City of Zephyrhills, Florida v. RE Crummer & Company

• Decision Date: 30 November 1956
• Docket Number: No. 16061.,16061.
• Court: U.S. Court of Appeals — Fifth Circuit
• Parties: CITY OF ZEPHYRHILLS, FLORIDA, Appellant, v. R. E. CRUMMER & COMPANY, Appellee.

237 F.2d 338 (1956)

CITY OF ZEPHYRHILLS, FLORIDA, Appellant, v. R. E. CRUMMER & COMPANY, Appellee.

No. 16061.

United States Court of Appeals Fifth Circuit.

November 30, 1956.

James S. Welch, Leonard C. Carter, Lakeland, Fla., for appellant.

Joseph C. Young, Clearwater, Fla., Claude R. Edwards, Orlando, Fla., for appellee.

Before RIVES, TUTTLE and JONES, Circuit Judges.

JONES, Circuit Judge.

The City of Zephyrhills, Florida, in 1926 or 1927, probably 1926, entered into a contract with L. B. McLeod Construction Company for street paving and the installation of whiteway improvements. The City was empowered by its legislative charter to pave, grade and otherwise improve streets and to make the expense of any and all such improvements a lien upon the abutting property. Laws of Florida, Special Acts 1925, ch. 11327, § 9. Pertinent to the inquiry necessary to our decision are the following portions of the City's charter:

"Whenever it shall be deemed advisable to issue bonds for the purpose or purposes hereinafter named, to wit: For raising money to be used in constructing or maintaining waterworks or a system of sewage, or otherwise promoting the health of said city; for constructing, widening, opening, extending or paving the streets or sidewalks of said city; for opening, constructing or maintaining public parks or promenades; for erecting school houses and maintaining a system of public education in said city; for establishing and maintaining a fire department; for erecting and maintaining buildings for the use of said city; for redemption of bonds outstanding, and for any one or more of said purposes, the City Council are hereby authorized to issue bonds of said municipalities under the seal of the corporation in an amount not to exceed fifteen per centum of the assessed value of the taxable property within the limits of said city, said value to be determined by the latest completed assessment roll of the city, signed by the Mayor, countersigned by the President of the City Council and attested by the Clerk, with interest coupons attached, which shall be signed in like manner; provided, that waterworks bonds shall not be counted as any part of the bonded indebtedness within the said limitation; and provided further, that before said bonds shall be issued the issuance of same shall be approved by an affirmative vote of a majority of the electors voting at an election to be held for that purpose, which election shall be regulated by ordinance as to manner of conducting or certifying same, after the same has been advertised for not less than thirty days in a newspaper published in Zephyrhills, and at which election only resident electors otherwise qualified, who shall have in their own right record title to taxable real estate within the corporate limits and who have owned such lands continuously for at least three months before the date of holding said election, shall be entitled to vote. The bonds herein provided for shall in no case be sold for less than ninety-five per cent. of their par value and shall not bear a greater interest than six per centum per annum." Id. § 37.

"When at any time the City Council shall decide to pave, grade, lay out, open, repair or otherwise improve any street, alley or highway, or any part thereof, or to construct, repair or improve any sewer or drainage pipe or passage, they shall pass a resolution ordering the same to be done, and shall advertise for bids for making said improvements, * * * Whenever any of said improvements shall have been completed and shall have been accepted by the City Council * * *, and after ascertaining the entire cost of the improvement completed, and accepted, the City Council shall assess against the property abutting on the street, alley or highway improved two-thirds of the entire cost of the improvement, one-third against the property abutting on each wise, and the other one-third of the cost thereof shall be borne by the city; but when sewers are laid no greater amount of the cost thereof shall be assessed against the abutting property than two-thirds of the cost of laying a twelve (12") inch sewer." Id. § 42.

"Within five days after the said assessments have been made, or as soon thereafter as the same can be done, unless the same have in the meantime been paid, the City Council shall cause certificates of indebtedness for the amount so assessed to be issued against the abutting property. * * *" Id. § 43.

"In all cases provided in this Act for the paving, grading, laying out, opening, repairing or otherwise improving of any street, alley or highway * * *, the City Council shall by resolution or otherwise assess the entire cost of such improvement against the abutting property if the improvement consisted of the construction or repair of sidewalks or curbs, and shall assess two-thirds of the entire cost of the improvement against the abutting property if the same consisted of any of the other improvements hereinbefore mentioned, the remaining one-third thereof to be paid for by the city. If the assessments so made are not paid within five days after the making thereof, the City Council shall cause certificates of indebtedness to be issued therefor, in the manner and form in this Act specified. * * *" Id. § 46.

Two-thirds of the cost of the improvements made under the McLeod Construction Company contract was to be assessed against the property abutting on the streets improved by the work done. There were certificates issued pursuant to assessments against which improvement bonds were issued in the amount of $74,620.50. When the work called for by the construction contract had been completed the contractor submitted a final estimate and a statement showing an adjusted balance of $82,060.00. Further credits reduced the balance to $81,435.56. The plaintiff, R. E. Crummer & Company, has produced a copy of a purported resolution of the City Council reciting its adoption on August 19, 1927. The defendant City, in its answer, charged that the plaintiff "secured agents to alter the minute books of the City of Zephyrhills and to transplant in the records of the said City a fraudulent resolution authorizing the issuance of said notes in question, so as to make it appear that the said notes were regularly and legally issued and thus deceive the Court", and "The notes are therefore void". From answers of the City to the plaintiff's interrogatories we learn that it was contended that the minutes are not true and official records of the City, and that the signature of the president of the City Council thereon is not genuine. The preamble to the resolution (we shall refer to it as such) authorized the sale to L. B. McLeod of improvement bonds and the credit of the purchase price on the amount owing on the contract the payment of a small amount of cash and the issuance to the contractor of notes of the City in the amount of $10,515.06. Notes in that amount were issued to the contractor for the balance due it. The notes were transferred by the contractor and acquired by the plaintiff from the contractor's assignee. The plaintiff brought suit against the City on three of these notes. The district court denied the City's motion for summary judgment but entered, on motion of the plaintiff, a summary judgment against the defendant for principal and interest of $24,549.06 and attorney's fees of $4,800. The City has appealed.

The City makes two contentions. It urges that the notes are to be regarded as bonds, that they were issued without the approval of an affirmative vote of a majority of the electors voting at an election held for that purpose and hence invalid; and that its motion for a summary judgment should have been granted. Its other contention is that there were issues of fact which should not have been disposed of by a summary judgment.

On the question of the validity of the notes as affected by the provisions of the City's charter requiring approval by electors of bonds to be issued, it is urged by the City that there is a close analogy between the language of the Zephyrhills charter and that of an amendment to the Florida Constitution adopted in 1930 providing that "Counties, Districts or Municipalities of the State of Florida 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." Fla.Const. Art. 9, § 6, F.S.A. It is not contended that the constitutional provision itself applies here but that the decisions of the Florida Supreme Court construing and applying it provide precedents that...