City of Louisville v. Murphey

• Decision Date: 18 June 1887
• Citation: 5 S.W. 194,86 Ky. 53
• Parties: CITY OF LOUISVILLE v. MURPHEY and others. REED v. SAME.
• Court: Kentucky Court of Appeals

5 S.W. 194

86 Ky. 53

CITY OF LOUISVILLE v. MURPHEY and others.

REED v. SAME.

Court of Appeals of Kentucky.

June 18, 1887

Appeal from Louisville chancery court.

B. F Buckner, R. W. Woolley, and J. G. Simrall, for appellants.

L. N Dembitz, Goodloe & Roberts, Muir & Heyman, and Wm. Lindsay for appellees.

PRYOR C.J.

These two cases--the one in the name of the city of Louisville against Daniel Murphey and others, and the other in the name of P. B. Reed against the same parties--were heard together in the court below, and argued as one case in this court. The object of each action is to enjoin the assessor of the city of Louisville from including in his tax-bills an item of 30 cents on each $100 in value of taxable property, levied to pay the interest on bonds issued by the city to the Louisville, New Albany & St. Louis Railroad and to the Elizabethtown & Paducah Railroad. The entire amount due or to become due by the bonds is $2,500,000; $500,000 due in 1891 to the first-named road one million due to the last-named road in 1888, and the other million in 1903. Nearly all of the bonds remain unpaid, and all bearing interest.

By an act to amend the charter of the city of Louisville, approved March 30, 1880, it was provided that "the general council of the city of Louisville shall, for the purpose of providing for the payment of the principal and interest of the bonds issued by said city to the Elizabethtown & Paducah Railroad Company, dated October 1, 1868, and the bonds issued to the same company, dated January 1, 1873, and the bonds issued to the Louisville, New Albany & St. Louis Railway Company, dated September 1, 1871, continue to levy annually and cause to be collected, a tax of thirty cents on each one hundred dollars' worth of the property, real, personal, and mixed, money, choses in action, bonds, stocks, and evidence of debt in said city, subject to taxation under the revenue laws of the state of Kentucky, and said levy shall continue to be made so long as it shall be necessary to pay the principal and interest of said bonds. Said taxes, when collected, shall be paid into the sinking fund of said city, and said sinking fund shall, with said taxes and other resources, pay the aforesaid bonds. Sec. 5. The bonds authorized to be issued by this act, and all other bonds of said city for which the city is primarily liable, shall be a charge on the sinking fund of said city. Sec. 6. Nothing in this act shall repeal the authority which the city of Louisville has to levy and collect taxes to pay the principal and interest of the bonds herein charged on the sinking fund, should said taxes be necessary to pay the same."

By a subsequent act of May 12, 1884, amending the city charter, it is provided: "Sec. 3. The general council shall in each calendar year, as early in the month of December as practicable, by ordinance, levy an ad valorem tax not exceeding the following rates: For city purposes proper, not more than eighty-five cents on each one hundred dollars; for the support of the high schools and common schools, not more than thirty cents; for meeting the principal and interest of the bonds issued to the Elizabethtown & Paducah and the Louisville, New Albany & St. Louis Railroads, not more than thirty cents and a half; for the use of the sinking fund, not more than forty cents; for the house of refuge, not more than five cents; for cleaning and repairing sewers, not more than two cents; for cleaning and repairing public ways, and including footways and crossings, not more than thirty cents; for reconstruction of carriage-ways of streets and alleys, in conformity with section six of the charter amendment act, approved February 20, 1873, not more than twenty-six cents; for bonds under the ordinance and vote of 1883, not more than twelve cents. * * * Sec. 4. If, in any year, the general council shall fail to pass a levy ordinance, or if the levy ordinance in any year shall be invalid or inoperative, the rate of taxation for the succeeding year shall be as follows, and any tax-bill made by color of an invalid levy ordinance shall be valid to that extent: For city purposes proper, seventy-five cents on each one hundred dollars' worth of property subject thereto; for school purposes, thirty cents; for subscription to the Elizabethtown & Paducah and Louisville, New Albany & St. Louis Railroads, as long as these taxes are needed, thirty cents; for the sinking fund, forty cents; for the house of refuge, two cents; for cleaning and repairing public ways, eight cents; for cleaning and repairing sewers, one cent; for reconstruction of carriage-ways, six cents; for bonds under ordinance and vote of 1883, twelve cents,--in each case on the one hundred dollars' worth of property subject to such tax."

For some unaccountable reason the city council failed to pass any levy ordinance for the collection of taxes for city purposes for the year 1887, and therefore the only authority for collecting the taxes for this year for the purposes of the city is the act referred to, the fourth section, by which the legislature has said that in the event the city council should in any year fail to pass an ordinance for that purpose, or, if passed, the ordinance should prove to be invalid or inoperative, then the legislative ordinance should be enforced at the rate of taxation therein prescribed. It is now maintained by counsel for the appellants that the legislative ordinance embraced by the fourth section of the act, in so far as it attempts to authorize the collection of taxes to pay the principal and interest of these bonds, is invalid and void; and, if not, that the tax imposed is not needed to pay the bonds or the interest on them for the year 1887. The manifest object of the legislature, in adopting the fourth section of the act in question, was to provide the city with means to carry on the municipal government in the event the council failed to pass an ordinance authorizing the tax, and to provide a remedy for imposing taxation in the event the ordinance passed for that purpose should prove invalid. The contingency upon which this legislation is to be enforced has transpired, and the principal question is as to the validity of the enactment.

It is conceded by counsel for the appellants that, as no levy ordinance was passed, all the taxes imposed by the fourth section can be collected except the tax to pay these bonds because a definite and specific sum has been fixed by the legislature to be collected without condition or limitation as to all other taxes, but as to the bonds the levy is not only conditional upon the non-action of the council, but is made to depend upon the question as to whether such a levy is in fact needed for the payment of this indebtedness; that as there is no one to judge of the necessity for such collection, the city council having failed to take any action, neither the...