Kathleen Citrus Land Co. v. City of Lakeland

• Decision Date: 13 June 1936
• Citation: 124 Fla. 659,169 So. 356
• Parties: KATHLEEN CITRUS LAND CO. v. CITY OF LAKELAND et al.
• Court: Florida Supreme Court

169 So. 356

124 Fla. 659

KATHLEEN CITRUS LAND CO. v. CITY OF LAKELAND et al.

Florida Supreme Court

June 13, 1936

Rehearing Denied July 21, 1936.

En Banc.

Suit by the Kathleen Citrus Land Company against the City of Lakeland and others. From an adverse order, complainant appeals.

Reversed and remanded with directions.

BROWN J., dissenting. Appeal from Circuit Court, Polk County; W. J Barker, Judge.

COUNSEL

Wm. K Love, of Lakeland, for appellant.

Carver & Langston, of Lakeland, for appellee.

Peter O. Knight, of Tampa, Francis P. Fleming, of Jacksonville, Allen Clements, Jim Clements, and J. A. Franklin, all of Fort Myers, Fred R. Wilson, of Sanford, Murray Sams, of De Land, E. Noble Calhoun, of St. Augustine, Sumter Leitner, of Arcadia, Ernest E. Mason, of Pensacola, Ralph A. Marsicano, of Tampa, W. G. Vaughn, of Melbourne, Leon J. C. Harton, of Daytona Beach, J. M. Austin, of Leesburg, J. W. Watson, Jr., of Miami, Wm. M. Madison, of Jacksonville, Russell Snow, of Cocoa, E. O. Denison, of Fort Pierce, Thomas W. Butler, of Punta Gorda, R. A. McGeachy, of Milton, and W. L. Long and W. H. Nollman, both of Sebring, as amici curiae.

OPINION

ELLIS Presiding Justice.

This is an appeal from an order dismissing a bill of complaint exhibited in the circuit court for Polk county by Kathleen Citrus Land Company, a Florida corporation, doing business in Lakeland, Fla., the record owner in fee simple of lands in the city of Lakeland and a taxpayer of ad valorem taxes levied and assessed by the city thereon, against the city, the mayor, commissioner, city comptroller, city treasurer, and city clerk, the name of each such officer being given in full.

The purpose of the bill is to restrain temporarily and permanently the city and its named officials from issuing 'sewer revenue debentures' under the provisions of an ordinance theretofore adopted by the city commissioners, and hereinafter more particularly described, and from issuing such debentures under the provisions of chapter 17118, Laws of Florida Acts 1935, without the approval of the proposed debt by the freeholders of the city in accordance with the provisions of section 6, article 9, of the Constitution of Florida, as amended in 1930.

The order from which the appeal was taken was made upon a motion by the defendants to dismiss the bill. The motion admits the allegations of the bill well pleaded. Fla. Chancery Act (Ann.) McCarthy, p. 81, § 33, and annotations; City of Jacksonville v. Shaffer, 107 Fla. 363, 144 So. 892; Yates v. St. Johns Beach Development Co., 118 Fla. 788, 160 So. 197.

As no answer was filed in this case, the court on motion to dismiss will consider only the facts alleged in the bill, but nothing dehors the bill. Chancery Act, supra, p. 82 note.

If therefore the bill states any ground of equitable relief, the motion should have been denied. See authorities cited above.

The complainant is a corporation, but it is a person in law and a resident and citizen of the city of Lakeland within the meaning of laws defining the jurisdiction of courts or otherwise relating to citizens if the purpose of the law renders it applicable. See 14 C.J. 66, 67.

This court has held that a citizen taxpayer may have a right to maintain a suit to enjoin the execution of illegal contracts involving payments from a public fund to which the citizen taxpayer is a contributor. See Hathaway v. Munroe, 97 Fla. 28, 119 So. 149.

This court has also announced the doctrine that when authority to bring a suit to suppress a nuisance is properly conferred upon a private citizen the suit is in effect one instituted in behalf of the public and in which the public is the real complainant to the same extent as though the suit were brought by the Attorney General, language of Mr. Justice Strum in the case of Pompano Horse Club v. State, 93 Fla. 415, 111 So. 801, 52 A.L.R. 51.

It is difficult to conceive of a more reprehensible dereliction of official duty than the affirmative act of misappropriating public funds or the exercise of arbitrary power in the matter of taxation contrary to constitutional or statutory inhibitions. Such conduct is a renunciation of official obligation, the usurpation of authority. Taxation is an attribute of sovereignty and requires the consent of the governed through duly accredited representatives. It can be exercised only pursuant to a valid statute containing definite limitations. A tax is not a debt in the ordinary sense. It is not predicated on contract. It is a burden imposed by the sovereign power through duly accredited representatives for the support of the government. It is inherent in the sovereign power and may be exercised even to the point of destroying the commercial or use value of the thing on which it is laid. See Reynolds v. Florida C. & P. Ry. Co., 42 Fla. 387, 28 So. 861, affirmed in 183 U.S. 471, 22 S.Ct. 176, 46 L.Ed. 283; Atlantic C. L. R. R. Co. v. Lakeland, 94 Fla. 347, 115 So. 669; Flood v. State ex rel. Homeland Co., 95 Fla. 1003, 117 So. 385; St. Lucie Estates, Inc., v. Ashley, 105 Fla. 534, 141 So. 738; Van Deman & Lewis Co. v. Rast (D.C.) 214 F. 827; 61 C.J. 76; 26 R.C.L. 26.

A burden directly or indirectly imposed upon persons or property for the support of governmental activities is an exercise of the taxing power. 61 C.J. 68; 26 R.C.L. 13, 267, and authorities cited in the notes; Union Bank v. Hill, 3 Cold. (Tenn.) 325, 327; Columbia Gaslight Co. v. Mobley, 139 S.C. 107, 137 S.E. 211.

The power to levy a tax therefore is one of the essential attributes of sovereignty and is inherent in and necessary to the existence of every government. McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316, 4 L.Ed. 579.

It follows therefore from the nature and quality of the sovereign power of taxation that it should be exercised carefully, wisely, and clearly within the limitations of the power which may be vested in a governmental agency.

The city of Lakeland, which was organized under the laws of Florida, particularly chapter 10754, Sp. Acts 1925, undertook through its duly constituted officers acting as they supposed under the provisions of chapter 17118, Laws of Florida Acts 1935, to enact an ordinance by its city commission proposing the construction of a sewerage system as an extension to the sanitary sewerage system which was then owned and operated by the city. The ordinance was adopted in Marcy, 1936, and provides for the construction of the sewerage system extension at an estimated cost of $176,365, which it was proposed to secure by the issuing of 'sewer revenue debentures' in the sum of $115,000 maturing serially from 1937 to 1967, inclusive, that sum to be supplemented by a proposed grant of public money from the United States Government. It was proposed that the debentures should be paid only from a sinking fund in which there should be set aside in approximately equal monthly installments out of the revenues and income derived from the operation of the sanitary sewerage system as so extended, after the provision for the payment of all operating costs, such sums as should be sufficient for the payment of the interest on and principal of the debentures as the same should respectively become due.

Under the provisions of the ordinance, the payment of the debentures and the accruing interest thereon are to be secured by a pledge of an exclusive first lien upon all revenues set aside in the sinking fund and not to be payable from nor to be a charge upon any funds other than the revenues so pledged to the payment of the debentures. The ordinance provides that no tax liability should be imposed 'upon any real or personal property in the City of Lakeland,' nor should the obligation 'constitute a debt' against the city. The ordinance declares the 'project' to be expedient and necessary in the interest of 'public health and welfare'; that the 'project' would cover an area not now served by a similar convenience. The amount to become due on the debentures by way of principal or interest which latter should be evidenced by coupons should be payable at the treasurer's office in Lakeland or at a place in New York at the option of the holder of the debenture or coupon.

A form of the proposed debenture is set out in the ordinance and contains a promise on the part of the city to pay the bearer or registered owner of the debenture the amount stated in the obligation 'solely from the sinking fund provided therefor' and not otherwise.

The proposed written obligation recites that the requirements of the Constitution and statutes of the state of Florida have been complied with as well as those of the ordinance in the matter of issuing the obligation.

'The debentures' are to be signed in the name of the city under its official seal. Lengthy provisions are recited in the ordinance for the keeping of books, the registration of the 'debentures,' the signing and complete execution of the evidences of debt, and the creation of a sinking fund from the operation of the sanitary sewerage system of the city. It is provided that from the proceeds of the sale of the 'debentures' a deposit is to be made in the sinking fund of an amount representing the accrued interest to the date of sale and amount of interest which shall become due during the period of the construction of the 'project.' The ordinance provides how the 'project' is to be operated. 'Reasonable rates' for the use of or in connection with the sewerage system are to be charged. The city or any department, agency, or instrumentality thereof may use the system for which the city will be charged 'the reasonable value of the facilities or services.'

In case of default in the payment of principal or interest on any 'debentures' the holders of 20 per centum in principal of...