State v. City of Miami

Decision Date19 December 1933
Citation152 So. 6,113 Fla. 280
PartiesSTATE et al. v. CITY OF MIAMI.
CourtFlorida Supreme Court

Rehearing Denied Jan. 22, 1934.

En Banc.

Proceedings by the City of Miami against the State and another. From an adverse decree, defendants appeal.

Affirmed. Appeal from Circuit Court, Dade County; H. F Atkinson, Judge.

COUNSEL

F. P Fleming and H. A. Kooman, both of Jacksonville, for appellants.

J. W Watson, Jr., Mitchell D. Price, and Charles W. Zaring, all of Miami, for appellee.

OPINION

DAVIS Chief Justice.

This proceeding was brought by the city of Miami under sections 5106-5112, Comp. Gen. Laws, 3296-3302, Rev. Gen. St., for the validation of certain water revenue certificates proposed to be issued by it under authority of section 3(7) of the Charter of Miami [1] as amended by chapter 16561, Special Acts of 1933, Laws of Florida. The lower court entered a decree confirming and validating such certificates and the state of Florida, statutory defendant below, and Joseph S. Diver, an intervening taxpayer, have prosecuted this their joint appeal, from the validation decree.

The water revenue certificates involved were proposed to be issued under an emergency ordinance designated as No. 1100, adopted by the city commission as such under date of October 2, 1933. The purpose of the issue was to realize moneys to pay for constructing certain additions, replacements, and improvements to the city owned water supply system. This was to be done by making the proposed certificates payable solely from the net revenue of the combined present water supply system and the proposed improvements. It is conceded on the record by all parties that the city's proposal is to issue the certificates without submitting the proposal therefor to the freeholders of Miami for approval under section 6 of article 9 of the Constitution of Florida as amended in 1930.

Section 5106, Comp. Gen. Laws, section 3296, Rev. St. Gen., et seq., supra, provides that any municipality, desiring to incur 'any bonded debt or to issue certificates of indebtedness,' shall have the right, if it deems it expedient, to determine its authority to incur bonded debt, or to issue certificates of indebtedness, and the legality of all proceedings taken or had in connection therewith, by filing a petition against the state of Florida in the circuit court of the county, pursuant to which a full hearing is provided for, at wiich the municipality's authority for incurring such bonded debt, or for issuing such certificates of indebtedness, as a matter of law and fact, may be judicially investigated, and all propositions of controverted law and fact set at rest by a conclusive adjudication as to the validity of bonds, or certificates of indebtedness, prior to their issue by the affected municipality.

At the threshold of the present case, the proposition is suggested by counsel for appellants to the effect that the statutory proceedings under the sections of our statute above referred to are applicable only to bonded debts or certificates of indebtedness which are the legal equivalent of bonds; that, inasmuch as it is contended by the city of Miami in the present case that the proposed 'Water Revenue Certificates' are in no sense evidences of municipal debts or bonds, nor the legal equivalent thereof under the Constitution and laws of this state, if such contention be sustained by this court, it can only result in a dismissal of the present proceeding for want of jurisdiction because the validation statute does not authorize proceedings to validate anything except bonds or certificates of indebtedness. On the other hand, it is suggested by the appellants that, if the proposed 'Water Revenue Certificates' are in law and in fact either 'bonds' or 'certificates of indebtedness' within the purview of sections 5106, Comp. Gen. Laws, et seq., supra, then the decree of validation must be reversed on its merits, because in the lastmentioned circumstance such proposed 'Water Revenue Certificates' would either improse on the city of Miami a debt liability in excess of its maximum debt limit or constitute a bonded debt not created nor authorized by the approving vote of the city's freeholders as provided in the Constitution for the 'issuance' of bonds.

Our conclusion on the proposition of jurisdiction is that the statutory proceedings for validation of bonded debts and certificates of indebtedness authorized by the sections to which reference has hereinbefore been made are broad enough to include every form of proposed bonded debt, as well as every form of proposed certificate of indebtedness, negotiable or nonnegotiable, limited or general, which a county, municipality, taxing district, or other political subdivision may undertake to issue under purported authority of law.

The purpose of the statutory validation proceedings is to provide a forum and a course of legal procedure to which any county, municipality, taxing district, or other political district or subdivision may resort for the purpose of determining whether or not any proposed obligation in the form of a bonded debt, or in the form of a certificate of indebtedness, may be validly issued by it in the form proposed in its ordinance, resolution, or other action taken under the law as the initiatory step for issuance of an obligation of that character. And in every such proceeding it is the intent of the statute that such judicial investigation of the pleaded validation proposal shall be made, that the court may determine therefrom whether or not that which is pleaded as petitioner's proposal is within the legal authority of the petitioner to do, so that, if it be adjudged valid, the validity thereof shall never again be subject to be called in question in any court in this state. See section 5109, Comp. Gen. Laws, section 3299, Rev. Gen. St.

Jurisdictional facts pleaded in good faith constitute the test of jurisdiction. Hutchinson v. Courtney, 86 Fla. 556, 98 So. 582. So whether the proposed form of bonded debt, or the proposed form of certificate of indebtedness, be actually of the character that may be validated in and by the particular validation proceedings taken under the law or not, the appropriate assertion in such judicial proceedings, of the validity of what is involved in a validation petition filed under the statute, coupled with the affirmation of petitioner's proposal to issue bonds or certificates in the form set forth, and under the circumstances narrated in the validation petition, is sufficient to invoke the jurisdiction of the circuit court to investigate and determine, as to all questions of law and fact raised or that may be raised under the pleadings, the legality of what is proposed, whether the proposal itself be ultimately adjudicated to be within the competency of the petitioner's powers or not.

Thus the statute has been held applicable to a proceeding instituted for the validation of time warrants. Hubert v. City of Vero Beach, 93 Fla. 323, 112 So. 52. And on a like principle we hold that the jurisdiction of the circuit court conferred by the validation statute has been properly invoked in a case like the present, where it is made to appear in the the petitioner's validation petition that what are claimed to be legally authorized certificates of indebtedness, although the certificates are of a peculiar, special, or limited character, are the subject of the city's prayer for validation and confirmation.

Turning now to the merits of the case as presented by the issues joined between the appellant Diver, the intervening taxpayer and the city, we find that the facts disclosed by the record are in substance that the city of Miami had long prior to the proposed issuance of the water revenue certificates here brought in controversy constructed for itself by means of a city bond issue a water supply system at a cost of $1,850,000, of which amount $1,745,000 is still unpaid; that the city does not undertake to directly distribute water in the city, but has constructed through a franchise agreement with a private corporation for profit, Miami Water Company, to distribute water to consumers; that under such contract it has been provided that the Miami Water Company should collect for the city from consumers, and pay over to the city, as payment for the water supplied, such surcharges as the city might fix; that it has been further provided that such surcharges shall be no more, however, than may be sufficient to pay operating expenses, interest, amortization, and depreciation on the water supply system constructed and owned by the city; that under the proposal for issuance of the water revenue certificates, herein sought to be validated and confirmed, the city plans to divert and use part of the proceeds of its aforementioned surcharges to pay for needed replacements repairs, improvements, and additions to the water supply system; that this is being done by the city in order to insure its ability to perform its contract with the Miami Water Company, which contract was entered into in the year 1925 and binds the city for the full period of Miami Water Company's thirty years franchise, as the distributor, to deliver to that company, without cost or expense to the distributor therefor, all the water necessary or requisite for, or in connection with, the distribution of water under said company's franchise; that heretofore the amount of the net revenues accruing to the city of Miami from its water supply service has ranged from $62,360 in 1930 to $91,070.34 in 1933; that the present water supply facilities were constructed largely of wooden materials, which are now in an almost complete state of disintegration; that, unless the present decadent lines are replaced with new material sufficient...

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