State Ex Rel. Davis v. Ryan

• Decision Date: 15 May 1934
• Citation: 118 Fla. 42,158 So. 62
• Parties: STATE ex rel. DAVIS STATE ex rel. AKE v. RYAN et al. STATE ex rel. AKE v. BROWARD COUNTY PORT AUTHORITY et al.
• Court: Florida Supreme Court

158 So. 62

118 Fla. 42

STATE ex rel. DAVIS STATE ex rel. AKE v. RYAN et al. STATE ex rel. AKE v. BROWARD COUNTY PORT AUTHORITY et al.

Florida Supreme Court

May 15, 1934

On petition for rehearing in each of two mandamus cases.

Rehearing in each case denied.

For former opinions, see 151 So. 416, 718.

COUNSEL Shutts & Bowen, L. S. Bonsteel, and Chas. A Carroll, all of Miami, for relator Davis.

C. L Chancey, of Fort Lauderdale, for relator Ake.

McCune Hiaasen & Fleming, of Fort Lauderdale, for respondents.

OPINION

PER CURIAM.

The arguments on rehearing are predicated mainly upon the suggestion that the court overlooked the contentions for respondents that the bonds in controversy, issued by the municipalities, and by statutory authority assumed by the Port District, are illegal and void ab initio upon the asserted ground that the issue of such bonds by the municipalities violates the provisions of section 10, article 9 of the Florida Constitution that: 'The Legislature shall not authorize any county, city, borough, township or incorporated district to become a stockholder in any company association or corporation, or to obtain or appropriate money for, or to loan its credit to, any corporation, association, institution or individual.' Decisions of this and other courts are cited, which, it is argued, support the contentions made. Much industry, research, and ability of counsel are shown by the briefs which have been of great assistance to the court. The quoted provision of the Constitution is controlling in cases where it is applicable. See Brumby v. City of Clearwater, 108 Fla. 633, 149 So. 203.

The statutes applicable to this case do not authorize any city or district to become a stockholder in any company, association, or corporation, or to obtain or appropriate money for, or to loan its credit to, any corporation, association, institution, or individual; and it is not contended that either of the cities or the district has become a stockholder in any company, association, or corporation. But it is contended that the bonds in controversy are illegal and void because of stated activities of J. W. Young resulting in a tripartite agreement, and because of the agreement itself, entered into June 28, 1926, between the city of Fort Lauderdale, party of the first part, the city of Hollywood, party of the second part, and Hollywood Land & Water Company, the Home Seekers' Realty Company, Hollywood Development & Harbor Company, all Florida corporations, and J. W. Young, an individual, parties of the third part, having reference to the issue of bonds by each of the cities and the use of the proceeds thereof for the construction of a harbor improvement situated in both cities; such harbor being now called Port Everglades. It is argued that in issuing the bonds the cities severally do in effect obtain or appropriate money for, or lend the credit of the cities to, the corporations and the individual who are the parties of the third part to the tripartite agreement of June 28, 1926, thereby in effect violating the above-quoted provision of section 10, article 9 of the Constitution, and rendering the bonds issued by the cities for the harbor improvement illegal and void ab initio.

A purpose of the quoted organic provision is to prohibit the use of public funds in enterprises or projects in which private parties have private rights of ownership or use. There is in the organic provision no purpose to forbid contributions by private parties to an enterprise or project that is wholly public in its nature, ownership, management, and use.

In the cases principally relied on by counsel for respondents the statutes attempted to expressly authorize the use of public funds for enterprises or projects in which private parties had private property rights of ownership or use. See Pleasant Township v. AEtna Life Ins. Co., 138 U.S. 67, 11 S.Ct. 215, 34 L.Ed. 864; Lord v. Denver, 58 Colo. 1, 143 P. 284, L. R. A. 1915B, 306, Ann. Cas. 1916C, 893. Citizens' Sav. & Loan Association v. Topeka, 20 Wall. 655, 22 L.Ed. 455, involved a manufacturing enterprise. In Munroe v. Reeves, 71 Fla. 612, 71 So. 922; State ex rel. Nuveen v. Greer et al., 88 Fla. 249, 102 So. 739, 37 A. L. R. 1298; Brown v. City of Lakeland, 61 Fla. 508, 54 So. 716; Holland v. State, 15 Fla. 455; and, State v. L'Engle, 40 Fla. 392, 24 So. 539, the statutes expressly authorized the bond issues that were impliedly forbidden by the Constitution. See, also, Johnson v. Board, 81 Fla. 503, 88 So. 308; Leonard et al. v. Franklin et al., 84 Fla. 402, 93 So. 688. Here the public harbor project and the bond issues are authorized by statute, and are not expressly or impliedly forbidden by the Constitution. The project is a public and not a merely quasi public improvement.

In this case the statutes do not authorize private parties to participate in the control of the public improvement project, which is a deep-water port harbor connected with the navigable waters of the Atlantic Ocean. Private parties have no private ownership rights in the harbor. The charter acts of the cities authorize the issue of municipal bonds for purposes that fairly include the public harbor project for which the bonds were issued. Illegality in the proceedings taken in issuing the bonds is not shown. The bonds were validated by judicial decrees under the statute before they were sold. The bonds issued by the city of Fort Lauderdale were validated by chapter 12739, Special Acts of 1927. See, also, chapter 12877, Special Acts of 1927. The validating judicial decrees were not appealed from, and are not shown to be invalid, the bonds are not illegal on their face. It is not made to appear as against the statutes, and the court decrees that the municipal bonds were issued to obtain money or credit for private parties. An unlawful use of the proceeds of bonds legally issued and sold may not affect the validity of the bonds in the hands of bona fide holders for value. If property owners and others are benefited by the public project, the municipal bonds issued for the public project are not thereby rendered invalid; the public project being by the statute made a municipal purpose. See Hunter v. Owens, 80 Fla. 812, 86 So. 839; City of Venice v. State, 96 Fla. 527, 118 So. 308; West et al. v. Town of Lake Placid, 97 Fla. 127, 120 So. 361; Whitney v. Hillsborough County et al., 99 Fla. 628, 127 So. 486. Neither the Constitution nor the statute forbids private parties to contribute to the public improvement, no private rights being acquired in the public project by the contributors.

There are averments in the answers of respondents to the effect that J. W. Young and his corporations acquired the bed of Lake Mabel and surrounding lands aggregating approximately 12,000 acres, the greater portion of the land being low, swampy marsh land which required drainage and filling in to make it habitable; that under glowing advertisements the land was subdivided, and sales to the public aggregated $75,000,000; that when the city of Hollywood was created in 1925, J. W. Young and his companies owned 80 per cent. of the land in the city and that J. W. Young and his employees were named commissioners of the city for four years; that J. W. Young and his companies undertook to build a deep-water harbor at Lake Mabel, now known as 'Port Everglades,' at a cost of $15,000,000, and issued and sold to the public $5,000,000 of bonds of the Hollywood Development & Harbor Company; that the project failed; 'that some time prior to the 28th day of June, 1926, the said J. W. Young and his Hollywood Allied Companies for the purpose of relieving himself and his corporations from the burden of defraying the cost of the construction of said deep water harbor at Lake Mabel and for the purpose of fulfilling and carrying out their said scheme and plan so advertised and published as aforesaid for the construction of said deep water harbor at Lake Mabel the purpose of which was by the said J. W. Young and his Hollywood Allied Companies calculated to be of great private gain and financial benefit to the said J. W. Young and his Hollywood Allied Companies, commenced negotiations with the officials of the said Cities of Hollywood and Fort Lauderdale, which last named City is a municipal corporation organized and existing under a special charter in the State of Florida, to-wit, chapter 10552, Special Acts of 1925, with the view of converting the construction of said deep water harbor into a public enterprise, and of inducing the said Cities of Fort Lauderdale and Hollywood of defraying and paying a portion of the costs and expenses of constructing said deep water harbor; that said negotiations resulted in the execution of an agreement bearing date June 28, 1926, commonly known as the tripartite agreement.'

The above and other like and kindred averments do not render illegal the issues of municipal bonds involved in this case, when no illegality is shown in the statutes and the proceedings had thereunder resulting in the bond issue. It is not shown that J. W. Young or his employees acted for either city in issuing the municipal bonds or in making contracts with J. W. Young or his corporations.

The tripartite agreement of June 28, 1926, contains, among others, these statements:

'2. That the construction of a deep water harbor at Lake Mabel is a feasible and practicable project of Statewide--even Nationwide importance, and such construction will be particularly advantageous to the municipalities herein named.

'3. That the contracting parties deem it to the best interests of the public that said harbor be constructed, maintained and operated as a public enterprise.'

This indicates the nature of the project as a public improvement. The agreement...