City of Hazard v. Duff

• Decision Date: 10 June 1941
• Citation: 154 S.W.2d 28,287 Ky. 427
• Parties: CITY OF HAZARD v. DUFF et al.
• Court: Kentucky Court of Appeals

154 S.W.2d 28

287 Ky. 427

CITY OF HAZARD v. DUFF et al.

Court of Appeals of Kentucky

June 10, 1941

Rehearing Denied Oct. 7, 1941.

Appeal from Circuit Court, Perry County; J. E. Sanders, Special Judge.

Action by the City of Hazard against H. P. Duff, trustee and another for an injunction against further proceedings under an execution in defendant Duff's favor against plaintiff. Judgment for defendants, and plaintiff appeals.

Affirmed.

W. E Faulkner, of Hazard, for appellant.

John E Campbell, of Hazard, for appellees.

VAN SANT, Commissioner.

This action was instituted by the city of Hazard against H. P Duff, a judgment creditor of said city, and Justus Begley sheriff of Perry county, seeking to enjoin said defendants from proceeding further under an execution in favor of Duff against the plaintiff and which had been levied on a brick building of plaintiff situate on High Street in the city of Hazard.

It is claimed by appellant that said property was acquired by the city for governmental purposes; that same is in the process of being repaired and improved, and on completion will be occupied, for governmental purposes and therefore is not subject to execution. Defendants contend that the property is held by the city in its proprietary capacity and for that reason the city is not entitled to the immunity claimed.

A municipal corporation has a two-fold character, the one governmental and the other proprietary. In the establishment of a municipality, the state, acting through its Legislature, does not divest itself of its right to administer the public affairs of the state in its entirety; it merely constitutes the city its agent for the purpose of government within a limited territory. As such agency, the city executes the functions which would otherwise be performed by the state itself, and in such capacity it is imbued with all the rights and immunities of sovereignty.

In its private capacity it is clothed with an entirely different character.

It has long been recognized that the people of a local community, more or less compact in its development, require certain conveniences which are not necessary or feasible to persons in rural or less compact districts, and such conveniences as would be financially impossible of attainment in communities less densely populated. These conveniences are of time furnished by private corporations organized for profit. But since such conveniences often become necessities to be enjoyed and utilized by the entire population in circumscribed areas, it has sometimes been found more satisfactory to include the entire community in the undertaking or organization of the business furnishing them, and, where the boundaries of the community to be benefited by such conveniences are coincident with the boundaries of a municipal corporation created by the Legislature, it has been customary for the Legislature to grant to the municipality the right to exercise the franchise which might otherwise be granted to a private corporation. When a municipality elects to function under this authority it must do so as a private corporation and, in such capacity, it may not be clothed with the immunities, rights, and privileges of the sovereignty. It is, in such private capacity, a franchise holder of the sovereignty. Taxpayers of the municipality become the owners of the business thus authorized to be conducted, and while acting in that capacity, the municipality is subject to the liabilities of any corporation or association engaged in like or similar enterprises. 19 R.C.L. section 9, page 697. The municipality is not liable for torts committed in the exercise of its governmental functions; neither is its property used in that capacity subject to execution. But it is liable for its torts committed in the exercise of its private capacity; and its property used in its private capacity is subject to execution.

In 19 R.C.L. section 339, page 1050, it is said: "A judgment creditor cannot levy execution upon property of a municipal corporation which is devoted to public use but this rule does not...