Bice v. City of Haines City , 142 Fla. 371 ( 1940 )

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] In June, 1939, the City Commission of Haines City adopted a resolution authorizing its City Attorney to foreclose the City's liens acquired for nonpayment of taxes and special assessments on certain parcels of property located within the limits of the City. The appellant as complainant brought this suit to restrain the City Commissioners from carrying out said resolution. He grounds his case on the fact that all said parcels of land on which the City had acquired a lien were affected by and had reverted to the State under Section 9 of Chapter 18296, better known as the Murphy Act, and being so, were not amenable to the City's claim.

There was a motion to dismiss the bill of complaint but at this point, John R. Hill being the owner of a valid outstanding negotiable bond of the City dated July 1, 1920, and maturing July 1, 1931, moved to be permitted to intervene as a party defendant and file his answer to the bill to foreclose. His motion was granted. The intervenor by his answer contends that Section 9 of Chapter 18296 is violative of Section 10, Article I of the Constitution of the United States, and Section 17 of the Bill of Rights, Constitution of Florida. The motion to dismiss the bill of complaint was granted and the answer of the intervenor was sustained. This appeal was prosecuted from both decrees.

The first question urged challenges the validity of Section 9 of Chapter 18296 in that it seeks to divest municipalities of their liens acquired for the nonpayment of city taxes and vest a fee simple title in and to the lands covered thereby without making compensation therefor.

Since the entry of the order appealed from, this Court has in State ex rel Hurner v. Myrtle M. Culbreath, et al., opinion filed October 6, 1939, answered this question contrary to the contention of appellant. Appellees contend that the last cited case does not conclude the question because of the holding of this Court in City of Sanford v. Dial, 104 Fla. 1, 142 So. 233, and like cases, wherein we held that under Section 894, Compiled General Laws of 1927, all liens for State, County and Municipal taxes as distinguished from special assessments were on an equal footing.

We were mindful of this line of cases when we decided Stateex rel. Hurner v. Culbreath, supra, but they do not affect the case at bar. While Section 894, Compiled General Laws of 1927, did have the effect of placing State, County, and Municipal tax liens on the same level, it created no vested right in any of the entities holding them. It was competent for the Legislature to change the status of the liens brought in question and Section 9 of Chapter 18296 accomplished that purpose.

It is next contended that as to the intervenor Section 9 Chapter 18296, is violative of Section 10 of Article I of the Federal Constitution in that it relieves all lands covered thereby from assisting to service his bond contract when all the lands within the corporate limits of the City were pledged for that purpose.

It is true that constitutional validity may be determined by practical operation and effect but we do not think that Section 9 of Chapter 18296 impairs the intervenor's contract. It had the effect of vesting a fee simple title in the State to all lands that had been certificated to the State for nonpayment of taxes more than two years prior to its passage. It is shown that the lands involved in this case had not paid any taxes for many years. They were accordingly a dead asset and were returning nothing to service the intervenor's contract.

Furthermore, the intervenor did not acquire a lien on any lands in the City to secure the payment of his bond. All he acquired under his bond contract was a pledge of the full faith and credit of the City of Haines City and the levy by it of an ad valorem tax to pay his bond. He is in position to enforce this pledge. He does not allege that he has a lien on the taxable property of the City or that the City is devoid of ample means to pay his claim exclusive of the lands brought in question.

It is a well settled principle of law that an Act of the Legislature will not be held in violation of the contract clause of the Federal Constitution unless it operates on the contract involved. Chapter 18296 in no way affects the intervenor's contract as a bondholder. The class of lands that it affects are in the main those on which fictitious values have been attached and by reason of which they have yielded no taxes for any purpose for years. The ultimate purpose of Chapter 18296 was to restore these lands to the tax rolls at their real value and thereby enable them to bear their part of the tax burden.

The intervenor took his bond with knowledge that the Legislature could deal with all tax certificates covered by the Murphy Act in the manner that it did. No bond contract is thereby affected. The bondholder can proceed at any time to enforce an ad valorem levy sufficient to take care of his bonds and as soon as the lands vested in the State under Chapter 18296 are restored to the tax rolls, they will carry their part of the burden. This will improve rather than subtract from his security and the full faith and credit of the City is always present.

We have not overlooked the contention of appellee that Chapter 18290 impairs the ability of Haines City to perform its contracts with creditors in that it strikes out a substantial portion of its security which may be pledged for its obligations. In this contention, it confuses the object of its security. That lies in the full faith and credit of the City rather than in lands that have gone off the tax books for nonpayment of taxes.

In State ex rel. Hurner v. Culbreath, et al., supra, we held that the State's lien for nonpayment of taxes could be made paramount to that of the County, Municipality, Drainage or other taxing district. We further held that the State's lien could be satisfied to the exclusion of the liens of all subordinate taxing districts. We have never held and do not hold here the liens of subordinate taxing districts can be peremptorily cancelled. Some or all of them may vanish because of the paramount lien of the State.

Section 9 of Chapter 18296 applies to lands certified to the State for nonpayment of State and County taxes. It does not apply to special assessments such as drainage taxes imposed on an acreage basis. Liens for the non-payment of such taxes accrue under different statutes; they do not vest in the State and are disposed of under different statutes by different agencies. We express no opinion as to when or under what circumstances such liens may give way to that of the State.

The judgment is reversed.

Reversed.

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