Opinion
January 15, 1952. Rehearing Denied March 27, 1952.
Appeal from the Circuit Court for Lake County, T.G. Futch, J.
C.E. Duncan, Tavares, and Bedell Bedell, Jacksonville, for appellants.
Wallace E. Davis, Merton S. Horrell, Orlando, R.P. Hamlin, Tavares, and James G. Horrell, Orlando, for appellees.
It appears by the record in this cause that the Town of Howey in the Hills in Lake County, Florida, was established by Chapter 10675, Special Acts of 1925, Laws of Florida. Pursuant to the authority granted by the Acts, supra, the town issued corporate improvement bonds in the aggregate amount of $300,000.00, which were validated by a final decree of the Circuit Court of Lake County, Florida, on October 25, 1925. The bonds were also validated by Chapter 11521, Special Acts of Extraordinary Session of 1925. The name of the town was changed to Howey in the Hills by Chapter 12882, Special Acts of 1927. Chapter 12883, Special Acts of 1927, slightly reduced the boundaries of the Town of Howey in the Hills. The reduced boundaries did not affect appellees' lands.
On December 10, 1928, the Circuit Court of Lake County entered a judgment adjudicating that certain of the lands of the Florida Fruit Company and other lands involved in the instant suit were excluded from the benefits of the municipal corporation. On April 28, 1932, the Circuit Court of Lake County entered an order validating an issue of refunding bonds in the amount of $269,000.00. The refunding bonds were issued for proper municipal purposes. The decree of validation referred to the previous validating decree of the Circuit Court of Lake County dated October 5, 1925, and Chapter 11521, Special Laws of Florida, Extraordinary Session of 1925.
Chapter 16479, Acts of 1933, Special Laws of Florida, contracted the boundaries of the Town of Howey in the Hills and the lands involved in the instant suit and other lands were excluded from the corporate limits, but these lands were not relieved from any of the town's then existing bond obligations. On October 3, 1939, W.J. Meredith obtained a judgment in the Federal District Court for the Southern District of Florida against the Town of Howey in the Hills. The judgment held that certain of the corporate bonds were issued before and certain of the corporate bonds were issued after the passage of the 1927 Act, supra. The Court further held that Chapter 12883, Acts of 1927, Laws of Florida, were inoperative to relieve the property excluded thereby from taxation for the payment of the bonds issued prior to 1927 and inoperative as to the refunding bonds issued in 1932. The judgment of the Federal District Court commanded the officials to levy and collect taxes to service the bonds. A similar judgment was obtained by the Palmora Company against the town in the same Court on November 24, 1939.
It appears that the town and its officials made levies required by the Federal Court judgments and certain of the appellees and others brought suit in the Circuit Court of Lake County to enjoin the levy and collection of such taxes. Seven of the parcels involved in that suit are likewise involved in the instant suit. On June 25, 1941, the Circuit Court of Lake County entered a final decree enjoining the town from levying or assessing or attempting to collect taxes against the property described until such property shall have been incorporated in the Town of Howey in the Hills. Chapter 22332, Acts of 1943, Special Laws of Florida, authorized the levy and collection of taxes for debt service for the payment of the original bonds and the refunding bonds or judgments on bonded debts of the lands within the town, as defined by Chapter 12883, Special Acts of 1927.
On August 25, 1944, the Town of Howey in the Hills instituted in the Federal District Court for the Southern District of Florida a municipal bankruptcy proceeding, and on November 25, 1944, an interlocutory decree was entered finding that the town had outstanding indebtedness as of May 1, 1944, in the sum of $417,011.07. This finding included the two issues of bonds issued by the town in the year 1925 and the refunding bonds of 1932. The court decreed the plan of composition and ordered the validation proceedings to be completed as to all creditors as early as possible.
On November 27, 1944, the Circuit Court of Lake County entered its final decree validating such refunding bonds. The final validating decree of the refunding bonds obligated the lands referred to in Chapter 22332, supra, whose boundaries were previously defined by Chapter 12883, Acts of 1927.
On August 3, 1945, nineteen plaintiffs-appellees filed in the Circuit Court of Lake County their bill of complaint against the Town of Howey in the Hills and other parties were permitted to intervene, and during the course of the proceedings several substitutions of parties were made. The bill of complaint is framed on three theories: (1) that the plaintiffs-appellees' lands described in the record were never lawfully within the boundaries of the town and they have never received any municipal benefits; (2) that even if plaintiffs' lands were originally within the town, they were excluded by the 1933 Act and were and are commensurately and virtually excluded from benefits of the town and have never been, and cannot be, benefited by the town, and plaintiffs' lands are therefore not taxable for the bonds; (3) and that even if the plaintiffs' lands were originally a part of the town, and if the 1943 Act had the effect of bringing the lands back into the town, nevertheless the lands, owing to extent of territory and from distance, are virtually and commensurately excluded from the benefits of the town, and under sections 171.02-171.03, F.S.A., are entitled to be excluded from the town and forever released from all debts, duties, or liabilities of the town, including the bonds issued by the town. The bill prays for an injunction to restrain defendants from assessing, levying and collecting taxes upon the described property and for cancellation of outstanding tax certificates.
The Town of Howey in the Hills and its officials filed an answer to the bill of complaint in which they set out as defenses: (1) that plaintiffs were benefited by the proceeds of the bonds and were therefore taxable to pay the same; (2) the bonds were issued pursuant to a law and were approved by a court of competent jurisdiction; (3) the taxes were levied on the lands involved pursuant to a judgment entered in the Federal Court; (4) the original bonds and the refunding bond issues were validated as required by law; (5) plaintiffs-appellees did not object to the original bond issue or the refunding bond issue; (6) the plaintiffs did not object to the bankruptcy composition; (7) the plaintiffs are guilty of laches and are estopped by acquiescence; (8) the other defenses set out in the answer are hereinafter set forth.
The Chancellor below sustained a motion to strike on various grounds described portions of the answer, when testimony was taken on the remaining portions thereof and on final hearing the equities of the cause were decided in behalf of the plaintiffs and against the defendants and relief as prayed for was granted. An appeal was perfected to this Court from the final judgment which resulted in a reversal thereof. See Town of Howey-in-the-Hills v. Graessle, 160 Fla. 638, 36 So.2d 619. On the going down of the mandate the stricken answer of the defendants-appellants was amended so as to conform to the opinion of this Court, supra. Additional testimony was taken and the cause was heard for the second time by the Chancellor on its merits, when a final decree was entered for the plaintiffs below permanently enjoining the town and its officials from assessing, levying or collecting taxes on the described lands owned by the plaintiffs and the intervenors. The final decree cancelled of record all tax certificates issued for the nonpayment of taxes by the Town of Howey in the Hills against the described lands and the owners thereof as described in the final decree. The Town of Howey in the Hills and its officials appealed.
It was the view of the able Chancellor below that the following question was decisive of this controversy: "Did the lands involved in this suit, or any of them, or any part of them, receive any benefit from the expenditure of the proceeds derived from the sale of the original bond issue for the payment of which the Town of Howey-in-the-Hills now seeks to tax them?" (Tr. 192.) Several witnesses for the plaintiffs-appellees each testified that the lands of the plaintiffs received no benefits from the Town of Howey in the Hills in the way of streets, sidewalks, street lights, fire hydrants, water, police protection, garbage disposal, etc.
Contradictory evidence adduced by the defendants going to the question of municipal benefits discloses: (1) that property located outside the town within five miles of the Fire Department of the town received a reduced fire insurance rate and all of the property of the plaintiffs was thus benefited; (2) the town and Florida Public Service Company (now Florida Power Company) constructed a transmission line into the town and $24,000.00 of the original bond money was so used; that the electrical distribution system makes available electricity for the several property-owner plaintiffs; (3) the town maintains a water distribution system through the property and plaintiffs could obtain water by applying for the same; (4) the town constructed and now maintains roads into the property sought to be excluded. It is quite true that this Court, under its adjudications, will not interfere with the findings of fact by a Chancellor unless an abuse of discretion has been made to appear.
It appears by the record that the town has fewer than 150 qualified voters. In 1930 it had a population of 338; in 1940 a population of 203, and in 1945 a population of 163. The population, supra, now resides about 50 per cent within the town and the remaining 50 per cent in the excluded area. Plaintiffs lands are principally citrus groves. Houses are located on four of the properties. There are 38 residences within the present town limits and 33 or 34 houses in the excluded area. Since 1945 additional residences have been constructed in the excluded area. The town is a center of the citrus industry which affords the principal means of income for the people of the community. The builtup portion of the town consists of a hotel, packing house, canning plant, post office, a school, store, dwelling houses, water tank, fire station, golf course, airport, bathing beach and fishing camp. It is traversed by State Road No. 456 and is served by a branch of the Atlantic Coast Line Railroad.
Counsel for appellants point out that the Chancellor below applied to the facts in this controversy a rule or principle of law not sustained by our adjudications. The rule as applied by the Chancellor below being: "Did the lands involved in this suit, or any of them, or any portion of them, receive any benefits from the expenditures of the proceeds derived from the sale of the original bonds issued for the payment of which the town of Howey in the Hills now seeks to tax them?" It is contended that the following is the applicable rule as expressed in Town of Largo v. Caraher, Fla., 44 So.2d 84, 86: "* * * lands which `were benefitted or were reasonably susceptible to benefits by the inclusion of the same within the city limits and by the expansion program for which the bond funds were to be expended' might in equity be `assessed upon a just and uniform basis for their proportionate share of the debt.' By this we meant, and now hold, that such lands should be assessed for taxes in accordance with the statutory law and constitutional provisions of this State upon the subject of taxation and in the same manner that all other real property liable to such tax is taxed. * * *" See Town of Largo v. Caraher, Fla., 44 So.2d 84; Allen v. Town of Largo, Fla., 39 So.2d 549; State ex rel. Watson v. City of Holly Hill, Fla., 46 So.2d 498.
It is next contended by counsel for appellants that the Chancellor in entering the final decree failed or omitted to weigh or consider the following items in the record: (1) the bond validating decree of the Circuit Court of Lake County dated October 25, 1925; (2) the Act of the Legislature validating the bonds, being Chapter 11521, Special Acts of 1925, Extraordinary Session; (3) the decree of the Circuit Court of Lake County dated April 28, 1932, which validated refunding bonds in the sum of $269,000.00; (4) the final judgment entered in the Federal District Court for the Southern District of Florida in the case of Meredith v. Howey in the Hills dated October 3, 1939; (5) the final judgment entered in the Federal District Court for the Southern District of Florida in the case of Palmora Company v. Town of Howey in the Hills dated November 24, 1939; (6) the municipal bankruptcy proceedings on the part of the Town of Howey in the Hills dated November 25, 1944; (7) the decree of the Circuit Court of Lake County dated November 27, 1944, validating the refunding bonds pursuant to a decree of the Federal District Court for the Southern District of Florida; (8) plaintiffs are estopped to maintain this suit by judgments and final decrees.
It will be observed that items (1) to (8), inclusive, supra, were placed in the amended answer pursuant to our mandate in Town of Howey-in-the-Hills v. Graessle, supra [ 160 Fla. 638, 36 So.2d 622]. Our ruling admitted these items into evidence and required a consideration thereof on final hearing. Our language is viz.: "* * * the principal matter involved is liability of such lands for taxes for debt service purposes only; that such debt is of approximately twenty-five years' standing; that bankruptcy proceedings have been had wherein the taxable property of such town would be a controlling factor in arriving at a final determination thereof; and further considering that plaintiffs were seeking relief in equity and that it may not be good equity, under the facts and circumstances alleged in the pleadings and the parts of the answer stricken as above quoted, now to relieve plaintiffs of all tax liability for debt purposes and thereby shift said debt onto the lands remaining in the Town * *."
Counsel for appellants contend that the decree appealed from has the effect of (1) invalidating four final decrees as previously entered by the Circuit Court of Lake County involving these municipal bonds; (2) two judgments of the Federal District Court for the Southern District of Florida; (3) holds invalid and void Chapter 10675, Special Acts of 1925, and Chapter 11521, Special Acts of 1925, Extraordinary Session. As reflected by the following language of the final decree, "the Legislature of the State of Florida was without authority to pass the Act of 1943," being Chapter 22332, Acts of 1943.
The decree appealed from is reversed with directions to dismiss the bill of complaint.
SEBRING, C.J., and TERRELL, HOBSON, and MATHEWS, JJ., concur.
DICKINSON, Associate Justice, dissents.
ROBERTS, J., not participating.