds are binding on the taxpayers, and no violation of the *Page 231 Constitution in issuing the bonds appears by the bonds or by the issuing or validating proceedings. Sparks v. Ewing, 120 Fla. 520,163 So. 112; City of Hialeah v. United States, 87 F.2d 953; State, ex rel. Conn, v. Henderson, 130 Fla. 288, 177 So. 539; Hillsborough County v. Keefe, 82 F.2d 127; State, ex rel. Rogers, v. Walthall, et al., 125 Fla. 423, 170 So. 115. See also validating Act, Chapter 10338, Acts of 1925; 44 C.J. 1254; 104 Fed. 473, 486; 17 Fla. 174; 125 Fla. 423, 170 So. 115; 123 Fed. 1.
If the bonds or the proceeds of bond sales were being illegallyused "for the benefit of any chartered company" by making improvements primarily for the benefit of property owned by chartered companies in building sea walls and other improvements in front of, or on such private property, as is in effect alleged, such illegal action must have been obvious to citizens and taxpayers of the town; and any taxpayer could have invoked judicial decrees enjoining such asserted illegal use of the bonds or the funds; and not having done so, all have thereby waived their rights to challenge the validity of a tax to pay the bonds upon the stated grounds resting in pais, when, as here, no illegal use of the bonds or their proceeds for the benefit of any chartered company, as asserted, appears by the bonds or by the record of the proceedings for their issue, or by the law under which the bonds were issued. See Abell v. Town of Boynton,95 Fla. 984, 117 So. 507; State, ex rel., v. Broward County Port Authority, 118 Fla. 42, 151 So. 416, 718, 158 So. 62. See Perry v. Town of Panama City, 67 Fla. 285, 65 So. 6; State, ex rel., v. Brandon, 92 Fla. 793, 110 So. 127; 44 C.J. 1253.
In Thompson v. Town of Frostproof, 89 Fla. 92, 103 So. 118, the bonds had not been issued, and it was held that no "bonds can legally be issued to improve streets where no *Page 232 streets in law exist." See City of Fort Myers v. State, 95 Fla. 704, 117 So. 97.
In the Weinberger case, 93 Fla. 470, 112 So. 253, the issue ofbonds by a special tax school district was enjoined because the bonds showed on their face that an express command of the Constitution as to the terms of the bonds would be disregarded and violated if the bonds were issued. The record proceedings for issuing the bonds and the terms of the bonds were in conflict with the express commands of Section 17, Article XII, of the Constitution then in force. See Leonard v. Franklin, 84 Fla. 402, 93 So. 688; Barrow v. Moffett, 95 Fla. 111, 116 So. 71; State v. Board of Public Instruction, Indian River County, 98 Fla. 1152,125 So. 357; Bd. Pub. Inst. v. Union School Furn Co., 100 Fla. 326, 129 So. 824.
In State, ex rel. Bours, v. L'Engle, 40 Fla. 392, 24 So. 539, a statute authorizing general county bonds to be issued for public free school purposes in the county was adjudged in violation of the limitations contained in Article XII of the Constitution, and therefore void. No bonds were issued.
In the Nuveen case, Article XII of the Constitution impliedly forbade the issue of municipal bonds for the support and maintenance of public free schools, which rendered the bonds ineffectual, even in the hands of purchasers for full value, because they were issued by the municipality for public free school purposes in violation of the Constitution as shown by therecord and by the bonds, and not by matters de hors the record arising after the bonds were issued and sold. The statute attempting to authorize the municipality to issue bonds for public free school purposes on its face, violated Article XII of the Constitution. Munroe v. Reeves, 71 Fla. 612, 71 So. 922; State, ex rel. Nuveen, v. Greer, 88 Fla. 249, 102 So. 739, 37 A.L.R. 1298; Nuveen *Page 233 v. City of Quincy, 115 Fla. 510, 156 So. 153. See also Brown v. City of Lakeland, 61 Fla. 508, 54 So. 716. See Parkersburg v. Brown, 106 U.S. 487; Johnson v. Bd. Pub. Inst., 81 Fla. 503, 88 So. 308; Bd. Pub. Inst. v. Union School Furn. Co., 100 Fla. 326,129 So. 824.
"Municipal bonds issued without competent legal authority or for a purpose that is forbidden by controlling law are invalid even in the hands of bona fide holders for value. And recitals of compliance with the law contained in municipal bonds, cannot confer authority not legally given to issue the bonds. 44 C.J. 1248; State, ex rel. Nuveen, v. Greer, 88 Fla. 249, 102 So. 739; 37 A.L.R. 1298; Holland v. State, 15 Fla. 455; State, ex rel. Bonns, v. L'Engle, 40 Fla. 392, 24 So. 539; Brown v. City of Lakeland, 61 Fla. 508, 54 So. 716; Munroe v. Reeves, 71 Fla. 612; 71 So. 922; Weinberger v. Board of Public Instruction, 93 Fla. 470, 112 So. 253; State v. Hillsborough County, 113 Fla. 345,151 So. 712; First Nat. Bank of Key West v. Board of Public Instruction, 107 Fla. 525, 145 So. 203; O'Brien v. Wheelock,184 U.S. 540, 22 S. Ct. 354; 46 L. Ed. 636; Sutliff v. Lake County Comm'rs, 147 U.S. 230, 13 S. Ct. 318, 37 L. Ed. 145. See Barnett v. Dennison, 145 U.S. 135, 12 S. Ct. 819."
"Where there is adequate legal authority for the issue and sale of municipal bonds, and the bonds are issued for an authorized municipal purpose, mere administrative or ministerial irregularities in issuing the bonds may not render the bonds invalid in the hands of a bona fide holder, particularly when the bonds contain a statement that the laws have been fully complied with in issuing the bonds. See Crawford v. State, ex rel.,110 Fla. 301, 149 So. 340; State v. Rodes (Fla.) 151 So. 289; Jefferson County v. B.C. Lewis Sons, 20 Fla. 980; Town of Aurora v. Gates, 125 C.C.A. 329, 208 F. 101, L.R.A. 1915A, and notes. *Page 234 An illegal use of the proceeds of bonds legally issued and sold to bona fide holders for value may not affect the validity of the bonds. 44 C.J. 1247." See also West Plains Tp. v. Sage, 69 Fed. 943. State, ex rel., v. Broward County Port Authority, 118 Fla. 42, text page 670, 151 So. 416, 718, 158 So. 62.
"While the proceeds of bonds sold by the municipality must be applied to the purposes for which the bonds were issued and sold, the purchaser of such bonds is not required to look to the application of the proceeds, and hence it is no defense that the proceeds of the bonds were improperly applied or used for an unauthorized purpose." McQuillin, Municipal Corporations (2d Ed.) Vol. 6, Sec. 2516. See Hightower v. Raleigh, 150 N.C. 569,65 S.E. 279; Jones v. Camden, 44 S.C. 319, 23 S.E. 141, 51 Am. St. Rep. 819; Clifton Forge v. Allegheny Bank, 92 Va. 283, 23 S.E. 284.
This suit is to enjoin taxation to pay municipal bonds, based upon matters not of record when the bonds were issued: i.e., the use of the bonds or the bond proceeds in violation of Section 7, Article IX, of the Constitution. The bonds were issued and sold years ago upon a record of proceedings showing the bonds were to be issued for authorized municipal purposes; and at least a large part of the bonds were validated by decrees of the Circuit Court under the jurisdiction conferred by statute; and nothing in the record of the proceedings or in the bonds indicated that the bonds were to be used in violation of Section 7, Article IX, of the Constitution, which organic section does not require bonafide purchasers of municipal bonds to see to the proper application of the bond proceeds. See Hightower v. Raleigh,150 N.C. 569, 85 S.E. 279.
The statute under which the decrees were rendered validating the bonds, provides by published notice for appropriate *Page 235 parties, including the taxpayers and citizens of the municipality, with adequate notice of hearing; and the statute also provides that "the decree of the Circuit Court validating and confirming the issuance of the bonds (if not reversed on appeal) * * * shall be forever conclusive as to the validity of said bonds * * * against the * * * municipality * * * and against all taxpayers and citizens thereof; and the validity of said bonds * * * shall never be called in question in any court in this State." Sec. 5109 (3299) C.G.L. See Little River Bk. Tr. Co. v. Johnson, 105 Fla. 212, 141 So. 141; Abell v. Town of Boynton, 95 Fla. 984, 117 So. 507; Steen v. Bd. of Pub. Inst.,80 Fla. 146, 85 So. 684; Bd. Pub. Inst. v. State, ex rel. Tanger Inv. Co., 121 Fla. 703, 164 So. 697. See notes 37 A.L.R. 1310; 86 A.L.R. 1057.
In City of Bradenton v. State, 88 Fla. 381, 102 So. 556, 36 A.L.R. 1297, the circuit court denied a validating decree upon averments in the answer by a taxpayer tending to show that the proposed municipal bonds if issued would violate Section 7 of Article IX of the Constitution; and such decree denying validation was affirmed by this Court.
Any taxpayer could have contested the validating proceedings covering bonds referred to in this case, if the bonds were to be used in violation of Section 7, Article IX, Constitution. See Juvenal v. Dixon, 99 Fla. 936, 128 So. 27. Or illegal use of the bonds proceeds could have been enjoined. See City of Tampa v. Salomonson, 35 Fla. 446, 17 So. 581; Suburban Inv. Co. v. Hyde,61 Fla. 809, 55 So. 76; Brown v. City of Lakeland, 61 Fla. 508, 54 So. 716.
Section 7, Article IX, of the Constitution of Florida does not forbid the issue or the payment of bonds of a municipality for authorized municipal purposes, or require bona fide purchasers of such bonds to see to the proper application *Page 236 of the bond proceeds; and when taxpayers of the municipality acquiesce in the validation of such bonds and in the use of the bond proceeds, taxation to pay the bonds held bona fide should not be enjoined on the ground that the bond proceeds were used for the benefit of chartered companies or individuals, unless it appears by the statute authorizing the bonds, or by the bonds, or by the record proceedings for issuing or validating the bonds, that the bonds or the proceeds thereof were to be used for the benefit of chartered companies or otherwise in violation of such Section 7, Article IX.
No taxpayer resisted, as authorized by statute, the validation of the bonds on the ground that Section 7, Article IX, would be violated by the issue of the bonds as was done in City of Bradenton v. State, 88 Fla. 381, 102 So. 556, 36 A.L.R. 1297; the issue of the bonds was not enjoined as in Weinberger v. Board of Public Instruction, 93 Fla. 470, 112 So. 253, and in Brown v. City of Lakeland, 61 Fla. 508, 54 So. 716; the bonds were validated under the statute and on their face showed they were issued in compliance with law, and they do not show that they were issued in violation of the Constitution as did the bonds held invalid in the Nuveen and Weinberger case. Illegal use of the bond proceeds could have been enjoined.
The bonds held bona fide having been issued pursuant to statutory authority and not in violation of Section 7 of Article IX of the Constitution, taxes may be levied to pay them as required by law even though proceeds of the bonds may have been illegally used for the benefit of chartered companies or individuals, there being no showing by a record binding on bonafide purchasers of the bonds that they were issued in violation of Section 7 of Article IX of the Constitution.
BROWN and BUFORD, J.J., concur. *Page 237