Rorick v. Board of Com'rs of Everglades Drainage Dist.

• Decision Date: 07 July 1928
• Docket Number: No. 160.,160.
• Citation: 27 F.2d 377
• Parties: RORICK et al. v. BOARD OF COM'RS OF EVERGLADES DRAINAGE DIST.
• Court: U.S. District Court — Northern District of Florida

27 F.2d 377 (1928)

RORICK et al. v. BOARD OF COM'RS OF EVERGLADES DRAINAGE DIST.

No. 160.

District Court, N. D. Florida, at Pensacola.

July 7, 1928.

Murray, Aldrich & Roberts, of New York City, Cooper, Knight, Adair, Cooper & Osborne, of Jacksonville, Fla., and Watson, Pasco & Brown, of Pensacola, Fla., for plaintiffs.

Fred H. Davis, Atty. Gen., and Marvin C. McIntosh, of Tallahassee, Fla., for defendants.

CLAYTON, District Judge.

There are pending before the court two bills by the plaintiffs, one seeking specific performance to compel the delivery of bonds under alleged contract by and between the plaintiffs and the defendants, the board of commissioners of Everglades drainage district. Hearing on motion to dismiss such bill has not been had.

In the other, case No. 160, now under consideration by the court, plaintiffs, as owners of certain of the bonds already issued and outstanding, pray injunction to prevent the averred impairment of their claimed contract under the bonds issued by the defendant drainage district in conformity with division 1, title 7, Rev. Gen. Stats. of Fla. 1920, as amended from time to time, and now being embraced in sections 1160 to 1188, Rev. Gen. Stats. of Fla., and it is insisted that the bonds were, by virtue of section 1182, issued under an alleged irrepealable contract with every holder of any bond or coupon, for the language of the statute is: "The provisions of this article shall constitute an irrepealable contract between the said board and said Everglades drainage district and the holders of any bonds and the coupons thereof, issued pursuant to the provisions hereof." And the plaintiffs urge that an additional equity of their bill is found in the provision in section 1178 of the Revised General Statutes, as amended, the essential part of the text being:

"But nothing herein contained shall be deemed a limitation of the right of the Legislature to authorize additional bonds of said board, payable from drainage taxes: * * * Provided any such additional authority shall be accompanied by the levy and imposition of additional taxes or assessments sufficient to meet the payment of the bonds authorized and interest thereon * * * provided for by a sinking fund as herein required, and such additional bonds shall constitute an obligation of equal dignity with the bonds herein authorized and equally with the bonds herein authorized may be entitled to payment from all drainage taxes then or thereafter imposed * * * without preference to any bonds or series of bonds over any other bonds or series of bonds."

Under section 1183 there was a legislative appropriation from all the moneys of the drainage district for the interest upon the bonds and the principal as the same matured, and also a provision for a sinking fund to be created by the payment annually into such sinking fund of an amount at least equal to 2 per cent. of the amount of all bonds outstanding.

By this section it became the duty of the treasurer, out of the proceeds of the taxes imposed and out of any other moneys in his possession belonging to the drainage district, to pay interest on the bonds, and the principal as the same matured, "which moneys so far as necessary are hereby set apart and appropriated for the purpose," and also it was provided that "there is hereby created a sinking fund for the payment of the * * * said bonds," "and the said board shall set apart and pay into such sinking fund annually out of the taxes levied and imposed by this article, and the other revenue and funds of the said district, at least 2 per cent. of the amount of bonds outstanding" — not merely a sinking fund up to 2 per cent., but a sinking fund of at least 2 per cent., for the retirement of all bonds as they mature.

The prayer is to enjoin the carrying out of chapter 12016, Acts of 1927 of Florida, authorizing the board to issue $20,000,000 additional bonds of the Everglades drainage district, and, specifically, to enjoin the board from issuing the new bonds. The plaintiffs' theory is that they are entitled to the equitable relief prayed for, because, as they allege, the issuance of the bonds under the 1927 act would impair the obligations of the plaintiffs' bonds heretofore issued.

It is not deemed necessary to amplify this statement, nor to refer more extensively to the Florida statutes touching the plan for the drainage of the Everglades territory. Happily for the understanding of the case in its historical and legislative aspect, I have had the pleasure of reading the carefully prepared and excellent opinion rendered by Mr. Justice Whitfield, speaking for the Supreme Court of Florida, in Martin v. Dade Muck Land Co., 116 So. 449. This illuminating deliverance, at once a fine judicial utterance and at the same time a valuable historical document, can be referred to in order to supply any omissions in my statement of the legislative enactments and their historical background.

The cause is submitted upon the defendants' motion to dismiss the bill for the want of equity, and upon the motion of the plaintiffs for interlocutory injunction. Now, coming to the questions raised by the pleadings, the verified bill and the motion to dismiss:

1. The jurisdiction of this court is challenged upon the ground that this is a suit against the state. This cannot be true, for it was aptly said in the Martin Case, supra, that "the Everglades drainage district is a statutory subdivision of the state for special governmental purposes. It embraces a large portion of each of several counties, and the administration of its governmental affairs is wholly distinct from the government of the several counties." And, further, it was there said: "It is competent for the Legislature, as an incident to the formation of a taxing district for governmental purposes, to impose administration duties upon state or other officers to effectuate the objects of the district; there being no express or implied organic provisions to the contrary."

And what is not a suit against the state, just as this case is not such suit, is now well understood and demonstrated in numerous adjudged cases, beginning with Ex parte Young, 209 U. S. 123, 28 S. Ct. 441, 52 L. Ed. 714, 13 L. R. A. (N. S.) 932; 14 Ann. Cas. 764, where it was held that the officers of the state, clothed with some duty with regard to the enforcement of the laws of the state, and who threaten and are about to commence an action, either civil or criminal, to enforce an unconstitutional state statute, may be enjoined from so doing by a federal court. In the instant case the state officers are named, but they are named as constituting the board of commissioners of the Everglades drainage district, a corporate entity, so that the mention of their incidental official status in connection with their functions as a part of the drainage corporation must be treated as in the nature of descriptio personæ, for no state officer functions as a member of the board in behalf of the state in its sovereign capacity.

However, if this were a suit against the officers of the state, it is for the purpose of preventing them from enforcing an enactment or the performance of an act alleged to be injurious to the rights of the plaintiffs and repugnant to the Constitution of the United States, and therefore this suit does not fall within the prohibition of the Eleventh Amendment to the Constitution of the United States. Gunter v. A. C. L. R. R. Co., 200 U. S. 273, loc. cit. 283, 284, 26 S. Ct. 252, 50 L. Ed. 477, and cases there referred to. For it is not now open to debate that even officers of a state may be enjoined by a federal court when about to commence proceedings under an unconstitutional statute; and this principle is not confined to proceedings restraining the enforcement of statutes which as enacted are unconstitutional, but includes confiscatory and therefore unconstitutional action begun or threatened even under a constitutional statute. L. & N. R. R. Co. v. Greene, 244 U. S. 522, 37 S. Ct. 683, 61 L. Ed. 1291, Ann. Cas. 1917E, 97. For illustrative cases having bearing on the one here, see Hopkins v. C. A. College, 221 U. S. 636, 31 S. Ct. 654, 55 L. Ed. 890, 35 L. R. A. (N. S.) 243; I. C. Co. v. Regents (D. C.) 199 F. 509; Phœnix Lumber Co. v. Regents (C. C.) 197 F. 425; Camden Interstate Co. v. Catlettsburg (C. C.) 129 F. 421. This opinion need not be padded with other like cases.

2. It is hardly necessary to say that the state enactment here involved does not require the District Judge to have the assistance of two other judges on the hearing for injunction, for the act does not affect the entire state, nor does it operate against the Governor and other state officers, who exercise the usual and ordinary powers and discharge usual state-wide official duties. Therefore section 266 of the Judicial Code (28 USCA § 380) does not apply, for here, in reality, the defendant is an incorporated minor political subdivision, in the language of the creating act, "to be known and designated as the Everglades drainage district," and therefore three judges are not requisite on this hearing, although the constitutionality of the state statute in a certain particular is drawn into question. To say more on this point would hardly be pardonable, for the question is settled in Ex parte Collins, 48 S. Ct. 585, 72 L. Ed. ___; Smith et al. v. Wilson et al., 273 U. S. 388, 47 S. Ct. 385, 71 L. Ed. 699.

3. Now going on: After the session of the Legislature in 1927, chapter 12016 of the Acts of 1927, the validity of which as against the bondholders, the plaintiffs here, was not drawn into question, but the statute was attacked in the Martin Case as being void for a number of reasons assigned, chiefly upon the ground that the taxpayers' lands were upon an elevated ridge, and not in need of artificial drainage, and could not receive any benefit from the drainage work, and therefore could not be taxed without doing violence to the...