Weinberger v. Board of Public Instruction , 93 Fla. 470 ( 1927 )

Specific provisions of the State Constitution definitely regulate the issue of bonds by Special Tax School Districts. Sec. 17 Art. 12, Constitution, as amended in 1924, page 484, Acts of 1923. In statutory judicial proceedings in which the organic provisions were not considered, bonds were validated to be issued by a Special Tax School District. The statute provides that the decree validating the bonds "shall be forever conclusive as to the validity of said bonds against the taxing district and against all taxpayers and citizens thereof; and the validity of said bonds shall never be called in question in any Court of this State" (Sec. 3299, Rev. Gen. Stats.); and the decree dated July 20, 1926, adjudicated that the bonds are "validated and confirmed in all respects and that said bonds are the duly authorized and legally binding obligation of" the special tax school district. The question whether the bonds as proposed to be issued, violate the definitely applicable mandatory provisions of the Constitution, was not presented, considered or decided in the validation proceedings.

This appeal is from a decree dismissing a bill brought September 9, 1926, to enjoin the issuance and sale of the validated bonds on the ground that the bonds violate not a statute but the provisions of the Constitution under which alone they can legally be issued. Section 17, Art. 12 of the Constitution, as amended in 1924, specifically provides that "any bonds issued hereunder shall become payable within thirty years from the date of issuance in annual installments which shall commence not more than three years after the date of issue. Each annual installment shall be not less than three per cent of the total amount of the issue." The bonds as proposed to be issued plainly violate the above organic commands in that they are not made payable in annual installments, but are specifically made payable in periods of three and five years.

Section 580, Revised General Statutes, 1920, provides that "the Board of Public Instruction shall determine by resolution to be entered in its records" * * * "the time when the principal and interest of such bonds shall be due and when payable;" but this provision is superseded and modified by the above quoted organic amendment so as to require the board to determine by resolution to be entered in its records, that the bonds shall become payable in annual installments commencing not more than three years after the date of issue, each annual installment to be not less than three per cent of the total issue.

The organic provisions are effective and controlling, and modify or supersede any conflicting statutory provisions in the premises contained in Section 580 or other sections of the Revised General Statutes of 1920. Perry v. Consolidated Special Tax School Dist. No. 4, Hillsborough County, 89 Fla. 271, 103 So.2d Rep. 639. Where a regulation is prescribed by the Constitution, it is in effect a prohibition against a conflicting statutory regulation. State ex rel. Murphy v. Barnes, 24 Fla. 29, 3 So.2d Rep. 433; State ex rel. Church v. Yeates, 74 Fla. 509, 77 So.2d Rep. 262; Leonard v. Franklin, 84 Fla. 402, 93 So.2d Rep. 688; State ex rel. Bours v. L'Engle, 40 Fla. 392, 24 So.2d Rep. 539; Brown v. City of Lakeland, 61 Fla. 508, 54 So.2d Rep. 716; Munroe v. Reeves,71 Fla. 612, 71 So.2d Rep. 922.

Bonds to be paid by taxation, can be issued only as authorized by law, and when the issue of such bonds is regulated by specific provisions of the Constitution, such provisions cannot be waived; and bonds issued in violation of the organic commands can have no authorized existence and are necessarily void if the Constitution controls.

Where the Constitution contains provisions regulating the issue of bonds by governmental subdivision or agencies of the State, such provisions are the controlling law. Bonds issued in violation of such organic provisions are unauthorized and void and cannot be authorized or rendered valid by legislative enactment; and the same rule applies to judicial validations of bond issues when the organic provisions are not duly adjudicated. But where the validation is by competent judicial procedure and the particular organic provisions were duly adjudicated to have been not violated by the particular bond issue, such bonds if sold and delivered to innocent parties for fair value upon the faith of the adjudication of validity, and are otherwise valid, may be protected as property by the Constitution (State ex rel. Nuveen v. Greer, 88 Fla. 249, 102 So.2d Rep. 739, 37 A. L. R. 1298; Pennington v. Van, ___ S.D. ___, 204 N.W. Rep. 17, text 19), though the adjudication, if found to be erroneous, may not be binding as a precedent in future adjudications on the same organic provisions. The previous decision may be overruled, but that would not affect the rights duly acquired while the prior decision was effective. Christopher v. Mungen, 61 Fla. 513, 55 So.2d Rep. 273; Stateex rel. Nuveen v. Greer, 88 Fla. 249, 102 So.2d 739, 37 A. L. R. 1298.

Statutes validating governmental bond issues may cure statutory or administrative procedural defects (Givens v. Hillsborough County, 46 Fla. 502, 35 So.2d Rep. 88; Rogers v. City of Keokuk, 154 U.S. 546, 14 Sup. Ct. Rep. 1162; Grenada County Sup'rs v. Brogden, 112 U.S. 261, 5 Ct. Rep. 125; 15 C. J. 627; Charlotte Harbor N. R. Co. v. Welles, 260 U.S. 8, 43 Sup. Ct. Rep. 3); and statutory judicial proceedings validating bond issues may, if so provided by statute or valid rule of procedure, operate to estop the same parties from further litigation as to all matters, organic or otherwise, that were duly adjudicated in the validating proceedings, as well as all statutory or other non-organic procedural defects and irregularities that reasonably should have been litigated in the validation proceedings. Thompson v. Frostproof, 89 Fla. 92, 103 So.2d Rep. 118; Lyle v. State ex rel. Caldwell, 69 Fla. 97, 67 So.2d Rep. 574. See also Peacock v. Feaster, 52 Fla. 565, 42 So.2d Rep. 889; 34 C. J. 818; Floersheim v. Board of Com'rs of Harding County, 28 New Mexico 330, 212 Pac. Rep. 451;131 Ga. 629; 168 P. 609; Bartlesville v. Holm, 40 Okla. 467, 139 Pac. Rep. 273, 9 A. L. R. 627, 94 U.S. 351; 168 U.S. 1; 34 C. J. 1874. But such validating statutes cannot make valid, bonds that are void because issued in violation of the specific commands or requirements of the Constitution; and any provision of a statute to the effect that bonds which have been judicially validated shall be conclusively valid and not subject to judicial controversy, cannot preclude or estop proper parties from invoking appropriate judicial inquiries as to whether the bonds violate definitely applicable provisions of the controlling organic law, when the constitutional question has not been adjudicated. Likewise the validity of bonds as against definite organic requirements is not conclusively established by judicial adjudications when the organic provisions alleged to have been violated were not considered and duly adjudicated in the judicial proceedings. Otherwise the Constitution would not be the dominant law, and by indirection the controlling organic law would be rendered impotent and circumvented by legislative or judicial action, when both the legislative and the judicial power are subject to the Constitution as the supreme law that must be made effective, notwithstanding any enactment or adjudication to the contrary. See Quaker City Nat. Bank v. Nolan County, 59 Fed. Rep. 660; 37 A. L. R. 1310 Notes; 9. A. L. R. 634 Notes. Even if one taxpayer be estopped because of being an actual party to an adjudication, other taxpayers may not be estopped when a constitutional command is violated in issuing bonds to be paid by taxation.

In this case the taxpayer did not intervene as he could have done under the statute, therefore he was not an actual party to the validation proceedings; and the constitutional question here presented was not in any way an issue in the validation proceedings.

Even if the tax-payer, who at most was only constructively a party to the validation proceedings, is bound by the validation decree as to all non-organic questions that were presented or that should have been presented for adjudication in the validation decree, such taxpayer is not estopped to invoke appropriate judicial inquiry as to organic questions that affect the validity of the bonds and that were not presented in the validation proceedings; and even if one taxpayer becomes an actual party to such validating proceedings and is estopped by the adjudication of an organic question, other taxpayers not actual parties may not be estopped by the adjudication, when the bonds have not been sold and delivered, and the bonds in fact violate specific commands of the Constitution, there being no other provisions of law or of procedure for testing the constitutionality of the bonds. Otherwise the organic commands would be futile, and statutes or rules of procedure would operate to sanction a violation of organic law when such statutes and rules should be construed and applied to enforce the Constitution as the paramount law. No question of rights of innocent holders for value is involved, where the bonds have not been sold and delivered. And bonds that have been sold are subject to organic defects that have not been adjudicated. State ex rel. Nuveen v. Greer,88 Fla. 249, 102 So.2d Rep. 739, 37 A. L. R. 1298.

What is said in an opinion upon a point not raised or properly involved cannot control in a subsequent case where the very point is presented for decision. Union Tank Line Co. v. Wright, 249 U.S. 275, 39 Sup. Ct. Rep. 276. General words used in a judicial opinion should be construed with such limitations as are required by a reference to the facts in the case. Smitz v. Wright, 64 Fla. 485, text 486, 60 So.2d Rep. 225; concurring opinion ex parte Ernest Amos, 112 So. 289, filed January 11, 1927; 177 N.Y. 106; 101 Am. St. Rep. 722; 15 Fla. 2d 412.

In Thompson v. Frostproof, 89 Fla. 92, 103 So.2d Rep. 118, the Constitution did not specifically regulate the issuing of the municipal bonds that were in that case authorized bystatute for municipal purposes; and the statement in the opinion "that the purpose of a decree validating bonds is to put in repose any question of law or fact that may be raised affecting the validity of such bonds," must be interpreted in the light of the issues and facts presented (German Alliance Ins. Co. v. Home Water Supply Co., 226 U.S. 220, 33 Supt. Ct. Rep. 32), and as including only such matters as may be cured by statutory validation or that may be foreclosed by adjudication in such a proceeding, and as not including matters controlled by specific organic provisions that cannot be affected by statute, that cannot be waived and that cannot be foreclosed by judicial action when not embraced in the issues adjudicated. This rule of interpretation is particularly applicable to statutory bond validating proceedings in which the only necessary parties are the governmental subdivision or agency that proposes to issue bonds and the State through the State Attorney. Any other interpretation in such a case would operate to deprive persons of organic property right without due process of law and in violation of the commands and requirements of the Constitution. There can be no statutory or judicial estoppel to challenge the validity or governmental bonds that are void because they violate specific provisions of the Constitution when the matter has not been adjudicated and cannot be waived. The courts are not authorized to hold that though the bonds are not issued as the Constitution requires, yet as the Constitution controls, the bonds should be made effective according to controlling organic law and not according to their own terms. The Constitution does not operate to change the terms of bonds issued in violation of the Constitution, so as to make constructively valid, provisions in the bonds that are in law and in fact invalid; but the Constitution does operate to render invalid, bonds that are issued in violation of the commands or requirements of the organic law. The authority to issue the particular bonds in this case is conferred and regulated by the Constitution, and as the bonds are not issued according to the requirements of the Constitution, there is no authority to issue, and bonds issued without authority are void. To exercise delegated authority in violation of its terms is to exercise authority not conferred. See Barnum v. Okolona, 148 U.S. 393, 13 Sup. Ct. Rep. 638; Norton v. Dyersburg, 127 U.S. 160, 8 Sup. Ct. Rep. 1111; Dixon County v. Field, 111 U.S. 83, 4 Sup. Ct. Rep. 315; Lake County v. Graham, 130 U.S. 674, 9 Sup. Ct. Rep. 654; L. R. A. 1915A 947, Note.

Corporate ratification cannot supply a want of statutory power. Lewis v. City of Shreveport, 108 U.S. 282, 2 Sup. Ct. Rep. 634. Statutory validation cannot cure a violation of constitutional provisions in issuing bonds. Quaker City Nat. Bank v. Nolan County, 59 Fed. Rep. 660; Quaker City Nat. Bank v. Nolan County, 66 Fed. Rep. 883; Quaker City Nat. Bank v. Nolan County, 14 C. C. A. 157; Cheney v. Jones, 14 Fla. 587, text 614; State ex rel. Nuveen v. Greer, 88 Fla. 249, text 271, 102 So.2d Rep. 739, text 747, 37 A. L. R. 1298, text 1310. See also Katzenberger v. Aberdeen, 121 U.S. 172, 7 Sup. Ct. Rep. 947; Citizens' Savings L. Ass'n of Cleveland v. Topeka, 20 Wall. (U.S.) 655; McPherson v. Foster, 43 Iowa 48; 15 C. J. 626.

Where bonds are issued in violation of the Constitution there is no estoppel to assert the invalidity of the bonds. City of Parkersburg v. Brown, 106 U.S. 487, 1 Sup. Ct. Rep. 442; 15 C. J. 626; 37 A. L. R. 1310 Notes. The bonds in this case have not been sold and delivered. No rights of innocent holders for value are involved.

The Constitution provides that "all courts in this State shall be open, so that every person for any injury done him in his lands, goods, person or reputation shall have remedy by due course of law." Sec. 4, Declaration of Rights; Getzen v. Sumter County, 89 Fla. 45, 103 So.2d Rep. 104.

Remedy by due course of law contemplates an observance of organic rights.

The citizen taxpayers within a Special Tax School District have a direct constitutional right and interest in the issue of bonds by the district to be paid by taxation, which right and interest cannot be curtailed or impaired by legislative or judicial regulations; and it is the right and privilege if not also the duty of such citizen tax-payers to maintain suits to enforce the mandates and requirements of the Constitution that specifically regulate the issue of bonds by the district. If any statutory provision or judicial rule or action in effect deprives a taxpayer of his rights in the premises, so as to violate the organic provisions, such encroaching statutory or judicial action is by the superior force of the Constitution rendered inoperative; and it is the duty of the Courts by appropriate procedure and due course of law to effectuate the paramount organic law.

The statutes provide special proceedings for validating bonds in which the governmental subdivision or agency and the State by the State Attorney are the only necessary parties, citizens and taxpayers being given notice by publication and a right to intervene; and Section 3299, Revised General Statutes, purports to estop the subdivision and all taxpayers and citizens thereof from thereafter challenging in the courts the validity of bonds that are validated by decree, and makes no provision for litigating the rights of taxpayers by anyone else. Thestatute literally interpreted purports to foreclose organic rights of resident citizens by mere publication without personal service, and to preclude the assertion of organic rights that cannot be waived and that have not been adjudicated. If the statute is interpreted as controlled by the Constitution it may be made effective, and this should be done if it reasonably can be. Davis v. Florida Power Co., 64 Fla. 246, 60 So.2d Rep. 759; Langford v. Odom, 77 Fla. 282, 81 So.2d Rep. 469; In re Seven Barrels of Wine, 79 Fla. 1, 83 So.2d Rep. 627; Linder v. United States, 288 U.S. 5, 45 Sup. Ct. Rep. 446; Dahnke-Walter Milling Co. v. Bondurant, 257 U.S. 262, 42 Sup. Ct. Rep. 106; Burr v. Florida East Coast R. Co.,77 Fla. 259, 81 So.2d Rep. 464; State ex rel. Young v. Duval County, 76 Fla. 180, 79 So.2d Rep. 692; Florida East Coast R. Co. v. State, 79 Fla. 66, 83 So.2d Rep. 708; Missouri Pac. R. Co. v. Boone, 270 U.S. 466, 46 Sup. Ct. Rep. 341.

The Circuit Courts of this State have original jurisdiction in "cases in equity," and "cases at law," "and of such other matters as the Legislature may provide." Section 11, Article V. Jurisdiction of "cases" has reference to controversies "presented in such form, with adverse litigants, that the judicial power is capable of acting upon them, and pronouncing and carrying into effect a judgment between the parties, and does not extend to the determination of abstract questions or issues framed for the purpose of invoking the advice of the Court without real parties or a real case." Liberty Warehouse Co. v. Grannis, ___ U.S. ___, 47 Sup. Ct. Rep. 282, decided January 3rd, 1927. See also Postum Cereal Co. v. California Fig Nut Co., ___ U.S. ___, 47 Sup. Ct. Rep. 284, decided January 3rd, 1927; Keller v. Potomac Electric Power Co., 261 U.S. 428, 43 Sup. Ct. Rep. 445; Muskrat v. United States, 219 U.S. 346, 31 Sup. Ct. Rep. 250. See also Fidelity N. B. v. Swoke, U.S. Sup. Ct. April 11, 1927.

If in authorizing the Legislature to confer upon the Circuit Courts jurisdiction of "other matters," the Constitution contemplates functions or controversies other than judicial "cases," it does not contemplate that judicial "cases" shall be litigated and adjudicated or effectuated contrary to controlling provisions and principles of fundamental law.

Whatever may be the "other matters" of jurisdiction which the Legislature may confer upon the Circuit Courts (see Stateex rel. Young v. Duval County, 76 Fla. 180, 79 So.2d Rep. 692; Pugh v. Bowden, 54 Fla. 302, 45 So.2d Rep. 499; Phillips v. Town of Altamonte Springs, Fla., 110 So. 460;56 Fla. 243,) and whatever may be the governing rules of procedure and adjudication, other than the requirement of due process of law, in exercising jurisdiction in such "other matters," "cases in equity" and "cases at law" within the meaning of the Constitution are those wherein adversary parties present justiciable issues for judicial adjudication according to controlling provisions and principles of fundamental law. Adjudications in "cases in equity" and in "cases at law" have legal attributes of finality and enforceability resulting from an exercise of the judicial power of the State that may not be incident to determinations in proceedings that are special in their nature and that are not according to the essential requirements of a judicially litigated and adjudicated "case," with adversary parties and justiciable issues.

In this case the validating proceedings showed that the bonds were to be issued in violation of the specific mandate of the Constitution as to when they shall be payable, and the State Attorney, for the State, the only defendant, merely referred to the administrative steps taken and stated that he knew of "no reason why the said bonds should not be validated and confirmed as prayed." This does not appear to be a compliance with the statute (Sec. 3297, Rev. Gen. Stats. 1920), so that the stated validating proceedings not being in accord with the statute in not raising the constitutional question, are not such as to make the estoppel of Section 3299 applicable when the bonds violate the Constitution.

The bonds recite that 250 of them are issued and that they are issued "by virture of and in strict compliance with the Constitution and the laws of Florida." But the statute requires a record to be made of the time when the bonds are to be made payable (Sec. 580, Revised General Statutes, 1920, as modified by the Constitutional Amendment to Section 9, Art. XI); and the required statutory record and the validating proceedings show the bonds are made payable in violation of the specific terms of the Constitution, and all parties are bound by the public records upon which the bonds purport to be issued notwithstanding recitals contained in the bonds. Dixon County v. Field, 111 U.S. 83, 4 Sup. Ct. Rep. 315; Lake County v. Graham, 130 U.S. 674, 9 Sup. Ct. Rep. 654; Sutliff v. Lake County Com'rs, 147 U.S. 230, 13 Sup. Ct. Rep. 318; 15 C. J. 626. In Gunnison Co. v. Rollins, 173 U.S. 255, the recitals were specific and the rights of bona fide holders for value were involved.

A taxpayer and those whom he represents may, pursuant to reasonable statutory or judicial rules, be bound or estopped by an adjudication as to matters organic or otherwise included in the adjudication, 59 P. 976; 91 P. 699, or as to such matters, not controlled by organic law, as reasonably should have been litigated in the suit, and in some instances as to matters of organic as well as statutory right that affect private individual rights and can be waived by individuals; but taxpayers are not subject to statutory or judicial estoppel as to matters not put in issue and adjudicated, that involve the constitutional validity of bonds of a governmental subdivision or agency of the State, when the issue of such bonds is definitely regulated by the Constitution, though the bonds have been validated in statutory judicial proceedings to which the taxpayers were not parties and in which statutory validating proceedings the constitutional question was not presented, considered or decided. Such matters involve public andquasi soverign rights and obligations, and being controlled by specific organic provisions, such rights cannot be waived by individuals, and are not subject to impinging statutory provisions or judicial requirements. Otherwise the Constitution would be less than supreme and its mandates and requirements could be impaired or nullified by statutory or judicial action or rules.

The Constitution does not contemplate that rights conferred by the organic law may be directly or indirectly impaired or nullified by statutes or judicial procedure. The Constitution confers upon the freeholder electors of a Special Tax School District the right to vote for or against bonds to be issued by the district, and the Constitution specifically provides when the bonds shall be payable and how they shall be paid by tax levies. The taxpayers have an organic right in the payment of the bonds and may require the bonds to be made payable as the Constitution commands, which right cannot be impaired by statutory limitations upon the organic right to appropriate remedy in the courts by due course of law for injuries to such property rights.

The Legislature cannot directly by statute or indirectly by forbidding judicial inquiry, legalize bonds that are issued in violation of specific provisions of the Constitution; nor can the Legislature by statute estop citizen taxpayers to pursue the organic right to remedy by due course of law in the courts of the State for an injury to their organic property rights, when such right to a remedy has not been duly asserted and adjudicated or waived when it can be waived; nor can such organic right to remedy in the courts be by statute so curtailed as to substantially impair or nullify the right; and where a statute, like Section 3299, Revised General Statutes of 1920, in effect estops all citizens and taxpayers of a district from challenging in the courts the validity of bonds to be issued by the district in violation of particular commands and requirements of the Constitution, when such organic validity has not been adjudicated, and the organic rights involved cannot be waived, such statute should be construed as not covering unadjudicated constitutional questions or that as to such matters is inoperative, since otherwise the statute would in effect be a denial of rights secured by the Constitution; and under the Constitution it is the duty of the courts in appropriate proceedings duly taken to enforce the paramount law and to effectuate such organic rights, notwithstanding the contrary provisions of the statute.

Before the right of taxpayers to challenge the constitutional validity of bonds that are to be paid by taxation can be concluded by judgment, there must have been a fair adversary presentation by proper parties of the organic question, either specifically or by inclusion in other matters, to a court of competent jurisdiction, and a consideration and adjudication of the matter by the Court in due course of law. See Lindsay v. Allen, 112 Tenn. 637, 82 S.W. Rep. 171; People ex rel. v. Chicago, B. Q. R. Co., 247 Ill. 340, 93 N.E. Rep. 422; Peopleex rel. v. Illinois Cent. R. Co., 298 Ill. 516, 131 N.E. Rep. 624; Orcutt v. McGinley, 97 Neb. 762, 151 N.W. Rep. 322; Jackson v. Bullock, 62 Fla. 507, 57 So.2d Rep. 355; 35 C. J. 805, 912, 932; 168 P. 77.

The validation proceedings are not res adjudicata or an estoppel as against the taxpayer in this case because:

1. The parties are not the same.

2. The issues are not the same.

3. The facts considered are not the same.

4. The statutory proceedings were not substantially complied with as to the defenses made, therefore the statutory estoppel is not applicable when the bonds violate specific provisions of the Constitution, and that question was not presented by the State Attorney or otherwise.

5. The bonds being void because violative of specific provisions of the Constitution there can be no estoppel to challenge their validity by interested parties who are not estopped by being parties to an adjudication of the question.

6. The organic right to remedy by due course of law cannot be impaired by statutory estoppel when the matter at issue, an organic requirement, has not been adjudicated.

7. The statute is inoperative to indirectly by estoppel validate bonds that are void under the Constitution and that cannot be directly validated by a curative statute.