Atchison, T. & S. F. Ry. Co. v. Drainage Dist. 1 of Lyon County

• Decision Date: 03 July 1931
• Docket Number: 30293.,30284
• Citation: 133 Kan. 586,1 P.2d 253
• Parties: ATCHISON, T. & S. F. RY. CO. v. DRAINAGE DIST. NO. 1 OF LYON COUNTY et al. MISSOURI-KANSAS-TEXAS R. CO. v. SAME.
• Court: Kansas Supreme Court

1 P.2d 253

133 Kan. 586

ATCHISON, T. & S. F. RY. CO. v. DRAINAGE DIST. NO. 1 OF LYON COUNTY et al.

MISSOURI-KANSAS-TEXAS R. CO. v. SAME.

Nos. 30284, 30293.

Supreme Court of Kansas

July 3, 1931

Syllabus by the Court.

Statute under which drainage district was organized should, on abandonment of project, govern liquidation of obligations incurred in formative stage.

Where a drainage district was organized and it was afterwards determined that its corporate purposes were too burdensome or impracticable to be executed and that they should be abandoned, the statute under which the obligations incurred in its formative stage should be liquidated is the one under which it was organized and according to the construction placed upon that statute by the courts whose jurisdiction was regularly invoked for that purpose.

Debts incurred in formative stage of drainage district should, on abandonment of project, be liquidated by percentage tax on realty.

Where debts are incurred in the formative stage of a drainage district, and the drainage project is abandoned, those debts should be liquidated by a percentage tax on all the realty within the district and not on a fatuous calculation of what benefits would have been conferred upon the various properties within the district if the project had not been abandoned.

Railroad property constituting real property is subject to taxation as "land" in assessment project incident to organization of drainage district, notwithstanding statute (Rev. St. 1923, 79--102).

Although for general purposes of taxation all railway property is classified as personal property, nevertheless whatever part of such property is in fact real property is subject to taxation as land in an assessment and taxation project incident to a scheme to organize a drainage district in which such railway property is located.

Railroad claiming property was unfairly assessed for liquidation of debts of drainage district must pursue statutory remedy, and cannot recover taxes paid or enjoin assessment (Rev. St 1923, 79--707, 79--1404, 79-- 1409, 79--1702).

If the railway property subject to taxation for the liquidation of the debts of the drainage district was unfairly assessed, the statute provided a remedy therefor, and any grievance pertaining thereto was not justiciable in this action.

Evidence held not to sustain complaint that assessment within drainage district included property of railroad other than real estate.

The complaint of one of appellants that in assessing its land within the drainage district the value of its personal property, terminal facilities outside the district, going value, and intangible assets was included, is not sustained by the record.

On abandonment of drainage project, percentage tax on all realty to liquidate indebtedness was proper, though indebtedness might otherwise have been apportioned according to benefits.

The percentage tax on all the realty in the drainage district to liquidate its indebtedness was proper, although, if the drainage project had not been abandoned, that indebtedness in whole or in part might have been absorbed and apportioned to particular tracts within the district according to the benefits accruing thereto.

The objection that the levy to liquidate the district's indebtedness was excessive considered and not sustained.

Appeal from District Court, Lyon County; Cassius M. Clark, Judge pro tem.

Suit by the Atchison, Topeka & Santa Fé Railway Company against Drainage District No. 1 of Lyon County and others, and suit by the Missouri-Kansas-Texas Railroad Company against the same defendants. From adverse judgments, plaintiffs appeal.

Wm. R Smith, Alfred A. Scott, and C. J. Putt, all of Topeka, and Wm. Osmond, of Great Bend, for appellant Atchison, T. & S. F Ry. Co.

W. W Brown and C. E. Pile, both of Parsons, and O. T. Atherton, of Emporia, for appellant Missouri-Kansas-Texas R. Co.

O. L. Isaacs, of Emporia, for appellee Board of Trustees of Drainage Dist. No. 1.

Clarence V. Beck, Co. Atty., of Emporia, for appellee J. H. Glotfelter.

DAWSON J.

These are consolidated appeals from judgments of the district court of Lyon county wherein the appellant railway companies were denied injunctions to restrain the collection of certain taxes imposed on their property by the defendant drainage district and denied recovery of certain taxes paid by them under protest.

The litigation grows out of certain proceedings heretofore undertaken to create a drainage district in Lyon county. The purposes for which the district was organized were found to be impracticable, and the project was abandoned, but the undertaking had gone the length of creating certain indebtedness which must be paid. The problem of how that indebtedness should be liquidated was considered in Fidelity Nat. Bank & Trust Co. v. Morris, 127 Kan. 283, 273 P. 425, and Fidelity Nat. Bank & Trust Co. v. Morris, 130 Kan. 290, 286 P. 206.

To liquidate the indebtedness of the district, its officers made a computation of the estimated amount required, and certified a levy to the county clerk of .01672 cents on each dollar of valuation of real and corporate property in the district. On that basis the tax assessment against the Santa Fé Railway's corporate realty within the drainage district was $7,288.22, and against the Missouri, Kansas & Texas company the sum of $4,129.17.

Plaintiffs paid the first half of these assessments under more or less effective protests. In their respective petitions to recover these payments and to enjoin collection of the remainder, plaintiffs allege many infirmities in the proceedings leading to the assessments and taxes complained of. Such of these as require consideration will be noted in connection with plaintiffs' arguments directed against the judgments which the trial court entered in behalf of the defendant drainage district.

The first contention of the Santa Fé Company is that its property within the district was well above flood level and therefore it could not have been benefited if the drainage project had been put into effect. To that there are at least two answers: Property may be isolated or marooned by flood water where not submerged by it, and a flood protection scheme might be as beneficial to it in the one case as in the other. Roby v. Drainage District, 77 Kan. 754, 95 P. 399. Again, if the proposed flood protection scheme had been of no practical benefit to the Santa Fé Company, it is a fair presumption that the responsible officials would have so determined, and no other assessment than its proportional liability for the general overhead expenses of the district would have been imposed on its property.

The same appellant next raises the question as to what law governs its liability for these taxes--the statute under which the district was organized or the statute of 1929. We think it clear that it is governed by the original act and the interpretation thereof as stated in Fidelity Nat. Bank & Trust Co. v. Morris, 127 Kan. 283, 286, 273 P. 425, 426: "How shall that tax be levied? *** Whatever benefits have been received by land within the district have been received from the survey and report of the engineer, the rejection of his report, and the determination to abandon the project. Those benefits, whatever they were, have been received by all the land within the district. *** It follows that in any effort to be obedient to the law the tax to pay this indebtedness should be a percentage tax levied on all the land in the district according to its value in money."

That ruling was made on January 12, 1929. The statute of 1929, to which appellant refers, is evidently Laws 1929, c. 175, Rev. St. Supp. 1930, 24--647 et seq., which took effect on May 28, 1929. It therefore has no bearing on the question at issue. Douglas County v. Woodward, 73 Kan. 238, syl. 1, 84 P. 1028; Bailey v. Baldwin City, 119 Kan. 607, 240 P. 852.

The next point raised by the Santa Fé Company is an inquiry as to what this court meant in the Morris Case just quoted, where we said that the tax to pay the indebtedness should be a percentage tax levied on all the land in the district according to its value in money. Counsel would remind us...