Saunders v. City of Jacksonville

• Decision Date: 02 April 1946
• Citation: 157 Fla. 240,25 So.2d 648
• Parties: SAUNDERS, Tax Collector, et al. v. CITY OF JACKSONVILLE.
• Court: Florida Supreme Court

25 So.2d 648

157 Fla. 240

SAUNDERS, Tax Collector, et al. v. CITY OF JACKSONVILLE.

Florida Supreme Court

April 2, 1946

Rehearing Denied April 24, 1946.

William M Madison and Gov. Hutchinson, both of Jacksonville, for respondent.

ADAMS, Justice.

This litigation was begun by the City of Jacksonville by filing a bill pursuant to Sec. 196.01, Fla.Stat.1941, F.S.A., to enjoin Clay County from collecting an ad valorem tax on the electric light poles and other properties held and used by the City in Clay County to transmit electric power from plaintiff's plant in the City of Jacksonville, located in Duval County, into the adjoining County of Clay.

A motion to dismiss was grounded largely on the theory 'that it affirmatively appears that the said property was used for and only for or as a part of the proprietary activities of the said City of Jacksonville outside of and beyond the limits and without the corporate boundaries of the said City.' This defense presupposes that Chapter 21985, Acts of 1943, F.S.A. § 192.52, and Sec. 192.06, Fla.Stat.1941, F.S.A., is either void or is inapplicable to the facts of this case. The chancellor upheld the bill and filed an able opinion which has been helpful to this Court. We are called upon to review the order upholding the bill under Rule 34 of this Court.

The question for us to decide is whether the legislature is authorized under Article 9, Section 1, Constitution of Florida, to exempt municipally owned property from taxation where the property is located and utilized in its proprietary capacity beyond the corporate limits of the municipality.

The relevant part of Article 16, Section 16, Florida Constitution, provides that the property of all corporations shall be subject to taxation unless the property is held and used exclusively for a municipal purpose.

Article 9, Section 1, Florida Constitution, authorizes the legislature to exempt by law property for municipal purposes. Pursuant to Article 9, Section 1, the Legislature enacted Chapter 21985;

'That the real and personal property of public utilities, owned, operated or controlled by any municipality in the State of Florida situate, lying and being in the county other than the county in which such municipality is located shall not be subject to ad valorem or personal taxes in such county.'

See also Sec 192.06, Fla.Stat.1941, F.S.A.

It is conceded by the City that the properties are being held and used by the City in its proprietary capacity, which narrows the question to whether property so held and used may be for a municipal purpose as contemplated by our Constitution.

One of the latest expressions of this Court on the subject of municipal purpose is to the effect (State ex rel. Harper v. McDavid, 145 Fla. 605, 200 So. 100, 102, 133 A.L.R. 360):

'* * * What constituted a municipal purpose is a legislative question that should not be interfered with by the courts in the absence of a clear abuse of discretion. A municipal purpose is much broader in its scope than it was a generation ago. Under our system of jurisprudence, constitutional validity may be determined by practical operation and effect. Measured by this test, we cannot say that the legislature exceeded its power in pronouncing the properties of the Housing Authority held for a municipal purpose free from all forms of taxation. They are held not for profit, must be restricted to a low income group, and contribute materially to the health morals, safety, and general welfare of the people. They aid materially in reducing the cost of fire prevention and police protection and the Housing Authority is authorized to make annual compensation to the City in lieu of taxes and other services furnished. * * *

'The time was when a municipal purpose was restricted to police protection or such enterprises as were strictly governmental but that concept has been very much expanded and a municipal purpose may now comprehend all activities essential to the health, morals, protection, and welfare of the municipality. City of Fernandina v. State, 143 Fla. 802, 197 So. 454. In State v. City of Tallahassee, 142 Fla. 476, 195 So. 402, we approved the construction of an office building as a proper municipal enterprise and in previous decisions we had approved airports, golf courses, school buildings, and other structures as proper for a city to undertake. * * *'

This case was of sufficient import to gain selection in 133 A.L.R. 360. We also cite with approval our opinion, Marvin v. Housing Authority of Jacksonville, 133 Fla. 590, 183 So. 145.

There is no doubt that the furnishing of electric current is a municipal purpose. See Jacksonville Electric Light Company v. City of Jacksonville et al., 36 Fla. 229, 18 So. 677, 30 L.R.A. 540, 51 Am.St.Rep. 24.

The contention of Clay County then narrows to the claim that the property is not held and used for the benefit of the inhabitants residing within the corporate limits of the City of Jacksonville. This claim is untenable. Article 8, Section 8, our Constitution, gives the legislature power to prescribe the jurisdiction and powers of municipalities and no limitation is found therein which might give aid to the county's claim. The whole scheme and purpose of our municipal law is to render service to the individual in areas where the population is congested. Questions of policy are delegated to the legislature. That body was doubtless well aware of the need for light, heat and power by those areas outside of municipalities. In granting the exemptions it was clearly within its constitutional power and in so doing it obviously encouraged the extensions of these regarded necessities to the people in adjoining areas.

We may assume that the legislature was deeply conscious of the desire and need for this service to the people in the adjoining areas. We are not justified in declaring the act invalid because it might enable the City to compete with private utilities required to pay taxes.

The exemption inures to the property itself when held and used for municipal purposes. The Constitution makes no requirement as to its location. If the property serves a municipal purpose to the residents within Jacksonville, then it likewise serves a municipal purpose to the residents outside of Jacksonville. Its character does not change when the power line traverses the city or county line. See Cooley on Taxation, 3rd Ed., page 247.

Smith v. Housing Authority of City of Daytona Beach, 148 Fla. 195, 3 So.2d 880, is cited to show that the right of exemption is a question of fact. This case went off on the failure to allege ownership in the housing authority. It is not inconsistent with the rule announced in the other housing authority cases cited earlier in this opinion. State ex rel. Burbridge v. St. John, 143 Fla. 544, 197 So. 131, is cited for the county but this opinion was modified (see 143 Fla. 876, 197 So. 549) and in our opinion does not apply to these facts. City of Lakeland v. Amos, 106 Fla. 873, 143 So. 744, is cited by the county. The distinguishing feature is to be found that there we upheld an excise tax levied upon the gross receipts of the plant. We held in effect that it was not the city that enjoyed the exemption but rather the property owned and used by the city.

It is urged that abuses may arise if the City of Jacksonville is allowed to extend its lines tax free and take business from competing tax paying utilities. Our answer, if any is needed, is that the legislature is the arbiter of this question and its judgment under Article 8, Section 8, Constitution, is final unless an abuse of power is shown. Furthermore, until some qualified litigant comes into court and shows a discrimination entitling us to strike down the statute, we prefer not to invalidate the statute or declare it inoperative for in either event it would disrupt the scheme set up by the policy making department of our government and in so doing would impair the service presently being rendered to the people of Clay County for it is to be supposed that the grant of exemption from taxes entered into the schedule of rates granted to residents of Clay County.

It is a controlling factor that the owner of the property has no stockholders, or partners, and any income must necessarily accrue to the general public. See Springfield Gas & Electric Co. v City of Springfield, 292 Ill. 236, 126 N.E. 739, 18 A.L.R. 929; Id., 257 U.S. 66, 42 S.Ct. 24, 66 L.Ed. 131, as cited in Loeb v. City of Jacksonville, 101 Fla. 429, 134 So. 205, 79 A.L.R. 459. If the residents of the area within the city reap all the benefits then not only the county's theory is disproved but the Constitution makes no restrictions as to where the property must be located to enjoy the exemption. The framers of the Constitution intended that property held and used to afford municipal benefits were to benefit all the residents who might have access to them regardless of residence within the area of the city. Article 8, Section 8, makes the legislature the judge of the jurisdiction and powers of the city. If, by being tax free, the residents of Clay County are rewarded by a lower rate, then there is a municipal benefit accruing to them. Reverting to the supposition that the residents of the corporate area alone reap the benefits, it has been held that this would not warrant invalidating the statute. See A. & M. Consolidated Independent School Dist. v. City of Bryan, 143 Tex. 348, 184 S.W.2d 914, 916, wherein it was held that where the claim for exemption was dependent upon the property being used for a public purpose, it was not essential that it be shown to be used as a governmental purpose. In other words, the exemption attached if the property was held and used for the health, comfort and welfare of the...