Kentucky Cent. R. Co. v. Commonwealth

• Decision Date: 13 December 1888
• Citation: 10 S.W. 269,87 Ky. 661
• Parties: KENTUCKY CENT. R. Co. v. COMMONWEALTH.
• Court: Kentucky Court of Appeals

10 S.W. 269

87 Ky. 661

KENTUCKY CENT. R. Co. v. COMMONWEALTH.

Court of Appeals of Kentucky.

December 13, 1888

Appeals from circuit court, Franklin county; W. MONTFORT, Judge.

Actions by the commonwealth for taxes for the years 1884-1886 assessed and levied in accordance with the act approved April 3, 1878. The court found for plaintiff as to the Maysville &amp Lexington road, Northern and Southern divisions, and the Richmond branch of the Louisville & Nashville road, but held that the Covington & Lexington, (composed of the Covington &amp Paris and Paris & Lexington roads,) afterwards the Kentucky Central, was only taxable as specified in its charter of 1851. Both parties appeal.

Hallam & Meyers, for the Railroad. P. W. Hardin, for the Commonwealth.

LEWIS C.J.

This is an appeal from a judgment rendered in two actions, tried together, which the commonwealth of Kentucky instituted against the Kentucky Central Railroad Company to recover the amount of taxes alleged to be due and unpaid for the years 1884, 1885, 1886, according to returns made by the officers of the company to the auditor of public accounts of the state, and the valuation made by the board of equalization, as provided by an act approved April 3, 1878, entitled "An act to prescribe the mode of ascertaining the value of the property of railroad companies for taxation, and for taxing same."

As appears from a copy of the returns made to the auditor, the defendant owns and operates, as parts of its system, the following roads: The Covington & Paris road, the Maysville & Lexington road, Southern and Northern divisions, the Paris & Lexington road, and the Richmond branch of the Louisville & Nashville road. We think there is no room for controversy about the liability of the defendant to pay taxes in some mode upon all of those roads: for it not only controls, has the possession, and operates each one of them, but they were all returned to the auditor as subject to taxation; and the only question is as to the mode in which they ought to be taxed, and the amount of taxes the company is liable for.

In 1847 the Licking & Lexington Railroad Company was incorporated, with the right to construct a road from Covington to Lexington; it being provided in the charter that a tax of 25 cents on each share of stock of $50, owned and held by any stockholder, should be annually paid into the state treasury by the president and directors of the company. In 1849, by amendment to the charter, the name of the corporation was changed to "Covington & Lexington Railroad Company;" and March 3, 1857, an act was passed further amending, section 4 of which is as follows: "That on the 1st day of January next after the first declaration of dividends on the capital stock of said railroad company, and on every 1st day of January thereafter, it shall be the duty of the president and directors of said company to pay into the treasury of the commonwealth a tax on each one hundred dollars' worth of stock in said railroad company equivalent to the rate of tax on each one hundred dollars' worth of property for state revenue, and no more, and resident stockholders shall not list their stock in said company for revenue tax, nor be liable to payment of tax on the same in any other mode whatever."

But February 22, 1871, "An act to incorporate the Kentucky Central Railroad Company" was passed, the first section of which is as follows: "That Geo. H. Pendleton, John W Stevenson, Wm. Ernst, J. C. Gedge, G. Bowler, and E. H. Pendleton, their associates and successors, be, and are hereby, created a body corporate and politic, under the name and style of the 'Kentucky Central Railroad Company,' for the purpose of operating the Covington & Lexington Railroad, of which they are the owners by purchase under judgment and order of sale of the Fayette circuit court; and shall have, and are hereby invested with, all the powers, privileges, rights, immunities, and franchises, subject to the restrictions and...