Lee v. Atlantic Coast Line R. Co.

• Decision Date: 02 January 1940
• Citation: 141 Fla. 545,194 So. 252
• Parties: LEE, Comptroller, et al. v. ATLANTIC COAST LINE R. CO.
• Court: Florida Supreme Court

194 So. 252

141 Fla. 545

LEE, Comptroller, et al. v. ATLANTIC COAST LINE R. CO.

Florida Supreme Court, Division A.

January 2, 1940

Rehearing Denied March 9, 1940.

Suit by the Atlantic Coast Line Railroad Company, a corporation against J. M. Lee, as Comptroller of the state of Florida and others contesting the validity of certain special tax school district taxes and certain special tax road district taxes against the plaintiff for the year 1933, wherein Clay Levy and Madison Counties and the Boards of Public Instruction of Clay, Duval and Levy Counties intervened. From four adverse orders, defendants appeal and complainant cross-appeals.

Affirmed in part and in part reversed and remanded, with directions.

BROWN J., dissenting in part. Appeal from Circuit Court, Leon County; E. C. Love, Judge.

COUNSEL

George Couper Gibbs, Atty. Gen., Tyrus A. Norwood, Asst. Atty. Gen., and Keen & Allen, J. Velma Keen, Wm. P. Allen, and A. Frank O'Kelley, Jr., all of Tallahassee, for appellants.

John B. Sutton, of Tampa, and G. A. K. Sutton and Thos. B. Adams, both of Jacksonville, for appellee.

Olin E. Watts and Jennings & Watts, all of Jacksonville, for Board of Public Instruction of Duval County, cross-appellee.

OPINION

BUFORD Justice.

On May 31, 1934, Atlantic Coast Line Railroad Company filed its bill of complaint against J. M. Lee as Comptroller of the State of Florida to contest the validity of certain special tax school district taxes and certain special tax road district taxes against the Railroad property for the year 1933. The bill was afterwards amended in many respects. During the time that the suit has been pending in the Circuit Court there have been settlements between the Railroad Company and the involved districts in many of the counties, and, therefore, the bill of complaint was dismissed as to districts in all counties other than Clay, Duval, Levy and Madison. Clay, Levy and Madison Counties and the Boards of Public Instruction of Clay, Duval and Levy Counties were intervenors in the court below. Motions were interposed to dismiss the bill of complaint and to strike certain parts of the bill of complaint and to strike certain amendments to the bill of complaint.

The Board of Public Instruction of Duval County filed answer and motion to dismiss the bill of complaint.

On June 28, 1938, the Circuit Judge entered separate orders on the various pleadings and on September 7, 1938, after having granted a rehearing to the Board of Public Instruction of Duval County, entered an order granting the relief sought by that Board. The Board of Public Instruction of Duval County was joined as an appellant here solely for the purpose of obviating any question of non-joinder of necessary parties.

The matter is before us on direct appeal and cross appeal. The direct appeal brings for review four orders of the Chancellor of June 28, 1938, while the cross appeal brings for review an order of the Chancellor entered the 7th day of September, 1938, and the appeal is also

'From so much of that certain order and decree made in said cause dated June 28, 1938, and recorded in Chancery Order Book 14 at page 593 of the records of said Circuit Court, as held part of the bonds issued by Special Tax School District 6 of Duval County valid; that is to say, in an amount up to 20% of the tax valuation of property in said district; and as held valid a corresponding part of the complained of debt service levy for said district.

'3. From so much of Paragraph 1 as strikes pages 51-a through 51-f of the bill of complaint as amended, paragraphs 2 and 3, portions of paragraph 4, paragraph 7, paragraph 8, paragraph 10, and paragraph 11, of decree dated June 28, 1938, and recorded in Chancery Order Book 14 at page 593 of the public records of said court.

'4. From paragraphs 3 and 10 of order and decree dated June 28, 1938, entitled 'Decree on Joint and Several Motion of Clay County, Florida, et al. to Strike Certain Parts of the Bill of Complaint and Amendments Thereto', recorded in Chancery Order Book 14, page 595, of said public records.

'5. From Section 1.B, Paragraph 2(1), (2), (3), (4), and Paragraph 5(4), and from Section II.C, paragraphs 4 and 8, of decree entitled 'Decree on Joint and Several Motion as Amended of Levy County, Florida, et al., to Strike Certain Parts of the Bill of Complaint and Amendments Thereto, and for Other Relief', recorded in Chancery Order Book 15, page 23 et seq., of the public records of said court.'

The first order of June 28, 1938, above referred to denied motion to strike the contents of the bill of complaint as shown on page 48 thereof through page 33, and on page 186 through page 191 and on page 196 through page 202 thereof. Then it contained the following:

'It is further ordered, adjudged and decreed in respect to pages 61 and 62 there upon the Defendant's motion to dismiss, as well as the motion of the Intervenor, Board of Public Instruction of Duval County, to dismiss and its answer incorporating such motion, that the same is granted in part and denied in part, viz.:

'That the bond issue of $100,000.00 be and it is hereby declared to be valid to the extent that the same is supported by twenty percent of $179,742.00, which is the sum admitted in the Answer to be the total assessed value of said Special Tax School District No. 6 of Duval County, Florida, on January 1, 1925, to such proportionate extent the tax is invalid.'

Four other orders and decrees were entered, three of which were of the same date as that above referred to and the other was dated September 7, 1938, in which a part of one of the decrees of June 28, a part of which is hereinabove quoted, was modified.

The three other decrees of June 28, 1938, were denominated as follows:

1. Decree on Defendant's Motion to strike certain parts of the bill of complaint and amendments thereto;

2. Decree on joint and several motion of Clay County, Florida, et al., to strike certain parts of the bill of complaint and amendments thereto;

3. Decree on joint and several motion, as amended, of Levy County, Florida, et al., to strike certain parts of the bill of complaint and amendments thereto and for other relief.

These decrees were upon motions as indicated attacking the bill of complaint. (The motions identified the allegations attacked, by reference to pages of the bill of complaint, or to paragraphs of the bill of complaint.) The allegations attacked and the ruling of the Chancellor on the motion applying to the several allegations may be digested as follows:

[141 Fla. 552] Pages 51a-51f, inclusive: Alleged that the improvements made in the several road and bridge districts with the proceeds from the sale of the bonds were detriments rather than benefits to plaintiff. Granted; because Plaintiff, by failing to take appropriate steps when the bonds were issued to show lack of benefits, is now estopped from setting up same.

Pages 51g and 51h: Allege Chapter 15659, Acts of 1931, Ex.Sess., and Chapter 14486, Acts of 1929, Ex.Sess., provide a complete scheme whereby counties and special road and bridge districts will be reimbursed for building state roads, and the bonded indebtedness so incurred will be liquidated by gas taxes; it is thus unnecessary to levy taxes for such debt. Denied; these allegations, connected with the allegations in the Amendment to the Bill of Complaint, make out a prima facie case entitling Plaintiff to relief because it imposes an undue burden on interstate commerce.

Pages 195a-195g, inclusive, 48-51, inclusive, 186, 187, 188, 190, 196-201, inclusive, 201d-201h, inclusive: Allege that property belonging to Plaintiff assessed by the Railway Assessing Board cannot be lawfully taxed in excess of 10 mills for debt service, such levying being contrary to both the State and Federal Constitutions; alleges also the continuance of the present tax levy for debt service will impair the ability of Plaintiff to operate its railroad, and will deprive Plaintiff of its property without due process of law. Denied; these allegations in the amendment to the Bill of Complaint make out a prima facie case entitling Plaintiff to relief because it imposes an undue burden on interstate commerce.

Par. e, Page 197d-197f, incl.: The roads originally constructed with the bonds are a detriment to plaintiff. Taxable values have also decreased, causing more hardship on Plaintiff. Denied; the allegations in the Amendment to the Bill of Complaint make out a prima facie case entitled Plaintiff to relief because it imposes an undue burden on interstate commerce.

Page 201h: Alleges that the excessive revenues in previous years are sufficient to take care of interest and sinking funds and thus it is wholly unnecessary to exceed a levy of 10 mills in any one year for any one district. Granted; the allegations contained therein are immaterial.

Pages 190a and 190b: Allege that the petition for formation of the district was filed and granted on the same day, contrary to sec. 721, C.G.L. The Board of Public Instruction had no jurisdiction to act on such petition. These questions were not presented at the validation proceedings, and thus not settled there. Granted; validation proceedings cured such defects, they being procedural and not constitutional. Plaintiff is now estopped from raising these objections.

Par. a, Page 193a; Par. a, Pages 194a and 194b: Allege that any levy over 5 mills is void according to Art. VII, Sec. 17, Constitution of Florida. Denied; the contract was fixed by bondholders by the terms of said provision as it existed when the bonds were issued.

Par. b Pages 193a and 193b: Alleges that $15,000 bonds were validated under Chapter 6327, Acts of 1911, where it was intended to be under Chapter 6237, Acts of 1911. ...