Board of Education of Kenton County v. Talbott
| Decision Date | 28 March 1941 |
| Citation | 286 Ky. 543 |
| Parties | Board of Education of Kenton County v. Talbott, Commissioner of Finance Department, et al. Same v. Commonwealth ex rel. Martin, Commissioner of Revenue. |
| Court | United States State Supreme Court — District of Kentucky |
2. Schools and School Districts. — A county board of education is a "quasi municipal corporation" governed by rules applicable to strict municipalities (Ky. Stats., sec. 4399-18)
3. Licenses. — The constitutional provision exempting public property and institutions of charity and education from taxation does not exempt county boards of education from payment of gasoline tax with respect to gasoline used for transportation of school children (Acts 1932, c. 150, secs. 1, 7a; Ky. Stats., secs. 4281g-1 et seq., 4281g-2, 4281g-17, 4281g-18, 4399-45; Constitution, sec. 170).
4. Schools and School Districts. — Under constitutional provision requiring sums produced for purposes of common school education to be appropriated to the common schools only, what are purposes of common school education is a matter of opinion, and unless particular item of expenditure is extreme or clearly otherwise, legislature may declare it to be a purpose of common school education (Constitution, sec. 184).
5. Schools and School Districts. — By failing to exclude specific excise tax on gasoline from amount paid for purchase of fuel for transportation of school children, legislature intended that such tax should be included as part of the cost of transportation, and hence could be regarded as an appropriation of a portion of the school fund for that purpose, especially in view of statutes expressly excluding school busses and school children from other taxes (Ky. Stats., secs. 1342a-1, 2739g-7, 2739j-1, 4399-18, 4399-20; sec. 4281g-1 et seq.).
6. Licenses. — The repeal of 1932 act imposing gasoline taxes, by 1936 act imposing similar taxes, did not release county board of education from payment of taxes accruing under the earlier act (Acts 1932, c. 150; Ky. Stats., secs. 465, 4281g-1 et seq.).
7. Judgment. — In action by revenue agent for the state at large to collect gasoline tax, order merely sustaining demurrer to petition, but not dismissing the petition, was not a "final judgment" and hence was not "res judicata" against right to recover such tax from county board of education (Ky. Stats., sec. 4281g-1 et seq.).
Appeal from Franklin Circuit Court.
John E. Shepard for appellant.
Hubert Meredith, Attorney General, Jesse K. Lewis, Assistant Attorney General, and J.J. Leary for appellees.
Before W.B. Ardery, Judge.
Affirming.
The County Board of Education of Kenton County sued the Commissioner of Finance and other State officers setting forth its responsibilities and duties under the law to provide school facilities for the children of the county, and alleging that it was entitled to receive for the year 1937-1938 from the State Treasury $6,915.24, but that the Commissioner of Finance had refused to approve the requisition therefor issued by the Superintendent of Public Instruction, and without authority of law had caused a deduction of $2,836.00 to be made and paid to the Department of Revenue. Injunctive relief was prayed.
In a few days the Commonwealth, on relation of the Commissioner of Revenue, sued the Board of Education of Kenton County, charging that the Board had purchased, without the State and imported, between December 7, 1935, and February 21, 1936, 16,205 gallons of gasoline on which it was required to pay a tax of five cents a gallon under the terms of Chapter 150, Section 1, of the Acts of 1932, which was as follows:
The petition set out that that act was repealed at the 1936 Third Extraordinary Session of the General Assembly by Chapter 6 of the published acts for that session, now Section 4281g-1 et seq., Statutes, and between September 5, 1936, and January 3, 1938, the Board had in like manner bought 40,515 gallons of gasoline under that act, which provides in part as follows:
It was further charged that the Board of Education had failed and refused to procure a license as a wholesale dealer in gasoline or to file a bond with the Department of Revenue as provided by the act of 1932 (Chapter 150, Section 7a) and the Act of 1936 (Chapter 6, Sections 18 and 19 of the Third Extraordinary Session, Kentucky Statutes, Sections 4281g-17, 4281g-18) and had refused to make the reports required by that act. The petition claimed the Board was liable for a penalty of 20 per cent on the amount found to be due, and interest from the date when due until paid; and also an additional penalty of 20 per cent when the amount is collected by court proceedings. Accordingly, judgment was prayed for the principal sum of $2,836 and a penalty of $1,134.40 with interest on certain sums from various dates beginning with January 31, 1936.
The two suits were consolidated. The substance of the Board's pleading is as follows:
1. The Board is charged with the duty under the Statutes of providing transportation for two thousand school children of the county outside of the cities, over an area of 160 square miles; the only practical and economical means of transporting them is by motor busses and the most economical method is to purchase gasoline in tank car lots and handle and distribute the same at convenient points with its own facilities. All of the gasoline was used exclusively for that purpose. The Board is not a dealer or distributor of gasoline or empowered as such within the meaning of Section 4281g-1, Subsection (c) or Section 4281g-2 of the Statutes.
2. The only revenue available to the Board out of which any taxes claimed to be payable on the gasoline could be paid is that provided by "taxation * * * for purposes of common school education," which is irrevocably dedicated and appropriated to the common schools and to the other purpose by the terms of Section 184 of the Constitution.
3. By the provisions of Section 184 of the Constitution, the revenue for school purposes cannot be diverted or appropriated for construction, maintenance or repair of roads or bridges, the purposes for which the gasoline tax is levied.
4. The Board submitted its budget for each fiscal year to the State Board of Education as required by the statute and the same was approved. By the terms of Section 4399-45 of the Statutes, the County Board of Education and the members thereof are prohibited from spending any money in excess of that shown in the budget or for any other purpose than shown therein. That in none of the years mentioned were any funds provided for with which to pay taxes on gasoline.
5. The payment of the tax sought to be collected would necessitate the reduction of the school term, affect the scholastic standing of the children of Kenton County, and result in their disqualification from entering recognized standard schools of learning which require 9 months' high school per year as a prerequisite to admission, and would otherwise prevent the Board from performing the duties imposed upon it by law.
6. The Board is now levying and has for many years continuously levied the maximum tax permitted by law.
7. As justification for exclusion from its budget of any provision for the payment of the gasoline tax, the Board pleads that an action was filed in September, 1934, in the Kenton Circuit Court by the Revenue Agent for the State-at-Large against the Kenton County Board of Education seeking to recover the tax on gasoline consumed in its school busses and a judgment was rendered by that court in February, 1936, adjudging the Board not to be liable for the tax, and that judgment is still in effect. It is pleaded in bar of the Commonwealth's right to collect the taxes sought in this action.
8. The Board challenges the contention of the Commonwealth that the Act of 1932 was re-enacted by the Act of 1936. It argues that the title to the latter act is confined solely to the imposition of a tax and the repeal of certain sections of the existing statutes, which relieved it of the payment of the tax under the 1932 act.
The judgment rendered upon the pleadings was in favor of the Commonwealth against the County Board of Education for the tax and penalties, amounting to $3,970.40, and interest, and authorized the deduction of the entire sum from the amount due the Board as its part of the general school fund. Such judgment, of course,...
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