I agree with the opinion expressed by Mr. Justice BUFORD, in the concurring opinion prepared by him in this case, that the question whether the homestead of a citizen of Jacksonville within the limit of exemption, which under the provisions of Article X, Sec. 7 of the Constitution adopted at the general election on November 6, 1934, is exempt from taxation up to the value of $5,000.00, will be exempt from taxation for debt service on account of the proposed four hundred and forty-five thousand dollars of refunding bonds, which the city through and by its City Council has decided to issue, is not involved in this appeal which is from an order made by the Circuit Court for Duval County in a statutory proceeding for the validation of the proposed bond issue. *Page 522
The proceeding for the validation of bonds which the municipality desires to issue is a special statutory proceeding prescribed by Sections 5106 to 5129 inclusive of the Compiled General Laws of Florida, 1927. The proceeding is begun by the county, municipality, taxing district, or other political district or subdivision by filing a petition against the "State of Florida in the circuit court of the county in which such election has been held or other proceedings have been had or taken."
The only allegations of the petition necessary to be set forth therein relate to the authority for incurring the debt; the fact that an election has been held and that such election was in favor of issuing the bonds if an election was required; the ordinances or resolutions authorizing the issuance, and the fact of their adoption and all essential proceedings taken in connection therewith; the amount of the bonds or certificates to be issued; what interest they are to bear and when and where the principal and interest are to be paid. Such are the only possible issues involved or subjects on which issues may be made in a bond validating proceeding under the statutes of this State.
The purpose of the statute was to obtain a sort of declaratory judgment of the court upon the validity of the proposed obligation, more accurately the validity of the proposed debt, that is to say, power to incur it and the validity of the terms of the proposed promise to pay which is to be issued as evidence of the debt. A judgment of validation obtained under such a statute and in such proceedings was deemed to facilitate the sale of the bonds as the purchasers thereof would consider such evidence of debt to be secure from further technical or formal objection to the power of the county or municipality to incur the debt and the terms of the promise to pay. *Page 523
In such proceedings all taxpayers or citizens of the municipality, county or taxing district are considered as parties defendant. The judge of the Circuit Court is empowered to determine all questions of law and of fact in the cause.
Chapter 14504, Acts 1929, relates to proceedings for the validation of bonds proposed to be issued by drainage, conservation or reclamation districts.
The questions of law and fact to be determined in such proceedings are by statutory provision required to be set forth in the petition for validation of the proposed bonds. The general rule in all proceedings under a special statutory enactment is that the proceedings prescribed by the statute shall be strictly followed and that rule obtains in this State. See 25 Rawle C. L. 1059; Jones v. Jones, 12 Pa. St. 350, 51 Am.Dec. 611, text 623; Election Cases, 65 Pa. St. 20, text 41.
Proceedings for the validation of bonds are special statutory proceedings. They are neither proceedings in chancery nor at law, but the appellate procedure takes the form of such proceeding in chancery in part.
The State Attorney for the Fourth Judicial Circuit answered for the State in this proceeding that the City of Jacksonville possessed the authority under the provisions of Chapter 15772, Laws of Florida, 1931, to issue the bonds described in the petition but neither admitted nor denied the facts alleged in the petition.
On the same day Jesse Boatright, alleging himself to be a citizen and taxpayer of the City of Jacksonville, submitted a petition in the Circuit Court for Duval County to be permitted to intervene in the cause. Under the provisions of the statute a taxpayer and citizen of the city by the publication of the notice to show cause why the bonds should not be validated was thereby made a party defendant to the proceedings and the court had jurisdiction of him as if he *Page 524 had been named in the petition and personally served with process. Sec. 5107 C. G. L., 1927.
An order allowing him to intervene therefore would seem to have been superflous. On the same day on which Boatright filed his petition he filed his answer, in which he averred that the proposed bonds were not refunding bonds such as were permitted to be issued under the Act, Chapter 15772, supra, in that they sought to pledge the revenues of the electric light plant of the City of Jacksonville which were not pledged in the bonds issued for the debt sought to be refunded.
He also tendered as a defense to the validation of the bonds the fact that the alleged refunding bonds provide for a continuation of the obligations of the bonds sought to be refunded which he avers are not extinguished by, but are merged into, the proposed refunding bonds with like force and effect as if the original bonds are still in existence, that the refunding bonds would therefore constitute a "lien upon all and singular the taxable property within the corporate limits of the City of Jacksonville in the same manner and form as the said original bonds sought to be refunded were liens thereon at the time of their issuance." It was averred that the City of Jacksonville is assessing taxes against all the real and personal property within the city to pay interest and sinking fund for the refunding bonds "without reference to whether or not the said property upon which it is so assessing taxes is or is not a homestead, in total disregard of the provisions of Article X, Section 7, of the Constitution."
That section provides that homesteads of citizens and residents of the State up to the value of five thousand dollars shall be exempt from all taxation.
Based upon those averments the defendant, Boatright, prayed that the petition to validate the bonds be dismissed. *Page 525
On the same day a motion to strike the answer was filed and the same came on immediately to be heard. The motion to strike the answer of Boatright was granted and a long order prepared and entered validating the bonds. From that order Boatright appealed on the same day and filed his assignment of errors.
Certainly no time was lost in the preparation of this case from the day the State Attorney interposed the answer in behalf of the State. The celerity with which the cause was determined in the lower court may evidence the importance with which an early decision on the points presented was regarded by those having charge of the proceedings and the confident opinion of the court as to the lack of merit contained in the defense of Boatright.
I think the Judge of the Circuit Court was correct insofar as the order striking the answer applied to that portion of it setting up as a reason why the bonds should not be validated that the City of Jacksonville was proceeding to assess taxes upon the homestead of Boatright. That averment cannot by any process of reasoning be regarded as in the slightest degree relating to or having any material bearing whatsoever upon the power of the city to issue the refunding bonds and the regularity of the proceedings under which they are proposed to be issued.
The attempted defense has no place in such proceeding. It is obvious that the property which may be taxed to provide for the payment of interest on the proposed bonds and a sinking fund to pay the principal as it becomes due has no bearing whatsoever upon the authority of the municipality to issue the bonds and the proceedings followed by the City Council in the execution of the power. By the very provisions of the statute taxes may be levied upon all taxable property within the city for the debt service, but what property may be taxable is a question which has no relation to *Page 526 the power to issue the bonds nor bearing upon the regularity of the process by which the power to issue the bonds is exercised.
The reason given by the Judge for the conclusion reached by him on the point is a matter with which an appellate court is not necessarily concerned nor do the reasons offered by him inject into the proceedings a justiciable question to be reviewed.
It is sufficient that the defense was stricken as having no bearing on the case. I agree with Mr. Justice BUFORD that what this Court may say as to the sufficiency of such a defense is "obiter and without any force and effect to bind either a taxpayer or a bondholder and is a mere gratuitous expression of what members of the Court may conceive to be the law in that regard."
I am of the opinion that the order dismissing the answer of the defendant Boatright insofar as it presented the defense that the proposed bonds are not refunding bonds is erroneous.
The proposed refunding bonds do in terms enlarge upon the obligation of the original bonds by attempting to pledge additional sources of revenue as well as to continue the obligation of the bonds that are proposed to be refunded as the answer in terms specifically avers and the form of the proposed bonds shows. That being true such bonds may not be issued without the approving vote of the freeholders of the city as contemplated by Section 6 of Article IX as amended of the Florida Constitution. See State v. Citrus County, 116 Fla. 676,157 South. Rep. 4.
The above mentioned amendment to the Constitution of this State has been under consideration by this Court in many cases. It is held that the original indebtedness is not extinguished by the refunding bond, but is merged in the refunding bond. The original obligation represented by the *Page 527 bonds has even been said by this Court in some of the cases cited in the majority opinion to be projected into the future by the refunding bonds, which it is said Section 6 of Article IX so recognizes. See State, ex rel. Pinellas County, v. Sholtz, 115 Fla. 561, 155 South. Rep. 736.
A reference to Senate Joint Resolution No. 26, Acts Legislature 1929, p. 784, will reveal that it contains no such language. The amendment merely provides that counties, districts and municipalities shall have power to issue bonds only after the same shall have been approved by a majority of the votes cast in an election in which a majority of the freeholders who are qualified electors residing in such counties, districts or municipalities shall participate to be held in the manner to be prescribed by law. The amendment by its terms was not applicable to refunding bonds issued exclusively for the purpose of refunding of the bonds or the interest thereof of such counties, districts or municipalities. There was no such express power to issue bonds vested in such taxing agencies by the Constitution prior to that amendment, which does not provide that the refunding bond projects into the future the obligation of the bond refunded. The point, however, is beside the question in this case.
The authority under which in 1926 and 1931 the City of Jacksonville issued its Incinerator and Water Works Improvement Bonds and the refunding bonds of 1931 consisted of certain acts of the Legislature. Resting upon the authority of those Acts, ordinances were adopted providing that the city should levy annually such special tax on the taxable property within the corporate limits of said city as may be necessary to pay the interest on said bonds and provide a sinking fund each and every year for the payment of the bonds. *Page 528
Chapter 15772, Acts 1931, supra, provided that the resolution authorizing the refunding bonds may pledge to the payment of principal and interest of such refunding bonds or to a sinking fund for the bonds a fixed proportion or a proportion to be determined from time to time as provided in the resolution of the moneys from time to time collected either by taxation of any kind whether upon real or personal property or collected from other revenues or receipts of the unit.
But the resolution under which these proposed refunding bonds are intended to be issued pledges all net revenues from the electric light plant of the city, and the "entire taxable property of said City of Jacksonville is also and shall stand irrevocably pledged by this resolution" for the "payment of each and every, all and singular the said bonds both principal and interest."
Here not only additional sources of revenue are pledged but it is sought to pledge the "taxable property of said city" which never was made or attempted to be made by legislation or ordinance security for the payment of such obligations.
The use of such language may have been an error. The choice of words was not accurate, but that error cannot be corrected by the court by substituting other and more accurate words to denote the pledge of the city's revenue collecting capacity.