Klein v. City of Louisville

• Decision Date: 22 May 1928
• Parties: KLEIN et al. v. CITY OF LOUISVILLE et al.
• Court: Kentucky Court of Appeals

6 S.W.2d 1104

224 Ky. 624

KLEIN et al. v. CITY OF LOUISVILLE et al.

Court of Appeals of Kentucky

May 22, 1928

Appeal from Circuit Court, Jefferson County, Chancery Branch, Second Division.

Action by Junius C. Klein and others against the City of Louisville and others. Judgment of dismissal, and plaintiffs appeal. Affirmed.

William F. Clark, of Newport, and Gordon & Laurent, of Louisville for appellants.

William T. Baskett, of Louisville, Chester B. Masslick, of New York City, and E. J. Marshall, of Toledo, Ohio, for appellees.

O'Neal & O'Neal, of Louisville, amici curiæ.

McCANDLESS J.

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:

"Sec. 2. Bridge Commission. That the mayor of any city of the first class, with the approval of the legislative body of the city may appoint four persons, who, with the mayor ex officio, shall constitute a bridge commission. * * * The persons appointed as provided herein shall constitute a body corporate under the name (insert name of city) bridge commission and shall have power to contract and be contracted with, to sue and be sued in that name and to adopt a seal and alter same at pleasure."

Section 3 gives the commission full and ample authority to decide on the type of bridge, its location, and to acquire the necessary site; 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, easements or other interest in the 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:

"Nothing in this act contained shall be so construed as to authorize or permit any city to incur any indebtedness of any kind or nature as contemplated by the provisions of the Constitution of the commonwealth in relation to the indebtedness of cities. Cities of the first class are hereby authorized to provide funds for the purposes of this act by the issuance of revenue bonds of such cities by an ordinance or resolution of the commission and without a vote of the voters, the principal and interest of such bonds shall be payable solely from the special fund herein provided for such payment."

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, setting 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 also embracing a provision for the approval by the original bond purchasers of the appointment of consulting engineers, and of the security given by the bridge contractors and by any bank or trust company, in which the proceeds, bonds, or bridge tolls or other moneys of the commission shall be deposited, and may provide that no contract of construction shall be made without the approval of the consulting engineers.

By sections 10 and 11 it is provided that the rate of tolls shall be fixed and adjusted as may be required by any law of the United States so as to provide a sufficient fund to pay the principal and interest of the bonds provided under the act, and providing an additional fund for repairing, maintaining, and operating such bridge, including costs of administration, etc. After the payment of operating expenses, such revenues are placed in a special fund charged with the payment of the bonds and interest. When the bonds and interest are fully paid the tolls shall cease, except for the cost of maintenance, repair, and operation, and, if the cost of operation is provided by other means, it shall become a free bridge. Upon the payment of all the bonds and interest, the city assumes the operation, maintenance, and repair of the bridge, and the commission is dissolved as is usual in cases of this character.

1. It is urged, first, that the title of the legislative act is in conflict with the provisions of section 51 of the Constitution. Without quoting the title a second time, we may say that we do not find any merit in this contention, and fully agree with the learned chancellor who said:

"I think there is nothing in the act which is not sufficiently indicated by its title, nor do I think that it can be said that the act deals with more than one subject. It undoubtedly deals with a great diversity of details connected with the execution of so large a project, but all of these matters are directly related to the general subject of an interstate bridge."

The next insistence is that the act is violative of various subsections of section 59 of the Constitution, in that it (a) authorizes the opening of a highway; (b) because it grants a charter to a corporation; (c) because it licenses the operation of a bridge; (d) because it regulates tolls; (e) because it creates a lien upon the bridge revenue; (f) it is the enactment of a special law where a general law could have been made applicable.

The cited section forbids the passage of local or special laws violating the subjects named, but, as the act relates to a municipality, it must be construed together with section 156 which provides:

"The cities and towns of this commonwealth, for the purposes of their organization and government, shall be divided into six classes. The organization and powers of each class shall be defined and provided for by general laws, so that all municipal corporations of the same class shall possess the same powers and be subject to the same restrictions."

It thus appears that, if the act is within the purview of the latter section the provisions of section 59 do not apply to it. But appellants insist that the provisions for classification in section 156 are restricted to matters of organization and strictly governmental functions, and do not embrace quasi private municipal functions; that the latter are controlled by section 59 for which reason the power here attempted to be granted is forbidden....