Duval Cattle Co. v. Hemphill

• Decision Date: 07 July 1930
• Docket Number: No. 5631.,5631.
• Citation: 41 F.2d 433
• Parties: DUVAL CATTLE CO. et al. v. HEMPHILL.
• Court: U.S. Court of Appeals — Fifth Circuit

41 F.2d 433 (1930)

DUVAL CATTLE CO. et al. v. HEMPHILL.

No. 5631.

Circuit Court of Appeals, Fifth Circuit.

June 3, 1930.

Rehearing Denied July 7, 1930.

W. M. Bostwick, Jr., Joseph M. Glick stein, A. W. Cockrell, Jr., and Perse L. Gaskins, all of Jacksonville, Fla., for appellants.

J. Turner Butler and Giles J. Patterson, both of Jacksonville, Fla., for appellee.

Before BRYAN and FOSTER, Circuit Judges, and SIBLEY, District Judge.

BRYAN, Circuit Judge.

This is an appeal from a final decree declaring and foreclosing liens for delinquent drainage taxes on certain lands lying within the Baldwin drainage district. Appellee was appointed receiver of the district in a suit brought against it by the holders of some of its bonds, and brought this as an ancillary suit pursuant to an order of court directing him in behalf of the bondholders to enforce the collection of all unpaid and delinquent drainage taxes levied upon the lands in the district by foreclosure proceedings if necessary, and for that purpose to take possession of the delinquent tax books of the district. Krietmeyer v. Baldwin Drainage District (D. C.) 298 F. 604. The defendants, appellants here, are the Duval Cattle Company a corporation, owner of the lands involved, J. G. Boyd, and several other individuals and corporations claiming interests in the lands as stockholders of the cattle company, or under mortgages that are subordinate to the drainage bonds, unless, as is contended, those bonds are void, either because the statute under which they were issued is unconstitutional, or because its essential provisions had not been complied with in the formation and maintenance of the drainage district.

The statute in question is chapter 6458, which was enacted by the Legislature of Florida in 1913 to provide for the organization and maintenance of drainage districts, for the purpose of reclaiming wet or overflowed lands. The act as amended has been brought forward and appears as section 1451 et seq., Compiled General Laws of 1927. It provides for the formation of a drainage district by the state board of drainage commissioners, or by a majority, either in numbers or in acreage, of the owners of any contiguous body of wet or overflowed lands, or lands subject to overflow, "for the purpose of having such lands reclaimed and protected from the effects of water, for sanitary or agricultural purposes, or when the same may be conducive to the public health, convenience or welfare, or of public utility or benefit." Section 1451.

The initial proceeding prescribed for the creation of a drainage district at the instance of private landowners is a petition, which, after notice, is required to be presented to the circuit judge of the county in which the lands, or the greater portion thereof, are situated. The petition is required to state that the owners of the lands whose names are subscribed to it "are willing to and do obligate and bind the lands owned by them" to pay the drainage taxes which may be assessed. If after a hearing the court be of opinion that the lands described in the petition should not be incorporated into a drainage district, the proceedings are to be dismissed; but the court, if it be of opinion that the proposed drainage district "will be for the advantage of the owners of the real property therein or that the same would be in the interest of the public health, convenience or welfare" (section 1453), shall enter an order declaring the drainage district to be a public corporation of the state. Upon the entry of an order of incorporation, a meeting is to be called of all the owners of land in the district, for the purpose of electing from among their number a board of three supervisors.

Upon being elected, the board of supervisors is to select an engineer whose duty it becomes to make a survey, determine what lands will be improved or reclaimed by drainage, make an estimate of the cost of carrying to completion the plan of reclamation, and submit a written report which after adoption by the board is to be known and designated as "the plan of reclamation." After this plan of reclamation is filed in the clerk's office, the circuit judge who incorporated the district is to appoint commissioners to appraise the lands and assess the benefits that will accrue to each governmental lot, 40-acre tract, or other subdivision according to ownership. Public highways, railroads, and other rights of way are to be assessed according to the increased efficiency and decreased maintenance cost of roadways resulting from the proposed works and improvements. The commissioners are also to make a report of their findings, which, after notice, is required to be submitted to the court which passed upon the original petition. If it appear after a hearing that the estimated cost of construction, according to the plan of reclamation, will be less than the benefits assessed against the lands in the district, it is provided that the court shall enter an order approving and confirming the report of the commissioners. After the list of lands, the report showing the assessed benefits, and the last-mentioned decree and judgment of the court have been filed in the clerk's office, the board of supervisors are required to levy a tax sufficient to pay the total cost of the completion of the proposed plan of reclamation, and in addition 10 per cent. of the total amount for emergencies. The taxes are to be apportioned on each tract of land in proportion to the benefits assessed, and not in excess thereof, and, in case bonds are issued, the interest thereon shall be added to the taxes. The board of supervisors is also required, during each year of the existence of the district, to determine and levy the amount of the annual installments of the total taxes. Drainage taxes are declared to constitute liens, to which only the liens of the state for general state, county, school, and road taxes are paramount, upon all lands against which they are required to be levied. The county tax collector of each county in which the lands of any drainage district are situated is required to collect delinquent as well as current drainage taxes, and the board of supervisors is required to select a treasurer who shall receive and receipt for all drainage taxes so collected. The collection of delinquent drainage taxes may also be enforced in a suit by and in the corporate name of the district; and, if the district fail to bring suit within ninety days after such taxes have become delinquent, the holder of any bond issued by the district is given the right "to bring suit for the collection of delinquent taxes."

The board of supervisors is authorized to apply to the court to amend or change the plan of reclamation, and the procedure, in the event an order of court be granted permitting the change, is the same as is prescribed for the original appraisal of the lands and assessment of benefits. The board of supervisors is also authorized to issue bonds not to exceed 90 per cent. of the total amount of the taxes, and these bonds are required "to show on their face the purposes for which they are issued, and shall be payable out of money derived from the aforesaid taxes." By an amendment adopted in 1923, chapter 9129, it is provided that, if any bond or interest coupon be not paid within sixty days after maturity, a court of competent jurisdiction, on the application of the holder of such overdue bond or interest coupon, may appoint a receiver for the drainage district with authority to collect drainage taxes and to bring suit to foreclose drainage tax liens, provided that, when all overdue bonds and interest have been paid the receiver shall be discharged and the affairs of the district shall again be conducted by its board of supervisors.

The Baldwin drainage district was organized in 1916 in the manner prescribed by chapter 6458. Its outside boundaries take in township 2, south of range 23 east, and townships 2 and 3, south of range 24 east, containing all told, 68,868 acres. The two northern townships are traversed by two railroad lines which extend in a general easterly and westerly direction, but cross each other near the western boundary, and by a third railroad line running north and south which crosses the other two. Because of these several railroad rights of way and crossings, which take up altogether 620 acres, appellants contend that the district is made up of seven tracts of noncontiguous land. The original petition excluded these railroad rights of way and represented that the remaining 68,248 acres, which were included therein, constitute a contiguous body of land, and they were declared to be contiguous by the order of court establishing the drainage district. It was also alleged in the original petition, and declared by the decree of the court, that the drainage and reclamation of this body of land would be for the advantage of the owners of the land, and also conducive to public health, convenience, and welfare, and of public utility and benefit. The total cost of the project was estimated at $304,000, and the total benefits to accrue were estimated at upwards of $2,300,000. After the district was organized, and benefits were assessed, the board of supervisors sold three issues of district bonds. The first issue was for $300,000, the second for $150,000, and the third for $110,000. The second and third issues were found to be necessary because of increases in the cost of construction. It appears from the minutes of a meeting of the landowners held in 1926 that the proceeds from all three bond issues had not been sufficient to reclaim all the lands, and that more canals than were provided for in the plan of reclamation would be necessary to carry off flood waters that accumulated on 4,000 acres in one of the townships.

The bonds are in statutory form, and are now in the hands of subsequent holders for value and...