TUTTLE, Chief Judge.
This is an appeal by Negro plaintiffs, residents of the City of Jacksonville, Florida, from a judgment of the trial court refusing to enjoin two private individuals, who had purchased two separate golf courses formerly operated by the City, from restricting the use of the golf courses to white patrons only.
Earlier in the litigation the trial court had enjoined the City of Jacksonville from continuing to operate the golf courses on a racially segregated basis. Thereafter, the City, after taking bids, on terms very favorable to any prospective purchaser, including the right to make a very small down payment and an extended period for paying the balance of the purchase price, accepted bids from the two former golf professionals at the two respective courses for the purchase of the two courses. In one instance there was a down payment of $10,000, and a mortgage for $590,000, for a total purchase price of $600,000; and in the other instance there was a down payment of $15,000, and a mortgage of $600,000, for a total purchase price of $615,000.
Each of the two conveyances contained the following reversionary clause, which had the effect of assuring that the two golf courses would be continued to be used by the purchasers only "for the purpose of a golf course." This reversionary clause is in the following language:
This reversionary clause was inserted in the deeds pursuant to ordinance passed by the City Commissioners of the City of Jacksonville, and upon the recommendation of one of the City Commissioners, Thomas, who had held the post on the Commission administering the financing of the city's golf courses, parks, and other public amusement places. Commissioner Thomas testified that the reverter clause that he suggested to be placed in the deed was designed for the purpose of insuring the citizens of Jacksonville of having golfing facilities.
It is not contended by the appellants that the deeds were not made in good faith — that is to say, that there were any side agreements or understandings between the City and the purchasers to the effect that the purchasers would operate the golf courses on a segregated basis if they acquired title to them. The basis of their claim that they are entitled to the relief sought is that, by virtue of the restrictive covenant in the deed, the City projected its control into the hands of the new owners. Thus, they contend, action of the owner is still City action. There is thus no issue of fact here for our determination. The only question is a legal one: Do the agreed facts compel the conclusion that the operation of the golf course in the hands of the new owners continue to be state action within the purview of the XIV Amendment?
It is conceded, as it must be by the appellees, that if the City of Jacksonville had entered into a long term lease with these grantees, under which an estate for years or a leasehold had been created, to enable the lessees to continue the operation of the City's golf courses, the City would still be involved to the extent necessary to constitute such operation state action. Such is clearly the law, not only in this Circuit but in the other Circuits in which the courts have passed on this proposition. In the case of Derrington v. Plummer, 5 Cir., 240 F.2d 922, this Court said:
In that case we held that a lessee of county courthouse space for restaurant facilities stood in the place of the county and that "His conduct is as much state action as would be the conduct of the County itself."
The United States Supreme Court has recently said in Burton v. Wilmington Parking Authority, 365 U.S. 715, at page 725, 81 S.Ct. 856, at page 861, 6 L.Ed.2d 45:
On the other hand, it is clear, and it is conceded by the appellants, that there is no requirement under the Fourteenth Amendment or otherwise that a city must continue to operate such public amusement facilities as a golf course if it decides for any reason that it no longer wishes to do so. See Frank Hampton et al. v. City of Jacksonville, Fla., 5 Cir., 304 F.2d 319, in which we have held that the City of Jacksonville has the legal authority to withdraw from the field of operating swimming pools completely, if it desires to do so. And see City of Montgomery, Ala. v. Gilmore, et al., 5 Cir., 277 F.2d 364; and Tonkins v. City of Greensboro, 4 Cir., 276 F.2d 890. The appellees rely heavily on these decisions, and on the case of Eaton v. Board of James Walker Memorial Hospital, 4 Cir., 261 F.2d 521, as distinguishing the rights of Negro plaintiffs to non-discriminatory use of formerly publicly owned facilities which had been sold in a bona fide sale to private parties, from those cases in which a like claim is made as to formerly publicly owned and operated facilities subsequently leased to private lessees for operation.
Conceptually, it is extremely difficult, if not impossible, to find any rational basis of distinguishing the power or degree of control, so far as relates to the state's involvement, between a long-term lease for a particular purpose with the right of cancellation of the lease if that purpose is not carried out on the one hand, and an absolute conveyance of property, subject, however, to the right of reversion if the property does not continue to be used for the purpose prescribed by the state in its deed of sale. Appellees in this case stress the fact that there is no "immediate control," and that there is no "present interest" in the City of Jacksonville. These are empty phrases when considered in connection with the absolute obligation on the part of the present owners of the property that they immediately, presently and always use the leased property for golf course purposes, and no other. This is complete present control even though the daily operation is, of course, not subject in other matters to the City's direction.
In the case of Boman v. Birmingham Bus Company, 5 Cir., 280 F.2d 531, we noted that when a state authorizes a
Appellees' reliance on Tonkins v. City of Greensboro, supra, is misplaced. In that case there was an outright sale of a swimming pool without any restriction or reversionary clause of any kind. The inclusion of the restrictive covenant here is a distinguishing factor of the utmost legal significance. With reference to the Fourth Circuit case of Eaton v. Board of Managers of James Walker Memorial Hospital, supra, it appears that it was decided before the Supreme Court announced its decision in the Wilmington Parking case, supra. Being unable, as we are, to find any valid distinction between the effect of the lease in the Wilmington Parking Authority case and the sale with a reversionary interest in the Walker Hospital case, we doubt whether the Court of Appeals for the Fourth Circuit would have decided the Hospital case as it did had it followed the Supreme Court decision. In any event, we feel that this Court's decision in Derrington v. Plummer, supra, expresses the law of this Circuit, which furnishes the guide to our action.
We conclude that the inclusion of the reversionary clause in these conveyances constituted the purchasers of the two golf courses state agents, within the purview of the Fourteenth Amendment.
The judgment of the district court, therefore, must be Reversed and the case Remanded to the trial court for further proceedings not inconsistent with this opinion.
GEWIN, Circuit Judge (dissenting).
In this case the majority opinion assigns the judicial plow to an earthmoving task in strange new ground. Being unable to follow the winding and flexuous course of the furrows that skim across the surface in important areas, cut a shallow track at other places, and never reach standard depth anywhere, I respectfully dissent.
At best, the majority opinion constitutes an unwarranted extrapolation of the principle of equal protection of the laws as set forth in the Fourteenth Amendment.
On April 1, 1959, effective as of April 7, 1959, the same court and the same judge, upon the plaintiffs' motion for a summary judgment, entered its final decree restraining the City of Jacksonville, Florida, its officers, agents, servants and employees and their successors in office, from refusing to allow the plaintiffs and other Negroes similarly situated to use two golf courses upon the same conditions as white persons. The court retained jurisdiction for the purpose of enforcing the injunction. On April 6, one day before the injunction was to take effect, the City of Jacksonville closed both golf courses. On August 11, 1959, the City passed an ordinance authorizing the sale of the golf courses, and on February 19, 1960, the city sold Hyde Park Golf Course to Fred A. Ghioto; and on February 29, 1960, the City sold the Brentwood Golf Course to Ronald Hurley. The race question is not mentioned in the ordinance, the minutes, the deeds or the mortgages.
On February 5, 1960, before the sales were consummated, appellants filed a petition to modify the final decree and asked the District Court to enjoin the sale of the golf courses; make the purchasers parties to the suit; and to enjoin them (the purchasers) from refusing to permit petitioners and other Negro citizens similarly situated the use of the
Logically, it appears to be appropriate to follow the reasoning of the majority opinion in the sequence there chosen.
The trial court who heard the evidence found as a fact that the two deeds and two purchase money mortgages in question contained no restriction as to the use of the property with respect to race; that no collusion, illegality, fraud or clear abuse of discretion had been shown to exist with respect to either of the sales of the golf courses; and that the sales were bona fide and without side agreement. The appellants in their reply brief state, "Appellants do not seek on this appeal to overturn the findings of fact of the District Court * * *", and further, "* * * do not challenge the findings of the District Court that the sale was bona fide and without side agreement"; and further, appellants do not challenge the power of the City to sell rather than integrate recreational facilities. While my brothers of the majority admit the validity of the sales as bona fide "without side agreement", the opinion insinuates a connotation otherwise, by making reference to the sales as being "on terms favorable to any prospective purchaser, including the right to make a very small down payment and an extended period for paying the balance of the purchase price * * *"; the fact that two golf professionals purchased the courses; and that Commissioner Thomas recommended the sale.
The record is devoid of any evidence from which even an inference could be drawn that the appellants have been denied the right to play golf on the courses since the sales were consummated. The petition was filed before the sales were completed. There is no in-indication that the appellants, or any of their associates, or anyone interested in them, made any effort whatever to purchase the property. The sales were advertised extensively, and the public at large was invited to tender bids for the purchase of the courses. In oral argument, counsel for appellants admitted that the purchasers (present owners) of the golf courses had the right to restrict golfing to members of the Negro race or could mix Negro and white golfers on the courses without violation of any of the terms of the sales.
It is also quite obvious that the present owners could sell the property, lease it or exercise any acts of ownership and possession they desire, subject only to the provision that the property must be used as golf courses.
After concluding, in the fashion herein outlined, that there is no issue of fact for our determination, the majority opinion holds that the legal conclusion reached by the trial court are not supported by the undisputed findings of fact.
The opinion proceeds to a consideration of the case of Derrington v. Plummer, 5 Cir., 240 F.2d 922, which had under consideration a lease. The opinion seems to conclude that every lease by city or county where the question of racial discrimination is in the background is unlawful. Yet, the quoted provision from Derrington clearly holds that leases which meet the required standard therein set forth may be valid; and further, the quoted opinion unqualifiedly asserts, "No doubt a county may in good faith lawfully sell and dispose of its surplus property, and its subsequent use by the grantee would not be state action.". (emphasis added)
The following facts in Derrington clearly distinguish it from the instant case. In the first place the property involved was not surplus property. It was the County Courthouse, closely related to all the functions of the County. A lease and not a sale was involved. By the terms of the lease, the County agreed to provide water service, lighting, heating and air conditioning. Employees of the County were to be given a 10% reduction in the price of food and drinks "through the use of coupons or meal tickets or other means as may be determined by the Commissioners Court of Harris County". (emphasis added) As stated in the Derrington opinion, discrimination had been practiced under the lease as a matter of fact: "During the original period of the lease, appellees undertook to purchase food in the cafeteria and Derrington refused them permission solely because they were Negroes.". Further, it was stipulated that if appellees or any other Negroes were again to present themselves for service,
The majority then seeks support from the recent case of Burton v. Wilmington Parking Authority, 365 U.S. 715, 81 S.Ct. 856, 6 L.Ed.2d 45 decided April 17, 1961. Adroitly, the majority seeks to use the cited case to establish the proposition that it was the duty of the City of Jacksonville to insert a provision in its deeds to the purchasers requiring the purchasers to discharge the responsibilities placed upon states by the Fourteenth Amendment. Such is not the holding of the Burton case. In Burton the court was careful to point out the facts which caused it to hold the lease invalid, among which are the following:
and finally the court finds as a fact:
The facts in the Burton case are a far cry from a bona fide sale without side agreement such as we have here admittedly.
The Burton case goes farther and establishes the legal principles applicable, among which are the following significant, clear and unequivocal pronouncements of the law:
In spite of the last quoted rule that the state must be involved "to some significant extent", the majority opinion holds that the City of Jacksonville has violated the equal protection clause of the Fourteenth Amendment because it indicates that the City is, "exercising a part of sovereignty" in that it is performing a state function. (Emphasis supplied.)
With reference to the reverter clause,
It is difficult to understand such a conclusion. To hold that the reverter clause here under attack vests in the City complete present control, violates long established rules of real estate law generally; the decisions of the Florida Supreme Court; and the applicable rules according to the latest edition of Restatement of The Law on the subject of future interests in real estate. In the case of Sorrels v. McNally, 89 Fla. 457, 459, 105 So. 106, the Supreme Court of Florida has held as follows:
Patton on Titles, Second Edition, Volume 1, Section 203, page 454 defines the interest as follows:
See also Tiffany Real Property, Third Edition, Volume 1, page 386; and 33 American Jurisprudence, Section 206, for substantially the same statement of the law.
Perhaps the best statement of the rule is set forth in Restatement, Property, Future Interests, Volume 2, § 155, page 532 (1936):
The holding of the majority that these fundamental real property laws correctly stated in ancient and modern texts are "* * * empty phrases * * *" is untenable in my view.
The case of Boman v. Birmingham Transit Company, 5 Cir., 280 F.2d 531, relied upon by the majority is not in point. Although the opinion in the instant case refers to the Birmingham Bus Company as "the private company", the opinion in Boman characterizes it as a public utility engaged in the business of furnishing transportation to the public, operating on the public streets of the city, engaged in "the public's business" and "* * * doing something the state deems useful for the public necessity or conveyance". As further pointed out in Boman, "this is what differentiates the public utility which holds what may be called a `special franchise', from an ordinary business corporation * * *." It is not simply "the private company".
It also seems to me that the majority has reverted to an unsupported statement of fact (though earlier stating that "There is no issue of fact here for our determination."), when the assertion is made in summarizing the support claimed from Boman that the golf courses were sold "* * * only on condition that they continue to be used in such manner that the public will still enjoy their benefits in the same capacity * * *". (emphasis added) Factually, the golf courses were not sold on the condition
In speaking of "* * * the right of reversion if the property does not continue to be used for the purpose prescribed by the state in its deed of sale" as being a reason for reversing the trial court, the majority indicates that "the purpose prescribed by the state" is an unlawful purpose. There is nothing unlawful in the reverter provision insofar as the equal protection clause of the Fourteenth Amendment is concerned. The trial court found the fact to be that no discrimination was involved in the transaction. In the lease cases cited there was a clear purpose of discrimination. If we accept the facts as found by the trial court that there has been no purpose of discrimination in this transaction, it seems inappropriate to assert that the purpose prescribed in the sale involved here is substantially the same as the purpose involved in the discriminatory leases mentioned.
We can not agree that consideration of Tonkins v. City of Greensboro, 4 Cir., 276 F.2d 890, is out of place here. While an outright sale with no reverter clause was involved there, it should be remembered that one of the chief issues before the trial court in this case was the claim of appellants that the sale was not bona fide and was infected with collusion. That issue was not abandoned until the appellants filed their reply brief. Even so, Tonkins still has some application in the instant case. Note 1 of the majority opinion quotes the testimony of Commissioner Thomas apparently to reflect on the motives involved in the sales; and the majority opinion emphasizes the factual consideration that the reverter clause was inserted in the deeds, "* * * upon the recommendation of one of the City Commissioners, Thomas, who had held the post on the Commission administering the financing of the city's golf courses, parks, and other public amusement places". In Tonkins the complaining parties relied heavily on the fact that Dr. Taliaferro as a member of the Parks & Recreation Commission "* * * did actively oppose the plaintiffs' demand and recommend sale of the pool, and that he was later instrumental in organizing the corporation which ultimately purchased it from the City." I agree that these considerations relate to the facts. As such, they are not applicable if the findings of the trial court were accepted at face value, as they should be.
The Eaton case
The Eaton case was decided on November 29, 1958 — less than four years ago. Certiorari was denied by the Supreme Court on May 4, 1959, three years ago. The Supreme Court decision referred to in the quotation is the Burton case — decided April 17, 1961, about one year ago.
Actually, the Eaton case is well reasoned and deserves the highest consideration. The facts are almost identical with the instant case, including a reverter clause.
In Eaton the court deals with other cases presenting essentially the same problem, all of which support the conclusion reached in Eaton. It is interesting to note that the District Court
Gross inconsistency in judicial pronouncements is an evil which we should not precipitate, whether unwittingly or deliberately. Philosophically, there are those who believe that consistency is a jewel, while others claim it to be a virtue of fools. Stare decisis should not control to the point of holding the court to ancient principles which no longer serve a good purpose. If correct moral reasons exist for overruling former judgments, former judgments should be overruled. All courts sit to correct errors, including those of its own; and if precedents must be overruled to achieve justice, that should be done.
Chief Justice Bleckley of the Supreme Court of Georgia in the case of Ellison v. Georgia Railroad Co., 87 Ga. 691, 696, 13 S.E. 809 (1891) said:
In the case of Galloway Coal Co. v. Stanford, 215 Ala. 79, 109 So. 377 (1926) Justice Somerville made the following comment on the doctrine of stare decisis:
Court decisions however, affect the very existence of people. Properly applied, the rule of stare decisis is grounded
Negro citizens of Jacksonville, Florida, and everywhere are entitled to fair and impartial treatment. They are not entitled to special treatment. To emasculate ancient rules which have guided the Judiciary through its long history solely for the purpose of achieving a particular result, is to set the judicial ship afloat in troublesome waters without chart, compass or rudder. Litigants are entitled to expect faithful obedience to well established rules, but no litigant is entitled to have a rule made solely for his benefit; especially when such special rules destroy the ancient landmarks and guidelines by which people have been taught to chart their affairs. Our function is jus dicere and not jus dare. There are no talismanic words which will convert illogical and unreasonable conclusions into logical and reasonable ones.
I would affirm.
JONES, Circuit Judge (specially concurring).
The City Commissioner who had been in charge of its golf courses testified that if its golf courses were operated without racial discrimination the play would fall off to an extent that there would be operational losses too great for the City to bear. If the City could not operate the courses on a non-segregated basis without losses too great to bear, it is not to be supposed that a private owner could profitably operate without discrimination, or that such an operator, who had made his purchase with little more than a token payment, could or would operate at a loss.
The City Commissioner's testimony showed two purposes for the inclusion of the reverter clause in the deed, first to obtain the highest value for the property and second, to insure the citizens of Jacksonville of having golfing facilities. Since the City believed the golf courses could not be operated without losses on a non-segregated basis, and nothing appears to indicate that the purchasers could operate otherwise, it follows that the reverter clause was intended to insure the operation of the golf courses for the citizens of Jacksonville who are white to the exclusion of those who are colored. This, I think, is State action.
"A. I recommended to the City Attorney that he include a reverter clause in the specifications because both of our appraisers when they went out and appraised the property, they said that the best potential value of the golf courses was the continued use as a golf course, so therefore, rather than to confuse the issue more, I recommended the reverter clause be placed in it and they be sold for the continued use as golf courses, so that the City may derive the highest sale price from the courses.
"Q. Commissioner, did you not only say that the purpose of the reverter clause was to provide and to assure the citizens of Jacksonville of some golfing facilities, something in that order?
"A. I believe I did say that with the reverter clause, the golf courses could not be diverted to warehousing projects, that the citizens of the City of Jacksonville would have golfing facilities.
* * * * * * *
"Q. Now, this reverter clause that you had in the deed, as you said, was designed for two purposes, one was to get the highest and best value for the property as golf courses and the other was to insure the citizens of Jacksonville of having golfing facilities, am I correct in that statement?
"* * * Under the sale retains a present valuable interest in both golf courses and that this interest under the sale will anner (sic) to the benefit of the citizens of Jacksonville and for said reasons unless the purchasers of both golf courses are enjoined from refusing to permit the petitioners and other colored citizens similarly situated to use the Hyde Park and Brentwood Golf Courses upon the same basis and upon the same conditions as white persons are permitted to use them, they will be denied the equal protection of the law * * *" (R. 6).
"* * * The purported sale * * * is an act of subterfuge on the part of the Defendant City of Jacksonville in an effort to abridge the rights of the petitioners and other colored citizens similarly situated in that the * * * price and conditions of each sale are unusual and uncommon * * * and * * * in bad faith" (R. 7).
In its order dismissing the petition to modify the final decree entered on April 1, 1960, the court found the issues to be as follows:
"The basic contentions made by plaintiffs in said petition were that the pending sales of the two golf courses and the transactions leading up to their sale were taken in bad faith, that the sales were not bona fide, were without adequate consideration, were an act of subterfuge to abridge the rights of plaintiffs and other colored citizens similarly situated from using said golf courses, and that the defendant city still retained an interest in said golf courses sufficient to require the purchasers to permit all citizens the use of same." (R. 201-2).
The court found the following facts:
"4. The two deeds and the two mortgages referred to above contained no restriction as to the use of the property with respect to race."
"5. There was no proof at the trial of any sort that any racial restrictions were imposed by any side agreement or any understanding, any tacit understanding or anything else, between the City Commission or anyone else connected with the city and each of the two purchasers, defendant Ghioto and Hurley, nor that said sales were not bona fide in all respects." (R. 204)
Throughout the trial, counsel for the appellants relied heavily on the allegations of subterfuge, fraud, etc. With reference to the admissibility of certain evidence, counsel for the appellants stated as follows:
"Your Honor, our original issue in this matter dealt with the question of whether or not the whole transaction here involved subterfuge." (R. 146)
The trial court stated the chief issue before it to be as follows:
"I certainly don't want to decide this case on any narrow technical ground. I don't want to exclude evidence on narrow technical grounds. I don't think it's the way to approach this case. I will permit examination about discussion between Commissioners of the reasons and terms of the sale and matters of that sort. Of course as to the actual vote on the sale, as you point out, they perhaps are exercising a legislative function, but this attack made by this petition is on the bona fides both of the Commission, the executive body of the City and of the two purchasers, these two impleaded defendants, Mr. Hurley and Mr. Ghioto, and I think we may as well open the thing up and see what happened. That's my view about it and you may continue along this course of examination, Counsel." (R. 130)
At the request of counsel for appellants, the witnesses were under the rule and as stated by the trial court in the quoted excerpts, the appellants were given every opportunity to present every shred of evidence available.
"Full, entire; including every item or element of the thing spoken of, without omissions or deficiencies; as, a `complete' copy, record, schedule, or transcript."
"Perfect; consummate; not lacking in any element or particular; as in the case of a `complete legal title' to land, which includes the possession, the right of possession, and the right of property."
See also 8 Words & Phrases, "Complete", p. 386; and Webster's Third International Unabridged Dictionary.
Black defines "control" as follows:
"Power or authority to manage, direct, superintend, restrict, regulate, direct, govern, administer, or oversee."
See also 9A Words & Phrases, "Control", p. 4; and Webster's Third International Unabridged Dictionary.
"The term `condition subsequent' denotes that part of the language of a conveyance, by virtue of which upon the occurrence of a stated event the conveyor, or his successor in interest, has the power to terminate the interest which has been created subject to the condition subsequent, but which will continue until this power is exercised."
The nature of the estate conveyed is further defined in Restatement, Property, Vol. 1, § 45, p. 133 (1936) as follows:
"An estate in fee simple subject to a condition subsequent is created by any limitation which, in an otherwise effective conveyance of land, (a) creates an estate in fee simple; and (b) provides that upon the occurrence of a stated event the conveyor or his successor in interest shall have the power to terminate the estate so created."