Jones v. City of Corbin

• Citation: 227 Ky. 674
• Parties: Jones v. City of Corbin et al.
• Decision Date: 05 February 1929
• Court: United States State Supreme Court — District of Kentucky

Page 674

227 Ky. 674

Jones v. City of Corbin et al.

Court of Appeals of Kentucky.

Decided February 5, 1929.

Municipal Corporations. — City's lease, with option to purchase machinery and equipment for its light and water plant, providing for payment of rental and price of equipment, on purchase thereof, out of the revenues from plant, without subjecting general funds of city thereto, or providing for tax to meet city's obligation, held valid.

Appeal from Whitley Circuit Court.

J.J. TYE for appellant.

HIRAM H. OWENS for appellees.

OPINION OF THE COURT BY JUDGE CLAY.

Affirming.

This is a proceeding under the Declaratory Judgment Law (Civil Code of Practice, sections 639a1-639a12) by a taxpayer against the city of Corbin, its mayor, and commissioners, to test the validity of a contract which the city proposes to make with the Skinner Engine Company. From a judgment upholding the contract, the taxpayer appeals.

The admitted facts are these: Corbin is a city of the third class and under the commission form of government. It owns and operates a light and water plant. The equipment is insufficient to meet the immediate and future demands of its citizens. On May 29, 1928, the commissioners passed Ordinance No. 1120, by which 15 per cent. of the revenue derived from its light and water plant was set aside and appropriated for the purpose of securing additional machinery. At the time this action was brought, there was about $7,000 in the fund, and the fund was accumulating at the rate of about $1,500 per month. Thereafter the commissioners passed a resolution authorizing the city to lease, with option to purchase, the necessary machinery and equipment, and to advertise for bids therefor in accordance with specifications prepared by the superintendent of the light and water plant. Among other provisions of the resolution was the following: "Said rental and said purchase, if made, shall be paid out of the fund set aside and provided by Ordinance No. 1120, and not otherwise."

It is now proposed to enter into a lease contract with the successful bidder. The material provisions of the contract are in substance as follows: The lease is for a period of 24 months. The rental for the first month is $7,446, payable in cash. The rental for each of the succeeding 23 months is $1,062.50, payable monthly in advance. The rentals are to be paid "out of the proceeds of the funds realized as provided by Ordinance 1120, and not otherwise." At the end of the lease the...