State v. City of Miami

• Decision Date: 06 June 1958
• Docket Number: No. 29247,29247
• Citation: 103 So.2d 185
• Court: Florida Supreme Court
• Parties: STATE of Florida, Appellant, v. The CITY OF MIAMI, Florida, Appellee.

Page 185

103 So.2d 185

STATE of Florida, Appellant, v. The CITY OF MIAMI, Florida, Appellee.

No. 29247.

Supreme Court of Florida.

June 6, 1958.

Richard E. Gerstein, Miami, and George Eadie Orr, Miami Beach, for appellant.

William L. Pallot and Vivion B. Rutherford, Miami, and Mitchell, Pershing, Shetterly & Mitchell, New York City, for appellee.

Scruby & Yonge, Orange Park and Ralph A. Marsicano, Tampa, as amicus curiae.

DREW, Justice.

In State v. City of Miami, 146 Fla. 266, 200 So. 535, this Court affirmed a decree of the Circuit Court of Dade County validating municipal bonds issued for the purpose of acquiring and enlarging a system for pumping and purification of water for consumption and distribution to the users thereof. In that opinion, this Court approved the trust indenture under which these bonds were issued. This trust indenture provided, inter alia, for the issuance of additional bonds from time to time and as necessary to pay the cost of acquiring and constructing necessary extensions and improvements of the system. According to the record before us, there have been numerous issues of additional bonds under this provision of the trust agreement, all of which have been validated by the Circuit Court of Dade County.

Under the provisions of the aforesaid trust agreement the City of Miami, by Resolution No. 29193, passed and adopted by the City Commission on July 3, 1957, authorized the issuance of an additional $2,500,000 Water Revenue Bonds, Series of 1957, to be dated as of June 1, 1957, for the purpose of paying the cost of acquiring and constructing necessary extensions and improvements to the waterworks system of the City and extraordinary renewals and replacements. Following the adoption of such resolution, the City instituted these proceedings under Chapter 75, F.S.1957, F.S.A., to validate said bonds. Service was duly had upon all parties, a rule nisi was issued, duly published and made returnable before the trial judge on the 7th of August, 1957. On the 29th of July an amendment was filed to the petition for validation in which it was alleged 'That the property of the waterworks system of the City, the revenues of which are pledged to the payment of said $2,500,000 Water Revenue Bonds Series 1957 and all other bonds issued under the trust indenture as provided therein, is exempt from all taxation under the provisions of the Florida Statutes.'

The state's attorney answered the petition and the amendment denying that the property of the waterworks system of the City of Miami was exempt from all taxation under the Florida Statutes; on the contrary it was averred that by virtue of Chapter 57788, General Laws of Florida, Acts of 1957, which purported to amend Sections 192.06 and 192.52, F.S.1945, F.S.A., a portion of the property of the waterworks system (that portion of the distribution system outside the municipal limits) was subject to taxation. Moreover, the state's attorney alleged that, by virtue of certain provisions of the Home Rule Charter of Dade County, the City of Miami was deprived of the exclusive right to operate a waterworks system in the City under the terms and provisions of the trust indenture aforesaid, and, further that by virtue of such Home Rule Charter said City was unable to comply with the provisions of the trust indenture and particularly certain sections thereof which were described in the answer, but which need not be detailed here.

Obviously for the purpose of determining the Home Rule Charter question and the question of taxability of the system outside the City in the validation proceedings, a stipulation was entered into by the City and the state's attorney making those municipalities which lie adjacent to the territorial limits of the City of Miami and which receive their water supply from it, as well as the County of Dade and its Board of County Commissioners, parties defendant to said action. The amendment bringing in new parties was allowed by order of the circuit judge and thereafter answers were filed by or decrees pro confesso entered against each of said parties.

The decree appealed from not only decrees said bonds to be valid and binding obligations of the City, but in addition thereto finds and adjudges:

'(7) That the Trust Indenture is a valid and binding contract of the City of Miami duly entered into pursuant to law and all of the provisions of the Trust Indenture are valid and binding obligations and agreements of the City, and the provisions of the Home Rule Charter of Dade County, which was ratified by a majority of the qualified electors of the County voting thereon at the election held May 21, 1957, and became effective on July 20, 1957, applicable to the ownership or operation of a waterworks system in the City of Miami do not impair the power and right of the City of Miami to issue said $2,500,000 City of Miami Water Revenue Bonds Series 1957 under and subject to the provisions of the Trust Indenture or render the City of Miami unable to comply with any or all of the provisions of the Trust Indenture.

'(8) That under the provisions of said Home Rule Charter the County is not authorized or permitted to acquire all or any part of said waterworks system of the City or take any action affecting the operation thereof except upon provision being made by the County for the payment of all bonds issued and outstanding under the Trust Indenture in accordance with their terms.

'(9) That all of the property of the waterworks system of the City of Miami is held and used by the City exclusively for municipal purposes and is exempt from all taxation under the laws of the State of Florida.'

The briefs present for our consideration three propositions, as follows:

'I.

'Do the provisions of the Home Rule Charter of Dade County, applicable to the ownership or operation of a waterworks system in the City of Miami, impair the power and right of the City to issue $2,500,000 City of Miami Water Revenue Bonds, Series 1957, under and subject to the provisions of the Trust Indenture securing the Water Revenue Bonds of the City, or render the City of Miami unable to comply with any or all of the provisions of the Trust Indenture?

'II.

'Is Dade County authorized or permitted under the provisions of the Home Rule Charter to acquire all or any part of the waterworks system of the City or take any action affecting the operation thereof, except upon provisions being made by the County for the payment of all bonds issued and outstanding under the Trust Indenture in accordance with their terms?

'III.

'Is the property of the waterworks system of the City of Miami held and used to supply consumers outside of the City for a profit exempt from all taxation under the laws of the State of Florida?'

The first question presented was properly raised for consideration in this validation proceeding. It goes directly to the question of the power to issue the bonds and the proceedings taken in connection therewith. See Thompson v. Town of Frostproof, infra.

In its answer the County of Dade alleged:

'(3) That these respondents say that the petitioner is entitled to an appropriate final decree validating and confirming the bonds described in the petition for validation, subject, however, to the provisions of Article VIII, Section 11, of the Florida Constitution (F.S.A.), and the Home Rule Charter of Dade County. That the Board of County Commissioners, as the legislative and governing body of Dade County under the Florida Constitution and Home Rule Charter, has not yet exercised the powers vested in it in respect to any water supply system operated by a municipality, and until such power and authority is exercised, the municipalities within Dade County may issue bonds and extend or expand existing water supply systems in accordance with their charters, the laws of Florida and the State Constitution, subject only to the provisions of Article VIII, Section 11, and the Home Rule Charter. * * *'

The decree appealed from upholds the position asserted by the County in paragraph 7 heretofore quoted. Our examination of the record in this cause and of the applicable provisions of the Constitution and laws of this State in effect at the time of the issue and validation of said bonds impels us to the conclusion that in the disposition of this proposition the trial court was correct. While the Board of County Commissioners of Dade County under the Constitution of Florida and the Home Rule Charter may, pursuant to the provisions and in accordance with the requirements of said laws, exercise certain powers over municipalities of Dade County and any water supply system operated by any municipality therein, such power has no effect until...