Louisville Bridge Co. v. City of Louisville

• Decision Date: 30 May 1883
• Parties: Louisville Bridge Co. v. City of Louisville.
• Court: Kentucky Court of Appeals

Page 189

81 Ky. 189

Louisville Bridge Co. v. City of Louisville.

Court of Appeals of Kentucky.

May 30, 1883.

APPEAL FROM LOUISVILLE CHANCERY COURT.

BULLOCK & ANDERSON, I. & J. CALDWELL, WINSTON, AND WM. LINDSAY FOR APPELLANT.

T. L. BURNETT, CITY ATTORNEY, AND LANE & HARRISON FOR APPELLEE.

CHIEF JUSTICE HARGIS DELIVERED THE OPINION OF THE COURT.

The city assessor of Louisville, in August, 1876, without notice to the Louisville Bridge Company, assessed for taxation so much of its right of way and bridge improvements thereon as lies between the north line of the Louisville and Portland Canal and low-water mark on the northwestern shore of the Ohio river.

The assessment was for back taxes, alleged to be due for the years 1874, 1875, and 1876. The assessor fixed the valuation each year at $750,000, but no opportunity of a review of the assessment was alleged to have been given the company by keeping the assessment rolls open the requisite length of time, and giving notice thereof, as required by law.

Upon this assessment, the city of Louisville brought this action in equity against the Bridge Company to subject its right of way and bridge over the water in the Ohio river to the payment of the taxes for those years, and the penalties for the non-payment thereof within the statutory periods. The city recovered the sum of $51,975, the amount of the taxes, and the Bridge Company has appealed from the judgment.

Its counsel insist that this judgment is erroneous, because the bridge and right of way are not subject to state or municipal taxation. Many other questions upon the pleadings, ordinances, manner of assessment, citation, &c., are discussed and urged with force and plausibility, and we might say, as to some of them, unanswerably; but it is unnecessary to decide them, in view of the radical effect of one of the two main questions relied upon by the appellant. We will proceed to discuss those questions.

It is contended that appellant's bridge and right of way described in the petition are not subject to the taxing power of the State of Kentucky, because —

First. Of the third clause of section 8, article 1, of the Constitution of the United States, which provides that Congress shall have power "to regulate commerce with foreign nations, and among the several states, and with the Indian tribes."

Second. Of the 11th section of the compact with Virginia, which declares "that the use and navigation of the river Ohio, so far as the territory of the proposed state, or the territory which shall remain within the limits of this commonwealth lies thereon, shall be free and common to the citizens of the United States, and the respective jurisdictions of this commonwealth, and of the proposed state, on the river as aforesaid, shall be concurrent only with the states which may possess the opposite shores of the said river."

The jurisdiction of the state of Kentucky over that part of the Ohio river which marks her northwestern border to low-water mark on its northwestern shore has been so often considered that we had thought the question one of authority; but able and learned counsel, whose views are entitled to consideration, contend that the question presented by this record is new, and has never been settled adversely to their position, and we therefore feel that it is our duty to dispose of the question by a review of the history, legislation, and authorities which support the principles applicable to it.

In 1779 Virginia opened a land office, but prohibited the location or entry of any land within her then charter limits, lying to "the northwest side of the river Ohio."

This prohibition must have been made in contemplation of the cession of that part of her territory to the United States.

Preliminary to the cession, congress, on the 6th day of September, 1780, passed a resolution recommending "to the several states having claims to waste and unappropriated lands in the western country a liberal cession to the United States of a portion of their respective claims for the common benefit of the union."

On the 2d day of January, 1781, Virginia yielded to the congress of the United States, for the benefit of the said states, "all right, title, and claim," which she had "to the territory northwest of the Ohio river," subject to certain conditions. Congress, by an act of September 13th, 1783, stipulated the terms on which the United States agreed to accept the cession of the territory named. On the 20th day of December of that year, although the terms on which congress agreed to accept the cession did not "come fully up to the propositions of Virginia," that state accepted the terms of congress, and by an act of her general assembly authorized her delegates in congress, by proper deeds or instruments in writing, to convey unto the United States all her right, title, and claim, "as well of soil as jurisdiction," to the territory lying "to the northwest of the Ohio river." And in pursuance of that authority, Thomas Jefferson, Samuel Hardy, Arthur Lee, and James Monroe, on the 1st day of March, 1784, executed a deed of cession from Virginia to the United States, conveying the soil and jurisdiction of that territory.

Thus Virginia parted with that magnificent "tract of country" embraced by her charters of 1606, 1609, and 1611-'12, granted by James the First of England; and thus the United States became invested with title to its soil and jurisdiction for the benefit of all the states, including Virginia.

On the 13th day of July, 1787, congress passed "an ordinance for the government of the territory of the United States northwest of the river Ohio," in which it was declared "for the prevention of crimes and injuries, the laws to be adopted or made shall have force in all parts of the district," the territory then being one district; that "no tax shall be imposed on lands the property of the United States;" that "the navigable waters leading into the Mississippi and Saint Lawrence, and the carrying places between the same, shall be common highways and forever free, as well to the inhabitants of the said territory as to the citizens of the United States, and those of any other States that may be admitted into the confederacy without any tax, impost, or duty therefor."

The compact between Virginia and Kentucky was made on the 18th day of December, 1789, more than two years after the passage of the ordinance of congress establishing the northwest territorial government, and subsequent to the adoption of the constitution of the United States.

There is nothing in any of the acts, either of Virginia or the revolutionary congress, relating to the cession of the northwest territory to the United States, which conveys, surrenders, or affects the jurisdiction of the state of Virginia over the bank, bed, and waters of the Ohio river to low-water mark on its northwestern shore. The first mention that is made of the navigable waters leading into the Mississippi and Saint Lawrence, and of their character and use, is to be found in the fourth article of the ordinance of 1787, which referred only to such navigable waters flowing into either of those great rivers as laid within or flowed through the territory lying to the northwest of the river Ohio, as that territory so bounded, with the rivers embraced in it, was the subject of the ordinance, and alone conveyed by Virginia's deed of cession.

It is true that the ordinance of 1787 was in furtherance of the then prevalent sentiment of the country in favor of the free and common right of navigation of the Mississippi and the navigable waters flowing into it. But congress had no power then, under the articles of confederation or from the states, to regulate the navigation of inter-state streams outside of the ceded northwestern territory, over whose soil and rivers congress had jurisdiction by the terms of the deed of cession. And until the constitution of the United States was established, delegating to congress the power to regulate commerce among the states, it had no such power over the rivers within the jurisdictional limits of the states; therefore, the commercial clause of the constitution, and the ninth section of its first article, which declares that "no preference shall be given, by any regulation of commerce or revenue, to the ports of one state over another," and the second clause of section 10 of said article which says, "no state shall, without the consent of congress, lay any imposts or duties on imports or exports, except what may be absolutely necessary for executing its inspection laws," with their construction by the courts, declare and explain the nature and extent of the jurisdiction of the United States over the Ohio and other navigable waters.

By the decision of the supreme court in Handley's lessee v. Anthony, 5 Wheaton, 374, the territorial limits of Kentucky were authoritatively held to extend to low-water mark on the northwest side of the Ohio river, and her jurisdiction over the soil to lower water-mark affirmatively settled.

That jurisdiction extends to all kinds of property situated in the Ohio river, such as islands, or the right to the soil under the water, and there is no limit to its lawful exercise, except where jurisdiction and power has been delegated to the general government for specified purposes, and that of the state expressly or necessarily excluded.

It is said, in the case of McCulloch v. Maryland, 4 Wheaton, 316, that all subjects over which the sovereign power of a state extends are subject to taxation, and the sovereignty of a state extends to everything which exists by its own authority, or is introduced by its permission; and these principles are recognized in Gibbons v. Ogden, 9th Wheaton, 1, in which it was said the power of taxation is indispensable to the existence of the states, and may be exercised concurrently with the general government, but that there is no analogy between the power of taxation and the power of...