City of Fernandina v. State , 143 Fla. 802 ( 1940 )

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] In November, 1939, the City Commission of Fernandina approved an ordinance submitting to the freeholders of the city the proposition of whether or not it should issue bonds for the purpose of funding its floating indebtedness, such indebtedness being for money borrowed pursuant to provisions of the city charter and represented by short-term notes.

The election was held and the issuance of bonds in the sum of $50,000 was approved. The city filed its petition to validate to which the State attorney answered challenging the validity of the bonds on the ground first that the indebtedness was not incurred for a lawful municipal purpose; second, Chapter 19822, special Acts of 1939, under which the bonded indebtedness is proposed to be incurred, is unconstitutional and void; and third, Sections 3008 and 3009 C. G. L. of 1927, also relied on by the City as authority for the bonds, has no application to this case. On final hearing, the chancellor rejected the validation and dismissed the petition. The City appealed from that decree.

The chancellor found that all proceedings relating to calling and holding the election were regular and that the bonds were lawfully approved. He also found that $25,000 of the indebtedness proposed to be funded was borrowed to pay a debt incurred under a contract with O.H. Anderson whereby the city agreed to pay him certain sums for services rendered in bringing about the location of two, pulp and paper mills in the city. It is shown that the contract with Anderson was regular, that the services were fully performed and that the amount stated was paid him for them. No question as to reasonableness of the amount paid was ever raised.

The sole question here turns on that of whether or not the City was authorized to make such a contract.

Appellee contends that this question should be answered in the negative and relies on Sections 5 and 10, Article IX, of the Constitution of Florida to support his contention. Section 10 inhibits the Legislature from authorizing any city to become a stockholder in or from loaning its credit to any corporation or association. Section 5 inhibits counties and cities from imposing taxes for other than county or municipal purposes.

We find nothing in the contract or the facts of the case that violates Section 10 as the City in no sense becomes a stockholder in, nor does it loan its credit to or in any way appropriate money to the credit of the corporation which constructed the pulp mill. It is not shown that any inducement to the location of the pulp mills within the city other than natural advantages was offered, and certainly this could not be construed as loaning its credit to or taking stock in such an enterprise.

We next approach the question of whether or not the payment of a fee to Mr. Anderson for inducing the pulp mills to be located within the city was a municipal purpose of the use of the City's funds for such a purpose as contemplated by Section 5 of the Constitution. The question of what constitutes a municipal purpose is not static. It should be determined as of the time the Constitution is construed rather than as to what was so considered at the time of its adoption.

Section 7 of the city charter (Chapter 8949, Acts of 1921) as amended by Chapter 18521, Acts of 1937, among other things authorizes the City of Fernandina to do all things necessary and proper for the safety, health, convenience and general welfare of its inhabitants. And to exercise all other powers of local self government. For these purposes the City is authorized to borrow not exceeding $75,000 in addition to any other sums it may be authorized to borrow. The sum being refunded was borrowed for these purposes.

This provision of the city charter is much like the general welfare clause of the Federal Constitution which has been expanded by interpretation so much in recent years. Chapter 19822, Acts of 1939, authorizes the city to issue bonds to fund any floating indebtedness incurred under its charter. The bonds in question were approved to fund the amount borrowed to settle the Anderson contract including a like amount that was borrowed for other purposes.

It therefore appears that the city commission, the Legislature and the people of Fernandina considered the expenditure of the funds in question as being for a municipal purpose. This Court has approved expenditures by the municipality for advertising purposes, golf courses, city office building, air base and in Smith v. Daffin, et al.,115 Fla. 418, 155 So. 658; and again in Smith v. Jackson County,129 Fla. 787, 176 So. 858, we approved a contract very similar in many aspects to the one brought in question. In view of this support for the instant contract, we would not be authorized to strike it down unless clearly shown to be outside the pale of the Constitution.

The fact of what constitutes a municipal purpose is a much broader one than it was when the Constitution was adopted, at which time police protection was the primary service extended by the municipality. The provision of the city charter quoted and relied on was designed to give the city commission some latitude in determining such purposes and so long as the causes selected are shown to be in the reasonable purview of the Constitution they should be upheld.

It certainly cannot be disputed that attention to the economic welfare is one of the main concerns of the modern city. State, Federal, and local governments all recognize this and so long as such experiments are within reason and warranted by legislative fiat, it is not within the power of this Court to strike them down because it subscribes to a different economic theory or a different code of municipal morals. Even if in the making of such experiments the city picks up a "hot potato," it is not for this Court to undo it for reasons of policy.

In our view the experiment challenged was warranted by the city charter. Locating the two pulp mills within the city is shown to have given employment to more than one thousand laborers and in other respects contributed to the economic welfare of the city. There is no charge of fraud or waste or that the amount paid was not a reasonable compensation for the service rendered.

Other questions urged have been examined, but are found to be without merit. The judgment below is therefore reversed.

Reversed.

WHITFIELD, BUFORD, CHAPMAN and THOMAS, J. J., concur.

BROWN, J., dissents.