Johnson City v. Weeks

• Decision Date: 19 November 1915
• Citation: 180 S.W. 327
• Parties: JOHNSON CITY v. WEEKS et al.
• Court: Tennessee Supreme Court

180 S.W. 327

JOHNSON CITY v. WEEKS et al.

Supreme Court of Tennessee.

November 19, 1915.

Appeal from Chancery Court, Washington County; Hal H. Haynes, Chancellor.

Action by the City of Johnson City against J. W. Weeks, trustee, and others. From an order sustaining a demurrer to the bill of complaint, plaintiff appeals. Reversed and remanded.

Geo. C. Sells, of Johnson City, for appellant. J. Stanley Barlow, of Johnson City, for appellees.

WILLIAMS, J.

The bill of complaint was filed by the city of Johnson City, a municipal corporation, to enjoin the officials of Washington county from assessing and collecting taxes for county purposes upon a water pipe line, owned by the city, that extends from its corporation boundary line to the south gate of the National Home for Disabled Volunteer Soldiers, an institution occupying a park of several hundred acres partly within and for the most part without the corporate limits.

In the bill it is alleged that the city installed this pipe line for the purpose of disposing of surplus water, not needed or used by the city or its inhabitants, as a supply for the members of the Home adequate to their needs; that the Home has about 1,500 members, a number of whom are citizens of Johnson City; that it is to the interest of the city that such a supply be furnished, as otherwise the water supply of the Home was inadequate and unwholesome, thereby endangering the members and the residents of the city; that the only recourse of the Home for an adequate supply is from the municipal plant; that the rentals collected from that institution are used within the limits of Johnson City for municipal purposes, in extending and improving complainant's water system.

It is alleged that the levy would be void as being on property of complainant that is not subject to taxation, and the bill was filed to have the rights of the complainant city and of the county determined.

A demurrer was filed by the county officials, which was sustained by the chancellor, who conceived that, while the pipe line was properly in use for a corporate proprietary purpose, it was not used for a public purpose within the meaning of our Constitution and revenue act.

The Constitution, art. 2, § 28, provides:

"All property * * * shall be taxed, but the Legislature may except such as may be held by * * * cities or towns, and used exclusively for public or corporation purposes."

The revenue act undertakes to exempt from taxation all property of cities or towns "that is used exclusively for public or municipal purposes."

The city of Johnson City was authorized to lay a pipe line to supply the National Home for Disabled Volunteer Soldiers, lying beyond its corporate limits, under the grant of power contained in Acts 1909, c. 121, to "own and operate a system of waterworks for said city and adjacent territory." Omaha Water Co. v. Omaha, 162 Fed. 225, 89 C. C. A. 205, 15 Ann. Cas. 498, and same case 218 U. S. 180, 30 Sup. Ct. 615, 54 L. Ed. 991.

The last phrase, "adjacent territory," we take to mean its suburbs not within the limits of another municipality.

The National Home for Disabled Volunteer Soldiers is but a charity of the national government administered through the medium of an incorporated entity. Overholser v. National Home for D. V. S., 68 Ohio St. 236, 67 N. E. 487, 62 L. R. A. 936, 96 Am. St. Rep. 658; Ohio v. Thomas, 173 U. S. 276, 19 Sup. Ct. 453, 43 L. Ed. 699; Lyle v. National Home for D. V. S. (C. C.) 170 Fed. 846.

That institution is in no sense a municipal corporation, but stands in the same plight as does an institution administered as an agency of the state government, such, for example, as the State Normal School located near the same city.

The question to be solved, therefore, is: If a municipality lay a water line from its corporate limits to such an institution, or construct a lighting line, for the purpose of supplying water or light (as the case may be) from its plant for such an institution, located in territory adjacent to the corporate boundary, is such line subject to taxation (or to be treated as unexempt) in behalf of the county in which such fragment of line lies?

We had thought that the argument of this court in the case of Knoxville v. Park City, 130 Tenn. 626, 172 S. W. 286, L. R. A. 1915D, 1103, fairly demonstrated a negative answer; but the counsel of the county of Washington relies upon that case as one announcing a doctrine to the contrary.

In that case the following language was used:

"The Court of Appeals of Kentucky, in the later case of Com. v. Covington, 128 Ky. 36, 107 S. W. 231, 14 L. R. A. (N. S.) 1214, held that the fact that water was furnished for compensation to inhabitants of its suburbs, without its or any corporate limits, does not alter the public purpose or use of its water system so as to make it subject to taxation. But the court took care to distinguish the case it had in hand from the one we have under investigation, saying:

"`We do not mean that a city may enter upon the business of maintaining a waterworks system for other cities or towns, but only that the fact that it incidentally furnishes water...