Chamberlain v. City of Tampa , 40 Fla. 74 ( 1898 )

Carter, J.:

I. Courts of equity have jurisdiction to restrain municipal corporations and their officers from making unauthorized appropriations, or otherwise illegally and wrongfully disposing of the corporate funds to the injury of property holders and tax-payers in the corporation, and a bill for this purpose is properly brought by an individual tax-payer on behalf of himself and other tax-payers in the municipality. 2 Dillon on Municipal •Corporations, §§9.14-922; Cooley on Taxation, pp. 764-7; 10 Am. & Eng. Ency. of Law, 962; 1 Pomeroy Eq. Jur. §260.

II. Section 7, Chapter 4086, act of 1891, provides: “The city council of the said city of Tampa shall at their second meeting to be held in July, in each year, or as soon thereafter as may be practicable, ascertain and determine the amount of money to be raised by tax for general municipal purposes, which shall not be more than ten mills on the dollar .on the real estate and personal property in the city of Tampa. The city council may levy an additional tax of not more than five mills for waterworks and fire protection; and shall further levy an additional tax for a sufficient amount to meet the accruing interest on any bonds which the said city shall have heretofore issued, or shall hereafter issue, in accordance with the law.” Under its authority the city of Tampa in 1893 levied taxes to its utmost limit for general municipal purposes, and for water works and fire protection, viz: ten mills for the former, and five for the latter; and, in addition, three mills for a special purpose, vis: to meet accruing interest on bonds. The section quoted required the council to levy this additional tax, not at a definitely fixed rate, “but for a sufficient amount to meet the accruing- interest on any bonds,” &c. This levy was required for the specific purpose of meeting accruing interest on bonds, and so long as the city has outstanding bonds upon which interest falls due at stated intervals, the city has no power to divert the money raised by such levy to other purposes than the payment of such interest. Aside from this, to sanction the proposed action of the city council in the present case, would be to permit the city to do indirectly that which it is forbidden by its charter to do directly, that is, to collect by direct taxation more than fifteen mills for general municipal purposes, and for rvater works and fire protection. It had already levied and collected every dollar that it was authorized to collect during the fiscal year for these purposes, and it possessed no power to enforce any further contributions to those funds from its ■property holders by direct taxation. To permit it to transfer from another fund enforced for a special purpose, an amount for the benefit of those named would be indirectly authorizing the city to collect and appropriate taxes for general purposes and for water works and fire protection in excess of fifteen mills. The injury to taxpayers from such a course is obvious. With $2,300 to the credit of the interest fund, the tax for this fund for 1894 would have been greatly reduced from that of the previous year. The Legislature never intended that the special special levy for interest on ¡bonds should be applied to general purposes, or for water works or fire protection. It never intended to permit taxes for those last named purposes, in excess of fifteen mills, to be levied under the guise of a special interest fund. It appears from appellees’ answer that the authorized levy was entirely insufficient to meet the expenditures of the city, and that vital interests of the city in matters of sanitation and fire protection were suffering for lack of necessary funds. These critical periods will often occur in corporate as well as individual affairs wherever necessary expenditures exceed possible incomes, but they can furnish no excuse for a municipal corporation to divert its revenues from their legitimate purpose to another not authorized by law, however beneficial or meritorious. The city council is invested with a large discretion in administering the city’s financial affairs, but this discretion does not authorize them to divert taxes, set aside by its charter for a special purpose, to other purposes, so long as the special purpose exists, without .legislative sanction. State, ex rel. Barton, v. Hopkins, 12 Wash. 602, 41 Pac. Rep. 906.

The appellees, in the answer filed in the court below, insist that the $2,300 sought to be transferred to the santitation and the water works and fire department funds was a surplus in a special fund, contemplated by section 10, Chapter 3951, act of 1889, and for that reason properly transferable by the council. 'The appellant’s counsel contends that this act was repealed by Chapter 3950, act of 1889, and Chapter 4084, act of 1891. The act referred to is quoted in full in City of Tampa v. Salomonson, 35 Fla. 446, 17 South. Rep. 581, and it was there held that neither of the acts referred to repealed it. This act created a board of public works for the city of Tampa, with certain powers and duties, but if was given no authority whatever over any taxes levied for the interest fund, nor was it invested with any duties regarding any outstanding bonds, or interest due or to become due thereon. Its duties related principally to public improvements and by section 9 of the act it was required to submit to the council on or before a fixed day in each year an itemized estimate of the amount of money necessary and advisable to spend in the execution of its duties for the ensuing year, giving estimates of expenditures, specifying for what department required, as streets, sewers, public buildings, water works, fire department, &c. The next section (io) is, in part, as follows: “It shall be the duty of the mayor and city council, in their annual levy of taxes, to make such levy as in their judgment shall be necessary and advisable for expenditures under the direction of the board of public works, and the amount so levied or raised from taxes, bonds or other sources, shall be collected and carried to the credit" of the board of public works, and shall not be diverted from said board, or be used by the mayor and city council for any other purpose, but the same shall remain as a separate fund in the hands of the treasurer of the city * * * The board shall not divert the tax levy of the mayor and city council from the purposes or departments for which it was levied; provided, however, that whenever the mayor, city council and board of public works find that there is a surplus in any of the special funds created by the tax levy or otherwise, the city council shall then have the power to carry the amount of said surplus into the general fund, to be expended for the best interests of the city.” A cursory reading of this section will show that it deals solely with those funds which are under the control of the board of public works, and which have been levied or especially set apart to this board, or some department under its control. It has no reference to the interest fund, because this fund was not to be under the control of this board. It does not, therefore, confer authority upon the city council to transfer a surplus in the special interest fund to the general fund, but only the surplus of those special funds which are under the control of the board of public works.

The decree dissolving the injunction is reversed, and the cause remanded for further proceedings consistent with equity practice and this opinion.