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

• Citation: 57 F.2d 1048
• Parties: RORICK et al. v. BOARD OF COM'RS OF EVERGLADES DRAINAGE DIST. et al.
• Decision Date: 13 April 1932
• Court: U.S. District Court — Northern District of Florida

57 F.2d 1048 (1932)

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

District Court, N. D. Florida.

April 13, 1932.

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William Roberts, of New York City, and Watson & Pasco & Brown, of Pensacola, Fla., for plaintiffs.

Evans & Mershon, of Miami, Fla., George C. Bedell, of Jacksonville, Fla., Carter & Yonge, of Pensacola, Fla., and H. E. Carter, Asst. Atty. Gen., and Marvin C. McIntosh, of Tallahassee, Fla., for defendants.

Before BRYAN, Circuit Judge, and SHEPPARD and STRUM, District Judges.

STRUM, District Judge.

This is a suit in equity in which bondholders of Everglades drainage district seek injunctive relief against the board of commissioners of said district, the trustees of the internal improvement fund of Florida, and other officers, to restrain the effectuation by those officers of parts of chapter 13633, Laws of Florida, Acts of 1929, and parts of chapter 14717, Acts of 1931, which plaintiffs assail as impairing the obligation of their bond contracts, contrary to the United States Constitution, article 1, § 10, and as denying them due process and equal protection contrary to the Fourteenth Amendment.

Pursuant to the Act of Congress of September 4, 1841, § 8 (43 USCA § 857), Florida received 500,000 acres of land for internal improvements upon her admission to the Union, March 3, 1845. Pursuant to the Swamp Lands Act of September 28, 1850, §§ 1-4 (43 USCA §§ 982-984), Florida has received patents to more than 20,000,000 acres of swamp and overflowed lands. Grants to the state under the latter act were subject to the proviso that such lands and their proceeds should be exclusively applied by the state as far as necessary to the reclamation thereof by means of levees and drains.

By chapter 610, Laws of Florida, approved June 6, 1855, the unsold portions of the internal improvement lands above mentioned, and the swamp and overflowed lands patented under the act of 1850, together with the proceeds of prior sales thereof, were constituted a separate fund known as the internal improvement fund. The governor and four other state officers were thereby constituted, and are still, ex officio statutory trustees of the fund, in whom title to those lands is vested until sold or conveyed under legislative authority.

By chapter 610, Acts of 1855, these trustees are charged with the duty, pursuant to the proviso of the congressional act of 1850, to make such arrangements for the drainage of the lands as is most advantageous to the fund and the settlement and cultivation of the lands. They have authority to sell and convey the lands, and it is their duty to apply the proceeds to the purposes of the fund as may be provided by law. Chapter 610, supra, is still in force. See section 1384 et seq., and sections 1401, 1408, Comp. Gen. Laws Fla. 1927; Trustees Internal Improvement Fund v. Root, 63 Fla. 666, 58 So. 371; Trustees of Internal Imp. Fund v. Root, 59 Fla. 648, 51 So. 535.

Pursuant to the Swamp Lands Act of 1850, supra, one patent known as Everglades patent No. 137 (Hardee v. Horton, 90 Fla. 452, 108 So. 189, 191) was issued to the state of Florida, granting unsurveyed swamp lands of an estimated area of nearly 3,000,000 acres, which lands became a part of the internal improvement fund under chapter 610, supra, and subject to the statutory uses and purpose of that fund. These lands lie in an integrated area on or contiguous to the shores of Lake Okeechobee, reclamation of which lands presented unusual problems peculiar to the locality.

Reclamation by drainage of these and adjacent lands, some held by the trustees of the internal improvement fund under chapter 610, supra, and some vested in private ownership, was undertaken, pursuant to legislative enactment, as a separate enterprise by establishing the Everglades drainage district, so that the limited funds available to the trustees of the internal improvement fund from the sale of the public lands in the Everglades area could be augmented by special assessments upon all lands in the district which were benefited by the drainage improvements (except school lands, see Southern Drainage Dist. v. State, 93 Fla. 672, 112 So. 561), and all revenue anticipated by the issuance of bonds, thus enabling the reclamation work to promptly progress on a scale appropriate to the magnitude of the undertaking.

Following litigation as to earlier legislation, the present Everglades drainage district was established by chapter 6456, Acts of 1913 (section 1530 et seq., Comp. Gen. Laws Fla. 1927), comprising an area of approximately four million acres. Of these approximately one-fifth are now owned by the trustees of the internal improvement fund; the remainder being privately owned (except school lands). The boundaries of the district have been altered and much additional legislation enacted, but the act of 1913 is the genesis of the present district. See Martin v. Dade Muck Land Co., 95 Fla. 530, 116 So. 449, where a comprehensive legislative history of the district to 1927 will be found, prepared for the Supreme Court of Florida by Mr. Justice Whitfield.

Governmental affairs of the district are distinct from the general governmental affairs of the internal improvement fund, as well as from those of the state and the several counties, although management of the affairs of the district was originally imposed, as additional administrative duties, upon the same state officers who were trustees of the internal improvement fund. Those officers until recently composed the board of commissioners of Everglades drainage district. By chapter 13633, Acts of 1929, five civilian landowners in the district were added to the board, and, by chapter 14717, Acts of 1931, the board was constituted exclusively of five landowners in the district.

The questions before the court upon defendants' motions to dismiss the original and supplemental bills of complaint, as amended, and plaintiffs' motion for interlocutory injunction, are whether or not the legislation of 1929 and 1931 here complained of (chapters 13633 and 14717, supra), as well as official action taken or threatened pursuant to that and prior legislation, impairs the obligation of plaintiffs' bond contracts, in the following respects:

First. By diminishing the tax upon which plaintiffs are entitled to rely for the payment of their bonds.

Second. By relieving the board of commissioners of Everglades drainage district of their alleged obligation to pay annually into the sinking fund for the retirement of the district bonds sufficient funds of the district to pay the annual maturities.

Third. By relieving the trustees of the internal improvement fund of the obligation claimed to rest upon them under chapter 7305, Acts of 1917, § 3, to purchase and pay for certificates representing unpaid drainage taxes of the district when there are no other bidders at the tax sales.

Fourth. By authorizing certificates of indebtedness, issued by the board of commissioners of Everglades drainage district to the trustees of the internal improvement fund under section 65 (b) of chapter 14717, to be used in payment of drainage taxes assessed against the public lands in the district owned by said trustees.

Fifth. By authorizing the board of commissioners of the district to receive bonds and interest coupons of the district in redemption of certain tax certificates issued for unpaid drainage taxes of the District.

Sixth. By constituting the board of commissioners of five civilian members instead of the state officers who originally, and when all now outstanding bonds were issued, composed the board.

Chapter 6456, supra, establishing the district (section 1530 et seq., Comp. Gen. Laws Fla. 1927), authorizes the board of commissioners to construct a system of canals, drains, levees, dykes, etc., and to maintain the same, in such manner as the board shall deem advantageous to drain and reclaim the lands in the district.

For the purpose of constructing, completing, and maintaining those works, that act (section 5) directly imposed upon the lands in the district a graduated tax on an acreage basis; the land being zoned for that purpose. By numerous amendments (see section 1534, Comp. Gen. Laws Fla. 1927), the plan of zoning has been altered and the acreage taxes increased from time to time as the bonded debt of the district was increased. Vital changes in this respect were provided in the acts of 1929 and 1931, supra.

By chapter 8412, Acts of 1921 (section 1592, Comp. Gen. Laws Fla. 1927), an annual ad valorem tax of one mill was levied upon all real and personal property in the district, "to be known as a maintenance tax and shall be used for maintenance, repairs, upkeep, and any other general or necessary purpose of the district."

The lands within the district held by the trustees of the internal improvement fund are subject to the acreage taxes above mentioned and all other taxes, including, since 1921, maintenance and ad valorem taxes, and the said trustees of the internal improvement fund, in furtherance of the trust upon which the lands are held, are authorized and empowered to pay the same out of any funds in their possession derived from the sale of lands, or otherwise. (Section 5, chap. 6456, supra, as amended, now section 1534, Comp. Gen. Laws 1927).

Section 6 of the act of 1913, brought forward unaltered as section 1535, Comp. Gen. Laws 1927, provides that "the proceeds arising from the acreage tax levied by this Article shall be used by the said board of Commissioners of Everglades District in the construction and maintenance of such canals, drains, levees, etc., * * * and to the expenses of the board in the conduct of said work and its business generally, and to repay any loans and the interest thereon, and to the creation of a sinking fund for the retirement of the principal of the bonds that the board may issue under the provisions of this Article, and to the payment of the interest...