Kohler v. Benckart

• Decision Date: 13 November 1952
• Citation: 252 S.W.2d 854
• Parties: KOHLER v. BENCKART et al.
• Court: Supreme Court of Kentucky

Page 854

252 S.W.2d 854

KOHLER v. BENCKART et al.

Court of Appeals of Kentucky.

Nov. 13, 1952.

J. Harry Stamper, Richard L. Mackay, Lexington, for appellant.

Alex P. Humphrey, Louisville, Foster Ockerman, Lexington, for appellees.

CULLEN, Commissioner.

We have before us the question of the validity of an ordinance of the City of Lexington, imposing an occupational license tax upon the privilege of engaging in a business or profession or carrying on an occupation within the city. With respect to a business or profession, the tax is one percent of the net profits from activities conducted within the city. With respect to occupations, the tax is one percent of the compensation earned for work done or services performed within the city.

The ordinance is substantially the same as the ordinance of the City of Louisville that was upheld in City of Louisville v. Sebree, 308 Ky. 420, 214 S.W.2d 248. However, a number of alleged grounds of invalidity are raised here that were not raised in the Louisville case, and it is contended that Lexington, being a second-class city, does not have the same powers as Louisville, which is a first-class city.

The action questioning the validity of the Lexington ordinance was commenced by the director of finance of the city, as plaintiff, against the city as defendant. The petition alleged that a controversy existed between the director of finance and other officials of the city as to whether:

1. The city had authority under the Constitution and statutes to pass the ordinance.

2. The ordinance was enacted with proper formalities.

3. The ordinance imposed double taxation, for the year 1952, upon persons who had paid an annual license tax for the year 1952 under a previous ordinance.

4. The revenues of the ordinance must be used as provided in KRS 91.200.

5. The ordinance is subject to referendum.

The city filed an answer, asserting the validity of the ordinance in all respects, denying the applicability of KRS 91.200, and alleging that the ordinance was not subject to referendum.

After the city's answer was filed, one Woodford Kohler, an employed barber, was permitted to intervene, in his own behalf and in behalf of any and all persons who would be subject to pay the tax. Kohler filed an intervening petition, setting forth numerous alleged grounds of invalidity of the ordinance, and also alleging that petitions for a referendum on the ordinance had been duly filed, but had been rejected by the city commissioners. He prayed either that the ordinance be declared invalid, or that the city commissioners be required to submit the ordinance to a referendum. The city filed an answer to the intervening petition, consisting of a general denial.

The case was decided in the lower court upon the pleadings, without taking proof, although Kohler expressed a desire, through various motions, to introduce proof. The judgment upheld the validity of the ordinance, and held that the ordinance was not subject to referendum. Kohler has appealed, asserting 20 grounds of error.

The first five grounds of error have to do with alleged premature submission and decision of the case, and the refusal of the court to require the taking of depositions and the production of documentary evidence. It appears that the court announced an oral opinion in the case before the case was placed on the trial docket. However, the case then was docketed and judgment was not entered until the statutory time had elapsed. KRS 451.040.

The appellant does not show any prejudice resulting from the alleged premature submission and decision of the case, except as it affected his efforts to require the introduction of evidence. If he was not entitled to introduce evidence, then all of the first five grounds of error must fail.

It is the general rule that courts will not consider evidence aliunde to show the invalidity of a statute. In fact, many courts have said that they cannot consider evidence on such a question. 11 Am.Jur., Constitutional Law, sec. 145, p. 825. The question of constitutionality of a statute ordinarily is considered to be a question of law, in passing upon which the courts will take judicial notice of all pertinent facts that are matters of common knowledge.

It is not necessary for us to pass upon the question of whether a court can take evidence on the question of constitutionality of a statute. However, we do hold that it was not error for the trial court in the case before us to refuse to receive evidence.

The sixth ground of error is that a city of the second class, such as Lexington, has no authority to levy a tax of the kind here involved. It is argued that the tax is one 'on personal property, tangible and intangible, based on income, licenses or franchises,' within the meaning of section 181 of the Constitution; that such a tax cannot be levied without express legislative authority; and that the legislature has given no such authority to second-class cities. The theory on which the argument is based is that a tax such as this must be in lieu of an ad valorem tax, under section 181 of the Constitution; that KRS 92.280 requires a second-class city to levy an ad valorem tax on all personal property; and therefore no authority has been granted to substitute the license tax for an ad valorem tax. It is further argued that the City of Lexington is continuing to levy an ad valorem tax on all personal property, and therefore the license tax, on top of the ad valorem tax, violates section 181 of the Constitution.

The argument as to lack of authority is answered by the fact that the legislature, by KRS 92.281, has granted to all classes of cities the authority to levy any and all taxes provided for in section 181 of the Constitution. The argument as to unconstitutionality was answered in City of Louisville v. Sebree, 308 Ky. 420, 214 S.W.2d 248.

The seventh and eighth grounds of error are that the city had no authority to delegate legislative, executive and administrative powers to the director of finance, particularly the power to make rules and regulations for administration of the ordinance. In support of these grounds it is contended, first, that the board of commissioners must itself make all regulations because of the provision of KRS 89.190 which says that the board 'shall make all rules and regulations as to the conduct of the various departments necessary and proper for the efficient and economic conduct of the business of the city.' This contention has no merit, because it is obvious that the statute referred to deals only with regulations for the functioning of city departments, from an administrative standpoint, and has nothing to do with regulations prescribing details for the administration of an ordinance as it affects the public. In addition, the statute applies only to cities under the commission form of government, whereas Lexington is operating under the city manager form of government.

It is next contended that, by virtue of KRS 89.500, all 'legislative, executive and administrative power' of the city is vested in the board of commissioners, and they cannot delegate any powers to an administrative officer. The cases cited in support of this contention have to do with delegation of powers to private persons. It is generally recognized that a municipal corporation cannot delegate any of its powers to a private individual, but it is equally well recognized that a municipal council may delegate ministerial or administrative functions to subordinate officials, even though, nominally, all administrative powers are vested in the council. 37 Am.Jur., Municipal Corporations, sec. 118, pp. 732, 733.

The powers delegated to the director of finance by the Lexington ordinance are merely powers to prescribe administrative details, and we believe this to be a valid...