Board of Public Instruction for Dade County v. State Ex Rel. Tanger Inv. Co.

• Decision Date: 11 October 1935
• Citation: 121 Fla. 703,164 So. 697
• Parties: BOARD OF PUBLIC INSTRUCTION FOR DADE COUNTY et al. v. STATE ex rel. TANGER INV. CO.
• Court: Florida Supreme Court

164 So. 697

121 Fla. 703

BOARD OF PUBLIC INSTRUCTION FOR DADE COUNTY et al. v. STATE ex rel. TANGER INV. CO.

Florida Supreme Court

October 11, 1935

Rehearing Denied Dec. 3, 1935.

En Banc.

Error to Circuit Court, Dade County; Paul D. Barns, Judge.

Mandamus by the State, on the relation of the Tanger Investment Company, against the Board of Public Instruction for Dade County and others. To review a judgment for relator respondents bring error.

Affirmed.

BROWN J., dissenting.

COUNSEL

Peters & Kemp, of Miami, for plaintiffs in error.

Julian E. Ross and George W. English, Jr., both of Fort Lauderdale for defendants in error.

OPINION

PER CURIAM.

This is a companion case to the case of Board of Public Instruction for the County of Dade, State of Florida, a Corporation, et al., v. State of Florida ex rel. Tanger Investment Company, a corporation of Florida (Fla.) 163 So. 694, opinion filed this date, and the judgment is affirmed for the reasons stated for affirming the judgment in that case.

So ordered.

Affirmed.

WHITFIELD, C.J., and TERRELL, BUFORD, and DAVIS, JJ., concur.

BROWN, J., dissents.

On Petition for a Rehearing.

DAVIS Justice.

That in truth and in fact a required bond election was actually called or held, when necessarily judicially found as a fact in bond validation proceedings, or certified as a fact in the recitals of bonds that have been duly negotiated and passed into the hands of bona fide holders for value without notice, cannot be negatived or put in issue by the obligor on the bonds, is a universal rule of law in this country. This is so, because the certification or recital of the existence vel non of a recitable fact (such as the fact that a bond election was held and what its result was) on the strength of the truth of which recital in the bonds such bonds were sold or negotiated, effectually estops the obligor from subsequently denying the truth of the recital, or thereafter refuting or denying the truth of facts such obligor must have averred in judicial proceedings to have such bonds validated, even though the recited or certified fact of the calling and favorable result of a bond election to authorize the issuance of the bonds may be altogether nonexistent or the recital itself demonstrably false, as can be later shown by proof offered in a civil suit brought to enforce the bonds.

Special tax school district bonds are in all respects analogous to ordinary municipal bonds. This is true, because they are issued by a public corporation under its seal and pursuant to statutes which make them negotiable instruments when issued in accordance with the provisions of section 17 of article 12 of the State Constitution and the statutes cognate therewith.

The rule as to the estoppel of the obligor on municipal bonds to deny that they were issued in conformity with, or by virtue of, certain statutes or constitutional provisions amounting to conditions precedent, is best stated in 19 Ruling Case Law, par. 303, p. 1009, as follows, and is supported by the overwhelming weight of authority:

'A recital in municipal bonds that they are issued according to and in conformity with, or by virtue of, certain statutes is equivalent to the representation that every preliminary step required by these statutes to be taken as a condition to the exercise by a public corporation of the power thereby delegated to issue bonds has been properly and legally taken, where the bonds are in the hands of innocent holders, and the officers issuing them were expressly or impliedly authorized to determine the questions to which their recital relates. And the corporation is thereby estopped to assert, as a defense to the bonds, the failure on the part of its officers to perform any of these preliminary conditions, or any irregularity in such performance. Thus it has been held that a recital in bonds issued by a city, importing a compliance with the city charter in the issue thereof, estops it to assert a noncompliance with the requirement that a petition signed by a certain portion of the freeholders within the corporate limits should be presented to the council before any bonds should be issued, where the question of the presence of this petition and its sufficiency was to be determined by the authorities who issued the bonds. Such a recital also estops the municipality from denying the validity of the bonds on the ground that no election was held to authorize their issuance; that there were irregularities in holding the election; that a majority of the votes were not cast in favor of the issuance of the bonds; that the corporation has issued more bonds than the vote of the council authorized, or then were authorized by vote of the people of the municipality, or that the issue of bonds is in excess of the debt limit, unless the truth of such recital depends upon a matter of public record; that all the conditions which the statute requires as a condition precedent to the issuance of the bonds has not been performed, when the performance of such conditions is a matter to be determined by the officers who issued the bonds; that the delivery of the bonds held in escrow by a trustee was unauthorized, or that the municipality which issued the bonds was without corporate existence. It is of course essential to the legal effect of such a recital that it designate correctly the statute in conformity with which the bonds were issued, but an immaterial error in reciting the title of such statute will not affect the validity of the bonds.'

The case of Weinberger v. Board of Public Instruction of St. Johns County, 93 Fla. 470, 112 So. 253, is not in point to sustain the objections of plaintiffs in error in this case, nor has that decision been overlooked, distregarded, or overruled by this court in its determination of this controversy, as petitioner for rehearing asserts in his petition.

In the Weinberger Case, supra, the holding was that, since section 17 of article 12 of the Constitution affirmatively fixed unalterable requirements for the maturities of the bonds to be issued by special tax school district, nopower to issue bonds of different maturities existed, nor could the Legislature itself, by express enactment, lawfully authorize the issuance of bonds contrary to the express and mandatory provisions of the Constitution as to the required maturities, nor could the courts, acting under legislatively conferred jurisdiction in bond validation proceedings, curatively validate special tax school district bonds when same were void ab initio because attempted to be issued in direct violation of controlling mandatory organic provisions.

In that case the unconstitutional maturities of the bonds was necessarily apparent on the face of the validation proceedings. It was likewise obvious on the face of the bond authorization resolution and proceedings themselves, so no question of the rights of innocent holders of such invalid bonds could ever have arisen, because the constitutional defect was so obvious, as a question of law, on the face of both the bonds and the recited bond validation proceedings, as to put the whole world on special notice thereof.

In this case, however, the question brought in issue is a question of fact; namely, the obligor's denial that an election was ever called or held in fact to authorize the bonds before such bonds were issued, although the fact of such an election was recited in the bonds. On this point, the alternative writ of mandamus alleges that such bonds had been judicially validated by the circuit court and had been issued by the board of public instruction of Dade county on behalf of a special tax school district, containing the specific recital 'that all conditions, acts and things essential to the validating exists, have happened and have been done in full compliance with law, and that this bond is within every limitation prescribed by the constitution and laws of Florida, and that the faith, credit and assessable property of the said Special Tax School District No. 2 are hereby irrevocably pledged to the punctual payment of the principal and interest of this bond, in accordance with its terms.' The alternative writ further alleges that the bonds, when issued, had indorsed on them the official validation certificate of the clerk of the circuit court, as provided by section 5110, Comp.Gen.Laws (section 3300, Rev.Gen.St.).

Now under the law, before bonds can be validated in judicial proceedings instituted under sections 5106-5111, Comp.Gen.Laws (sections 3296-3301, Rev.Gen.St.) the obligor county, municipality, or special taxing district proposing their validation must affirmatively allege in a petition for validation (section 5107, Comp.Gen.Laws, supra) its authority for incurring the bonded debt represented by the bonds. It also must specifically allege the particular fact that an election has been held and that such election was in favor of the issuance of the bonds, in all cases where an election is required by either the Constitution or the laws of Florida as a condition precedent to the valid issuance of such bonds.

It was therefore necessary for the obligor board of public instruction in this case, when it petitioned for validation of the bonds in controversy in this suit, to aver and prove to the circuit court that a proper election authorizing the issuance of such bonds had been actually called and held in accordance with the Constitution, before it could reasonably expect the circuit court to enter a decree of validation. So the principal purpose to be accomplished by a decree of validation was to put this question, which was a question of fact the proof of which necessarily existed de hors the face of the bonds, in perpetual repose by means of the...