Kentucky Heating Co. v. City of Louisville.

Decision Date20 February 1917
Citation174 Ky. 142
PartiesKentucky Heating Company, et al. v. City of Louisville.
CourtKentucky Court of Appeals

Appeal from Jefferson Circuit Court (Chancery Branch, First Division).


MATT O'DOHERTY for appellants.



In this suit by the city of Louisville to collect from the Kentucky Heating Company a franchise tax assessed against it as of September 1, 1912, there was a judgment in favor of the city for $26,648.95, and from the judgment the appeal now before us was prosecuted.

The Kentucky Heating Company is a Kentucky corporation, engaged in the principal business of obtaining and selling natural gas secured from gas fields owned by it in Meade county, Kentucky, but it also manufactures artificial gas in Hardin county, Kentucky. The natural gas is conveyed in pipes from the Meade county fields to the city of Louisville in Jefferson county as is the artificial gas manufactured conveyed from Hardin county. It appears from the evidence taken in this case that it owns eighteen miles of pipe line in Meade county, three miles in Hardin county, twenty-two miles in Jefferson county, outside of the city, and seventy miles in the city. There are a few persons in Hardin and Meade counties to whom it supplies gas, and in Jefferson county, outside of the city, it receives from patrons annually for gas supplied about fourteen hundred dollars. But its principal business is confined to supplying gas to its patrons in the city of Louisville, and it supplies persons outside of the city more as a favor than as a matter of business.

The statute, which will be more particularly noticed hereafter, authorizes the imposition of what is commonly called a franchise tax upon corporations engaged in the manufacture and transportation of gas, and also provides that the companies so engaged shall each year make reports to the assessing authorities. In attempted compliance with this statute requiring reports to be made, the heating company, in October, 1912, made its report for the year ending September 1, 1912, to the assessor of the city. This report was verified by Donald McDonald, the president of the company and will later be referred to.

The assessor of the city of Louisville fixed the value of the franchise of the company, as of September 1, 1912, "after deducting the assessed value of all tangible property," at $1,500,000.00. The company deeming this assessment excessive, prosecuted an appeal to the board of equalization of the city, and this board, which has authority to hear evidence offered by the complaining party and increase or decrease assessments made by the assessor, at its meeting held in December, 1912, reduced the assessment to $1,200,000.00, and to recover the taxes due on this revised assessment this suit was brought.

Counsel for the heating company urges two principal grounds for reversal that will be considered in the order named: (a) that the franchise assessment of the heating company for the city of Louisville should have been made by the State Board of Valuation and Assessment and not by the city assessor of Louisville or the board of equalization of the city; (b) that if the assessor had power to make the assessment, he, by mistake or oversight, put an excessive valuation on the franchise, and the board of equalization by mistake or oversight placed an excessive valuation on its franchise.

In sections 4077-4084, inclusive, of the Kentucky Statutes, provision is made for the assessment by the State Board of Valuation and Assessment of the franchise of certain named corporations engaged in business in the state, including corporations doing the business the heating company was carrying on. But in 1898 the legislature adopted an act, that is now section 2984a of the Kentucky Statutes, authorizing the assessment for city taxation by the city assessor of the franchise of certain companies, including those engaged in the business the heating company was carrying on. This act, which contained thirteen sections, applied only to cities of the first and second class, the title of it reading, "An act concerning the assessment and valuation of corporate franchises and intangible property in cities of the first and second class." In 1900 the first section only of this act was so amended as to make its provisions embrace and apply to cities of the third class. A few other changes not necessary to notice were also made in this section by the amendment. In 1904, section one of the act was again amended by striking out the words "cities of the second and third class," so as to leave the act applicable only to cities of the first class. The form and substance of these amendatory acts are not objectionable, as it is allowable to amend by its re-enactment and publication one section of an act without reference to the other sections. Board of Penitentiary Comrs. v. Spencer, 159 Ky. 255.

But when the title of the act of 1904 is looked to, some question might be raised as to whether the attempt to amend section one of the act of 1898, as amended by the act of 1900, was effectual, but upon this subject we express no opinion. The question is not here, and even if it should be admitted that the attempted amendment of 1904 was a nullity, the original act, as well as the amendment of 1900, would remain and leave the provisions of the act applicable to cities of the first class. Cities of the first class were not taken, or attempted to be taken, out of the act by either the amendment of 1900 or the amendment of 1904. The act as it now appears in the 1915 edition of the Kentucky Statutes is the act of 1898 as it was amended by the act of 1900, with the exception that the first section of the act as it now appears in the Kentucky Statutes, is a copy of the amendment of section one by the act of 1904, which, as we have said, merely struck out the words "second and third class cities." So that we cannot agree with counsel that all of the act of 1898 (section 2984a) except section one, has been repealed. We think the whole of the act as it now appears in the Kentucky Statutes is in full force and effect, unless it be that the act of 1904 is invalid, and if this were so, the only effect would be, as we have said, to restore the act of 1900 and make the act applicable to cities of the second and third class as well as cities of the first class.

Another objection urged is that this act is special legislation prohibited by section 60 and by subsections 15 and 29 of section 59 of the Constitution. We think it would be a sufficient answer to this argument to say that in Murphy v. City of Louisville, 114 Ky. 762, the constitutionality of the act of 1898 was directly brought before the court and its validity upheld, and the only substantial difference between the act of 1898 and the present law as it appears in section 2984a of the Kentucky Statutes relates to the classes of cities to which the act applies.

But counsel insists that the objection now urged, that it violates section 59 of the constitution, and subsections 15 and 29 thereof, was not brought to the attention of the court in the Murphy case and, therefore, that opinion should not be held to foreclose an inquiry into the soundness of the argument now for the first time presented. It does not appear that the point now urged was brought to the attention of the court in the Murphy case and so we will consider it.

Section 59 of the constitution provides that: "The General Assembly shall not pass local or special acts concerning any of the following subjects, or for any of the following purposes, namely:" . . . . (Subsection 15): "To authorize or to regulate the levy, the assessment or the collection of taxes, or to give any indulgence or discharge to any assessor or collector of taxes, or to his sureties." . . . . (Subsection 29): "In all other cases where a general law can be made applicable, no special law shall be enacted."

Section 60 of the constitution also provides, in part, that: "The General Assembly shall not indirectly enact any special or local act by the repeal in part of a general act, or by exempting from the operation of a general act any city, town, district or county." And it is said that the legislation here drawn in question was an attempt on the part of the legislature in violation of the provisions quoted to repeal, by a special or local act, the general law conferring on the State Board of Valuation and Assessment the power to assess the franchises of corporations such as the heating company and to confer this authority by a local act on the city assessor.

It is true that if section 2984a of the statutes, giving to the city assessor authority to assess the franchises of certain corporations, such as the heating company, had not been enacted, the franchises of all these corporations could and would have been assessed by the State Board of Valuation and Assessment under the general law giving it authority to assess such franchises. But the constitution erected certain classes of cities and gave to the legislature authority to deal with these classes in so far as their municipal affairs were concerned by legislation applicable to these classes alone. And this legislative power has been recognized in great numbers of cases in which special laws applicable to the municipal affairs of cities alone have been upheld although these special laws were in direct conflict with or modified in material respects general laws that would have been in force in the cities except for the enactment of this special legislation. The power of the legislature to do this necessarily follows from the constitutional classification of cities and towns. The very purpose of putting them in classes was to enable the legislature to deal with the municipal affairs of each class in a manner separate and distinct from the legislation applied to...

To continue reading

Request your trial
1 cases
  • Edrington v. Payne
    • United States
    • Kentucky Court of Appeals
    • June 12, 1928
    ... ... 86 EDRINGTON et al. v. PAYNE et al. Court of Appeals of Kentucky June 12, 1928 ...          Appeal ... from Circuit Court, ... Kentucky Statutes or modify them. Ex parte City of Paducah, ... 125 Ky. 510, 101 S.W. 898, 31 Ky. Law Rep. 170; Com. v ... out. The act was upheld. In Kentucky Heating Co. v. City ... of Louisville, 174 Ky. 144, 192 S.W. 4, the first ... ...

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT