St. Louis-S. F. Ry. Co. v. Andrews, Co.

Decision Date10 April 1928
Docket NumberCase Number: 17858
Citation137 Okla. 222,278 P. 617,1928 OK 250
PartiesST. LOUIS-S. F. RY. CO. v. ANDREWS, Co. Treas.
CourtOklahoma Supreme Court
Syllabus

¶0 1. Taxation--Levies in Excess of Legal Limit Invalid Unless Authorized by Vote of Taxpayers.

Every tax levy made in excess of the limit prescribed by law is invalid, unless such excess levy be authorized by a vote of the electorate as required by law.

2. Statutes--Necessity for Title to Express Subject--Invalidity of Act Authorizing Tax Levy to Build County Courthouse.

The provision in chapter 13, S. L. 1925, which authorizes the board of county commissioners to make a tax levy oil not to exceed one mill in any one year for the purpose of erecting a county courthouse, is violative of section 57, art. 5, of the Constitution, which provides that: "Every act of the Legislature shall embrace but one subject, which shall be clearly expressed in its title" The right to levy a one-mill ad valorem tax in addition to the right to appropriate other funds authorized in said act is not expressed in the title thereof. Therefore an ad valorem levy made under the purported authority of said act is invalid.

3. Municipal Corporations--Constitutional Authority to Engage in Businesses.

Section 6, art. 18, of the Constitution provides: "Every municipal corporation within this state shall have the right to engage in any business or enterprise which may be engaged in by a person, firm, or corporation by virtue of a franchise from said corporation."

4. Same--Municipally Owned Public Utilities--Rates and Use of Revenue not Prescribed by Law.

Section 4507, C. O. S. 1921, confers the same right thus conferred by section 6, art. 18, of the Constitution, and while said section 4507 of the statute contains the provision: "It shall be the duty of such city to fix the rates charged for service to the public, as nearly as practicable, so as to pay the interest and not less than three per centum per annum on the principal or such bonds in excess of the expenses of maintenance and operation," yet neither said section of the statute nor any provision of the Constitution specifically prescribes just what rates may be charged by a municipally owned utility, nor to what purpose the profits derived therefrom must be appropriated.

5. Same--Public Utility Bonds--Constitutional Requirement of Tax Levy to Pay Interest and Create Sinking Fund.

Section 27, art. 10, of the Constitution authorizes any city or town by a majority vote of the qualified tax paying voters thereof to incur an indebtedness beyond the limit prescribed in section 26, Id., for the purpose of purchasing public utilities to be owned exclusively by said city, and any city incurring such indebtedness is vested with power and charged with the duty of levying a tax in addition to other taxes provided for by law sufficient to pay the interest on such indebtedness and to create a sinking fund for the payment of the principal within 25 years. Compliance with the foregoing provision in issuing bonds enters into and becomes a part of the contractual obligation of such bonds.

The Legislature can neither take away the rights thus conferred upon a city nor relieve it of the duties thus imposed upon it.

6. Same--Validity of Tax Levy.

A tax levy, made for the purpose of paying the interest on and creating a sinking fund for outstanding bonds issued for a municipally owned utility, is valid, there being no contention that the rate levied for such purpose is more than will be necessary.

Error from District Court, Kay County; Claude Duval, Judge.

Action by the St. Louis-San Francisco Railroad Company against H. N. Andrews, County Treasurer of Kay County. From the judgment, both parties appeal. Affirmed.

E. T. Miller and Stuart, Cruce & Franklin, for plaintiff in error.

Roy R. Carver, Co. Atty., Roy W. Cox, City Atty., H. S. Burke, John S. Burger, and Lydick, McPherren & Jordan, for defendant in error.

HARRISON, J.

¶1 Plaintiff in error brought this action to recover certain taxes which it had paid under protest to the county treasurer of Kay county, the tax in question being certain levies for the year 1925.

Five causes of action were alleged, the first being: That a levy of 5.204 mills had been made for current expenses and county highway funds; that 4,25 mills is the maximum rate allowed by law to be levied for such purpose without a vote of the people authorizing a greater levy, and the excise board not having been so authorized, the excess, amounting to .954 mills, was illegal. Wherefore plaintiff prayed judgment for the excess.

¶2 The second cause of action was that one mill of the total levy for said county was to create a fund for the construction of a county courthouse; that such levy having been made under the purported authority of chapter 13, S. L. 1925, is void, because the subject-matter of the act is not clearly expressed in the title thereof, as required by section 57, art. 5, of the Constitution; and that such levy was further illegal because not having been authorized by a vote of the people. Wherefore plaintiff prayed judgment for the taxes paid under such levy.

¶3 The third cause of action was that 5.78 mills of the levy made for the benefit of the city of Blackwell was for the purpose of paying interest and creating a sinking fund for certain municipal bonds which had been issued by the city of Blackwell for the purpose of constructing a public utility, consisting of waterworks, owned exclusively by the city; that said levy, to the extent of 5.78 mills, was void for the reason that under section 4507, C. S. 1921, the city should have charged water rates sufficient to pay the interest on and to create a sinking fund for such bonds without making any levy for such purpose, and was without authority of law to make a levy for such purpose, and therefore said levy was in violation of the statute and void. Wherefore plaintiff prayed judgment for the taxes paid under such levy.

¶4 The fourth cause of action was that 1.3 mills of the levy made for the benefit of the city of Blackwell was void, because in excess of the estimated needs submitted by said city to the county excise board. Wherefore plaintiff prayed judgment for the taxes paid under said levy.

¶5 Fifth cause of action was that 4.7 mills of the levy made by the county excise board for the benefit of school district 45 was void, because the fund for which such levy was made had a surplus balance on hand sufficient to meet the estimated needs for such school district without making any levy. Wherefore plaintiff prayed for judgment for the taxes paid under this levy.

¶6 It appears that plaintiff paid, under protest, the first half of its taxes in due time, and brought action to recover the alleged illegal taxes, and that before the cause was tried the last half of the taxes for that year became due, and plaintiff in due time paid said last half under protest, and by supplemental petition brought suit to recover the last half of the taxes.

¶7 It is conceded that plaintiff has fully complied with the statutes in bringing this action.

1. Under the agreed statement of facts the trial court gave judgment in favor of plaintiff in error on the first cause of action for all the levy in excess of 4.26 mills, which excess was .954 mills. Judgment was rendered for this portion, because such excess had not been authorized by a vote of the electorate as required by law.
2. The court also gave judgment in favor of plaintiff in error on the second cause of action for the one mill levied therein under chapter 13, S. L. 1925, without a vote authorizing such additional levy.
3. On the third cause of action the court gave judgment in favor of the defendant in error, county treasurer, for the 5.78 mills levied for the purpose of paying the interest and creating a sinking fund for the waterworks bonds which had been issued by the city of Blackwell.
4. On the fourth cause of action the defendant confessed judgment and judgment was thereupon rendered in favor of plaintiff in error.
5. On the fifth cause of action the defendant confessed judgment for a portion of the amount sued for, and plaintiff in error thereupon dismissed as to the remainder, and judgment was rendered in favor of plaintiff in error accordingly, and thus causes of action 4 and 5 are thereby dropped out of the case.

¶8 From the judgment rendered in favor of plaintiff in error on the first and second causes of action, defendant in error, county treasurer, through the county attorney, has appealed and filed petition in error. And from the judgment in favor of defendant in error and against plaintiff in error, railway company, on the third cause of action, the plaintiff in error has appealed and filed petition in error.

¶9 While the county attorney has not briefed the questions involved in the first and second causes of action, yet, they being public questions, questions in which every county in the state may become interested and involved, we shall not treat them as abandoned, but shall formally pass upon them.

¶10 As to the issues involved in the first cause of action, in which as above stated judgment was rendered in favor of plaintiff in error, because the excess levy had not been authorized by a vote as required by law, we find no reason for disturbing the judgment, and the judgment in that regard is affirmed.

¶11 As to the judgment in favor of plaintiff in error on the second cause of action, for the one mill levied under purported authority of chapter 13, S. L. 1925, the court, in its finding that such levy was made without a vote of the people authorizing such levy, is sustained by the agreed statement of facts. Also, the court evidently treats said chapter 13, S. L. 1925, as invalid. We must also sustain the court's judgment in this regard, for section 1 of said chapter, after providing that the board of county commissioners may use any or all of the unassigned portions of the sinking fund of the county derived from...

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