Kansas City v. Stewart

• Citation: 136 P. 241,90 Kan. 846
• Decision Date: 08 November 1913
• Docket Number: 18,979
• Parties: THE CITY OF KANSAS CITY, KANSAS, Appellee, v. SAMUEL STEWART, as County Treasurer, etc., Appellant
• Court: Kansas Supreme Court

136 P. 241

90 Kan. 846

THE CITY OF KANSAS CITY, KANSAS, Appellee, v. SAMUEL STEWART, as County Treasurer, etc., Appellant

No. 18,979

Supreme Court of Kansas

November 8, 1913

Appeal from Wyandotte district court, division No. 3; HUGH J. SMITH judge. Affirmed.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. TAXATION--City Taxes--Disposition of Penalties and Rebates--County Fund. The provision of the act in relation to the collection of taxes, that "all penalties shall be credited to the county fund, and all rebates charged to that fund," means that the rebates shall be charged to the county fund; and an amendment by implication which requires penalties on city taxes to be paid to the city does not prevent the rebates on the same tax being charged to the county.

2. Legislative Power to Dispose of Rebates. The legislature has power to require that rebates granted on taxes laid by cities, townships and school districts shall be charged to the county.

3. Statute Relating to Penalties and Rebates--Not Unconstitutional. A statute requiring all rebates to be charged to the county fund and all penalties to be credited to that fund, except those accruing to the taxes of cities of the first class, which shall be paid to the city, does not violate the provision of the state constitution that a tax shall be applied only to the object in pursuance of which it is levied.

4. Same. Such a statute does not violate the fourteenth amendment to the federal constitution by depriving any person of property without due process of law, or by denying to any person the equal protection of the law.

L. W. Keplinger, and C. W. Trickett, both of Kansas City, for the appellant.

James F. Getty, and R. J. Higgins, both of Kansas City, for the appellee.

Mason, J. Benson, J. dissenting.

OPINION

MASON, J.:

The city of Kansas City, Kansas, brought mandamus against the treasurer of Wyandotte county, to require him to pay money over to the city in accordance with the terms of certain statutes. Judgment was rendered for the plaintiff, and the defendant appeals.

The question in dispute concerns the disposition of the penalties imposed by law for delinquency in the payment of taxes levied by and for the city. In substance it is this: Is the county required to reimburse a city of the first class for the amount by which the taxes collected for the city are reduced by rebates granted for prompt payment, and at the same time to pay over to the city the amount collected as penalties for delay in the payment of taxes levied by the city, while in the case of taxes levied by cities of the second and third classes, and by townships and school districts, the rebates are charged to the county and the penalties credited to it?

In 1874 a system of tax collection was adopted (Laws 1874, ch. 131, § 1) by which one-half of a tax was made nominally due on December 20, and the other half six months later. If the whole tax was paid by December 20 a rebate of five per cent was allowed on the half due in June. If none of the tax was paid until after December 20, the whole amount became due and a penalty of five per cent was added. A like penalty was added in March, and again in June, if the delinquency was continued. This system remains in force, the March penalty, however, having been eliminated. (Gen. Stat. 1909, § 9428.) This proviso of the present statute was added in 1876: "Provided, all penalties shall be credited to the county fund, and all rebates charged to the same fund." (Laws 1876, ch. 34, § 91.) In 1895 the legislature amended a section of the statute, which fixed the time of settlement and the method of keeping accounts between the county treasurer and a city of the first class, by adding to the clause requiring the treasurer to pay to the city, at certain dates, all moneys collected for it, these words: "its proportion of penalties and interest." (Laws 1895, ch. 260, § 1.) This was elaborated in 1903 into: "and the city's proportion on all penalties and interest collected on all taxes and special assessments." (Laws 1903, ch. 122, § 136.) In this form it is a part of the present statute. (Gen. Stat. 1909, § 1000.) The interpolation in its original form was held to mean that the county treasurer shall pay to cities of the first class all penalties collected for delinquencies in the payment of taxes levied by the city, while in the case of school districts (and presumably in the case of cities of the second and third classes and townships) the penalties were still to be turned into the county fund. (Sedgwick County v. Wichita, 62 Kan. 704, 64 P. 621.) Upon the strength of that ruling the city of Kansas City demands the penalties accruing from delay in the payment of its taxes. The county treasurer resists the demand upon various grounds.

It is suggested that in the sentence "All penalties shall be credited to the county fund, and all rebates charged to the same fund," the second clause originally meant that rebates should be charged to the same fund that was credited with the penalties; and that when a change was made in the beneficiary of the penalties accruing on city taxes--crediting them to the city instead of to the county--a like change was effected in the fund to which city rebates should be charged. This interpretation might seem to reach a more equitable result, but we are of the opinion that the language quoted was intended to mean that the penalties are to be credited to the county fund and the rebates charged to that fund--the same fund--the county fund. This intention seems too obvious to permit of a different reading.

The defendant maintains that under this construction the statutes violate the provision of the state constitution requiring a tax to be applied only to the object in pursuance of which it was levied (Const. art. 11, § 4), and also violates the first paragraph of the fourteenth amendment to the federal constitution in that it deprives taxpayers of the county who reside outside of the city of property without due process of law, and denies to them the equal protection of the law. The question with regard to the state constitution was raised and passed upon in the Sedgwick county case already cited. It was there argued, and the argument was approved in a dissenting opinion, that the penalty was a part of the tax and could be applied to no other purpose than that for which the tax was levied. The court held, however, that while the penalty was to be regarded as a part of the tax for certain purposes, and would ordinarily attach to the original tax and be disposed of in the same way, the legislature may direct a different disposition. The court now adheres to that view, which finds some support in the text and the cases cited in 37 Cyc. 1594, and which is thus elaborated, although with regard to a different constitutional provision, in New Whatcom v. Roeder, 22 Wash. 570, 61 P. 767:

"It will be observed that the legislature, and not the municipality, fixes the date of the delinquency and the interest charge; in other words, creates the delinquent fund arising from this source. In tax laws penalties proper and interest charges are imposed for mere delinquencies in order to hasten payment. The general law of the state imposes this charge as a penalty for neglect to pay the tax in due season. The fund arising from this source is created by the legislative act of the sovereign state, and it follows that the legislature has a right to dispose of this fund to the same extent as other fines and penalties arising from the violation of other laws of the state." (p. 575.)

The contention is made that to charge the county with the rebates granted with respect to the taxes of cities of the first class is in effect to levy taxes upon one public body for the benefit of another. To this we can not agree. The allowance of a rebate is in substance a reward or inducement for the prompt payment of taxes. We think the legislature may cast this incidental expense upon the county, just as it might create a county office, the occupant of which should receive a salary for visiting those liable for taxes and endeavoring to hasten their payments. The plan adopted is not different in principle from the requirement that county officers, who are paid wholly from the county treasury, shall collect city, township and school district taxes.

"Counties are purely the creation of state authority. They are political organizations, whose powers and duties are within the control of the legislature. That body defines the limits of their powers, and prescribes what they must and what they must not do. It may prescribe the amount of taxes which each shall levy, and to what public purpose each shall devote the moneys thus obtained." (The State, ex rel., v. Comm'rs of Shawnee Co., 28 Kan. 431, 434.)

The argument that the federal constitution is violated is founded upon the theory that the statute discriminates between the residents of a city and the residents of the county outside of the city, to the disadvantage of the latter, and that there is no reasonable basis for such a classification in this connection. The statute in effect requires the county to pay all rebates, which, as already said, are rewards for the prompt payment of taxes. The penalties for delay in the payment of taxes levied by a city of the first class go to the city, and its taxpayers alone are thereby benefited. The penalties for delay in the payment of other taxes go to the county, and the taxpayers of the city share the benefit with the taxpayers of the county. This does result in a measure of discrimination between the taxpayers of the city and those of the rest of the county, to the disadvantage of the latter. In State v. Mayo, 15 N.D. 327, 108 N.W. 36, such a discrimination...