Williams v. Jones

• Decision Date: 17 December 1975
• Docket Number: Nos. 47434--47436,s. 47434--47436
• Citation: 326 So.2d 425
• Parties: Mary WILLIAMS et al., Appellants, v. John R. JONES, as County Appraiser of Escambia County, Florida, formerly known as Tax Assessor of Escambia County, Florida, et al., Appellees. DUNES MOTEL, INC., a Florida Corporation, et al., Appellants, v. John R. JONES, as County Appraiser of Escambia County, Florida, formerly known as Tax Assessor of Escambia County, Florida, et al., Appellees. John J. LERGENMILLER, Jr., et al., Appellants, v. John R. JONES, as County Appraiser of Escambia County, Florida, formerly known as Tax Assessor of Escambia County, Florida, et al., Appellees.
• Court: Florida Supreme Court

Page 425

326 So.2d 425

Mary WILLIAMS et al., Appellants, v. John R. JONES, as County Appraiser of Escambia County, Florida, formerly known as Tax Assessor of Escambia County, Florida, et al., Appellees.

DUNES MOTEL, INC., a Florida Corporation, et al., Appellants, v. John R. JONES, as County Appraiser of Escambia County, Florida, formerly known as Tax Assessor of Escambia County, Florida, et al., Appellees.

John J. LERGENMILLER, Jr., et al., Appellants, v. John R. JONES, as County Appraiser of Escambia County, Florida, formerly known as Tax Assessor of Escambia County, Florida, et al., Appellees.

Nos. 47434--47436.

Supreme Court of Florida.

Dec. 17, 1975.

Rehearing Denied March 4, 1976.

J. McHenry Jones of Jones, Liberis & Merting, Pensacola, for appellants.

J. B. Hopkins, Bert Lane of Beggs, Lane, Daniel, Gaines & Davis, Jack H. Greenhut, Pensacola, Robert L. Shevin, Atty. Gen., and Larry Levy, Asst. Atty. Gen., for appellees.

SUNDBERG, Justice.

This matter is before us on direct appeal from the Circuit Court of the First Judicial Circuit in and for Escambia County, Florida. We have jurisdiction of the appeal pursuant to Article V, Section 3(b)(1), Florida Constitution, and Rule 2.1, subd. a. (5)(a), Florida Appellate Rules, in that the Circuit Court passed directly upon the validity of Sections 196.001(2), 196.199(6) and 196.199(7), Florida Statutes, by holding that the county appraiser properly assessed certain leasehold interests of the appellants for the three years last past for taxation as real property pursuant to the cited sections. Appellants are lessees of county-owned property from the Santa Rosa Island Authority which was created by Chapter 24,500, Special Laws of Florida 1947. The circuit judge specifically held that Sections 196.001(2), 196.199(6) and 196.199(7) do not violate the equal protection clause of the Florida Constitution or the Fourteenth Amendment of the Constitution of the United States. The sections of the Florida statute in question were enacted as a part of Chapter 71--133, Laws of Florida 1971, commonly referred to as the 'tax reform act'. It should be noted at the outset that notwithstanding the fact that the Division of Statutory Revision and Indexing placed the contents of Section 196.001 at that chapter of the Florida Statutes for 1971, Section 16 of Chapter 71--133, Laws of Florida 1971, provided that Chapter 192, Florida Statutes, was to be amended by adding such new section as Section 192.010. Whereas Chapter 196, Florida Statutes, is entitled 'Exemption', Chapter 192, Florida Statutes, is entitled 'Taxation, General Provisions'.

The cases herein consolidated are representative of twenty-five cases filed in the court below wherein more than 300 taxpayers intervened. ¹ The twenty-five cases were classed so as to embrace all the issues involved and allow for the differences and the particular status of taxpayers. Basically, the taxpayers are divided into classes of commercial and residential leaseholders. The commercial taxpayers are represented by enterprises such as the operation of barber shops, plumbing businesses, beauty shops, laundries, rental cottages or rental units, motels, restaurants and campgrounds. In addition to the constitutional points raised, such commercial taxpayers assert that the operation of their facilities constitutes a governmental or public purpose or function and, accordingly, such leaseholds are Exempt from ad valorem taxation pursuant to Section 196.012(5), Florida Statutes. The main thrust of the appellants' arguments is: (i) that the leasehold interests are a category of personal property which at common law would be classified as a 'chattel real' or form of intangible personal property and, therefore, must be taxed in accordance with the provisions of Chapter 199, Florida Statutes, dealing with taxation of intangible personal property exclusively by the state; (ii) that the taxation of the leasehold interests as real property violates the provisions of Article VII, Section 2 and Section 4, of the Florida Constitution, as being an unreasonable classification under the 'just valuation' mandate of such Article; and (iii) that the taxation of such leaseholds as real property violates the taxpayers' rights to equal protection under the Florida Constitution and the Fourteenth Amendment to the Constitution of the United States. The issues were framed by the appellees' Motions to Dismiss the several Amended Complaints of the appellants. After hearing upon the Motions to Dismiss the trial judge in entering his Order of Dismissal made extensive and well-reasoned findings of fact and conclusions of law.

The appellants, subsequent to the filing of the appellees' brief in this Court, moved to strike portions thereof relating to argument by appellees in response to an asserted attack by the appellants upon the statutes as constituting an impairment of contract rights of the appellants. Appellants contend that the issue was not raised below nor was it assigned as error. From our review of the record it appears clear that the issue was raised in the Complaints as amended and was addressed by the trial court. Be that as it may, whether the appellants concede the point or not, we deem that issue to have been disposed of adverse to the appellants by our opinion in Straughn v. Camp, 293 So.2d 689 (Fla.1974). Accordingly, the Motion to Strike of the appellants is denied.

This is the third occasion in which the taxable status of leaseholds on Santa Rosa Island has been before this Court. See State v. Escambia County, 52 So.2d 125 (Fla.1951), and Straughn v. Camp, supra. The factual background and legislative history concerning the special and general acts establishing the authority for development of Santa Rosa Island and the tax treatment of leaseholders on the Island is aptly set forth in Straughn v. Camp, supra and we deem it unnecessary to reiterate that background here.

The questions presented by the instant appeal essentially are: Does the Legislature have the power constitutionally to treat leasehold interests in public land such as are here involved as real property for ad valorem tax purposes and, secondly, has the Legislature done so through the enactment of the statutory provisions here under attack? We answer both propositions in the affirmative.

As to the power of the Legislature to so legislate, the words of Mr. Justice Terrell on rehearing in the case of Bancroft Inv. Corporation v. City of Jacksonville et al., 157 Fla. 546, 27 So.2d 162 (1946), provide a guiding principle concerning the function of the Court in reviewing the exercise by the Legislature of its taxing power when he stated at page 170 of the opinion:

'. . . We approach it on the premise that this is a democracy in which every parcel of property is expected to bear its due portion of the burden of government, unless exempted by the legislature in the manner provided by Section 1, Article IX of the Constitution. Courts have no more important function than to direct the current of the law in harmony with sound democratic theory.'

In that case the Court, on rehearing, determined that the equitable interest of a purchaser of certain real property in Jacksonville, Florida, from the United States Government under an executory contract for sale was a sufficient interest in real estate to justify levy of ad valorem real estate taxes thereon.

Appellants' assertion that the classification of a leasehold interest in public land as an interest in real estate violates the provisions of Section 2, Article VII, Constitution of Florida, is, we believe, untenable. That section merely provides that all ad valorem taxation shall be at a uniform rate within each taxing unit, subject to certain exceptions with respect to intangible personal property. The predecessor to Article VII, Section 2, was Article IX, Section 1, in the Constitution of 1885. That document required a 'uniform and equal rate of taxation'. The words 'and equal' in the 1885 Constitution have been displaced in our current Constitution with the phrase 'within each taxing unit'. Such revision was simply for the sake of clarity. See commentary to Article VII, Section 2, Constitution of Florida, 26A F.S.A. Consequently, cases construing the former Article IX, Section 1, are relevant to an inquiry under Article VII, Section 2, of our present Constitution. In analyzing the restrictions upon the Legislature imposed by the former constitutional provision, this Court stated in Hayes v. Walker, 54 Fla. 163, 44 So. 747 (1907):

'Classifications for purposes of legislation may be made with reference to similarity of situation, circumstances, requirements, and convenience to best as to serve the public interest. The test as to the validity of classifications for purposes of legislation is good faith, not wisdom.'

The rate of the tax imposed by Section 196.001(2), Florida Statutes, is uniform as to all leaseholds of public property enumerated therein. The section under consideration does not apply non-uniformly in one political subdivision of the State of Florida as opposed to another. In that it applies similarly to all under like conditions, it cannot be said that such classification is arbitrary, unreasonable or unjustly discriminating.

By the same token appellant's attack upon the Legislature's ability to so classify under Article VII, Section 4, Florida Constitution, must fail. Article VII, Section 4, provides as follows:

'By general law regulations shall be prescribed which shall secure a just valuation of all property for ad valorem taxation, provided:

'(a) Agricultural land or land used exclusively for non-commercial recreational purposes may be classified by general law and assessed solely on the basis of character or use.

'(b) Pursuant to general law tangible personal property held for sale as stock in trade and livestock may be valued for taxation at a specified percentage of its value.'

The limitation imposed by the...