[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 806 This is an appeal from a final decree dismissing plaintiff's bill in which decree was embraced an order overruling the exceptions to the master's report. The case was tried upon the second amended bill of complaint filed by Mrs. Julia Henderson as substituted trustee under the will of Parker A. Henderson, deceased, and the answer of the several defendants.
The amended bill of complaint alleges that the plaintiff, who was the widow of Parker A. Henderson, deceased, has been substituted as trustee of the estate of her deceased husband in lieu of the First Trust Savings Bank of Miami; that among the assets of the estate was a mortgage given to Parker A. Henderson covering the land described in the bill of complaint; that said mortgage had been duly foreclosed and a master's deed delivered to the First Trust Svaings Bank as Executor and Trustee of the said Henderson estate and thereby the fee simple title then derived became an asset of said estate. That during the time the said bank was acting as executor of said estate it employed defendant J.M. Holferty as its agent for the purpose of renting and caring for the lands which the said bank had under its control as such executor. That during the time said Holferty was acting as such agent he acquired from the bond trustees of Goulds Drainage District certificate No. *Page 807 12 for the tax assessment for 1929; that he took said tax certificate in the name of W.R. Boose; that subsequently he applied for and obtained an alleged tax deed from the said bond trustees of said district and that said deed was issued to W.R. Boose, "c/o J.M. Holferty.' That Holferty had stated to plaintiff and to said bank that he was holding said certificate for them and they could reimburse him therefor at their convenience. It is further alleged in said bill that W.R. Boose was a relative and "straw man" of the said J.M. Holferty; that his name was used in said transaction to conceal the real purchaser of the tax sale certificate, which purchase was really made by Holferty while acting in the capacity of agent of the First Trust Savings Bank, the executor, and was acting in a fiduciary capacity for them.
In separate paragraphs the amended bill alleges in detail the procedure in connection with the sale and issuance of said tax certificate and the subsequent issuance of tax deed for said property.
The bill alleges that Holferty was and is indebted to the estate of said Parker A. Henderson for rents collected from said lands, and that the estate is indebted to Holferty for the drainage taxes which had been paid by him, and that plaintiff is ready and willing after an accounting between the parties to pay to the said Holferty any amount found by the court to be due him, and that in the event any money should be found to be due by Holferty to the estate, that such indebtedness be ordered paid to the estate. The bill prays for the cancellation of tax certificate No. 12, the cancellation of the alleged tax deed and the cancellation of all subsequent debts and encumbrances placed by the parties against said lands. The bill prays for an accounting between the parties and an adjustment of accounts existing.
To this amended bill the defendants severally filed motions *Page 808 to strike portions thereof, all of which motions were denied by the chancellor. The defendants thereupon filed separate answers to the bill. In his answer Holferty denied any agency or fiduciary relationship on his part, denied that he was indebted to the estate, affirmed that the tax sale certificate and tax deed were all legal. Defendants Thompson and Taintor in their answer alleged that they had purchased the land from Holferty for the sum of $4,200.00 receiving from Holferty and his wife a special warranty deed dated September 27, 1934, and recorded November 14, 1934; that such purchase was made in good faith and without any notice or knowledge that the plaintiff claimed any right, title or equity therein; that they had paid all of the purchase money notes except the last one in the sum of $1,312.50 which was not due until October, 1936, and that they had also paid out certain sums for redeeming certain taxes on said lands as well as for the taxes for the year 1936. In the answer filed by Boose and Holferty it is alleged that before the assignment of the tax certificate and the issuance of the tax deed, both the plaintiff and said bank as executor of the estate of Parker A. Henderson had knowledge of the delinquent taxes on said property and that the taxes for the year 1929 were unpaid and elected not to pay said taxes but to abandon the land; that they also had knowledge of the issuance of the tax certificate, its purchase by Boose and that Boose had made application for tax deed, and yet made no complaint or objection; that said lands had not been actually possessed, farmed or used for a period of several years before Holferty took possession thereof; that when tax deed was issued, the land was wild, unoccupied and uncultivated and had but little value, that the value of the land had been greatly increased by the expenditure of some $2,500.00 by Holferty and Boose for the purpose of clearing and cleaning the property and making it otherwise *Page 809 usable; and that it would be inequitable and unjust to allow plaintiff to now become entitled to possession of said land and that she should be held to be estopped to claim such title and possession.
Hon. Norris McElya was appointed by the court as special master and we quote as follows from his report, which we think gives a very fair summary of the facts in the case:
"The 105 acres of land involved in this litigation comprise one of three tracts of land in the south end of Dade County which the First Trust Savings Bank as Executor of the Estate of the late "Parker A. Henderson acquired by the foreclosure of mortgages. Julia Henderson, the widow of Parker A. Henderson, qualified as Trustee of the Estate of Parker A. Henderson. J.M. Holferty was a real estate agent located in the south end of the county who acted as rental and sales agent and consultant for the Executor in connection with this tract of land and two other tracts known as the 80 and 60 acre tracts, but so far as the record shows did not actually sell or lease the 105 acres.
"Holferty owned or controlled some Goulds Drainage tax certificates on the 60 and 80 acre tracts, and agreed with the Executor that he would not enforce the payment of same until funds were available in the estate from the rental thereof. Mrs. Henderson as Trustee was under the impression that the same situation existed in reference to the 105-acre tract, but it does not appear that the Executor had any understanding with Holferty as to Goulds Drainage District taxes on the 105-acre tract, and Holferty denies that he had anything to do with the 105-acre tract, although officials of the Executor admit they consulted with him generally in connection with the farm lands of the Henderson Estate, and it also appears that Holferty held bond credit *Page 810 with the Goulds Drainage District through which the Executor adjusted Goulds Drainage taxes on other tracts.
"On the 7th day of July, 1930, the tax collector of Dade County, Florida, by a separate sale, sold to the Commissioners of Goulds Drainage District, tax Certificate No. 12 for a stated consideration of $184.82. On April 28, 1933, J.M. Holferty bought from Harley R. Gore, Preston E. Lee, and G.E. McKaskill, as bond trustees, said certificate No. 12, for a stated consideration of $818.38, and took the certificate in the name of W.R. Boose, the brother-in-law of J.M. Holferty, in whose name a tax deed was issued on April 28, 1933, and on December 15, 1933, the title of the property was conveyed from Boose to Holferty for $1,034.62, purporting to represent the actual amount of money which was invested in the property. Holferty then spent some $1,200.00 in clearing and improving the land, and subsequently sold the property to A.B. Thompson and E.J. Taintor for approximately $4,200.00, $2,900.00 of which has been paid, and the balance of $1,312.50 is secured by a mortgage given by Thompson and Taintor to Holferty.
"At the time Boose bought the tax certificate the evidence shows that the property was worth $1,500.00 to $1,600.00 but that at the present time the property is worth between $10,000.00 and $15,000.00; that the annual rental value is approximately $10.00 per acre. Holferty claims that Boose was the real purchaser of the tax certificate and the tax deed, but in view of his alleged agreement with Boose that he could have any of the property back which he purchased for him, and in view of the fact that he kept no separate funds of Boose on hand, Boose was, so far as this transaction was concerned, nothing more than a 'straw man' and Holferty was the real party at interest. As the selling and renting agent of the Executor and general consultant in *Page 811 connection with the property belonging to the Henderson Estate, Mr. Holferty was in a position to obtain knowledge and information which he used for his own advantage, and his conduct in this transaction was somewhat reprehensible. However, the evidence clearly shows that Curtis E. Lee, acting as Treasurer of the Bondholders Trustees, gave Mrs. Henderson, as Trustee, and the Executor, ample opportunity to redeem the tax certificate before it was sold to Boose, and it therefore does not appear that the Trustee, the Executor of the Estate, or the Estate were deprived of any opportunity to protect the assets of the estate by the conduct of Holferty.
"Thompson and Taintor appear to be bona fide purchasers of the property in question without any knowledge of any relation which may have existed between Holferty and the Executor and Trustee, and in the opinion of the Master any attempt made to attack the title of Thompson and Taintor on the theory of constructive fraud on the part of Holferty must fail.
"At the time the Goulds Drainage District was established a committee was appointed as required by the statute, which, after the work was completed, was discharged by the County Commissioners and Bond Trustees were subsequently duly appointed. However, no Commissioners of the Goulds Drainage District were ever appointed, and since its inception the Bond Trustees have acted as Commissioners for the Goulds Drainage District. It is the contention of the plaintiff that since no Commissioners of the Goulds Drainage District were actually appointed, the procedure which was followed in this case and which has been uniformly followed since the organization of the District: for the Tax Collector to knock off the tax certificates to the Commissioners of the Goulds Drainage District where *Page 812 individuals have not purchased them, without receiving any actual money for the sale of the said certificates and without including the Goulds Drainage taxes in the sale of State and County taxes, and of delivering the said certificates to the Bond Trustees and acting Commissioners of the Goulds Drainage District, and their subsequent sale by assignment to individuals and the issuing of subsequent deeds upon such certificates, is void. And that the Clerk of the Circuit Court in signing a deed for the Commissioners of the Goulds Drainage District acted without authority because there were no official Commissioners ever appointed for the District. It is further contended by the plaintiff that since the statute creating the Goulds Drainage District required that the taxes shall be assessed and collected 'in the same manner as other taxes' it should be construed to mean that these taxes should be included in the sale of the property for State and County taxes, and that the Tax Collector had no authority to sell the property for State and County taxes and then again sell it for Goulds Drainage District taxes.
"The Goulds Drainage District was organized pursuant to the Law entitled 'Drainage by Counties' as embraced in Section 2785 to 2824, C. G. L. 1927. There is no decision in the State of Florida upon the validity of the method followed by the Goulds Drainage District, and so far as the Master has been able to ascertain there is no case directly in point as to the validity of the acts performed by the Bond Trustees as Commissioners. However, the reasoning of the Supreme Court in the case of Ridgeway v. Reese, 131 So. 136, and the case of Overstreet v. Gordon, 163 So. 447, although not exactly upon the point involved here, would indicate that in a case of this kind the original property owner could not complain upon a purely *Page 813 formal defense against the validity of a tax deed, and that whatever might be the rights of the bondholders to object to their Trustees acting also as Commissioners, the irregularity of the proceedings would do no more than to make the deeds voidable and not void.
"I further find that the Defendants, A.B. Thompson and E.J. Taintor, have paid for the redemption of taxes and the payment of taxes since they acquired title to the property, the sum of $809.40.
"I therefore find that the equities are with the defendants; that a decree should be entered in accordance with the prayer of the answer confirming the title in A.B. Thompson and Jolando Thompson, his wife, and E.J. Taintor and Jewel Taintor, his wife, subject to the mortgage of J.M. Holferty as set forth in the pleadings."
The final decree entered by Circuit Judge Paul D. Barns on November 13, 1937, and from which this appeal was taken reads in part as follows:
"The above styled and entitled cause comes on before this court to be heard upon plaintiff's exceptions to the report of the master, and argument of counsel for the respective parties having first been had and the court being fully advised in the premises, it appears that:
"(1) In 1919 Goulds Drainage District was organized under Chapter 21, entitled 'Drainage by Counties,' and embraces Sections 2785-2824, both inclusive.
"(2) At the time of the organization, a committee was appointed as required by Section 2787. At the completion of the work of the committee, with the assistance of engineers and other employees the County Commissioners approved the work, made the assessment for the benefits to the property holders and apportioned the assessment according to the acreage, certifying the assessment to the tax *Page 814 assessor who placed it on the general tax roll against the several portions of property, and under the assessor's certificate, the collector was instructed to collect the assessment:
" 'The same shall be collected by the tax collector in like manner as other taxes are collected and made a special fund for the payment of the indebtedness incurred in the construction and annual maintenance of said ditch, drain or canal, in accordance with Section 2790, Compiled Gen. Laws.'
"(3) It has been assumed by both sides that the work up to this point was regular and no point is raised prior to this assessment.
"(4) According to the testimony there are no commissioners or committee of the District, and there has been none since the drainage operation was completed. The Bond Trustees have been doing all the business of the District. See Testimony of Curtis E. Lee. The separate duties of the Bond Trustees and administrative committee showing the duties required of each are set out in Section 2797, Compiled General Laws of Florida.
"(5) The property had gone delinquent for State and County and other taxes, in 1927, and on October 26, 1929, the tax sale certificate for the 1927 State and County taxes was redeemed and at the time of the redemption the State and County taxes and all other taxes (except Goulds Drainage District taxes) for 1928 and 1929 were paid as required by Section 984 Compiled General Laws. The drainage tax, however, for 1929 was not collected as required by law when the property was redeemed.
"(6) On July 7, 1930, the Tax Collector held a sale for the drainage tax or assessment for 1929, although the tax assessment for 1929 was on the tax roll and should have been paid at the redemption for State and County taxes, *Page 815 and on July 7, 1930, Bob Simpson, tax collector, issued a tax sale certificate to 'Commissioners Goulds Drainage District Tax Certificate No. 12' for the sum of $184.82 as recited in the certificate. The testimony shows that Commissioners Goulds Drainage District in fact paid nothing to the Tax Collector for the certificate.
"(7) On the 28th day of April, 1933, Harley Gore, Curtis E. Lee and G.E. McCaskill, as Bond Trustees, assigned the Certificate No. 12 to W.R. Boose.
"(8) On the 27th day of June, A.D. 1933, 'the Board of Commissioners of Goulds Drainage District, issued a tax deed for the property involved to W.R. Boose, c/o J.M. Holferty, Route No. 2, Miami, Florida.'
"The attestation clause of the tax deed reads as follows: 'In testimony whereof, by virtue of the authority in me vested by law, and for and on behalf of the Board of Commissioners of Goulds Drainage District, I, the undersigned, as Clerk of the Circuit Court for the County and State aforesaid, have executed this deed, and hereunto set my official signature and seal at Miami in the County of Dade, State of Florida, this 27th day of June, A.D. 1933.
'E.B. Leatherman 'As Clerk of the Circuit Court '(SEAL) Dade County, Florida.'
"Mr. Leatherman states in this deed that he is acting for the grantors, Board of Commissioners of Goulds Drainage District, and not for the State of Florida as Grantor.
"(9) The Tax Roll of the County shows in several columns the different taxes beginning with State and continuing across the roll; County School Board Tax; Special School Tax District Tax; County Bond Tax; Florida Navigation Tax; Baker's Haulover Tax; Goulds Drainage District Tax. Each of these taxes are collected under the *Page 816 same statutory language as the Goulds Drainage District tax.
"(10) The county tax collector and assessor should treat the taxes levied for the Goulds Drainage District as they do state, county and school taxes, and when struck off to the state because of no sale to private buyers, that the Goulds Drainage District taxes should be on the same certificate as state and county taxes, and that same should be delivered to the clerk of the Circuit Court as are tax certificates for state and county taxes when not sold to a private buyer by the tax collector.
"Notwithstanding the foregoing facts this court finds that the procedure provided by law and the duties of the public officers have not been so far departed from as to make the sale void, whereupon, in consideration of the premises, it is
"ORDERED, ADJUDGED AND DECREED that the exceptions to the Master's report be and the same are hereby overruled and denied, and that the plaintiff's bill stand dismissed."
It is undoubtedly the general rule that where an agent having the management and control of real estate, or occupying a relation of trust and confidence to the owner with reference thereto, purchases at a tax sale, such a purchase vests no title in him but enures to the benefit of the owner. While there was a conflict in the evidence in this case as to whether or not Holferty was the agent of the Henderson estate, or of Mrs. Henderson or her predecessor as trustee of said estate, with reference to this particular tract of land, but the special master concluded, that Boose was but a straw man for Holferty and that Holferty's relations to the Henderson estate were such that he was in a position to obtain knowledge and information which he used to his own advantage, and that his conduct in this transaction was *Page 817 "somewhat reprehensible." But the master adds that the evidence shows that the treasurer of the bond trustees of the district, Mr. Lee, gave the trustee, Mrs. Henderson, and the executor, ample opportunity to redeem the tax certificate before it was sold to Boose, and that therefore the trustee and executor were not deprived of any opportunity to protect the assets of the estate by reason of the conduct of Holferty. By overruling the exceptions to the master's report the chancellor approved this finding and the rule is well settled that the conclusions of the chancellor on fact, even when the testimony is taken before a master, will not be set aside by this Court unless they are clearly erroneous. But in this instance, the chancellor's decree shows that the tax certificate referred to was highly irregular, and was not based on a sale held in accordance with the applicable statutes, and covered taxes which should have been included when the redemption of the tax sale certificate for 1927 taxes took place on October 26, 1929. See paragraph 5 of the decree above quoted.
Appellant contends that the tax sale certificate issued to the "Commissioners" of Goulds Drainage District and the tax deed issued by the clerk of the circuit court for and in the name of the Commissioners of Goulds Drainage District as grantor are both invalid.
Goulds Drainage District was organized some twenty years ago pursuant to the general statute providing for "drainage by counties" as set forth in Section 2785-2824 Comp. Gen. Laws of 1927. The drainage canal was dug in 1919. These statutes provide for two distinct sets of officers, a committee composed of three disinterested freeholders who shall have power to employ a surveyor, establish the route, depth, width and length of the canal, and report back to the county commissioners with an estimate of the approximate *Page 818 cost, and the county commissioners after giving notice by advertisement for bids, are to let the contract to the lowest responsible bidder, the work to be done under the supervision of the committee above referred to, and when the work is completed the committee is to report the same to the Board of County Commissioners, and if after inspection the County Commissioners approve of the work, the board is empowered to assess against the lands benefited or to be benefited by said drain or canal the difference between the estimated cost thereof, as estimated and assessed by the committee, and the actual cost thereof. Section 2792 C. G. L. provides that after the district has been established and assessments made and levied by the county commissioners and before awarding the contract the board of county commissioners shall issue and sell drainage bonds for the total amount of such assessments, less the interest charges. And in issuing and selling such bonds and distributing the proceeds thereof they shall act in conformity with the provisions of Compiled General Laws applicable to the issue and sale of bonds for constructing hard-surfaced highways or public buildings. The duties of the bond trustees are set out in section 2797 and said section does not authorize them to purchase tax certificates issued upon delinquent drainage taxes. It appears that the bond trustees are only empowered to borrow money to pay interest on bonds when there is no money in that fund and the committee above referred to is also authorized to borrow money only to meet expenses incurred in the discharge of its duties before funds have been provided by the issue and sale of bonds, and this with the approval of the board of county commissioners.
It will be noted that the statutes do not provide for "commissioners" for such a drainage district; it only provides *Page 819 for the appointment of a "committee" whose duties appear to have ended after the construction of the canal and the placing of the assessments, etc. Indeed, the statutes do not provide for any special governing body or administrative officers, but do provide for bond trustees for such a district, and the evidence shows that in this case the trustees have actually acted as the governing body of the district for many years and have been generally known and referred to both as commissioners and as trustees. As stated by the chancellor, "The bond trustees have been doing all the business of the district."
We concur in the conclusions of the chancellor as stated in paragraphs 9 and 10 of his decree pointing out the departure from statutory requirements in the sale for drainage district taxes involved in this case. The provision of Section 2790 C. G. L. to the effect that drainage assessments shall be collected "in like manner as other taxes are collected," was not complied with. The separate sale and issue of a separate tax sale certificate in the name of the district, separate and apart from other state and county taxes, was not authorized by the statute. Section 2790 says: "The same shall be collected by the tax collector in like manner as other taxes are collected, and made a special fund for the payment of the indebtedness incurred in the construction and annual maintenance of said ditch, drain or canal."
Section 1019 C. G. L. requires all tax deeds to be issued in the name of the State of Florida, or, in case of municipal taxes, in the name of the city or incorporated town, and shall be signed by the clerk of the circuit court. No special provision is made with reference to tax deeds issued for the nonpayment of drainage district taxes, so there is no statutory authority for the issuance of such a tax deed as *Page 820 we are dealing with here, which is issued in the name and for and on behalf of the "Commissioners of Goulds Drainage District" and signed by the clerk.
As shown above, the statute does not provide for "commissioners" of such a district, and the chancellor finds that there were no commissioners.
The final conclusion of the chancellor that "Notwithstanding the foregoing facts this court finds that the procedure provided by law and the duties of the public officers have not been so far departed from as to make the sale void," is in our opinion hardly justified by the statements of law and fact so well and clearly stated in the preceding portion of his opinion and decree.
The only possible theory upon which the separate tax sale, and the tax certificate and tax deed based thereon, could be upheld as being merely voidable and not absolutely void, would be to apply to this case the provisions of Section 1 of Chapter 14572, Acts of 1929 (repealed in 1935), which prescribes that no tax assessment sale or conveyance shall be held invalid "except upon proof that the property was not subject to taxation, or that the taxes had been paid previous to sale, or that the property had been redeemed prior to the execution and delivery of deed based upon certificate issued for non-payment of taxes." But this statute was applicable to only state and county taxes, not to municipal or district taxes. The case of Overstreet v. Gordon, 121 Fla. 180, 163 So. 477, dealt with state and county taxes.
The facts of this case do not show such laches as would bar the complainant from the equitable relief sought. Mrs. Henderson as trustee is entitled to a decree cancelling the tax deed, as being void and of no effect, and the deed to Tainter and Thompson was therefore ineffectual as a *Page 821 conveyance of the title which still remained vested in the trustees under the will of Parker Henderson, deceased, the tax deed notwithstanding. Nor did Taintor Thompson's purchase money mortgage effect any lien on the land, for like reasons.
The decree appealed from must therefore be reversed. However, one who seeks equity must do equity. Under all the circumstances disclosed by the record, it appears that certain of the defendants have made permanent improvements or betterments to the land at their own expense, which have increased its value, for which they are entitled to reimbursement, or to be credited therefor as against the rentals collected by them, and certain of the defendants have paid taxes for which they are likewise entitled for reimbursement or credit, as the facts and the law may require. These equities may be dealt with and worked out in further proceedings and decree in the trial court. It may be some further testimony will have to be taken. We will not therefore plow this ground in advance of the trial court. The able chancellor can doubtless adjust these equities between the parties with complete justice to all concerned.
Reversed and remanded for further proceedings not inconsistent with the foregoing opinion.
WHITFIELD, P. J., and CHAPMAN, J., concur.
TERRELL, C. J., concurs in opinion and judgment.
Justices BUFORD and THOMAS not participating as authorized by Section 4687, Compiled General Laws of 1927, and Rule 21-A of the Rules of this Court.
ON PETITION FOR REHEARING