Petition for Writ of Certiorari — Seaboard Air Line Railroad v. Sarasota-Fruitville Drainage District (No. 268)

Supreme Court brief1958

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IN THE he ee ge ge

Supreme Court of the Huited ‘States :

‘OCTOBER TERM. 1958 - 3.)

| \ eo epee

No._26&

SEABOARD AIR LINE RAILROAD COMPANY, —

Petitioner, — ; :

Sk vs. aie .

SARASOTA-FRUITVILLE DRAINAGE DISTRICT,

Respondent. - °

ét.

Petition for Writ of Certiorari to - United States

Court of Appeals for the Fifth Circuit

’ Morris E. WHITE,

Attorney for Petitioner;

1002 Citizens Bldg.

Tampa 2, Florida |

Of Counsel: _ . eae

FCWLER, WHITE, GILLEN, .

YANCEY & HUMKEY =~ e

1002 Citizens Bldg.

Tampa 2, Florida

—

—_== :

YHE FREE PRESS - TAMPA. FLORIDA

INDEX

OPINIONS BELOW ae |

JURISDICTION. - 2

QUESTIONS PRESENTED... =: 8

STATUTES INVOLVED : | 2

STATEMENT OF THE CASE | Ae 3

REAS®NS FOR GRANTING THE WRIT | ae

CONCLUSION =. : le 12

APPENDIX A-Statutes a? ie eee ae

B—Opinions and judgment. below

Decisioi of the United States Court,

of Appeals for the Fifth asic

January 14, 1958 °

Judgment of the United States Court

of Appeals for the Fifth Circuit,

January 14, 1958

a _ Decision of the United States Court

6 “. . of Appeals for the Fifth Circuit,

‘ _ * May 15, 1958 |

Judgment of the United States Court

of Appeals for. the Fifth Circuit,

May 15, 1958

_ CASES

Alabama Public Service Coshitatenton v. oes Ry..

96 So. 2d 130 (1957) aoa eee -

_ Page

é .

Co., 341 US. 341 (1951)

Arundel Corporation v. Griffin, 89 Fla. 128, 103 So.

422 (1925) ; 6

Bernhardt v. Polygraphic Co., 350 U.S. 198 (1956) 8

Bray v. ‘City of Winter Garden, ~ , Fla. ;

40 So. 2d 259 (1949) ee Ae

Burford v. Sun Oil Co, 319 US. 315/(1943) - 6

City of Miami v. Brooks, © Pia. __..__, 70 So.

; 2d 306 (1954) — . ee Ae |

Commonwealth of Pennsylvania v. Williams, 294

US. 176, (1935) . 6

Cooper v. American Air de 4 149 F.2d 355 (2nd °

Cir. 1945) _____:- ; 9

~— v. Parker, 152 F.2d 174 (7th Cir. 1945) 8.

Boyte v. City of Coral — 159 Fla. 802, 33 So. 2d .

41 (1948) . ay rere Ae

Erie R. R. Co. v. Tompkins, 304 U.S. 64 (1938) 7

Fisher v. American National Insurance Company, .

241 F.2d 175 (3rd Cir. cai

Great Lakes Dredge & Dock Co. v. Huffman, 319

U.S. 293 (1943) | “- 4

Goff v. City of Ft: Lauderdale, Fla. —, 65 So.

2d.1 (1953) | y ae

. ao. :

Hargrove v. Town of Cocoa Beach, | Fla. ry

Holbrook: v. City of Sarasota, ti 1 96 So.

2d 130 (1957) . : - 7,22 -

Kaufman v. City of Tallahassee, 84 Fla. 634, 94 So. . ’

. 697 ¢1923) Perey : 7, 10

Leiter Minerals, Inc. v. United States, 352 US. 220

(1957) He P 6

-Marchessault v. National Grange Liberty Company.

_ 229 F.2d 698 (2nd Cir. 1956). . a 8

. Mason v. Emery Wheel Works, 244 F.2d 906 (1st Cir. °

1957) 7 8

Meredith v. City of Winter. Haven, 320. U.S. 228 :

(1943) ... yak es 6

Meyer v. Tupper, 66 U.S. 522 ieee 8 ee

Pohland v. | City of Sheboygan, 251 Wis. 20, 27 N. W.

2d 736 ( 1947) . 7 11

Rabin v. Lake Worth Drainage District, Fla.

' , 82 So. 2d 353 (1955) - af oe a he

Riverbank Laboratories v. Hardwood Products Cor-

poration; 350°U.S. 1003 (1956) 8

AUTHORITIES —(Continubd)

ere Page

“Herrick v. Sayler, 245 F. od 171 (1957) - ae 9-

WL Sabian Construction Co. v. Chicago M. St. P. &

P. Ry. Co., 218 Wis. 390, aa N.W. 242 (1935) 10, i

Ronald v. Ryan, 157 Fla. 470, 26 So. 2d 339 (1946) 10

’ Ryan Stevedoring Co. v. Pan-Atlantic Ss, S. . Corp. 350

U.S. 124 (1956). 10

Standard Accident Ins. Co. v. New Amsterdam .Gas

Co., 249 F. 2d 847 (7th Cir. on Pech me 6, 9

| AUTHORITIES—(Continued)

| . Page .

State Road Visite Vv, Tharp. 146 Fla. 754, 1 So. )

2d 868 (1941) . oe 7, 10-.

State Road Department v. Bender, 147 Fla. 15, 2 So. |

2d 298 (1941) 7, 11

_Sutton v. Lieb, 342 U.S. 402 (1952) ; 6

Western Spring Co. v. Autuee, 229 F. 24 413 (oem

Cir. 1956) 9

/ Weyerhausér S.S. Co. v. Nacirema Co:, ‘US. ., 78

Sup. Ct. 438, 2.L. Ed. 2d 491 ( Decided March 3,

~ 1958) Se 10

STATUTES: ge

_ Rules of Decisien Act 28 U.S.C., Section 1652 3 7

; Chapter 8558, Laws of Florida 1921, Sec. 1 y

Chapter 7897, Laws of Florida 1919, Sec. 26 2, 5.

adie 298.62,.Florida Statutes 1957 2,5

Section 298.22, Florida Statutes 1957. ~25

- <—-_

cy f

, ee IN THE

Supreme Court of the United States yr

= OCTOBER TERM 1958 ts

SEABOARD AIR LINE RAILROAD COMPANY, . °

° Petitioner, ;

et 4

vs. - ia em ¢

: ° 5 J ‘ ; | : \

| SARASOTA-FRUITVILLE DRAINAGE DISTRICT,

Respondent. ,

Petitioner prays that a writ of certiorari issue to -

review the judgment of the United States Court of Ap-

~ peals for the Fifth Circuit entered in the above-entitled

_ > ease on May 15, 1958. 2

- _ITATIONS FO OPINIONS BELOW

The order of the Judge of the ‘United States Dis-

trict Court for the Southern District of Florida granting

' the respondent’s Motion to Dismiss the Complaint of —

petitioner (R. 15), is printed in Appendix B, hereto,

infra, page B-1. The initial opinion of the Court of Ap-

peals printed in Appendix B hereto infra,.page B-2, is

reported in 251 F.2d 583. The opinion of the Circuit

Court of Appeals on rehearing is printed in Appendix

B hereto infra, page B-17. and is to date unreported.

JURISDICTION “.

The judgment of the Circuit Court of Appeals was

‘entered on January 14, 1958 (R..42), and is printéd in

Appendix B hereto, infra page B-16. .The judgment -

of the Court of Appeals on the rehearing was entered.

on May 15,-1958 (R. 88), and is printed in Appendix B

hereto, infra page -B-26. The jurisdiction of. this Court

is invoked under 28 US.C., + Bection 1254 (4). -

QUESTIONS PRESENTED

' 1. Whether the decision of the Court of .Appeals .

is unconstitutional because of its erroneous determina-

tion of ,the function of a Federal Court to as¢ertain the

law of. the case in the exercise of diversity“ of citizen-

ship jurisdiction when there is an absence: of state

law on the point: in issue. ‘ 2 "

“2. Whether the Court of Appéals in a case based

on » the diversity of citizenship jurisdiction cortectly ex-

_ ercised its function in determining law. when there was

- an absence of state —s on the point in issue..

3. Whether the ‘Court of Appeals erred in deter-

mining,that a drainage district in the.State-of. Florida,

was without ee to gnter an ay agreement.

"STATUTES INVOLVED re

The statutory provisions involved are the Rules .

- . of Decisign Act, 28 U. S. C., Section 1652.and Chapter

8558, s of Florida 1921, Section 1; Chapter 7897,

Laws of Florida 1919, Section 26; Section 298.62, -Flor-

ida Statutes 1957: and Sectioh 298.22, Florida Statutes ©

2 1957.

i 3

STATEMENT OF THE CASE

The petitioner, a corporation organized and exist-

ing under the laws of the State of Virginia, brought suit

against the respondent, a corporatign existing under

the laws of the State of Florida, on foe 6, 1956, in

the United States District Court for the Southern Dis-

trict of Florida, Tampa Division, pn an agreement en- .

tered into in 1925 by the respondent and the petitioner's

predecessor in interest. Under the terms of this agree-

ment, the respondent was granted the right to Ipy and

thereafter maintain and use certain culverts beneath

the tracks and property of the petitioner, in consider-

ation of the agreement by. ‘the regpondent.to assume all -

. risk of loss, injury or damage to the person and prop-

erty ‘of the petitioner, and the agreement gn the part

of the respondent to indemnify and save ‘harmless the

petitioner railroad corporation from all loss, damage,

cost and expefse which the petitioner might sustain

growing out of the installation, presence, operation,

. maintenance or. removal of the culverts, or any part

thereof. (R. 6-10)" This indemnity agreement was the

sole consideration received by the petitioner in ex-

change for its grant of the easement during the entire

‘period which the respondent has enjoyed the use of the’

peoperty.

“This Complaint alleged the existence of the afore-

said agreement and further alleged that a short time

prior to December 5, 1953, the respondent. undertook to

and was engaged in the lowering of ditches in and about,

the aforementioned culverts adjacent to the embank-

‘ment supports of the petitioner's railroad tracks and

that as a result thereof the road’ bed gave way and the

embankment supporting the railroad tracks was under- _

mined, thereby removing the —— for the_petition-

bad

P add

er’s railroad tracks. These acts of\th respondent caused

petitioner s train No. 208; to be e Sea and wrecked |

The sasftndent tieateadl a motion to dismnints

_ alleging, ° ‘inter alia, that the respondent isa drainage ~.

district. organized under the laws of the State of Florida -

‘and that neither the respondent nor its officers iad any

_ authority. to enter into the agreement which was the ;

basis of the Complaint. (R. 12-14). - | 7

Oh January 19, 1957 the District Court seacied the

respondent’s motion to dismiss on the grounds that,”

the respondent being a drainage district organized and

existing under the General Drainage Law of the State

of Florida, it had no authority to bind itself as an. in-

emnitor for consideration of :the’ acquisition of an

, easement in land, and could not be held liable in tort:

The petitioner appealed and. the United a *

Court of Appeals,for the Fifth Circuit, with a judge

dissenting, reversed ‘the District Court in an opinion.

rendered JAnuary 14, 1958.1. The Court of: Appeals

‘held tha the General Drainage Law if the State of

Florida confer ed on drainage districts the power,to “

purchase propérty, a drainage district had the implied ©

1. The majority. of the. Court consisted of Judges Brown and.

Tuttle, Judge Rives dissening. Thé Court also cbse®ved that,

if the authority to enter into the indemnity agreement existed

-...that the respondent might well be. estopped'to deny its }' ‘abil its

(R. 36) Appendix’ B infra page -e.

° *

5 | i

, 4 ~

power to pore into an indemnity contract, for the proper ie ek

+ maintenance of the property acquired in consideration

of the property being conveyed to the drainage district. me

On petition for rehearing, the Court of Appeals in

a decision rendered May 15, 1958, in which one judge

. dissented,? withdrew and set aside its former opinion

and affirmed the judgment of. the District Court. In ©

this rehearing opinion, the Court determined: that the’

respondent drainage district was subject to-the doc-

~ trine of sovereign ‘immunity-arid,therefore,. could not

. enter into an indeninity agreement. a AE es

There is no authority in the State of Flofida de-

/ termiming the issues in this case, and this non-existence

.of authdzity wall™recognized by the majority of the

Court of peals“in its first opinion (R wid

REASONS FOR. GRANTING THE WRIT p

- 1. Thedecisitn of the Court of Appeals i$ uncon-

stitutional because 0} the Court’s erroneous det termina- we,

tion of its function in certaining state law i in. the exér-

cise of diversity of citizegship jurisdiction. It was man- -

datory upon the Court © ities to answer the ques-.

2.9 Chapter 8558, Laws: of “Flori 1921, Section 1 and: ‘chapter

7897, Laws of Florida 1919, Sectign 26 are the statutes’ desc

ing the ‘relevant powers of drainage districts in Florida

the indemnity agreement in quest! ‘was executed. Secth n

298.62, Florida Statutes 1957 and‘

Ga”

' Statutes. They are printed as part o\ Appendix A herein,

infra page A-1 et seq.

3. The majority of the Court consinted of tele Tuttle and Rives.

Judge Brown dissented. : 5 ; .

4 In his dissent on rehearing Judge Brown emp

majority had extended the doctrirles of sovereig immunity to.

ge 3 new area in the face of a clear trend” away fromthe use of

this doctrine by the Florida courts. - (R. 93-96}

_ infra page B-22.

tion of state law involved, even though it was as yet

unanswered by any’Florida court. Meredith v. City of

Winter Haven, 320 U.S. 228 (1943) .5 In its decision the

Court did not discuss its duty in diversity of citizenship .

cases of determining questions of applicable state law.

Reasoning from two cases which held under the facts

there involved that the drainage district. could not’ be

held liable for its tortious acts,® the Court determined

that this disempowered the drainage district to enter in-

- to ansindemnity agreement as a condition of a gift of an

easement which the district had express power to re-

5. in his dinsent. in the injgial opinion of the Court of damesie

~ Judge Rives statéd:.

“I would affirm the judgment of the district court. If,

-however, its judgment is to be reversed, then, considering the

{ nature of this action, its importance to the. Drainage District,

* and to the execution of the policies of the State oi Florida, I

' ‘would not think that the ‘ett of: the action as being at law

instead of in equity ought to prevent the federal. district court,

-as a matter of sound discretion, from declining to exercise its

jurisdiction until the State courts can authoritatively — the

-) questions of State law.”

a Judge Rives cited: ew

Commonwealth of Pennsylvania v. Williams, 294 U. S. 176

(193g); Burford v. Sun Oil Co., 319 U..S. 315 (1943); Great

Lakes Dreage & Dock Co. v. Huffman, 319 U. S. 293 (1943);

Meredith v. City of Winter Haven, 320 U. S. 228 (1943):

Alabama Public Service Commission v. Southern Ry. Co. 341

U..S. 341 (1951), ;Leiter Minerals, Inc. v. United States, 352

U.S. 220 (1957).

. It is here submitted. that this course of action was un-.

availabie to the Court of Appeals under. the doctrine of the

case of Sutton v. Leib, 342 U. S. 402 (1952). ‘The Florida

legislature haa provided that federal courts-can certify ques-

tions ef Florida law to the Supreme Coart of Florida if ‘the .

Supreme Court of Florida-implements this statute by rule of

Court. Sections 25.031 and 25.032, Florida Statutes 1957.

+ This statute has not been implemented:by rule of Court. See

Finnegan, J. concurring in Standard Accident Ins. Co. v. New

a6 Arundel Corporation v. Griffin, 89 Fla. 128, 103 So. 422 —

: and Rabin v. Lake Worth: Drainage District,

Fla. , 82. So.2d 353 (1955). These. cases do not

deal with the power of a drainage district to cohtract.

® ; / ; i &

/ | Py

LO, Amsterdam Casualty Co., 249 F.2d 847 at 853 (7th Cir. 1957). -

¢ 7

ceive. In so deciding; the Court of Appeals applied the

doctrine of: sovereign immunity in an instance not be-

fore applied by the Florida Courts in the face ofa mani-

fest trend away from the use of this, doctrine in the

Florida law. Kaufman v. City of Tallahassee, 84 Fla.

634, 94 So. 697 (1923); State Road Department v.

Tharp, 146 Fla.'754, 1 So. 2d_868 (1941); State Road.

Department v. Bender, 147 Fla. 15, 2 So. 2d 298 ; (1941) ; :

‘Doyle v. Cityof Coral Gables, 159 Fla. 802, 33 So. 2d,41;

(1948) ; Bray v. City of Winter Garden . ee

40 So. 2d 459 (1949) ; Holdbrook v. City of Sarasota

- Fla... 58 So. 2d, 862 (1952); Goff v. City of,

Ft. Lauderdale _ Fla. __ 65 So. 2d 1 (1953); City

of Miami v. Brooks » Fla. » So. 2d 306

(1954); Hargrove v. Town of Cocoa Beach oe:

, 96 So. 2d 130 (1957). “ice |

ae ‘ The judicial power of federal courts in diversity of

citizenship cases as defined in Article III, Section 2 of

the Constitution of the United States permits the -fed-

eral court to determine questions of state law as an~in-

dependént tribunal when there is no. state law on the

question in issue. The requirement of the Rules of De-

cision Act, 28 U. S. C., Section 1652, that-the federak

courts follow “the laws of the several states” does not

limit the authority of tre ‘federal court when there is an .

‘absence of state law on the question in issue. The pro-

‘nouncement of Erie R.R..v. Tompkins, 304 U. S. 64

(1938), merely requires that the federal courts in di-

versity cases follow the state ecisiona! law. The Court

‘of Appeals misconceived its function in this case by fail-

ing to exercise its uninhibited mandate to determine this .

case as an independent tribunal when there is no’ state

“law.” As diversity of citizenship jurisdiction was prop-

erly elena: ppenee had the right-to insist that it be.

: 8

fully exercised.’ A federal court can disregard existing .

authority in state law if it is apparent that recent

trends make such law antedated. Bernhardt v. Poly-

graphic Co. 350 U,S. 198-(1956).* It is:clear, therefore,

that a federal court should refuse to derive new state

law by a process of inference from general principles of

’ the law of the state in the same field. In the absence

of precise state law determining the question in issue ©

the constitutional function of a federal court in a diver-

sity of citizenship case is to consider I ours of. ju-

‘dicial authority and make its independent determination

of the question. It must consult the total law of the state’

ahd general authorities, and consider trends in the law

as well as any decisions on the question as may exist.

The court must act in this independent fashion when

the state court has not answered the question involved

‘in the case in order to carry out its constitutional func-

tion in the exercise of diversity of citizenship jurisdic-

tion. -

... 2. The various United States Courts, of’ Appeals

are in apparent confusion as to how they should go

about the task of ascertaining state law, when there is

no pronouncement of the question at issue by any state

court or tribunai: Recent decisions of the Second, Sev-

enth, and Tenth Circuits adopt the view that in. the

absence of articulate state law on the question at issue,

the Court would look te, the law- of other jurisdictions

.in determining what they felt the highest Court of the

State in question would do when faged with the deter-

mination. Marchessault v. National Grange Liberty

7. Meyer v. Tupper, 66 U.S. 522 (1861). fe

8. . Other cases demonstrating this flexibility of judiclal Panction

indiversity of citizenship cases are Riverbank Laboratories +

Hardwood Products Corporation, 350 U.S. 1003 (1956) ; Mason

v. Emery Wheel Works, 241 F.2d 906 (1st Cir. 1957) and

Daily v. Parker, 152 F.2d 174 (7th Cir. 1945).

G 4 oa

Company, 229 F.,2d 698 (Second Circuit 1956), Her-

rick v. Sayler, 245 F. 2d 171 (Seventh Circuit 1957), and

Western Spring Co. v. Andrew, 229 F. 2d 413 (Tenth

Circuit 1956) .? The Court of Appeals in the instant case,

- however, did not assume that when the Supreme Court w

of Florida was faced with the issue herein, that that -

Court would follow the only clear pronouncement on

the point found in general authorities. ‘Instead the

Court of Appeals developed its main argument by a

process, of inference from the Florida authorities in the

law of drainage districts. ‘It also cited some general

authority. The Court of Appeals was concerned,with

assaying the policy of the Florida law in determining.

this question.'° The instant case involved the power of

a drainage district to‘enter into a specific contract in

a given context. The question as to the existence of —

this power has been clearly answered by a case from

another jurisdiction considering the precise question

under an almost identical atatute = the same Jur-

16.

This | is » apparently, the view which . was aaa by the later :

Seventh Circuit Court of Appeals in the case of Standard Acci-

dent Insurance Co. v. New Amsterdam Casualty. Co., supra,

- note 5.

The court of appeals apparently agrees with the approach taken

in the third circuit case of Fisher v. American National In-

surance Compafty 241 F.2d 175 (1957).

The Court in the instant case did not discuss the question of

’ whether it was to go about construing the statute in question

in the same manner the highes court of Florida would employ

sin placing a construction on the statute. Clearly the federal

courts when sitting in diversity cases must decide questions

of state law as if they were sitting as judges of the states’

highest courts. Cooper _v. American Air Lines, 149 F.2d 355

(2nd Cir. 1945). The Federal Court must, then, adopt the

same approach to the problem as would be adopted by the

state court. The Seventh Circuit of Appeals in the case of

Herrick v. Sayler, 245 F.2d:171 (1957) carefully considered the

approach which would be taken by an Indiana court if it were

faced with the question of interpreting the Indiana statute

‘which was before the Federal Court in a iversity case as a

question of first impression. "4

- a Florida court so determining the question. The de-

-isprudential background. H. Hohensee Construction

Co. v. Chicago M. St.P. & P. aes Co., 218 Wis. 390, 261

N. W..242 (1935).

~_o—

It would: seem manifest that the Supreme Court of

_ Florida, if faced with the question herein, would: have

. followed this decision and tHat litfgants could rely upon

termination by the Court of ‘Appeals reflects judicial .

confusion that exists among the various circuits as to

their function in determining state law in diversity of

citizenship cases:

3. The Court of Appeals determined that the re-

spondent Drainage District was without power to enter

an indemnity contract because: the Drainage District

was not liable for its torts. This determination was: not

predicated on any direct Florida authority, and it is

‘ a determination which conflicts with the established

trend of Florida law to limit the use of the doctrine of

sovereign immunity. Kaufman v. City of Tallahassee,

84 Fla. 634, 94 So. 697 (1923); State Road anna

7 11. In his ‘enent in n the Opinion of the ‘Court of Appeals on re- |

hearing, Judge Brown observed that: teat

“fA] breach of performance would be a breach of contract |

notwithstanding the fact that it might have tort implications,

see, e.g., Weyerhaeuser 8.8. Co. v. Nacirema Cc., US.

; 2 L.ed. 2d 491, see especially at.p. 494 and footnote 5;

Ryan Stevecoring Co. v. Pan-Atlantic 8.8. Corp., 350 U. S.%424,

"100 Lted 133, 141.”

Liability has been imposed on Florida municipal corpora-

tions on the theory of implied contract when the conduct com- .

plained of was the tortious carrying ont of an implied con-

tractual duty. City of Miami v. Brooks, ve .Fla. ,

70 So.2d 306 (1954) citing cases; Goff v. City of Ft. Lauder-

dale, .Fla.~ — _ _, 65'So,2d 1 (1953). It cannot reas- -

onably be argued that a drainage district is so unlike a muni-

- cipal corporation that this authority should not have been of

weight in the Court's determination of the-law to be applied

in the instant case. Ronald v. Ryan, 157 Fla. 470, 260 So.2d |

339 (1946). - . , /

vy. Tharp, 146 Fla. 754, 1 So. 2d 868 (1941) ; State Road

Department w. Bender, 147 Fla. 15,-2 So.-2d 298. (1941) ;

__Doyle v: City of Coral Gables, 159 Fla. 802, 33 So. 24.41

(1948) ; Bray v. City of Winter Garden _ Fila. , 40

So. 2d 459 (1949) ; Holbrook v. City of Sarasota Fla.

"58 So. 2d 862 (1952); Goff v. City of Ft. Lauder-

dale .. Fla. . : 65 So. 2d 1 (1953); City of Mi-

ami v. Brooks Fla. , 70 So. 2d 306 (1954);

Hargrove v. Town of Cocoa Beach Fla. - ,96

So. 2d 130 (1957). Ae Aaya wee

The case of H. Hohensee Construction Co. v. Chi-

‘cago M. St. P. & P. Ry.-Co., 218 Wis. 390, 261 N. W.

242 (1935) ,22 is the only precise judicial pronouncement

on the issue involved in this case. .This case, deter: ive,

mined under an almost identical statute, found that .*

power of a drainage et to receive land by purchase -

implied the power. to execute an indemnity. agreement.

The determination of the Supreme Court of Florida -

would doubtless have adopted the interpretation of the

drainage district law set forth in the Hohensee case,

especially in light of ‘the limitation being placed on the

doctrine of sovereign immunity by that court.

12. The holding of the Hohensee¢ case is that an indemfitty coni-

tract of the kind involved in the instant case is binding on the

governmental entity even though the acts which create liability

“$y under the contract would fall within the realm of governmental —

; “function and would ‘usually invoke the doctrine of sovereign

immunity. The-enumeration of powers of the City in the-

. Hohenseee case and the drainage district in the instant case

are virtually identical and it is clear under the holding of the

Hohensee case that the implied power to enter into an indem-

nity agreement follows as a natural concomitant of the power

to receive a grant of property. The Hohensee case is sup-. |

ported by the later case of Pohland v. City of Sheboygan, 251 .

Wis. 20, N. W. 2d 736 (1947).

As was potted out by Judge Brown in his dicen

in the rehearing opinion, the effect of the: majority's

opinion was to obliterate the distinction between tort

and contract. (R. 94).

* .°. . CONCLUSION

For thé foregoing reasons, the petition for a writ

of certiorari should be granted. . +

Respectfully submitted,

' 8/Morris E. White, «

Morris E. WHITE,

Attorney for Petitioner

Of Counsel:

FOWLER, WHITE, GILLEN,

YANCEY & HUMKEY

1002 Citizens. Building -

Tampa 2, Florida

A-1

APPENDIX A.

28 U.S.C. § 1652 STATE LAWS AS RULES OF DE- |

CISION.

_ “The laws of the several states, except where the

Constitution or treaties’ ofthe United States or Acts

of Congress otherwise require or provide, shall be re-

garded as rules of decision in civil actions in the courts .

of the United States, in cases where ad apply.”

Ch. 8558, Laws of Florida 1921, Section 1:

“Section 1. That any and all drainage and sub-

drainage districts created or organized under the Laws ©

of. the State of Florida are hereby authorized and em-

.~ powered’to acquire by gift, purchase, exchange, dona-

tion or condemnation any lands within or without the

said district for canal rights-of-way, or for other gen-

eral purposes of the said District, and if acquired by

condemnation shall be, upon filing a petition gn the

office of the Clerk of the Circuit Court of the county

wherein the lands lie, which petstion shall ‘set forth{ the

_ following;”

< 298.62, Florida Statutes 1957: ° . a,

“Lands may be acquired for right-of-ways and

other purposes.—Any and all drainage and sub-drain-

age districts created or-organized under the laws of the

state may acquire by gift, purchase, exchange, donation

or condemnation, any lands within or without the said

district for-canal rights-of-ways, or for other general

purposes of the said district, and if acquired by con-

demnation the procedure shall be as prescribed in Chap-.

ter 73.” -

a_i

—stA-2

z i ‘.

Ch. 7897, Laws of Florida 1919, Section 26:

“In order to effect the drainage, protection and rec-

_ lamation of the land in the district subject to tax’ the

Board of Supervisors is authorized and empowered .

to construct any. and all of said works and im-

provements across, ‘through or over any public high- .

way, railroad right of way. track, grade, fill or cut in |

or out of said district; to remove any. fence, building or

other-improvements in or out of said district, and shall

have the right to hold, control and acquire by. donation

or purchase and if need be; condemn any-land, easement,

railroad right of way, sluice, reservoir, holding basis or

franchise in or out of said district for right of way,

holding basin for any of the purposes herein provided,

or for material to be used in constructing and maintain-

ing said works and improvements for drainage, prgtect-

ing and’ reclaiming the land in said-district. . .” ,

§ 298.22, Florida Statutes 1957:

“In order to effect the drainage, protection and-

reclamation of the land in the district subject to tax,

the board of supervisors may clean out, straighten, open

up, widen, or change the course and flow, alter or deepen

any canal, ditch, drain, river, water-course, or natural

stream; and concentrate, divert or divide the flow of

water in or out of said district; construct and maintain

main and lateral ditches, canals, levees, dikes, dams,

sluices, revetments, reservoirs, holding basins, flood-

ways, pumping stations and syphons, and may connect

same, or any of them. with any canals, drains) ditches,

levees or other works that may have | retofore.*

or which may be hereafter. constructed by the trustees

of the internal improvement fund.or the board of

. A-S

drainage commissioners of the state, and with

any natural stream, lake or water-course in or

adjacent to’ said district, build and construct any

other works: and improvements deemed necessary to

preserve and maintain the works in or out of said.

district; acquire, construct, operate, maintain, use~ .

sell, convey, transfer or other wise provide for

pumping stations, including pumping machinery, motive

equipment, electric lines and all appurtenant or auxil-

iary.machinés, devices:or equipment; contract for the

purchase, construction, operation, maintenance, use,

sale, conveyance and transfer of the said pumping sta-.

tions, machinery, motive equipment, electric lines and

appurtenant equipment, including the purchase of elec- .

tric power and ete for the operation of the same;

construct or enl or cause to be constructed or en-

larged, any and all bridges that may be needed in or out —

of said district, across any drain, ditch, canal, floodway,

holding, basin, excavation, public highway, railroad

right of way, track, grade, fill or cut; construct road-

ways over levees and embankments; construct any. and

_qll of said works and improvements across, through or

over any public highway, railroad right of way, track, |

grade, fill or cut, in or out of said district; remove any

fence, building or other improvements, in or out of said

\ district; and shall have the right to hold, control and

acquire by donation or purchase and if need be, con-

demn any land, easement, railroad right of way, sluice,

reservoir, holding basin or franchise, in or out of said

district, for right of way, holding basin for any of the

purposes herein provided, or for material to be used in

constructing and maintaining said works and improve-

ments for drainage, protecting and reclaiming the lands .

in said district. Said board.of supervisors also may de-

velop, hold and control all. water power created by the ©

| A-4

construction of works of said district, and may con-

‘struct and maintain hydro-electric power plants for the

' purpose of developing such power for the use of ‘said

district, use any funds in the treasury of said district

.not otherwise appropriated for the construction and

- maintenance of such power plants; and the said board

of supervisors may lease any surplus power in exeess

of that required for the uses of said district, and the

proceeds of such leases shall be paid into the treasury

‘ of said district. Said board ‘ also May condemn

_-or atquire, by purchase or grant, for the use of the dis-

trict; any land_or_ property within or without said dis-

trict not acquired or condemned by the court on the ~

report .of the commissioners assessing benefits and

damages, and shall follow the procedure set out in

chapter 73. |

.. ee | -

APPENDIX B

ORDER.

Filed Jan. 19, 1957. /

In the District Court of the United States in. sini for

_ the Southern District of Florida, Tampa Division.

Seaboard Air Line’ Railroad. Company, a corporation

existing under the laws of the State of Virginia,

Plaintiff,

3 Vv. No. 2949 Civil T.

‘Sarasota-Fruitville Drainage Distriet, a corporation

existing under--the—laws of. the State of Florida,

- Defendant. :

. This cause came on to be heard upon Motion of the

'. Defendant to Dismiss the Complaint, and the Court

having heard argument of céunsel and being fully ad-

vised in the premises, and it appearing that the Defend-

. ant is a’ Drainage District created, organized and ex-

isting under and-by virtue of the General Drainage

Laws of the State of Florida, and the Court being of

the opinion that it had no authority to bind itself as an

indemnitor -as_consideration for the acquisition of an

easement in land, and that it cannot be held liable in

tort, it is upon consideration, _

Ordered and Adjudged that the said Motion to Dis-

miss be, and the same is hereby granted, and the Com-

plaint is axes dismissed. \

Done ond Ordered in Tampa, Florida, this the 19th

day of January 1957.

WILLIAM J. BARKER,

Chief Judge. U. S. District

Court.. .

B-2

'*% wreHe

United States Court of A’ als

- FOR THE FIFTH CIRCUIT

No. 16590

SEABOARD AIR LINE RAILROAD COMPAN y,

Appellant,

versus

“ SARASOPA-FRUITVILLE DRAINAGE DEERE. f;

face

Appeal fron the United States District Court for the .

Southern District bus dumaoes

(J anuary 14, 1958.)

— > RIVES, TUTTLE and BROWN, Circuit Judges.

BROWN, .Circuit,. J gine’ The. sole question pre-

sented: here is whether a Florida: Drainage -District. ad-

,mittedly not liable for torts as such under Florida law,

Rabin v. Lake Worth Drainage. Dist.,... Fla... . , 82So.

. 2d 353, cert. gen’ 350 U.S. 958, 100 ek 833: Arundel

Corp. v. Griffin, 89 Fla., 128, 103 So. 422, is liable to a

Railway on an tiidesinity- tied: harmless agreement in a

canal right-of way easement granted by the Railway 28

years before. . The District. Court held that it was not

and accordingly dismisséd the complaint for failure to

state a. claim, FRCP 12.

The aiéalite claim was to recover approximately.

$28,000 in losses sustained by the Railway as a result

of one of its traing being derailed December 5, 1953.

B-3

° Dp 4

- with consequent damage to its ‘equipment and personal

injury to persons. It was alleged that the derailment

was caused by the lowering by the District of its ditches

adjacent to the District’s undertrack culverts, so that

‘the roadbed gave way and the underlying support to

the tracks was lessened.

In 1925 the Railway, for a nominal stated cash con-

sideration ($5.00) but “ * * in-further consideration of

the faithful: performance by the [District] of [its] .

covenants * * *,” granted the right to lay, maintain,

operate and use two specified culvert crossings under

its tracks and right of way. The District was expressly

required to pay all costs in the initial installation as

well as in the mairitenance, use, repair and removai of

the facilities. And, of crucial importance here, the Dis-

trict expressly. agreed:

1. “3. The lines of pipe shall be installed, maintained, repaired

pand renewed at the expense of the Licensee [District] and

*under the supervision and direction, and subject to the approval

and acceptance, of the Chief Engineer of the Railway.

* * °* * *

“5. ‘The Licensee [District] will make all repairs to the tracks

and other property of the Railway necessitated by the installa-

tion, operation, use, maintenance or removal of said lines of

pipe * * * The Railway may,-at its option, make such repairs,

and the Licensee [District] will * * . promptly reimburse the. -

- Railway therefor?

“6. Should the Licensee [District] discontinue the operation

of said lines of pipe * * * said lines of pipe, shall be removed

by the Licensee [District] at the expense of the lattef, from

beneath the tracks and from the property of the Railway, or

the Railway may, at its option, remove the. same, at the ex-

pense the Licensee [District]. In case of such. removal,

* * * thé tracks and property of the Railway are to be left in

as good condition as when previously found *.* *.— -

“7. The Railway .may terminate this agreement at any china

by giving the Licensee [District] thirty days notice * * * and

upon termination * * * the Licensee [District] * * * will, at

his own expense, remove said lines of pipe * * * from beneath

the tracks and from the property of the Railway, or the Rail-

way, * * *. may remove the pone, at the expense of the

Licensee. (District].”

B-4 z

ug, The Licensee [District] hereby as-

sumes all risk of loss, injury or damage of or to -

the person and the property of the Licensee

[District] and all other persons and property,

growing in any manner out of the installation,

presence, operation,’ maintenance or removal

of said lines of pipe, or any of the appurte-

‘ances or appliances, or any part thereof.

And the Licensee [District ] will further, at all

times, indemnify and save harmless the Rail-

“way from all loss, damage, cost and expense

which the Railway may sustain, resulting from’

loss, injury or damage caused as aforesaid.” ‘

‘What the scope of the indemnity maybe, whether,

on proof it covers this occurrence, whether if, as sug-

‘gested, it arose from the. Railway's negligence. not with-.

in the reach. of this terminology, are questions not be-

fore us. All the Court below decided, all that con-

' fronts us, is the assertion that this indemnity under-

taking was beyond the power of a Florida drainage dis-

trict so that the District could not be — either on

the contract or r by estoppel.

aya

We recognize that making ‘our way as beit ' we can |

in our Erie lights, there 7 especial reason that we

faithfully search out and apply the Florida law. Here

we; deal not only with Florida law as jurisprudence,

_but our decision necessarily affects Florida in its poli- -

tical adjustments between members of the public and

public creatures of the sovereign. Not the least of the

- difficulties in the process is that if we err, or if ex-

perience proves our decision unsound, unlike the Courts

of Florida, we do not have the means or opportunity

for! correction. Our function is not aided, nigel travail

not lessened, by handy labels of “strict” or “conserva-_.

a B-5

tive” approach or the like. If, in this problem concern-

ing which Florida has not yet written, it is the Florida

policy to recognize the validity of such contracts where

property: interests are acquired by them, it would not

be “strict” construction or “conservative” to hold to

‘the contrary out of some supposed notion that, when.

in doubt, < judicial function is to ae backwards, not .

_ forward.

Consequently, what is the. starting point remains. .

just that and is ‘not, as in the District urges, the final

‘. solution as well. Theré seems to be little disagreement |

. that Florida treats drainage districts as a specif gov-

ernmental body created for a limited and definite pur-

pose with limited authority and a limited power to tax.’

The approach, as it is for related drainage districts,

is that “The creative statute is a grant of power and

the supervisors of. the district. must look entirely to

the statute for their authority.” State ex rel. Devis v. :

Jumper Creek Drainage District, 153° Fla- 451," 14-Se-————---

2d 900. As these statutes set out the various powers

in much detail, “The careful enumeration of these pow-

ers is an indication that this Board was not to have ~

any others than those enumerated. * * *” Forbes Pio- |

neer Boat Line v. Board of Commi issioners of Everglades

Drainage District, T7 Fla. 742, 8& So. 346. 7

From this emphasis on the ecessity for express

. powers, the District urges that, in contrast to the Flor-

‘ida rule for counties investing them also with “ «a8

—

See, Halifax Drainage Dist. of Volusia County v. State, 134 -

Fla. 471, 185 So. 123; State ex rel. Root v. Crandon, 115 Fla.

153, 155 So. 6.67; Hardee v. State, 83 Fla. 544, 91 So. 909;

‘Forbes Pioneer Boat Line v.> Board of Commissioners of

Everglades Drainage District, 77 Fla. 742, 82 So. 346; Arundel

Corp. v. Griffin, 89 Fla. 128, 103 So 422; 11 Fla. Jur., Drain- -

age and Drainage Districts, § 9.

B-6

implied authority to use means necessary to make the.

expressed power effective * * *,” Molwin Investment

Co. v. Turner, 123 Fla. 505, 167 So. 33, a district does not

have the power to do those things reasonably necessary

to carry out the express power.

‘We think that giving full voice to this oii the

inquiry remains one of statutory authorization, and as

to that, we conclude that this type of contract is author-

ized.. |

Under one statutory provision, a district “* * *

shall have the right to hold, control and acquire by do-

nation or purchase and if. need be, condemn any land,

easement, railroad right of \way® * * *,” and under an-

other it “* * * may acquire | by gift, nerciane, exchange,

donation or condemnation, * * * ’ lands: * * * for canal

. right of as al ight iad tae | P

he acquisition of right of way for ditches, cul-

ae and canals is an absolute essential to. the opera-

tion of a drainage district. A district has the express

power to acquire and hold property. Whether this ease- |

| ment contract is an ae, of a lea in sane from .

3. Florida Statute, Sec. 298. 22, the district may “* * * construct.

and maintain * * * ditches, canals * * *; construct any and

all of said works and improvements across, through or over

any public highway, railroad right of way, track, grade, fill

or cut * * *; and shall have the right to hold, contrdl and

acquire by donation or purchase and if need be, condemn any

land, easement, railroad right of way, * * * for right of

; way * * #7)

4. Fla. Stat., §298. 62:

“Any and all drainage and sub-drainage districts created or

organized under*the laws of the state may acquire by gift,

purchase, exchange, donation or condemnation, any lands with-

in or without the said district for canal right.of ways, or for

other general purposes of the said district, and if acquired by

condemnation the procedure shall. be as prescribed in chap-

ter 73. of

‘4

B-7

the Railway in return from the promises of the District

in paragraph 8, and those detailed in note 3, supra, we

need not narrowly determine. Neither do. we resolve it

- narrowly asa “purchase.” The two terms, used in paral- |

lel, reflect a purpose to allow some latitude in the choice

of means by which the property right is obtained. |§ --——._

The express right to resort to condemnation is a

positive assurance that needed property will be acquired.

It reinforces the inference that it was to be left to the.

good faith managerial judgment of the district authori-

ties to determine the relative advantages or disadvan-

tages in the various available means of acquiring the

needed facilities. The consideration for the .property

might be the payment of a lump sum in cash along

conventjonal lines or the payment of stated sums over. _

a fixed period of time. The right and obligation to

pay flows. from the power to acquire. |

—_—_—__—_But-its-nature-is-not-altered_if the consideration is _

not cash, but an agreement to do a specific thing. For

‘ example, the undertaking in paragraph 5, note 3, supra,

to make and pay for repairs to the Railway’s property

occasioned by maintenance work, removal or weplace-

ment. of the culverts is certainly reasonable. Could ~~

one seriously question the obligation of the district to

do these things even had its easement or title been ac-

quired by condemnation? A parallel of this, and just

as reasonable, is the undertaking in paragraph 8 im-

posing on the district responsibility for “* * * loss, in-

jury or damage of or to the person and the property of

the Licensee [District] * * *.” Each of these is an es-

sential ingredient to the act of the Railway in granting

the right. While the subsequent ——— in ee

B-8

graph 8 to indemnify is an additional obligation, the

basic nature of it as a consideration moving the Rail-

way to make the grant remains the same. fa

The legislature has invested the district with au-_

thority to acquire by purchase or exchange. It.has not

prescribed how or in what manner that-purchase must -

‘be effected, nor the ndture or duration of the title. The

statutes do not demand that the consideration for the

purchase must be cash, now or later. To use a promise

as the consideration is a part of the express power

(and its exercise) to acquire by purchase-exchange.

Independent of concepts of.estoppel which we need

_ not pass on, this approach seems to be a sensible, reason-

able businesslike recognition that where one obtains the |

right to, or use of, property by agreements which are

traditional in‘ nature, any such agreement is not a col-

lateral undertaking, but is, -in reality, a part. of such

~acquisition:--If-the—property,—or- the_right to—its_use,_|

' ‘comes from the agreement, the agreement, reasonably _

related to the purpose of thé acquisition, is as valid

as the ownership. The one does not exist without the .

other. This concept has been well expressed in H. Ho-

hensee Construction Co. v. Chicago, M. St.P. & P. Ry

Co.,... Wis... , 261 N.W. 242, 243:

_ “This enumeratior’ of powers implies the __

power to enter into an agreement of indemnity

whenever such an agreement is necessary to its

protection or is to its advantage” in connection

with any contract it has e

_ make. -

* * * If it may accept a gift o land for sewer

purposes, it may accept it subject to such con- :

ditions as accompany the gift. If it may accept -

B-9

a gift of land for such purpose, it may accept a

gift of an easement in land for such purpose.

If it may purchase land for ‘such purpose, it

_ may purchase an easement in land for such

purpose. If -it may purchase an easement for

such’ purpose, it may purchase it without

-other consideration therefor than a promise to

indemnify the donor against liability resulting

from the use covered by the easement, and

against liability to which it is subjected dur-—- -—

ing the making of the structure.”

We recognize that it is probable in some states, and

perhaps possible as to some others, that the respective |

courts would consider an indemnity agreement beyond

the power of. the subordinate governmental entity.

- .Some of them, e.g., Vaughtman v. Town. of Waterloo,

note 5, supra, and Wheeler v. Sault Ste. Marie, note 5,

supra, emphasize particularly. the usual incapacity to

——make a --surety-or-guaranty—contract._But the con-_

tract here is not really comparable to a tragitional sure-

ty bond or undertaking to answer for the obligations of

another. Whatever the ultimate uncertainty might be

as to the significance;-if any, of the presence or lack of .

negligence on the part of the District or Railway or.

both, the contract makes positive that it relates in an

operational realistic sense to the activities of the Dis-

trict. By its terms the losses covered are confined to

5 See! e.g., these cases pressed heavily by the District: Nashville

v. Sutherland, 92 Tenn. 335, 21 S.W. 674; Becker v. Koekuk

Water Works, 79 Iowa 419; People v. Dibble, 189 N.Y.S. 29;

Vaughtman v. Town of Waterloo, 14 Ind.App. 649, 43 N.E.

476; Davenport v.. Pitt Cty Drainage District No. 2, 220 N.C.

237, 17 S.E.2d 1; Wheeler v. saylt Ste..Marie, 116 Mich. 338,

129 N.W. 685: American Malleables v. Town of Bloomfield, —

N.J., 81 Atl. 500, affd. 85 Atl. 167. .

B-10

those “* * * growing in any manner out of the installa-

tion, presence, operation, maintenance or removal of

said * * *” facilities.

Nor is there any basis for the fear that this subjects

a drainage district to a perpetual uncertain liability for-

unpredictable amounts. The District may subject the

matter to a continuous review to determine the current

wisdom of retaining essential property acquired by the

making of these promises, rather,than through the ‘ex-

penditure of cash resources. by voluntary purchase or

by condemnation. ‘Upon ‘such review, the district is

free:‘to determine a contract of this kind for a voluntary

grant of an easement subject to a thirty-day cdncel-

lation and obtain an absolute right or title free of con-

_ ditions by condemnation. proceedings.

While estoppel need not, if it could, be invoked to

sustain an action beyond a district’s power, see Hoskins

v. City of Orlando, 5 Cir., 51 F.2d 901, it may well be

where, as has now been done by us, the question of

power has been resolved and all that remains is the

manner of its exercise. This would inalude the asser-

‘tion of the subsidiary. contention that the contract

whose benefits have been enjoyed for 28 years had not

been executed’ by the proper officers or with adequate

formalities. For Florida recognizes a basic ‘distinction

that “* * * the principle of estoppel does not operate to

confer authority, though it may under some cireum-

stances be invoked to preclude a denial that authority

conferred was duly exercised.” State v. Greer, 88 Fla.

249, 102 So. 739.

. It follows that a claim was stated, and the cate

- must. be reversed and remanded for - Lurther and | not

inconsistent proceedings. |

REVERSED vad REMANDED.

B-11

RIVES: Circuit Judge, Dissenting:

I agree with the learned district judge that the

Florida Drainage District “had no authority to bind it-

self as an indemnitor as consideration for the acquisi-

~~ tion of an easement.”: Further, it seems to me that what

the Drainage District actually acquired from ‘the Rail-

road does not rise to the dignity of an easement, but

is nothing more than a.mere license. ‘That is shown by..

the contract as a whole and particularly by paragraph

7 thereof : .

_ “], The Railway may terminate this

agreement at any time by giving the Licensee _

thirty days notice, in writing, of its intention -

.so to do, and upon termination of this agree- 5

ment the Licensee, if required by the Railroad .

so to do, will, at his own expense, remove said

lines of pipe and all appliances or appurte-

riances thereunto belonging, from beneath the

tracks and from the property of the Railway,

or the Railway, at its option, or upon the re-

fusal of the Licensee so to do, may remove the

same, at the expense of the Licensee.”

Florida gives full lieved to the difference be-

tween an easement and a license, an easement being an

interest in land permanent in nature, while a license ‘is

a mere privilege to o do some act or acts upon the lands of

another.'

1. Gee Seaboard Air Line Ry. Co. v. ein. Fla. 1932, 149 So.

759, 761; Burdine v. Sewell, Fla. 1926, 109 So 648, 652; J. C.

Vereen & Sons v. Houser, Fla. 1936, 167 So. 45, 47; 17 Am. nJur.,

Easements, §4; 28 C.J.S., Easements, §2 b.

Florida Statute, $298.22, quoted in pertinent part

“ in.footnote 3 to the majority opinion, gives the Drainage

District authority to acquire “* * * any land, easement,

railway right of way * * * for right of way.” * °”

Section 298. 62, quoted in footnote 4 of the majority

opinion, gives the District authority to acquire “ * * *

any lands within or without the said district * * *.”

Nowhere can there be found authority to enter into an |

executory contract for the acquistion of a mere re-

vocable license. !

A drainage district in Florida is a. governmental

body with a limited sphere of operation and limited pow-

ers, and with no power or eenenity other than that con-

ferred by statute.?

. The authority to enter into a contract of indemnity,

- here sought to ‘be enforced, cannot be derived from

the authority to “purchase” or “exchange” “lands” or

an “easement.” The word “purchase” in common usage

means to obtain property by paying an equivalent in

money.*® “Exchange” is a word of. precise import mean-

ing the giving of one thing for another and requiring

the transfers to be in kind.‘ The Florida ‘statutes do

not expressly or impliedly authorize -the Drainage Dis-

trict to bind itself by future promises contained in an |

executory contract any more than they authorize the

District to bargain for or acquire a mere license or per- -

sonal privilege for a right of way. '

_ Forbes Pioneer Boat Line v. Board of Com’rs, Fla. 1919, 82 So.

346, 350; Halifax Drainage District Volusia County v. State,

Fla. 1938, 185 So. 123, 129; State ex rel Davis v. Jumper Creek

* Drainage District, Fla. 1943, 14 So. 2d. 900, 901..

3. (35 Words and Phrases, permanent ed., page 477.

4. 15A Words and Phrases, permanent ed., pp. 131, et seq.

\ ” B13

The Wisconsin case of H. Hohensee Construction

Company v. {Chicago\M.St.P. & P. Ry. Co.,.. Wis. .

261 N.W. 242, 243, is distinguishable because the City of

Milwaukee had much broader powers than the Florida

Drainage District. A later Wisconsin case, Pohland v.

City of Sheboygan, 251 Wis. 20, 27 N.W. 2d 736, pointed

- out that that case should not be construed to hold that

the city can make an indemnity contract “except so far

as it is necessary for its own protection.” It was not

necessary heré for the Drainage District to make a con-

tract of indemnity for, if it could not agree with the

Railroad on the purchase of.a right of way, the Florida

statutes vested in the Drainage District the power of

condemnation.

‘

No .principle of estoppel can apply against the

Drainage District, because it is a-creature of the gen-

- eral statutes andall persons dealing with it are charged

- with notice of the limitation of its powers.’ .

It. has been clearly established that a diainage dis-

trict is not liable for its torts. Rabin v. Lake Worth

Drainage District, Fla. 1955, 82 So. 2d 353. One of the

grounds for that immunity was thus expressed by the .

Supreme Court of Florida:

“The district has the power only to assess”

against lands within its boundaries assess-

ments to accomplish an over-all drainage oper-

- ation to make the lands within the whole area

cultivable and keep them so. The assessments —

for’ main and subsidiary cane are made

‘against the ae parcels of.lands accord-

_ 53 State ex rel Davis v. Jumper ‘Creek Drainage District, Fla.

1943, 14 So. 2d. 900, 901. See, also, Mayor, etc. of City of

Nashville v. a 92 Tenn. 335, 21 S.W. 674.

B-14

ing to the benefit each parcel will receive from

the project as a whole. Hearings are conducted

so that any property owner aggrieved by the

assessment may be heard. The financing of

the improvement is based on the total assess-

ment, the’ obligation undertaken to construct

. the project is discharged from the assessments

paid. How could the district be coerced to pay

any. judgment obtained in a tort action except

on the theory that by the commission of the

‘tort the lands in the district were benefited ‘ r

82 So. 2 at p. 355.

The ‘nied of the drainage district from liability

for torts is for the benefit of the landowners of the

district and to insure that their tax moneys will be |

applied to the purposes for which the drainage district

was established.

‘The same public policy of the State of Florida which

immunizes the Drainage District from liability for its

torts should apply with all! the more force to forbid it

. to enter into an indemnity agreement covering but not

limited to losses resulting from the negligence or fault

of the Drainage District.

. Whea the Florida sae and its courts have

. thus declared the public policy of the State, that policy

should not be nullified by the contract of the ‘Super-

visors of the . district.

I would affirm the judgment of the district court.

If, however, its judgment is to be reversed, then, con-.

sidering the nature of this action, its importance to

the Drainage District, and to the execution of the poli-

cies of the State of Florida, I would not-think that the

B:i5

‘ form of the action as being at law instead of in equity

‘ ought to prevent the federal district court,.as a matter

of sound discretion, from declining to exercise its jur-

isdiction until the State courts can authoritatively settle

the questions of State law.* |

I respectfully dissent.

» Commonwealth of Pennsylvania v. Williams, 294 U.S. 176, 185,

' 55 S.Ct. 380, 385, 79 L.Ed. 841; Burford v. Sun Oil Co., 319

US. 315, 318, 63 S.Ct. 1098, 87 L.Ed. 1424; Great Lakes Dredge

& Dock Co. v, Huffman, 319 U.S. 293, 297, 63 S.Ct. 1070, 87

L.Ed. 1407; Meredith v. City of Winter Haven, 320 U.S. 228,

235, 64 S.Ct. 7, 88 L.Ed. 9; Alabama Public Service Commis-

sion v. Southern Ry. Co., 341 U.S. 341, 349, 350, 71 S.Ct. 762,

95, L.Ed. 1002; Leiter Minerals, Inc. v. United States, 1957, 352

U.S. 220, 229.

7) ae

| _ JUDGMENT.

; y Extract frois - Minutes ét January. 14, 1958

‘SEABOARD AIR ‘LINE RA(LROAD COMPANY,

No. 16590 versus }

—

SARASOTA-FRUITVILLE, DRAINAGE DISTRICT.

58 e

f : | This cause came on to bé heard ste

"of. the record from the United States Distriet Court for

the Southern District of Florida, . and. was wee by

e counsel; Ze

* : TAS, »

ae On consideration whereof, It is now here ordered

wy. y and adjudged by this Court that the judgment of “the

, ‘ saia District Court i in this cause be, and the same is

hereby, reversed; and: that this cause be, and it is here-

_by, remanded to the said District Court for further and

not inconsistent proceedings in accordance with the °

opinion, of this Court;

rf ) It is. etnie ordered and adjudged that the appel-

a lee; Sarasota-Fruitville Drainage District, be condemn-

ed to pay the costs of this cause in this Court fc which

execution may be issued out of the said District: ‘ourt.

| “Rives, Circuit Judge, dissenting.”

‘

_. Before RIVES, TUTTLE and BROWN, Giron Sizes

or’ re- +

‘et Fs

.- Tee. 7

ess FOR THE FIFT:: CIRCUIT .-

; No. 16590

9 . .

” SEABOARD AIR LINE RAILROAD COMPAN 7

Appellant, * ee ee >

versus

* SARASOTA: -FRUITVILLE DRAINAGE DISTRICT, ne

Appellee.

Appeal] from the United States District Sauk for the

Southern ntanichels of Florida.

peo Wie (May 15, 1958.)

‘ON PETITION FOR REHEARING

. TUTTLE, Circuit Judge: This is a motio

hearing of the decision of this Court, which held, one

judge’ dissenting, that the judgment of the. trial court

should be reversed, 5 Cir., 251 F. 2d 583.. The question R

. presented on the appeal is the validity of an “agreement

entered into in 1925: ‘by which the Drainage District

agreed to save the Railroad harmless . “from all loss,

damage, cost and expense which thé Railway may sus- |

' tain, resulting from loss, injury or damage. . .. grow-

ing in any manner out of the installation, presence,

operation, maintenance or removal.of” culverts which.

the railroad gave the district a license, cancellable by

the railroad’ upon 30 days’ notice, to install: beneath its °

_ trackage on its.right of way.

a ’ ”

9 a

sen? | B18

ie On this motion the Drainage District strongly urges"

that such a state taxing unit cannot by contract bind

itself” to an obligation to respond for its acts injuring .

6f contract.

In considering a case. such as this it must be borne

in mind that the defense of the Drainage District carries

' with it none of the moral stigma which attaches to the

repudiation by persons sui juris of their contractural

obligations. - If the district is by law incapable: of bind-

ing itself ‘in this manner it is because of an overriding ..

public policy, and moreover it is or should be as ap-

parent to the other party to the coftract’ as to the

court which announces the principle. It is, after. all,

one of the oldest concepts in our system of- government ,

that the covereign cannot be sued without its consent.

This principle was succinctly stated by the United

States oe ‘Court in samara v. oe |

205 U.S. 349:

, “A sovereign is s exempt from suit, not wa

cause of any formal conception or obsolete the-

ory, but on the logical and practical ground

that there-can be no legal rights as against the

authority that makes the law on which the .

right depends.” 205 U.S. 349, a

. @ . ; ; ° fe hn GO

Upon careful consideration we think our previous

decision too greatly emphasized the. power of the dis-

trict to contract for the right to traverse the railroad’s °

right of way and ignored the critical fact that the con-

. tract here made to. acquire that right embodied an

agreement that may have been against public policy. :

B-19

As we said in our original opinion, all are agreed

that the Florida law is explicit that a drainage district.

created by Florida statute may not be made’ answerable |

for its torts. Arundel Corp. v. Griffin, 89 Fla. 128;

Rabin v. Lake Worth Drainage Dist., Fla., 82 So. 2d

353, cert. dénied 350 U.S. 958. Even though. in the lat-

ter case the effort to hold the district was on the

theory of an illégal taking of the plaintiff's property

the Supreme Court of Florida recognized that the dam-

“The General Drairag* District Act, Chap-

ter 298, Florida Statut.s, F.5.A., authorizes the

levying of taxes for sper.clc purposes stipulat-

‘ed in the Act. ‘These are limited strictly to the’

improvement and maintenance, of the drainage

district and the taxing. power ‘of the Board of

Supervisors cannot be exercised for any other —

_ purpose—general or special. See Campbell v. —

State, 133 Fla. 638, 183 So 340. To this extent

it can safely be concluded that it was not con-

templated by the Legislature that a drainage

district organized under the Act could be com- -—

pelled to respond in damages for a tort or

forced to levy taxes for this purpose.”

Rabin v. Lake Worth Drainage District, 82 So.

2d 353. “

The State of Florida has a valid interest in protect-

ing its taxpayers and‘citizens through public bodies —

_ such as this drainage district fronr certain liabilities.

In determining for what purposes the taxes paid shall

be put, the state has undertaken through statute and

- court decisions to balance the interests of individuals

- dealing with the districts. on the one hand and the tax- -

B-20. °

payérs acting through the public bodies on the other.

The statutes, in light of the decided cases, give the

district the power’only to levy taxes for specific pur-

poses and those purposes are limited to the improve-

ment and maintenance of the drainage district. The

District does have the power to acquire land or the

use of it by purchase, but the issue is whether it can

agree to pay for such purchase bya means which is

contrary to the —s of the state.

Certainly the district could pay money or other

valuable consideration, so long asthe consideration is

not one that is itself illegal. ‘Since the district could not

be liable by law in tort for its negligence or vicariously

for that of others, it should not be allowed to accept

such liability merely because accepting it is considera-

tion for the acquisition of a valuable right. To hold

otherwise would be to permit the district to negate a

policy the state has established for the protection of its

_ citizens by permitting the district to assume a liability

" or purpose for which the taxpayer’ Ss money is to go when

the legislature and the courts of Florida have said that

such money. must not go for that purpose.

The- Florida Supreme Court has held in several

cases that the fact that a taxing unit has attempted to

obligate itself to use tax money in a way not otherwise

authorized v making a contract that is beneficial to

the taxing ‘unit does not justify the otherwise illegal

expenditure of tax funds. State, ex rel, Davis v. Jumper

Creek Drainage District, 153 Fla. 451, 14° So. 2d°900;

First National Bank of Jacksonville v. Duval County,

45 Fla. 496; 34 So.'894; Brumby v. City of eta

‘B21

We conclude that the indemnity agreement in the.

“contract was void and may not be enforced,

The conclusion we ‘now reach is, we think, also in

accord with the weight of authority in other jurisdic-"

tions. Nashville v. Sutherland, 92 Tenn. 335, 21 S.W.

674;. Becker -v. Keokuk Water Works, 79 Iowa 4195

_ Vaughtman v. Town of Waterloo, 14 Ind. App. 649, 43

. NE 476; Wheeler v. Sault Ste. Marie, 116 Mich.338, 129

NW 685; Adanis v. City of ‘New Haven, 131 Conn. 552, —

41 A. 2d 111; Nashville Trust Co. v. City of Nashville,

182 Tenn. 545, 188 S.W. 2d 342.” - aie

The motion for rehearing is granted; the decision

and opinion of this Court heretofore entered are with-

- drawn and set aside and the judgment of the trial court

is AFFIRMED.

BROWN, Circuit Judge, Dissenting:

To the reasons set forth in the Court’s original

opinion, 251 F.2d 583, I would add as the basis of my |

dissent a-few comments.

The Court’s decision is changed not for the reasons

set forth by my Brother Rives in his original dissent,

251 F.2d 583 at 588—it is changed because of the rule

of sovereign immunity. _

The rule of sovereign immunity is one.which had

its origin in a different day. It is, I believe, now: thor-

oughly outmoded and despite the efforts of the logicians

to make it appear just or wise, it is looked upon as an

anachronism typical of the feudal monarchial society

whick. gaye it birth. ; :

“ B-22

While in diversity litigation we are duty bound

faithfully to search out and then apply state law, includ-

ing a local rule of sovereign immunity, we ought not to

- apply it to new situations unless the tide of local anal-

ogous law ‘is simply too much to stem. When faced -

with this problem, it is no simple answer to say that

if the principle is unsound, it is for the legislature to.

make the change. As distasteful as it may. be to con-

ceptual puvists to acknowledge a legislative consequence

in adjudication, the fact remains that decision- making _

is actually legislating, at least‘in the sense of applying

or extending an old principle to a new situation.

That is precisely what is really done here. For all

concede that the problem here presented. is new to

Florida, and whichever way we turn, we use the Florida

past as the usual working tools for the future. But

while this apparent conservatism may seem to make

* it more palatable, the fact is that we now decide for

the first time that in this new situation the rule of

sovereign immunity has pervasive decisive force.

Where the choice is open, t think we ought not to-

_ give this transfusion to a body of law that is now so

weary. If we attempt to assess shat the likely holding

of Florida would be, we ought, I ink, to appraise care-

' fully the Florida climate in this’ very field. Here I think

the Florida atmosphere is increasingly hostile to this |

vestigial rule for as new situations arise, Florida de-

clines to apply it. See for example State Road De-.

partment v. Bender, 147 Fla. 15, 2 So. 2d 298; State Road

_ Department v. Tharp, 146 Fla. 754, 1 So.2d 868; Kauf-

man v. City of Tallahassee, 84 Fla. 634, 94 So. 697;

Bray v. City of Winter Garden, .. .. Fla . : ., 40 So. 2d

‘459; City of Miami v. Brooks, ... Fla... . +» 10 So. 2d 306.

B-23 res

Moreover the gpproach' of the Court is to obliterate

the distinction between a tort liability and that imposed

by contract apparently on the theory that the dollar im-

pact on the entity would be the same.

Of. course that is to disregard really ancient mark-

_ ers as hoary as the plea that the king can do no wrong.

And it introduces a disturbing innovation in Florida-law

that if, on analysis, the entity would not have been

liable had the judgment’ been rendered in a tort action,

there can be no liability under an express contract.

- What that does is sharply illustrated by the con-

tract in question here by which for twenty-five years

the entire District has obtained a real and essential

benefit. In it the District agreed that it would make all

repairs to the track and right of way necessitated by

the use, maintenance or alteration of the under-track

1. “The Court states: '

“Certainly the district could pay money or cther valuable con-

sideration, so long as the consideration is not one that is

itself illegal. Since the district could not be liable by. law in

tort for its negligence or vicariously for that of. others, it

should not be allowed to accept such liability merely because

accepting it is consideration for the acquisition of a valuable

right. To hold otherwise would be to permit the district to

negate a policy: the state has established for the protection

of its citizens by permitting the district to assume a liability

or purpose for which the taxpaycr’s money is to go when the

legislature and the courts of Florida have said that such money

must_not_go for that purpose.” ~

| | ay B-24 i = |

* drainage lines.“ That is a perfectly reasonable contrac-

tual undertaking. The. right to make alteration and re-

pairs and to maintain the drainage pipes gives rise to

a contractual obligation to perform the operations in a

workmanlike manner. A breach of performance would

be .a breach of contract notwithstanding the fact that

it might have tort implications, see, e.g., Weyerhaeuser

S.8. Co..v. Nacirema Co.,... U.S... , 2 Led. 2d 391,

see especially at p. 494 and footnote 5; Ryan Stevedor-

ing Co. v. Pan-Atlantic 8.8. Corp., 350 U.S. 124, 100

L.ed. 133, 141. ae | .

. I would doubt that the most ardent advocate of sov-

ereign immunity would claim that such a contractual

undertaking. was beyond the power of a Florida Drain-

age District if, assuming that the drainage easement

was obtained by formal condemnation proceedings, the

District, as a part of subsequent improvement or main-

tenance, went in and removed the dirt fill from under

the tracks for a distance of 25 feet leaving rails and

)

The contract provides:

“3. The lines of pipe shall be installed, maintained, repaired

and renewed at the expense of the Lice~see [District] and

under the supervision and direction, and subject to the ap-

proval and acceptance, of the Chief Engineer of the Railway.

* ~ * * * . ; ;

_% “5. The Licensee [District] will make all repairs to the tracks

and other property of the Railway necessitated by the installa-

tion, 6peration, use, rnaintenance or removal of said lines of

pipe * * * The Railway may, at.its option, make such repairs,

_ and the Licensee [District] will * * * promptly reimburse the

Railway therefor.

“6. Should the Licensee [District] discontinue the operation

of said lines of pipe * * * said lines of pipe shall. be removed

by the Licensee [District] at the expense of the latter, from

beneath the tracks and from the property of the Railway, or

the Railway may, at its option, remove the same, at the ex-

‘pense of the Licensee [District]. In case of; such removal,

* * * the tracks and property of the Railway are to be left in

as good condition as when previously found * * —

3 /

B-25

fastened ties suspended in mid-air Would the Rail-

road under the state and national duty-imposed upon

it to run the trains be without a remedy save by the

sovereign’s grace? . | a

The answer, in the light of the Court’s opinion, is

now at best obscure. For now the touchstone is whether .

the liability is a vicarious tort liability or is akin to

it or might have been cast-in such a form.

By confusing that which is basically different, by

sweeping aside a jurisprudence produced by centuries-

of experience recognizing, especially in the field of

municipal and governmental entities, a distinction be-

tween tort and contract; we have done an unusual

thing: we have made the wall of sovereign immunity

higher and stronger, in Florida. aia

‘I therefore respectfully dissent.

aa,

B-26

ORDER ON MOTION FOR REHEARING.

Extract from the Minutes of May 15,: 1958.

SEABOARD AIR LINE RAILROAD COMPANY,

No. 16590

versus

SARASOTA-FRUITVILLE DRAINAGE DISTRICT. :

It is ordered by the Court that the motion for re-

hearing filed by appellee in this cause on February 12,

1958 be, and the same is hereby, eee: 3 ,

It is further ordered that the opinion and judg-

ment heretofore entered,on ganuary 14, 1958, whereby

the judgment of the United States District Court: for

the Southern District of Florida was reversed, be and

the same is hereby, withdrawn and set aside;

_ On further consideration of this cause, It is now

here ordered and adjudged by this Court that the judg-

ment of the said District Court in this cause be, and the

same is hereby, affirmed;

It is further ordered -and adjudged that the appel-

lant, Seaboard Air Line Railroad Company, be con-

demned to pay the costs of this /cause in this Court for

which execution may be issued out of the said District

Court. / ;

“Brown, Circuit Judge, digdenting.”

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.