City of Louisville v. Martin

• Decision Date: 18 June 1940
• Citation: 144 S.W.2d 1034,284 Ky. 490
• Parties: CITY OF LOUISVILLE et al. v. MARTIN, Com'r of Revenue, et al.
• Court: Kentucky Court of Appeals

144 S.W.2d 1034

284 Ky. 490

CITY OF LOUISVILLE et al. v. MARTIN, Com'r of Revenue, et al.

Court of Appeals of Kentucky

June 18, 1940

Rehearing Denied Dec. 13, 1940.

Appeal from Circuit Court, Franklin County; W. B. Ardery, Judge.

Action by the City of Louisville and others against James W. Martin Commissioner of Revenue and others to secure a reassessment of distilled spirits. From a judgment for the defendants plaintiffs appeal.

Affirmed.

THOMAS PERRY, and REES, JJ., dissenting.

Hal O Williams, Lawrence Grauman, Lawrence S. Poston, and Robert L. Sloss, all of Louisville, for appellants.

Hubert Meredith, Atty. Gen., and Jesse K. Lewis, Asst. Atty. Gen., for appellees.

CREAL Commissioner.

Section 4105, Kentucky Statutes, relating to reports of distilled spirits stored in distillery bonded warehouses for the purpose of assessment for taxation provides among other things that every owner or proprietor of such warehouse shall between the first day of September and the first day of October of each year, make sworn reports in writing showing the kind and quantity of distilled spirits in such warehouse on the first day of September of the year the statement is required to be made, the date when the spirits were made, the county, city, town, or taxing district in which the warehouse is situated, the fair cash value of the spirits estimated at the price it would bring at a fair, voluntary sale and such other facts as may be required.

Under section 4114i-11 of the statutes the duty devolves upon the State Tax Commission to assess for taxation spirits so reported at the fair cash value thereof estimated at the price it would bring at a fair voluntary sale as provided in section 4107.

In October 1938, the State Tax Commission on reports made pursuant to section 4105 assessed distilled spirits in bonded warehouses at a flat or blanket rate of $18 per barrel for the purpose of state, county, municipal and district taxation.

This action was instituted by the city of Louisville, the county of Jefferson and the board of education of Jefferson county against the State Tax Commission. In the petition it is alleged in substance that the assessment was made arbitrarily, in total disregard of the age of the liquor reported and at less than its fair cash value estimated at the price it would bring at a fair voluntary sale and contrary to section 172 of the constitution and section 4107 of the statutes; that if the assessment is permitted to stand it will result in large losses of revenue to each of plaintiffs. They prayed that the purported assessment be declared void and that the State Tax Commission be mandatorily enjoined to reassemble, set aside same and to make reassessment of distilled spirits in conformity with requirements of the constitution and statutes.

The lower court sustained both a special and general demurrer to the petition and plaintiffs declining to further plead the petition was dismissed and they have appealed.

There is stubborn controversy concerning the right of appellants to maintain this character of action. On behalf of appellees it is argued in effect that the commonwealth is immune from suits unless the right of action has been conferred by the constitution or by legislative act pursuant thereto (Constitution, section 231); that appellants are mere agencies of the state with only such authority as has been granted by statute; that while this action is brought against appellees, it in fact and to all intents and purposes is an action against the state; that under the statutes the assessment is final with no right of appeal granted; that authority for such action is not conferred by either the constitution or statutes. Appellants, of course, are out of agreement with appellees and make issue on every question argued; and assert in substance that this is not an action against the state nor an attempt by one of its subdivisions or agencies to control its functions, but an action to compel an official board of the state to perform a duty imposed upon it by law on behalf of the state as well as of appellants and which it has failed and refused to perform.

We think it unnecessary to enter into an extended discussion of the effect of provisions of section 4107, supra, that after notice and hearing, the action of the tax commission shall be final, since this is not an appeal from the action of the commission nor an attempt to have the assessment made corrected or modified, however, it is not inappropriate to add in passing that this court has held that an aggrieved party is not in all circumstances foreclosed by such a provision in assessment statutes from resorting to courts. See Hager et al. v. American Surety Company, 121 Ky. 791, 90 S.W. 550, 28 Ky.Law Rep. 782. The petition charges in effect that the assessment attempted to be made was void and therefore amounted to no assessment and asked that the commission be mandatorily enjoined to reassemble and make a valid assessment. The correctness of the doctrine contended for by appellees, that actions directly against the state or against an officer or agency who are but nominal parties and the state the real party in interest may not be maintained, unless such action has been authorized by law, is not to be doubted, but it is not a question of the doctrine but of its application that confronts us. This court has consistently held that actions may be maintained to compel state officers or agencies to perform a duty imposed upon them by law or to refrain from doing something that the law directs them not to do and that such action are not regarded as actions against the state. See...