Hager v. McConathy
| Decision Date | 09 August 1954 |
| Parties | HAGER v. McCONATHY et al. |
| Court | United States State Supreme Court — District of Kentucky |
John Y. Brown, Harry B. Miller, Jr., Lexington, for appellant.
George Ross, Richmond, for appellees.
CULLEN, Commissioner.
From the amounts of taxes collected for the Jessamine County School District for the years 1950-51, 1951-52, and 1952-53, Arch Hager, Sheriff of Jessamine County, retained three percent as his fee. The total amounts collected were $184,005.32 for 1950-51, $191,092.37 for 1951-52, and $195,033.25 for 1952-53, and the fees retained were $5,520.15, $5,733.56 and $5,850.97, respectively. The board of education having adopted a resolution in June 1951 agreeing to allow the sheriff a fee of three percent, was satisfied with the fees retained by the sheriff, but a group of taxpayers were not satisfied and they brought action alleging that the fees retained were in excess of the actual cost of collection. The court fixed $2,500 per year as the actual cost of collection, and entered judgment requiring the sheriff to pay over to the board of education the amounts retained by him for the three years in question, in excess of $2,500 per year. The sheriff has appealed.
The first contention of the sheriff is that the 1951 resolution of the board of education constituted a valid contract under which he was entitled to a fee of three percent. We are not prepared to say that a fee contract entered into between a school board and a sheriff, based upon a full consideration of the cost factors involved in the collection of the school taxes, and designed to reach a fair compromise on items reasonably subject to dispute, may not be upheld. However, the evidence concerning the so-called contract involved in this case indicates that the contract was made without any examination or consideration of the cost factors, and was a compromise only to the extent that some members of the board favored the allowance of the full statutory favored the allowance of the full were insisting that the fee be limited to two percent. It appears that considerations wholly foreign to the matter of actual cost of collection influenced the selection of three percent as the agreed fee.
Clearly, to uphold a contract entered into without consideration of the cost of collection, and calling for a fee substantially in excess of the cost of collection, would result in an unconstitutional diversion of school funds. Dickson v. Jefferson County Bd. of Ed., 311 Ky. 781, 225 S.W.2d 672; Board of Ed. of Madison County v. Wagers, Ky., 239 S.W.2d 48. We cannot uphold the contract here involved.
The sheriff next maintains that the actual costs of collection for the years in question exceeded the amounts retained by him. He estimates that the expense of personnel employed in all tax collection work amounted to $9,075 per year. This figure was reached by allocating to tax collection work all of the time of two part-time deputies, and 75% of the time for nine months of the sheriff and three full-time deputies. To the item of $9,075 the sheriff adds some miscellaneous expenses, reaching a total of between $9,600 and $9,900 as the total cost of collecting all taxes, each year. The school taxes represented between 62% and 63% of all taxes collected, and applying this percentage to the total cost of tax collection work the sheriff comes up with a...
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