Louisville Water Co. v. Hamilton

• Decision Date: 20 December 1883
• Citation: 81 Ky. 517,5 Ky.L.Rptr. 557
• Parties: Louisville Water Company v. Hamilton.
• Court: Kentucky Court of Appeals

81 Ky. 517

5 Ky.L.Rptr. 557

Louisville Water Company v. Hamilton.

Court of Appeals of Kentucky.

December 20, 1883

1. Under section 4, article 12, chapter 92, General Statutes water companies are bound for revenue. They are required to report to the auditor, on or before the 10th day of April in each year, their property, stocks, & c.

2. A statute of exemption will not be construed to be retrospective, unless such is the plain intent of the legislature. The intention to exempt must be shown in clear and unambiguous terms.

3. The property of water companies, like railroads and turnpikes can not be seized by collecting officers and sold, so as to deprive the public of the benefits derived from it.

4. The chancellor having possession of the case should compel the company by rule to pay the revenue into court.

APPEAL FROM LOUISVILLE CHANCERY COURT.

T. L BURNETT, RUSSELL & BARRETT, AND BROWN & DAVIE, FOR APPELLANT.

County taxes can not be enforced against appellant--

1. Because of the strictly public functions performed by the corporation.

2. Because the water-works at Louisville must be regarded as an entirety, and therefore can not be levied upon and sold piecemeal.

3. Because there is a statutory exemption from the tax.

4. A water company that supplies a city is exempt from execution levy on any of its apparatus or plant on the ground of public necessity and convenience. (Charter Louisville Water Co., act 6th March, 1854, sec. 1; Charter City of Louisville Lucas' ed., p. 47; Foster, & c., v. Fowler, & c., 60 Pa. State R., 27; Chicago v. Halsey, 25 Ill. 596; Leonard v. Brooklyn, 71 N.Y. 479; Dillon on Municipal Corporations, secs. 773-774, 3d ed.; Louisville v. Commonwealth, 1 Duv., 298.?? Merriwether v. Garrett, 12 Otto, 513; New Orleans v. Morris, 15 Otto,?? 602; Perry on Trusts, sec. 692.)

5. The plant, pumps, aqueducts, & c., of the Louisville Water Company?? must be treated, like the property and equipment of a railway, as an entirety. As such its property is not subject to execution levy. (Phillips v. Winslow, 18 B. Mon., 431; Newport and Cincinnat?? Bridge Co. v. Douglass, 12 Bush, 673.)

6. There is a statutory exemption from payment of the tax in question. (Act of 22d April, 1882, Session Acts, vol. 1, p. 915, chap. 1349, sec. 2; act of 27th March, 1880, Session Acts, vol. 1, p. 639, chap. 620, sec. 6; and for effect of such legislation see Cooley on Taxation, p. 14; Dillon on Municipal Corporations, secs. 9, 19, 20, 3d ed.)

RUSSELL & HELM FOR APPELLEE.

Undoubtedly, prior to the act of 1882, appellant was liable for taxes. The General Statutes, chapter 92, article 12, section 4, settles the question.

The act of 1882 should be given a prospective and not a retrospective consideration.

By its terms it does not exempt the appellant corporation from the payment of county taxes.

The act itself is unconstitutional, as it gives to one corporation an immunity from taxation when all similar corporations are required to pay. (Sec. 3, art. 1, chap. 92, Gen. Stats.; sec. 4, art. 12, chap. 92, Gen. Stats.; Gen. Stats., 1881 ed., p. 881; O'Donoghue v. Aikin, 2 Duv., 480; Head v. Ward, 11 Mar., 284; C. & O. R. R. Co. v. Judge Washington County Court, 10 Bush, 574; Watts v. Commonwealth, 78 Ky. 389; Cooley on Constitutional Limitations, 370, 371; Sedgwick on Statute and Constitutional Law, 173; Lincoln County Court v. L. & N. R. R. Co., recently decided; Dillon on Municipal Corporations, sec. 10; Hamilton Co. v. Mighel, 7 Ohio St. 109; Soper v. Henry Co., 26 Iowa 267; 4 Peters, 562; 10 How., 393; 3 Ib., 146; 1 Black, 144; 7 Harris, Pa., 144; Cooley on Taxation, p. 152 and note; Sutton's Heirs v. City of Louisville, 5 Dana, 28; Lexington v. McQuillan, 9 Dana, 513; Bank v. Tennessee, 104 U. S.; Hoge v. Railroad Co., 99 U.S. 354.)

OPINION

PRYOR JUDGE:

This appeal is from a judgment of the Louisville chancery court, enjoining the collection of taxes by the sheriff, and to prevent the levy by him of an execution on appellant's property. The Louisville Water Company is a corporation, the stock of which, or the greater part of it, is owned by the city of Louisville, and whose business it is to supply the inhabitants of the city with water. Taxes had been assessed against the property of this corporation for several years, and for some reason the company declined to make payment, and, when payment was about to be coerced by the collecting officer, this action was instituted in the court below, and an injunction obtained prohibiting the sale of the property of the corporation until the case could be heard by the chancellor. It is claimed in the petition that it is a public corporation, and not liable to taxation by reason of the public benefits resulting to the city of Louisville from the exercise of the corporate privileges. Without entering into a discussion of this branch of the case, it is a sufficient response to say that the 3d section of article 1 of Title Revenue and Taxation, chapter 92, provides in definite terms what property shall be exempt from taxation, and the exemption does not apply to this character of corporation. By section 4 of article 12 of the same chapter it is provided: " It shall be the duty of the president, secretary, or treasurer, of any gas or water company or association in this State, to report, under oath, to the auditor of public accounts, on the 10th day of July in each year, a complete statement of all property, real, personal, and mixed, including buildings, engines, machinery, pipes, reservoirs, tanks, & c., under the control of such gas or water company, and any cash on hand," & c. Upon this valuation they are required to pay tax, and the individual stockholders are not required to list their shares, for the reason that the taxation is based on the real value of the property as reported by the chief officer of the corporation, and the corporation is required to pay the tax, and not the stockholder.

By the 1st section of chapter 27, General Statutes, page 881, Title County Levy, it is provided " that whenever the county court of any county in the Commonwealth shall, by virtue of any power conferred by law, order and direct an ad valorem tax to be assessed, levied, and collected in said county, it shall be the duty of the assessor of the county to proceed to assess, at his regular assessment, all the property in said county not specially exempt from taxation," by virtue of section 3, article 1, chapter 92, General Statutes, Title Revenue and Taxation. Section 2 of this same act requires the chief officer of certain companies and corporations, including in express terms water companies, to list their property, or cause the same to be done, with the county assessor where they own property within the county, for the purposes of taxation.

A reference to these several statutes makes it manifest that it was never the intention of the legislature to relieve such corporations from their share of the burdens of taxation but, on the contrary, evinces a clear purpose to tax such corporate property. With this legislative intent, declared in express terms, it is needless to determine the nature of the benefits resulting to...