Veail v. Louisville and Jefferson County Metropolitan Sewer Dist.

• Decision Date: 08 November 1946
• Citation: 197 S.W.2d 413,303 Ky. 248
• Parties: VEAIL et al. v. LOUISVILLE AND JEFFERSON COUNTY METROPOLITAN SEWER DIST. et al.
• Court: Kentucky Court of Appeals

197 S.W.2d 413

303 Ky. 248

VEAIL et al. v. LOUISVILLE AND JEFFERSON COUNTY METROPOLITAN SEWER DIST. et al.

Court of Appeals of Kentucky

November 8, 1946

Appeal from Circuit Court, Jefferson County, Chancery Branch, Second Division; Scott Miller, Judge.

Action by Virginia Veail, a resident, taxpayer, and user of the sewer system of the City of Louisville, and Norbourne O Rudy, a resident, taxpayer, and prospective user of the sewage system in the Louisville and Jefferson County Metropolitan Sewer District, suing for themselves and all others in their respective categories and situations against the Louisville and Jefferson County Metropolitan Sewer District and others for a declaration of rights and the defendants in respect to the constitutionality of act authorizing the creation of a metropolitan city and county sewer district in each city of the first class and county containing such a city, and to enjoin defendants from complying with the act. From an adverse judgment, the plaintiffs appeal.

Judgment affirmed.

Hal O. Williams, of Louisville, for appellants.

J Verser Conner, Gilbert Burnett, Lawrence S. Poston, and Sam Steinfeld, all of Louisville, for appellees.

VAN SANT, Commissioner.

This action was instituted by appellant, Virginia Veail, a resident, taxpayer, and user of the sewer system of the City of Louisville, and Norbourne O. Rudy, a resident, taxpayer and prospective user of a sewerage system in the Louisville and Jefferson County Metropolitan Sewer District, suing for themselves and all others in their respective categories and situations. The petitioners seek a declaration of rights between them and those for whom they sue, and the defendants members of the Board of Louisville and Jefferson County Metropolitan Sewer District, City of Louisville, its Mayor its Director of Works, and the Judge of the Jefferson County Court, in respect to the constitutionality of the provisions of KRS 76.010 to 76.220, inclusive, which are presently complied in the 1946 Legislative Supplement to the Kentucky Revised Statutes, and which are contained in Chapter 104 of the Acts of the 1946 General Assembly. Appellants specifically prayed that appellees be enjoined from complying with the provisions of the Act. The Chancellor denied the injunction and dismissed the petition.

The Act is an enabling one, and authorizes the creation of a metropolitan city and county sewer district, which shall be a body corporate, in each city of the first class and county containing such a city. Such a district may not be created unless the legislative body of the city adopts an ordinance declaring it to be for the best interests of such city and inhabitants thereof that such a district be created. The Act provides that the district shall be governed by a board of five members, three of whom shall be appointed by the mayor of the city with the approval of its board of aldermen, and who of whom shall be appointed by the judge of the county with the approval of its fiscal court. The board is empowered to employ the personnel necessary to the efficient operation of the functions of the district. The present sewer facilities of the city are to be transferred to the district, and dedicated to its use. The board, with the approval of the board of aldermen of the city, is authorized to construct additions to the system; to acquire property by purchase, gift, or condemnation; to make contracts, borrow money, and issue bonds; and, subject to the approval of the board of aldermen of the city, to fix and collect sewer rates, rentals, or other charges, for services rendered by the facilities of the district. All rentals or other charges collected shall be devoted solely to the payment of the obligations of the district. The district is granted, by right of eminent domain or purchase, the power to invest itself with the fee-simple title to, or easement in, such real estate as may be deemed to be necessary to carry out its functions; but such property or right therein must be paid for solely from funds which shall have accumulated from the collection of service charges. The bonds authorized to be issued are to be liquidated solely out of such funds, and the bonds shall constitute neither an obligation or indebtedness of the city or of the county, nor a lien upon any of the property of the inhabitants of the district. Upon default in the payment of any bond, or interest thereon, 20 per centum of the bondholders may apply to the court for the appointment of a trustee to represent the interests of all the bondholders; such trustee is authorized to institute legal proceedings to enforce the rights of the bondholders in requiring the district's board to collect rentals sufficient to meet the obligations of the district; and the court is authorized to appoint a receiver to collect and receive all service charges and other revenues of the district. The mitial unit of the district is conterminous with the present boundary of the city, but it may be extended into the county, 'whenever the district and the owner or owners of real property to be served and located outside the limits of such city, by appropriate written instrument, agree as to apportionment of any and all costs of construction work, subsequent maintenance and operation appertaining thereto, * * *.'

Appellants contend the Act is violative of the State and Federal Constitutions, in the various respects hereinafter related. Until the passage of the Act under consideration, no single statute comprised all of the features objected to by appellants; but each of them is contained in one or more of various acts of the General Assembly, and heretofore most have, if each has not, been attacked and held to be constitutional by this Court.

The first complaint is that the Act violates Section 242 of the Kentucky Constitution and the Fourteenth Amendment to the Constitution of the United States, in that it takes private property without compensation to the owners thereof. In this connection, it is argued that the citizens of Louisville built its present sewer system by authorizing their officials to raise the money therefor by the issuance of bonds. These bonds are obligations of the city and its taxpayers, and the unpaid balance, less sinking fund reserves, amounts to approximately $14,000,000. The city and its taxpayers will remain obligated to pay these bonds until the year 1969. The Act in question provides that this sewerage system shall be operated by the Metropolitan District, and permits the citizens who are still paying for the system to be charged for using it; thus, the right to the free use of their own sewerage system has been taken from the taxpayers of the city without compensation. We cannot agree with this contention. The transfer to the Metropolitan Sewer District is a mere transfer of custodianship; and, even though the taxpayers of the City of Louisville own the physical properties of the sewer system, they have the right to entrust this property to the management of another municipality when authorized to do so by the Legislature. If the City of Louisville itself should continue to operate the sewerage system, it would have the right to charge the users of the system for their use of it. It is shown by the record that the taxpayers of the city are not the only users of the sewerage system; and it is obvious that some citizens will make greater use of the system than others. It would be entirely equitable to charge them in proportion to their use; thus, it would be legal for the city to establish a rate schedule for charges to all users of the system, though some of them may be the owners of the physical property by reason of the fact that they are taxpayers...