Louisville Ry. Co. v. Commonwealth

• Decision Date: 17 February 1899
• Citation: 105 Ky. 710,49 S.W. 486
• Parties: LOUISVILLE RY. CO. v. COMMONWEALTH. [1]
• Court: Kentucky Court of Appeals

49 S.W. 486

105 Ky. 710

LOUISVILLE RY. CO. v. COMMONWEALTH. ^[1]

Court of Appeals of Kentucky.

February 17, 1899

Appeal from circuit court, Franklin county.

"To be officially reported."

Action by the commonwealth against the Louisville Railway Company to recover taxes. Judgment for plaintiff, and defendant appeals. Affirmed.

St John Boyle and Humphrey & Davie, for appellant.

W. S Taylor, M. R. Todd, and M. H. Thatcher, for appellee.

PAYNTER J.

This action was brought by the commonwealth of Kentucky to recover taxes due upon the assessment of the appellant's franchises by the board of valuation and assessment for the year 1896. The appellant seeks to prevent a recovery in the action upon the ground of overvaluation of its franchises (a) That part of its franchises are perpetual, and part continue for years, and the board, in fixing the value proceeded upon the theory that all of its franchises were to exist without limitation as to their duration; (b) that as the county assessors, the railroad commissioners, and the board of equalization and assessment assessed the other property of the state at less than its fair cash value, therefore the action of the board of equalization and assessment in fixing the value of its property was prejudicial, because, in making the assessment, it did so at what it considered the fair cash value of its franchises.

Section 172 of the constitution is as follows: "All property, not exempted from taxation by this constitution, shall be assessed for taxation at its fair cash value, estimated at the price it would bring at a fair voluntary sale; and any officer, or other person authorized to assess values for taxation, who shall commit any willful error in the performance of his duty, shall be deemed guilty of misfeasance, and upon conviction thereof shall forfeit his office, and be otherwise punished as may be provided by law." Pursuant to that provision of the constitution the general assembly passed a general revenue act, which became a law November 11, 1892, and part of which is section 4020, Ky. St., which reads as follows: "All real and personal estate within this state, and all personal estate of persons residing in this state, and of all corporations organized under the laws of this state, whether the property be in or out of this state, including intangible property, which shall be considered and estimated in fixing the value of corporate franchises as hereinafter provided, shall be subject to taxation unless the same be exempt from taxation by the constitution, and shall be assessed at its fair cash value, estimated at the price it would bring at a fair voluntary sale." The law makes it the duty of the assessors of the various counties in the state to assess all real and personal property at its fair cash value, estimated at the price it would bring at a fair voluntary sale; and, in addition to that, they are required to make oath that they so assessed the property. Besides this, there is a board in each county, created by law, to revise the action of the county assessor, and to see that all the property is assessed at its fair cash value. It will be observed that section 4020, Ky. St., in effect, commands every officer, every board, and every commission in the state, whose duty it is to assess property for taxation, to assess it at its fair cash value, estimated at the price it would bring at a fair voluntary sale. Any law which may have been in force which authorized the valuation and assessment of property for taxation at less than its fair cash value was repealed by section 172 of the constitution. If there was any statute in relation to the assessment of property for taxation which was inconsistent with the constitution at the time of its adoption, it became inoperative thereafter, because, under the first subdivision of the schedule of the constitution, all such acts are no longer to be in force. In addition to that provision of the constitution, the legislature declared inoperative, in effect, all laws which authorized any officer, board, or commission to value or assess property for taxation at an amount less than its fair cash value, if there was such a law in force. Under section 4077, Ky. St., every corporation is liable to pay taxes on its franchise, if it is of any value. The auditor, treasurer, and secretary of state are thereby constituted a board of valuation and assessment for fixing the value of franchises for the purpose of taxation. Under section 4079, Id., the corporations are required to make a report to the auditor, giving certain information with reference to their property, with the view of enabling the board to value and assess the franchises; and in that section it is provided "that said board, from said statement, and from such other evidence as it may have, if such corporation, company or association be organized under the laws of this state, shall fix the value of the capital stock of the corporation, company or association, as provided in the next succeeding section, and from the amount thus fixed shall deduct the assessed value of all tangible property assessed in this state, or in the counties where situated. The remainder thus found shall be the value of its corporate franchise subject to taxation, as aforesaid." In 1888 the state board of equalization and assessment was created by an act of the legislature, and amended in 1890. The law was not re-enacted after the adoption of the present constitution, but Barbour & Carroll's Kentucky Statutes (1894) contain the act as amended, which is embraced in sections 4268 and 4281, inclusive. It will be observed that there is a note by the compilers before section 4268 as follows: "This article was not a part of preceding section." The preceding act to which reference is made is the general revenue law of the state, which took effect November 11, 1892. For the purpose of this inquiry it is only necessary to quote certain sections of the act, which read as follows:

"Sec 4273. That the clerks of the various county courts of this commonwealth are hereby required to make out an annual tabulated statement of all sales of real estate, as shown by the deed books in their respective counties, on suitable blanks, which the auditor is hereby required to furnish said clerks, and said clerks are required to make and file said tabulated statements on or before the first day of January in each year, town lots being kept separate from other real estate; said tabulated statements shall be for one year immediately preceding the fifteenth day of September, and shall contain a list of all sales of real estate, town lots being kept separate as aforesaid, the price paid, with terms and conditions, the number of acres, and the assessed value of same for the said year. Said tabulated statements shall only include sales where absolute fee simple title is given and if only a part of a tract of land or town lot is sold, shall give a short description of same, and state what proportion the same may be of such tract of land or town lot. The said tabulated statement shall be sworn to by the said clerk before some person competent to take oaths as a full and complete statement of said facts for the period of one year previous to the fifteenth day of September. Said statement shall also be signed and sworn to by the county attorney and county judge, and in their affidavits they shall state that they have examined the recorded and unrecorded conveyances filed for said twelve months preceding September the fifteenth last past, and each and every such conveyance (except those based on love and affection), with the consideration therefor correctly...