Klein v. City of Louisville
| Decision Date | 22 May 1928 |
| Citation | 224 Ky. 624 |
| Parties | Klein, et al. v. City of Louisville, et al. |
| Court | United States State Supreme Court — District of Kentucky |
3. Municipal Corporations. — Bonds authorized under Act February 16, 1928, for construction and operation of bridges by cities of the first class across any navigable stream forming a state boundary to be paid from a special fund derived from tolls and revenues of the bridge without any obligation of the city thereunder, held not to constitute a debt within meaning of Constitution, secs. 157, 158, limiting indebtedness of city.
4. Constitutional Law. — Act February 16, 1928, authorizing bridges across navigable stream forming a state boundary, and delegating power to commission to fix toll to be charged, held not in violation of Constitution, sec. 181, since such provision relates only to taxes on property, and tolls do not constitute taxes, but are charges on privileges of using bridge, and are analogous to special assessments.
5. Constitutional Law. — Act February 16, 1928, authorizing cities of the first class to construct and operate bridges across navigable stream forming state boundary, held not in violation of Constitution, sec. 160, because authorizing commission to fix tolls to be charged so as to thereby confer legislative power, since commission may be said to function as an administrative body to carry out legislative intent, and is necessarily vested with some discretion.
6. Bridges. — Act February 16, 1928, authorizing cities of the first class to construct and operate bridges across navigable streams forming state boundaries, held not invalid because conferring extraterritorial powers pursuant to action of federal Congress, based on Federal Constitution, art. 1, sec. 8, authorizing exercise of right of eminent domain in adjoining states.
7. Municipal Corporations. — Bonds issued by city pursuant to Act February 16, 1928, authorizing construction and operation of bridges across navigable stream forming state boundary, being issued by a commission functioning only as agent of the city, and payable only from a special fund to be derived from tolls, held not within Constitution, sec. 193, forbidding sale of bonds below par.
8. Taxation. — Act February 16, 1928, authorizing construction and operation of bridges across navigable stream forming state boundary, held not invalid because exempting bonds authorized therein from state and municipal taxes, since construction and maintenance of bridge is for public purposes, and Legislature was authorized to exempt bonds from taxation in accordance with Constitution, secs. 170, 171.
9. Constitutional Law. — Provision of Act February 16, 1928, authorizing cities of the first class to construct and operate bridges across navigable stream forming a state boundary, to effect that commission created therein might enter into agreement with trust company as trustee for holder of bonds issued with provision for protecting and enforcing rights and remedies of trustee and bondholders for approval of contract for construction by consulting engineers approved by bond purchasers, held not an unlawful delegation of power to trustee and purchasers of bonds.
Appeal from Jefferson Circuit Court
WILLIAM F. CLARK and GORDON & LAURENT for appellants.
WILLIAM T. BASKETT, CHESTER B. MASSLICK and E.J. MARSHALL for appellees.
O'NEAL & O'NEAL amici curiae.
Affirming.
By an act of the General Assembly of this state approved February 16, 1928, cities of the first class are authorized to construct and operate bridges across any navigable stream forming a state boundary; the venture to be financed by the sale of city revenue bonds which are to be paid solely from the tolls and revenues of the bridge, and for which the city is not to become liable or to incur any obligation; actual construction and operation to be under the control and supervision of a commission, to be appointed by the mayor and approved by the legislative bodies of the city, and forming a body corporate. By a similar act of the federal Congress approved February 25, 1928 (chapter 101), the city of Louisville was authorized to construct and maintain a bridge across the Ohio river at that point, in accordance with the legislative act; and it and its commissioners were empowered to exercise the right of eminent domain in the adjoining state of Indiana. The commission was duly appointed and confirmed. It contracted for the sale of $6,000,000 in bonds, and was proceeding in conformity with the two acts to issue the bonds and contract for sites and the construction of the bridge when this action was filed by certain taxpayers of the city of Louisville attacking the validity of the legislative act, as well as certain provisions of the federal act and the legality of a trust indenture executed by the commission under the authority of the act, and finally seeking to enjoin the commission from further action in the premises. A demurrer was sustained to the petition, and, plaintiffs declining to plead further, their petition was dismissed, and they have appealed.
The title of the act reads:
"An act enabling cities of the first class to construct, operate and maintain bridges across navigable streams, so as to connect such cities with an adjoining State; providing for a commission in such cities of the first class to construct, operate, control and maintain such bridges and fixing the powers and duties of such commission and providing for the issuance of revenue bonds of such cities to pay the cost thereof through bridge tolls without the incurrence of indebtedness of any such city."
Pertinent provisions of the act are:
Section 3 gives the commission full and ample authority to decide on the type of bridge, its location, and to acquire the necessary site; and to contract for its construction and equipment together with the purchase thereof, and to do all things necessary in the premises.
Section 4 authorizes the commission to purchase in the name of the Commonwealth of Kentucky any adjoining site of land, structures, rights of way, franchises, easement or other interests, in lands, including lands under water and riparian rights of any person, railroad, or other private corporation or municipality necessary for the building of the bridge and its approaches, upon such terms as it deems reasonable, "title thereto to be taken in the name of the city."
Section 5 authorizes the condemnation of the property indicated in section 4 in this state, and to exercise in any adjoining state "such powers of eminent domain as may be conferred upon the commission by any act of Congress now in force or which may hereafter be enacted." Title to the property condemned to be taken in the name of the city.
Section 7 provides that the commission shall operate, manage, and control such bridges in its discretion, fix the rate of tolls, establish by-laws and rules and regulations for the use and operation of said bridges, and to select such employees as it deems necessary and fix their compensation.
Section 9 provides:
Provision is then made for 20-year 4 1/2 per cent. revenue bonds, the form of which is to be provided by the commission, and which shall be signed by the chairman of the commission and by the chief executive officers of the city under the city's seal. Such bonds are exempt from taxation by the commonwealth and its municipalities. It is further provided that these may be sold by the commission when required for the payment of the cost of the bridge at not less than 92 cents on the dollar. The commission is further authorized to enter into an agreement with any trust company in the commonwealth as trustee for the bondholders. There is set forth the duties of the commission in the construction, maintenance, operation, and insurance of such bridges and conservation of the funds and insurance of moneys on hand or on deposit, the rights and remedies of the trustees and bondholders, restricting the individual right of action of the bondholders as is customary in trust agreements; and...
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