Louisville Car Wheel & Ry. Supply Co. v. City of Louisville

• Decision Date: 01 February 1912
• Citation: 142 S.W. 1043,146 Ky. 573
• Parties: LOUISVILLE CAR WHEEL & RY. SUPPLY CO. v. CITY OF LOUISVILLE.
• Court: Kentucky Court of Appeals

142 S.W. 1043

146 Ky. 573

LOUISVILLE CAR WHEEL & RY. SUPPLY CO. v. CITY OF LOUISVILLE.

Court of Appeals of Kentucky.

February 1, 1912

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

Action by the City of Louisville against the Louisville Car Wheel &amp Railway Supply Company. From a judgment for plaintiff defendant appeals. Affirmed.

Burnett Batson & Cary, for appellant.

Jos. S. Lawton and Clayton B. Blakey, for appellee.

LASSING J.

This litigation is the outgrowth of an effort on the part of the city of Louisville to collect taxes for the years 1909 and 1910 on the property of the Louisville Car Wheel & Railway Supply Company.

The defendant, in its answer, pleaded that under section 170 of the Constitution (section 2980a of the Kentucky Statutes [Russell's St. § 907]) and an ordinance of the city of Louisville, adopted July 29, 1898, it was exempt from the payment of taxes for a period of five years, and particularly for the two years for which the city sought a recovery. A demurrer was filed to this answer and sustained. The company declined to plead further, and a judgment was entered in favor of the city for the taxes, interest, and certain penalties authorized by an act of the General Assembly adopted in 1910 (Laws 1910, c. 71).

Two questions are raised upon appeal here: First, it is insisted that the trial court erred in sustaining the demurrer to the second paragraph of the answer, which pleaded these exemptions; and second, that the city is not entitled to recover penalties provided by the act of 1910.

The ground upon which the demurrer was sustained by the trial judge is not stated, but presumably it was because appellant's right to this exemption was not sufficiently pleaded. After setting up the provision of the Constitution, the act of the Legislature, and the ordinance of the city, passed for the purpose of carrying out these provisions, the answer alleges that, prior to September 1, 1908, the defendant located its plant on Seventh street, in the city of Louisville, and commenced to conduct a manufacturing business at said plant; that prior to said date, and after it had established its plant, as aforesaid, it filed with the city assessor the statement provided for in the ordinance. But the answer nowhere states that it had not theretofore, at some other point in the city of Louisville, been engaged in the same character of business. It does not allege that the business in which it was engaged was a new manufacturing business in the city of Louisville, and, unless it was a new manufacturing business, it was not entitled to the exemption sought. For, as said by this court in Louisville & Nashville R. R. Co. v. City of Louisville, 143 Ky. 258, 136 S.W. 611: "The statute evidently contemplates the bringing to the city of Louisville a business that had not theretofore existed there, *** a new enterprise, a new manufacturing establishment."

For appellant, it is urged that this omission in the answer is cured by the allegation therein that the defendant filed with the city assessor the statement provided for by section 3 of the ordinance; this allegation being set up in the following language: "That said manufacturing establishment was a new one, and was brought within the city limits since the passage of the act authorizing the exemption, and that it was so located or brought within the city in good faith, with the intention of being continued permanently, or for a longer period than five years." True the answer does allege that a statement embodying this language was filed with the city assessor. The law requires, before any manufacturing plant in the city shall be entitled to the exemption provided for in the ordinance, that it must file such a statement with the city assessor. The fact that such a statement was filed is merely an evidence that appellant was attempting to avail itself of the provisions of the act giving the exemption. But an allegation in the pleading that a statement containing these facts was filed with the city assessor is not sufficient. It was incumbent upon the pleader to affirmatively allege these facts in the answer, and this defect is not cured by the allegation that a statement embodying these facts was filed with the city assessor. It was incumbent upon the pleader to set up a state of facts which would show that it was entitled to the exemption. One of these facts was that it had filed the required statement with the city assessor. Other facts essential to show that it was entitled to the exemption are omitted. It was incumbent upon the pleader to set out every fact necessary to bring appellant within the provisions of the act, in order to entitle it to the benefits thereof, and, having failed to do so, the demurrer was properly sustained.

Upon oral argument, and in brief as well, counsel for appellant insists that it was not fairly dealt with, because of a "gentleman's agreement" which its counsel had with the attaches of either the city assessor's office or the city attorney's office. It is not clear that any such agreement was made, but if it was it was in open violation of section 52 of the Constitution, which provides that: "The General Assembly shall have no power to release, extinguish or authorize the releasing or extinguishing, in whole or in part, of the indebtedness or liability of any corporation or individual to the commonwealth, or to any county or municipality thereof." In the case of the City of Louisville v. Louisville Railway Company, 111 Ky. 1, 63 S.W. 14, 23 Ky. Law Rep. 390, 98 Am. St. Rep. 387, relief from certain taxes was sought, on the ground of a compromise agreement, entered into between the general council of the city of Louisville and the Louisville Railway Company. Upon review here, such an agreement was held to be void and unenforceable. See, also, Commonwealth v. Tilton, 111 Ky. 341, 63 S.W. 602, 23 Ky. Law Rep. 753. If neither the General Assembly nor the general council had power to make such an agreement, it is apparent that no officer of the city could do so.

The agreement relied upon in this case is that it was understood either that the assessment was to be postponed, or the litigation deferred, until a certain suit then pending against the Louisville & Nashville Railroad Company should be decided. On the authority of the section of the Constitution which we have quoted, as construed and applied by this court in the cases of the City of Louisville v. Louisville Railway Company and Commonwealth v. Tilton, supra, neither the city assessor nor the city attorney, nor any other employé of the city, had any right or authority to agree to omit from assessment, or to postpone the assessment of, the property, or take any step looking toward the ultimate defeat of the city in the collection of either the tax, or the interest or penalty due thereon. Hence, if such an...