Union Pac. R. Co. v. Dawson County

• Decision Date: 04 January 1882
• Citation: 11 N.W. 307,12 Neb. 254
• Parties: THE UNION PACIFIC RAILROAD, PLAINTIFF, v. THE COUNTY OF DAWSON, DEFENDANT
• Court: Nebraska Supreme Court

11 N.W. 307

12 Neb. 254

THE UNION PACIFIC RAILROAD, PLAINTIFF, v. THE COUNTY OF DAWSON, DEFENDANT

Supreme Court of Nebraska

January 4, 1882

ORIGINAL application for injunction.

A. J Poppleton, for plaintiff.

C. W McNamar, for defendant.

OPINION

MAXWELL, J.

This is an original action brought to restrain the collection of a sinking fund tax, levied upon the property of the plaintiff in Dawson county, in the year 1879, and also school taxes levied in excess of twenty-five mills on the dollar valuation in school districts No. 5, 6, 7, 11, 13, 17 and 27, of said county, in said year. A referee was appointed to take testimony, and his report is now before the court. During the pendency of this action, the case of the U. P. Railway Co. v. Dawson County, has been determined, holding that the bonds in question are valid. The sinking fund tax, so far as is necessary to meet such obligations, is therefore valid and binding.

The plaintiff however insists, that under the prayer for general relief it is entitled to a decree enjoining the commissioners from mis-appropriating such funds. It appears from the testimony that $ 3,039.13 of the sinking fund tax of that county, for the year 1877, was transferred to the county general fund; that in the year 1878, $ 4,936.18, was transferred to the county general fund, and $ 746.93 to the county road fund; that in the year 1879, $ 3,768.68 was transferred to the county general fund, and that these several sums were so transferred by the order of the county commissioners, and that an order still exists upon their record, authorizing such transfers. The power to transfer funds appears to be claimed under the provisions of an act: "To transfer surplus county sinking and other funds to the county general fund," approved February 15th, 1877, which provides: "That the board of county commissioners of the several counties of the state may appropriate to the county general fund any sinking fund in the county treasury, not levied for the payment of any bonded indebtedness; also any county moneys, from whatever source, excepting moneys levied for school purposes, that remain on hand in the county treasury, and are no longer required for the purpose for which the same were levied." [Comp. Stat., Chap. 18, Art. III, Sec. 4.]

A sinking fund tax is a tax raised to be applied to the payment of the principal and interest of a public loan. U. P. R. R. v. Buffalo County, 9 Neb. 449, 4 N.W. 53. U. P. R. R. v. York County, 10 Neb. 612, 7 N.W. 270.

Sec. 5, Art. IX, of the constitution provides that: "County authorities shall never assess taxes the aggregate of which shall exceed one and one-half dollars per one hundred dollars valuation, except for the payment of indebtedness existing at the adoption of this constitution, unless authorized by a vote of the people."

Sec. 30 of the revenue law, as amended in 1877, was as follows: "The rate of the general state tax shall not be less than one-half mill, nor more than four mills, on the dollar valuation; the rate of the state school tax shall not be less than one-half mill, nor more than two mills, on the dollar valuation; and the rate of the state sinking fund tax shall not be more than one mill on the dollar valuation, in any county in the state. For ordinary county revenue, including the support of the poor, not more than ten mills on the dollar; for county sinking fund such rate as in the estimation of the commissioners will pay one year's interest on all outstanding debts of the county, with not less than five per cent. of the principal." Laws 1877, 45.

The revenue law of 1879, [Comp. Stat. , Chap. 77,] did not take effect until September 1st of that year, therefore the act of 1877 was in force at the time the taxes in question were levied.

The limitation upon the rate of taxation is for the protection of taxpayers, and to secure economy in the expenditure of public moneys. It is the evident intention of the law that only the amount required in any particular fund in one year shall be levied, and no more. If the law limits the levy for the ordinary county revenue to ten mills on the dollar valuation no greater sum can be raised for that purpose by levying more than is required for a sinking fund, or any other tax, and then transferring the surplus to the general fund. If the law could thus be evaded it would afford no protection to taxpayers whatever. The act of 1877 merely authorizes the transfer of such portion of the sinking fund...