Purcell v. City of Lexington

• Decision Date: 14 November 1919
• Citation: 216 S.W. 599,186 Ky. 381
• Parties: PURCELL ET AL. v. CITY OF LEXINGTON.
• Court: Kentucky Court of Appeals

216 S.W. 599

186 Ky. 381

PURCELL ET AL. v. CITY OF LEXINGTON.

Court of Appeals of Kentucky.

November 14, 1919

Rehearing Denied Jan. 9, 1920.

Appeal from Circuit Court, Fayette County.

Action by the City of Lexington, on the relation of Thomas E. Coyne Back Tax Assessor, against J. D. Purcell and others. Judgment for plaintiff, and defendants appeal. Judgment affirmed, with directions to modify order of sale.

George C. Webb and Hunt & Bush, all of Lexington, for appellants.

H. E Ross and Miller & Miller, all of Lexington, for appellee.

CLARKE J.

The appellants are the present owners of the interest which the city of Lexington, as the fee-simple owner of four lots on Main and Water streets in the city of Lexington, demised in 1839 to Thomas K. Layton and Michael Gaugh by four separate leases which are identical in terms, and one of which omitting the description of the property leased and certificates of acknowledgment and recordation, is as follows:

"This indenture made and entered into this 13th day of February, 1839, between the city of Lexington, of the one part, and Thomas K. Layton, of the said city, of the other part, witnesseth:

That, in consideration of the rents, covenants and conditions on the part of said Layton to be paid, kept and performed, as hereinafter mentioned, the said city of Lexington hath demised and to farm let unto the said Layton, his executors, administrators and assigns, all that lot or parcel of land situated on Water street in the city of Lexington, and bounded as follows: [[[Description.] * * *

To have and to hold said parcel of ground to the said Layton, his executors, administrators and assigns, for and during the full end and term of 99 years from the 18th day of March, 1838, and the said city of Lexington doth hereby covenant that at the expiration of said term of 99 years it will cause to be executed another demise of said premises for the same term and containing the same covenants, clauses, conditions and rents as this indenture, and it is understood by the parties aforesaid, that this is a clause of perpetual renewal, and it is their intention so to make it, and the said city of Lexington doth further covenant and agree that she will keep him, the said Layton, his executors, administrators and assigns, in the full and complete use, occupation and enjoyment of said demised premises during the term aforesaid, free of all let or hindrance interruption or disturbance whatsoever, in consideration of which demise and the foregoing covenants by the said city, the said Layton doth covenant and agree that he and his executors, administrators and assigns, shall well and truly pay to said city of Lexington, her assigns, the annual sum of $35.83, to become due in equal semiannual installments, computing the time from the 18th day of March, 1838, being the rent reserved and payable and issuing out of the ground demised as aforesaid, and upon the said rent or any part thereof becoming due and being in arrear, the said city of Lexington, by her collector or assigns shall have the right to distrain, sue for and recover the same without delay, and said rent or any part thereof remaining in arrear and unpaid for the space of 12 months, from the time it shall become due, then it shall be in the election of the said city of Lexington, or its assigns to recover the same either by distress and suit, or to re-enter upon said demised premises, and upon such re-entry this lease shall become and be utterly null and void, and the premises with the buildings and improvements and appurtenances shall vest in said city of Lexington forever, and its assigns, and the said Layton is to perform and keep his article of agreement entered into on the 13th day of Feb. 1838, in the name and firm of T. K. Layton & Co. and in conjunction with B. Ford, M. Gaugh, and R. King, with said city of Lexington, and to perform its conditions and covenants. Said article of agreement is of record in the record books of the city council of Lexington. It is further covenanted and agreed that said Layton is to keep an insurance upon the premises and this lease and the buildings thereon, and the same shall be exempt from city taxation for the term aforesaid.

In testimony whereof the said city of Lexington hath caused the name and signature of the mayor of said city with the public seal of said city to be hereunto affixed, and the said Layton has hereunto set his hand seal the day and year first above written.

Charles H. Wickliffe, Mayor.

T. K. Layton."

The lessees, since the execution of the leases, have been in possession of the premises and paid the rentals, etc., as stipulated, and the city of Lexington never at any time prior to the filing of this suit, on July 20, 1916, collected any taxes or asserted the right so to do against the original lessees or any of the several successive assignees. In this action, styled and prosecuted in the name of "The City of Lexington, on Relation of Thomas E. Coyne, Back Tax Assessor, Plaintiff, v. J. D. Purcell, J. D. Purcell Company, a Corporation, and Security Trust Company of Lexington, Kentucky, a Corporation, Defendants," it was sought to have the value of the leasehold assessed against the lessees for taxation by the city for the five years preceding the filing of the suit, and to recover judgment for the taxes due thereon, with interest, penalty, and costs, and, from a judgment granting plaintiff the relief prayed for, the defendants have prosecuted this appeal.

1. It is first insisted that the court erred in overruling a special demurrer to the petition upon the ground that under the charter of cities of the second class, to which Lexington belongs, all actions for and on behalf of the city must be prosecuted by the city solicitor; that there is no such officer as "back tax assessor" recognized by the charter; and that, even if the council had authority to appoint such an officer, he is yet without authority to institute or prosecute an action in the name of the city. It is true that the charter does not in terms provide for such an officer as back tax assessor, and that in section 3166 of the Kentucky Statutes, a part of the charter of cities of the second class, it is provided that the city solicitor, in addition to other specified duties, "shall appear for the city, and attend to all cases in the circuit court and court of appeals, wherein the city may be a party complainant or defendant, or a party in interest." But this section only defines the duties of the city solicitor, and does not limit the powers of the city with reference either to the institution of actions or the employment of counsel, certainly not with reference to the assessment of omitted property and the collection of delinquent taxes, since in another section of the charter, being section 3187, Kentucky Statutes, is the provision, among others, that--

"Where any property, subject to taxation, has been omitted from assessment for any year or years, the city may, by direct action, brought in the name of the city by its city solicitor, city attorney or other duly authorized agent, in any court otherwise competent for the purpose, recover judgment against the person liable for the payment of taxes on such property."

As the petition alleges that the relator prosecuting this action was duly appointed back tax assessor for the city of Lexington and authorized "to discover and report for assessment all property subject to taxation in the city of Lexington which has been omitted from the assessment for any year or years and to maintain and prosecute suits in the name of the city of Lexington for the collection of taxes on property in the city of Lexington omitted from assessment for any year or years," we think it is clear that the court did not err in overruling the special demurrer to the petition.

2. Upon the merits, the principal question is whether the provision in the leases exempting the demised property from city taxes was a valid and binding obligation upon the city under the laws of the state at the time of the execution of the leases; but, before undertaking a decision of that question, it will be necessary to determine whether or not defendants' leasehold interest in the demised premises is such an interest as would be taxable against them under the present law even if there were no exemption clause in the leases, since the defendants earnestly insist that such interest as they have in the property, although personal property, is taxable under existing laws only as real estate against the lessor. This contention is based upon sections 458, 4022, and 4049 of our present Statutes, and the rule almost, if not universally, recognized as stated in 24 Cyc. 1074, that--

"In the absence of agreement or special covenant, the duty to pay all state, municipal, and county taxes and assessments which during the term of the lease becomes chargeable upon the premises is imposed by law upon the landlord."

This is a correct statement of the general rule, and as such accords with the provisions of the above sections of our Statutes, which, in so far as applicable, are respectively as follows:

"Sec. 458. The words 'real estate' or 'land' shall be construed to mean lands, tenements and hereditaments and all rights thereto and interests therein, other than a chattel interest."

"Sec. 4022. For the purpose of taxation, real estate shall include all lands within this state and improvements thereon; and personal estate shall include every other species and character of property--that which is tangible as well as that which is intangible."

"Sec. 4049. Real estate, or any interest therein, shall be listed in the county or district where situated against the owner of the first freehold estate therein."

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