Rorick v. Board of Com Rs of Everglades Drainage Dist

• Decision Date: 15 May 1939
• Docket Number: No. 554,554
• Citation: 307 U.S. 208,59 S.Ct. 808,83 L.Ed. 1242
• Parties: RORICK et al. v. BOARD OF COM'RS OF EVERGLADES DRAINAGE DIST. et al
• Court: U.S. Supreme Court

307 U.S. 208

59 S.Ct. 808

83 L.Ed. 1242

RORICK et al.

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

No. 554.

Argued March 28, 29, 1939.

Decided May 15, 1939.

Mr. William Roberts, of New York City, for appellants.

Mr. Clarence G. Ashby, of Jacksonville, Fla., for appellee Board of Com'rs of Everglades Drainage Dist.

Messrs. Tyrus A. Norwood and Marvin C. McIntosh, both of Tallahassee, Fla., for appellees Trustees of Internal Improvement Fund of Florida.

Opinion by Mr. Justice FRANKFURTER.

The case is here on appeal under Section 238 of the Judicial Code as amended (28 U.S.C. § 345, 28 U.S.C.A. § 345) to review a decree of a district court of three judges convened under Section 266 of the Judicial Code as amended (28 U.S.C. § 380, 28 U.S.C.A. § 380) denying an interlocutory injunction and dismissing the bill and supplemental bills. The bills challenged the validity of certain Florida statutes as impairments of the obligation of contract between the Board of Commissioners of Everglades Drainage District and the appellants, as holders of some of its outstanding bonds. The decree of the district court was based on its conception of the applicability of Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487, but this and other questions are not now open for consideration if Section 266 does not cover a situation like the present. If there be a jurisdictional barrier here, it binds us though not invoked by the appellees.

The record is singularly obscure. This litigation, which has extended over eight years, is but one phase of a complicated controversy pursued in both state and federal courts.

The bill was filed on May 19, 1931. A supplemental bill was filed July 4, 1931. The prayers of the bills were amended on November 5, 1931. A district court of three judges was convened on November 14, 1931. On September 17, 1932, orders were entered denying a motion to dismiss, and granting an interlocutory injunction conditioned on the filing of a bond for $50,000. Answers were filed in October and November, 1932. The required bond was not given and on February 23, 1933 an order was entered that the interlocutory junction should be vacated. The matter then lay dormant until a second supplemental bill was filed on July 19, 1937. It was not until August 2, 1938, that the order sought here to be reviewed, denying the motion for an interlocutory injunction and dismissing the bill, was made.

The facts will be summarized only to the extent necessary to expose the jurisdictional problem. The Everglades Drainage District (hereafter called District), comprising a large acreage in the southern part of Florida, was established by Chapter 6456, Laws of Florida, Acts of 1913. The administration of the District was entrusted to a Board of Commissioners (hereafter called the Board), a body corporate. The lands were originally part of a grant made by Congress to Florida in 1850 (43 U.S.C.A. § 982—984), whereby Florida undertook to apply the lands and proceeds derived from them to drainage and reclamation purposes. In fulfillment of this obligation Florida, in 1885 (Chapter 610, Laws of Florida, Acts of 1855), vested the lands in trustees of the Internal Improvement Fund (hereafter called Trustees) consisting of designated state officials. Subsequent legislation for the District made numerous changes affecting its financial administration and the relations between the District and the Trustees (Chapters 13633, 14717; 17902, Laws of Florida, 1929, 1931 and 1937). The changes concerned rates of taxes, disposition of their proceeds, procedure in cases of tax delinquency, and authorization of bond issues.

Appellants sued as holders of bonds issued prior to these latter statutes claiming that they impaired obligations created by such bonds as defined by Section 23 of the Act of 1913 which specifically provided that the terms of that Act should constitute 'an irrepealable contract' between bondholders and the District. In substance the bill and the supplemental bills alleged a reduction of the available taxes below those in effect at the time the bonds were issued, an adverse change in the debt service, and a diversion of revenues to purposes other than those required by the Act of 1913. The bills also complained of important changes effected by the later Acts regarding tax delinquencies on the lands in the District. It was alleged that under the earlier Act lands on which taxes were delinquent were to be sold at auction and, for want of bidders for the amount of taxes plus costs, were to be bid off to Trustees who were under a duty to pay for tax certificates as well as the drainage taxes in the future. Violation of contractual rights were alleged in that Trustees had ceased paying for the tax certificates as well as the drainage taxes, and that Section 65 of the 1931 statute had declared that Trustees held the certificates in trust for the District and required them to transfer the certificates to the District. Further violations of the contract were attributed to powers given to the District, after 1913, whereby it was authorized to compromise taxes, to accept bonds for redemption of lands, and to cancel tax liens on lands which came into the ownership of the United States Finally, a claim of impairment of contract was based on changes in the...