State v. City of Miami

• Decision Date: 25 February 1941
• Citation: 146 Fla. 266,200 So. 535
• Parties: STATE et al. v. CITY OF MIAMI.
• Court: Florida Supreme Court

200 So. 535

146 Fla. 266

STATE et al. v. CITY OF MIAMI.

Florida Supreme Court

February 25, 1941

Rehearing Denied March 8, 1941.

En Banc.

Action by the City of Miami against the State of Florida for validation of water revenue bonds, wherein R. C. Gardner intervened. From a decree validating and confirming the bonds, the State of Florida and R. C. Gardner appeal.

Judgment affirmed. Appeal from Circuit Court, Dade County; Paul D. Barns, Judge.

COUNSEL

G. A Worley, of Miami, for appellant State of Florida.

Aronovitz & Goldstein, of Miami, for R. C. Gardner, intervenor.

Lewis Twyman, J. W. Watson, Jr., and Sidney S. Hoehl, all of Miami for appellee.

OPINION

THOMAS Justice.

The system whereby water is furnished to consumers of Miami and environs may be said to consist of two parts: One for the pumpage, purification and preparation of the commodity for consumption, the other for distribution of it to users through pipes. The former is owned by the city, the latter by private corporations. It was to combine them and bring the entire production and dispensation under the ownership, hence regulation and control, of the city that the laws were passed by the state legislature, the resolution adopted by the city commission and the litigation instituted which gave rise to this appeal, the matter being presented to us on the challenge of the state and an intervenor to the chancellor's decree validating water revenue bonds of the aggregate par value of eight million dollars.

The final order, based on the petition for validation, the answers and the testimony relevant to these pleadings, was comprehensive in the findings and conclusions reached after an obviously careful study of the issues involved. A digest of the decree at the outset may be helpful in understanding the points to be determined in this opinion.

Facts found by the chancellor were that the city's part of the water system was acquired at a cost approximating three million five hundred thousand dollars, paid by general bonds of more than two million dollars, water revenue certificates payable from the net income of the system, in the sum of eight hundred ninety thousand dollars and grants from the United States of America of something more than four hundred thousand dollars. The water revenue certificates were confirmed by the circuit court and one of the decrees of validation was appealed to Supreme Court and affirmed. State and Diver v. City of Miami, 113 Fla. 280, 152 So. 6. He decided that the combination of the production and distribution systems was necessary to the efficient supply of water to the territory served by the constantly growing city. Under the authority of chapters 19980 and 19982 of the Laws of Florida, Special Acts of 1939, a resolution, numbered 16592, was adopted by the city commission providing for consolidation of the two plants by buying the ones privately owned and paying therefor from the proceeds of an issue of water revenue bonds to be retired only from the money received for the sale of water. In accordance with the provisions of this resolution, a contract was executed by the city and the corporations for the purchase by the former of the property of the latter, and this contract was approved by the voters at an election held for the purpose. The court was convinced by the appraisals that the actual value of the system to be bought exceeded the agreed purchase price. The judge determined further that the money received from the sale of the bonds was to be applied to: (1) Refunding outstanding revenue certificates ($367,000); (2) buying the distribution system ($4,500,000); and (3) paying the net cost of betterments subsequent to August 1, 1938, purchasing accounts receivable, defraying expenses incident to the transfer and the like ($3,133,000). The resolution provides for a trust agreement setting out the conditions governing issuance of the bonds, and the rates to be charged to insure funds for the ultimate payment of the indebtedness. The gross income from the distribution system for a period of five years was analyzed by the court and the anticipated net income declared sufficient to retire the indebtedness as outlined in the trust agreement.

The court concluded as a matter of law that the bonds and the execution of the trust agreement were authorized by the laws and the resolution and that the bonds were not of the character contemplated by Section 6 of Article IX of the Constitution of Florida, as amended in 1930, not being a general debt of the city, but payable only from the income to be received from the combined water plant.

The water revenue bonds were validated and confirmed, and on the appeal from the decree the matter reaches this court.

Inasmuch as the statutes we have mentioned were the source of the authority of the city to make the purchase, it seems appropriate that we consider first the strength of the attacks made upon them by the appellants. It is insisted that they cannot be valid because of defects in the notice given of their introduction in the legislature. This notice appeared in a newspaper published in the city of Miami, and in substance follows:

'Notice is hereby given by the commission of the City of Miami that it intends to offer local or special legislation for a law to authorize the City of Miami to * * * purchase, extend * * * acquire, any one or more, or any combination of, the following: * * * water works systems, including new water lines * * *; and to issue bonds for the purpose of * * * acquiring or purchase of the above municipal projects; providing how bonds may be payable either from taxes or exclusively from the revenue of such municipal improvement; providing for the procedure for the issuance of such bonds with or without an election * * * and * * * their validation; providing that the powers conferred by the act are supplemental and in addition to the powers now enjoyed and vested in the City of Miami', etc.

There is no need to reiterate what has been announced by this court in its many opinions, such as State ex rel. Landis, Atty Gen., v. Reardon, 114 Fla. 755, 154 So. 868, with reference to the purpose of the applicable section of the constitution, Sec. 21, Art. III, as amended November 6, 1928, and we shall confine our observations to the specific objections to the notice involved in the instant case. It is said by the appellants that a reader of it was not advised at what session of the legislature an effort would be made to secure the passage of the legislation however, the notice appeared for the first time on the 22nd day of March, 1939, in which year by the constitution a regular session of the legislature was held, and it was at this regular session that the statutes were introduced and passed. Further, this notice is criticized because it contains no statement that proposed legislation would be introduced 'in a legislature of the State of Florida' and it is urged that because the city of Miami has the power to enact laws that the reader could not determine but that the intention was to have an ordinance passed by the city commission of that municipality. This objection is obviously unsound. A study of the introduction and conclusion of that part of the publication which we have quoted would give the information unmistakably that it was the city itself that intended to obtain legislative authority to authorize it to do certain things and that this authority, if given, should be in addition to the powers then enjoyed by it. Also, the notice bore the name of an individual described as 'City Attorney.' An elaboration on the import of the item seems futile, and from our study of it we are at a loss to see how any one able to read could have been misled. Certainly he would have been charged with the knowledge that a session of the legislature of...