Municipal Bond & Mortgage Corp. v. Bishop's Harbor Drainage Dist.

• Decision Date: 07 March 1944
• Citation: 154 Fla. 246,17 So.2d 226
• Court: Florida Supreme Court
• Parties: MUNICIPAL BOND & MORTGAGE CORPORATION v. BISHOP'S HARBOR DRAINAGE DIST.

17 So.2d 226

154 Fla. 246

MUNICIPAL BOND & MORTGAGE CORPORATION v. BISHOP'S HARBOR DRAINAGE DIST.

Florida Supreme Court

March 7, 1944

Appeal from Circuit Court, Manatee County; W. T. Harrison judge.

H. C Tillman and Pat Whitaker, both of Tampa, for appellant.

G. P Smythe, of Bradenton, Mabry, Reaves, Carlton & White, of Tampa, D. G. Haley, of Sarasota, and A. B. Rowe, of Bradenton, for appellees.

TERRELL, Justice.

This is the third time we have considered this case. On first consideration Tervin et al. v. State ex rel. Landis, 116 Fla. 633 156 So. 627, a quo warranto proceeding, we held the act under which Bishop's Harbor Drainage District was attempted to be created valid, but we held the district to be without legal existence because essential requirements of the act were not met in its creation. We affirmed the lower court as to the ouster of Tervin, the supervisor, but reversed it as to the ouster of Osborn, the receiver. We also reversed the lower court as to the holding that Municipal Bond and Mortgage Company was not a bona fide holder of bonds issued by the district because that question was not properly before the court.

On second consideration, Municipal Bond & Mortgage Corporation v. Bishop's Harbor Drainage District, 133 Fla. 430, 182 So. 794, we held that the bill of complaint did not directly allege the existence of a de jure or de facto corporation, that a de facto corporation must have been shown and that since no such showing was made the validation decree was void. When the mandate in this case went down the plaintiff amended its bill of complaint. A motion to dismiss was overruled, the cause went to final hearing and the court held that there had been no attempt in good faith to create a de facto corporation, that bonds issued by the district thus created were invalid and that appellants were not bona fide purchasers of the bonds and dismissed the bill. This appeal is from the final decree.

Ten questions are argued but they all turn on that of whether or not a de facto corporation, to-wit: a drainage district, was created. It is admitted that if there was a bona fide de facto drainage district the bonds issued by it are collectible.

The record shows that a petition for the formation of the drainage district was filed in the circuit court, that proof of publication was made to put the landowners on notice, that the circuit court entered a decree establishing the drainage district. It is also shown that three supervisors of the district were elected and advertised for bids to sell bonds for the payment of construction work in the district. There was also an attempted compliance with other prerequisites of the general drainage law of Florida, Sections 1457 to 1570, C.G.I. 1927, F.S.A. § 298.14 et seq.

On these points there appears to be no dispute but it is contended by appellee that none of these essential steps to the creation of a valid drainage district were done in good faith so the ultimate question in the case turns on that of a bona fides versus a sham attempt to follow the law.

Good faith is not an abstract quality floating in the firmament like bacteria in foul breath. It is a concrete quality, descriptive of the motivating purpose of one's act or conduct when challenged or called in question. In this case it has reference to the purpose of those who undertook the formation of Bishop's Harbor Drainage District. If that purpose was sincere and amounted to an honest attempt to effectuate the purpose of the law, that is to drain and improve the lands of the...