Bee v. City Of Huntington 0. 0. Eakle

• Decision Date: 19 September 1933
• Docket Number: (No. 7752)
• Citation: 114 W.Va. 40
• Court: West Virginia Supreme Court
• Parties: W. E. Bee v. City of Huntington0. 0. Eakle v. County Court of Braxton County et al.andJess Snider v. W. M. Martin, Assessor, et al.

114 W.Va. 40

W. E. Bee

v.City of Huntington

0. 0. Eakle

v.County Court of Braxton County et al.andJess Snider

v.W. M. Martin, Assessor, et al.

(No. 7752)

Supreme Court of Appeals of West Virginia.

Submitted August 30, 1933.

Decided September 19, 1933.

(Rehearing denied October 27, 1933)

1. Counties

The limitations on assessments prescribed by the constitutional amendment (section 1, chapter 9, Acts Extraordinary Session, 1932) adopted at the last general election, embrace levies for all purposes, including previous bonded debts, except in cases in which such limitations would necessarily result in the impairment of existing contractual indebtedness; and the various fiscal bodies of the state are, therefore, required to provide for the current requirements of existing contractual obligations before levying for current governmental expenses, in order to prevent levies in excess of the limitations.

2. Counties

In the event of the current requirements for legally contracted indebtedness of a governmental unit exceeding the amount leviable within the limitations, the levies may be extended to meet such obligations, notwithstanding the amendment.

Separate suits by W. E. Bee against the city of Huntington, by 0. 0. Eakle against County Court of Braxton County and others, and by Jess Snider against W. M. Martin, Assessor, and others, which were heard, respectively, on plaintiff's application for preliminary injunction, on plaintiff's application for appeal from adverse decree, and on plaintiff's application for injunction.

Injunctions awarded in first and second cases, and denied, in the third.

Maxwell, Judge, dissenting.

W. E. Bines and Van B. Hall, Koontz, Hurlbutt & Revercomb and W. Elliott Nefflen, for appellant Eakle.

James E. Cutlip, Prosecuting Attorney, and G. G. Davis and Homer A. Holt, Attorney General, for appellees County Court of Braxton County et al.

George S. Wallace, for plaintiff Bee.

Wm. C. Graham, MaxweU W. Flesher, Chas. Ritchie andj Philip H. Hill, for plaintiff Snider and defendant City of Huntington.

E. E. Winters, Jr., for defendants Martin et al.

Litz, Judge:

The first of these cases is a suit of a taxpayer, in the city of Huntington, to enjoin the levying of municipal taxes, for the fiscal year 1933-34, in excess of the alleged maximum levies permitted under the constitutional amendment adopted at the general election of 1932, classifying property for taxation and limiting the respective levies in the several classifications. The bill has been presented to this court for a preliminary injunction (under chapter 53, article 5, section 5, Code 1931), following the refusal thereof by the circuit court of Cabell County.

In the second case a taxpayer of the town of Sutton, Holly District, Braxton County, seeks like relief against the munici- pality, the county court of Braxton County, and others. This case is here upon application for an appeal from a decree of the circuit court of Braxton County, denying relief upon final hearing on the bill, answer and proof.

The third case is a suit by the owner of real estate, situate in Huntington, attacking the validity of the amendment in so far as it authorizes the classification of property for taxation to discharge prior governmental bonded indebtedness.

As the first and second cases involve the same questions, they will be considered, together, before discussing the third.

The amendment follows: '' Section 1. Subject to the exceptions in this section contained, taxation shall be equal and uniform throughout the state, and all property, both real and personal, shall be taxed in proportion to its value to be ascertained as directed by law. No one species of property from which a tax may be collected shall be taxed higher than any other species of property of equal value; except that the aggregate of taxes assessed in any one year upon personal property employed exclusively in agriculture, including horticulture and grazing, products of agriculture as above defined, including live stock while owned by the producer, and money, notes, bonds, bills and accounts receivable, stocks and other similar intangible personal property shall not exceed fifty cents on each one hundred dollars of value thereon and upon all property owned, used and occupied by the owner thereof exclusively for residential purposes and upon farms occupied and cultivated by their owners or bona fide tenants one dollar; and upon all other property situated outside of municipalities, one dollar and fifty cents; and upon all other such property situated within municipalities, two dollars; and the legislature shall further provide by general law, for increasing the maximum rates, authorized to be fixed, by the different levying bodies upon all classes of property, by submitting the question to the voters of the taxing units affected, but no increase shall be effective unless at least sixty per cent of the qualified voters shall favor such increase, and such increase shall not continue for a longer period than three years at any one time, and shall never exceed by more than fifty per cent the maximum rate herein provided and prescribed by law; and the revenue derived from this source shall be apportioned by the legislature among the levying units of the state in proportion to the levy laid in said units upon real and other personal property; but property used for educational, literary, scientific, religious or charitable purposes, all cemeteries, public property, the personal property, Including live stock, employed exclusively in agriculture as above defined and the products of agriculture as so defined while owned by the producers may by law be exempted from taxation; household goods to the value of two hundred dollars shall be exempted from taxation. The legislature shall have authority to tax privileges, franchises, and incomes of persons and corporations and to classify and graduate the tax on all incomes according to the amount thereof and to exempt from taxation, incomes below a minimum to be fixed from time to time, and such revenues as may be derived from such tax may be appropriated as the legislature may provide. After the year nineteen hundred thirty-three, the rate of the state tax upon property shall not exceed one cent upon the hundred dollars valuation, except to pay the principal and interest of bonded indebtedness of the state now existing." Section 1, chapter 9, 1932 Extraordinary Session of the Legislature.

In Finlayson v. City of Shinnston, 113 W. Va. 434, 168 S. E. 479, this court, construing the amendment, held that the limitation of assessments therein prescribed embraces levies for all purposes, including previous governmental bonded debts, except in cases in which such limitation of levies would result in the impairment of existing legal obligations. Following this decision, the legislature by an Act of March 11, 1933 (chapter 38, Acts 1933), relating to tax levies, authorized the various tax levying bodies to '' impose the levy necessary for current expenses" to the extent of the maximum levies prescribed in the amendment, and to lay additional levies to "meet current requirements of now-existing indebtedness." The levying bodies sought to be enjoined have pursued this course by imposing the maximum levies for current expenses and additional levies to meet current requirements of existing indebtedness. It will thus be observed that the interpretation of the amendment by the legislature is incompatible with the previous construction of this court in the Finlayson case.

Plaintiffs contend that a levying body may not levy beyond the respective aggregates specified in the amendment without the special authorization, therein prescribed, from the qualified voters of the particular governmental unit.

Defendants insist that they may levy, in accordance with the statute, to the limit of such aggregates for current expenses of government, and, in addition thereto, taxes necessary to meet current requirements of existing indebtedness, or, at least, of indebtedness incurred prior to the amendment. They rely upon three grounds, which will be considered in the order 'named, as follows: (1) That the language of the amendment, in the light of other provisions of the constitution, should be so construed; (2) that the maintenance of modern, orderly government is necessary for the preservation of property values and the collection of taxes to prevent the impairment of debts created prior to the amendment, and (3) that the essentials of government must be provided for regardless of the constitutional limitation.

The attorney general has cited Mauney v. Board of Commissioners, 71 N. C. 486; French v. Board of Commissioners, 74 N. C. 692, and Clifton v. Wynne, 80 N. C. 145, as supporting the first ground. These cases involved the interpretation of the following constitutional declarations:

(1) "The general assembly shall levy a capitation tax on every male inhabitant over twenty-one and under fifty years of age, which shall be equal on each to the tax on property valued at three hundred dollars in cash. The commissioners of the several counties may exempt from capitation tax in special cases, on account of poverty and infirmity, and the state and county capitation tax combined shall never exceed two dollars on the head.

(2) "The taxes levied by the commissioners of the several counties for county purposes shall be levied in like manner with the state taxes, and shall never exceed the double of the state tax, except for a special purpose and with the special approval of the general assembly.'' The court read into these provisions an implied limitation upon the taxation of property to two dollars on three hundred dollars valuation for current expenses and indebtedness, but did not extend the implication to legal indebtedness existing prior to the adoption of the constitution, in 1868. It will be observed that the North Carolina court applied a liberal interpretation of the constitutional...