Wilson v. Clay County Court

• Decision Date: 13 February 1934
• Docket Number: No. 7896.,7896.
• Parties: WILSON. v. CLAY COUNTY COURT et al.
• Court: West Virginia Supreme Court

175 S.E. 224

WILSON.

v.CLAY COUNTY COURT et al.

No. 7896.

Supreme Court of Appeals of West Virginia.

Feb. 13, 1934.

Syllabus by the Court.

1. The act of the Legislature of the Second Extraordinary Session of 1933, known as House Bill No. 234, held constitutional.

2. When necessary to prevent the impairment of a pre-existing debt contract, the levy apportioned to a taxing unit for debt service may be exceeded.

3. When such excess levies are required, they need not be laid upon the basis of classification of property contained in the tax amendment, but, when so provided by act. of the Legislature, they may be laid uniformly upon all classes of property.

4. Levies apportioned to municipalities may be transferred to be used for district debt purposes in districts wherein there are no municipalities.

5. The ratio of classified property leviescontained in the tax amendment is to be substantially followed in the enabling act of the Legislature thereunder, but it is within the discretion of the Legislature to depart reasonably from such ratio in the apportionment of levies made to the taxing units of the state, when necessary to do so to give practical effect to the tax amendment.

WOODS, P., and LITZ, J., dissenting.

Appeal from Circuit Court, Clay County.

Suit by J. Fred Wilson against the County Court of Clay County and others, wherein Houston G. Young and Harry S. Moore, trading as Young, Moore & Co., and another, intervened. From an adverse decree, plaintiff appeals.

Affirmed.

Koontz, Hurlbutt & Revercomb, W. Elliott Nefflen, and Harry B. Lambert, all of Charleston, and B. C. Eakle and E. G. Pierson, both of Clay, for appellant.

Henry N. McLane, Pros. Atty., of Clay, Homer A. Holt, Atty. Gen. and Fred L. Fox, of Sutton, for appellees County Court and others.

Brown, Jackson & Knight, Lon H. Kelly, Robt. S. Spilman, W. E. R. Byrne, and Herman Bennett, all of Charleston, for appellee Young, Moore & Co.

KENNA, Judge.

This suit was brought in the circuit court of Clay county, by J. Fred Wilson, a citizen, resident, and taxpayer in Clay county, and in Henry district, Henry independent district, and the town of Clay, as well as a taxpayer in Buffalo district and in Otter district, of that county, against the defendants, the county court of Clay county, its president and commissioners, the board of education of the county of Clay, its president and members, the town of Clay, a municipal corporation, its mayor, recorder, and councilmen, and Fred L. Fox, tax commissioner of the State of West Virginia. The purpose of the suit is to enjoin levies purposed to be laid by the defendant taxing bodies upon the property of the plaintiff under the provisions of an act of the Legislature of the Second Extraordinary Session of 1933, known as House Bill No. 234, being the enabling act under the provisions of the Tax Limitation Amendment adopted November 8, 1932 (Const. art. 10, § 1, as amended [see Acts 1932, Ex. Sess. c. 10]). The basis of the attack upon the proposed levies is the alleged unconstitutionality of the act of the Legislature under which it is averred they are to toe laid. A demurrer to the bill of complaint was filed and overruled. The defendants then answered the bill, intervening petitions were filed toy Houston G. Young and Harry S. Moore, trading as Young, Moore & Co., and by J. M. Lorentz, a stipulation of fact was made, and the case was submitted to the circuit court of Clay county upon its merits. The court entered its decree sustaining the provisions of the act and refusing the injunction prayed for. This appeal is prosecuted to the final decree of the circuit court of Clay county refusing to award the injunction.

The bill of complaint, the demurrer, answers, intervening petitions, stipulation, exhibits, and briefs are voluminous and exhaustive. It is not thought necessary to recount the details of the pleadings and papers that raise the questions to be decided. To do so would be but an unnecessary digression from a discussion of the issues of law before us, perhaps tending to confuse more than to clarify. It is sufficient to say that the case presents a situation that brings into play, and consequently tests as to validity, the salient features of the act of the Legislature known as House Bill 234, and presents them for decision upon this appeal.

The questions thus raised are the following:

(1) May the Legislature divide the levies apportioned by it to the taxing units of the state on the basis of requiring approximately 30 per cent. thereof to be devoted to payment of existing debt and 70 per cent. to current expenses, so that, where essential to prevent the impairment of contracts, excess levies may be laid for debt service above the 30 per cent. authorized? Or, phrased differently, can the Legislature set apart a portion of the local unit's levying power for current expenses without permitting its entire levying power to be first exhausted for its debt service requirements?

(2) Can such excess levies, if they are permitted to be laid, be laid uniformly on all classes of property, as is provided in the act, or is that particular part of the act invalid and the excess levies, if allowed, required to be classified as are the levies within the limitations?

(3) Can the levies of 12.5 cents and 25 cents on classes 1 and 2 property apportioned by the act to municipalities be transferred to be laid for district debt purposes in those magisterial districts which contain no municipalities, or should this transfer of levies, as effected by the act, be held invalid as adiscrimination in favor of class 3 property and against classes 1 and 2 property in those districts wherein there are no municipalities, and as setting up a ratio of levies not contemplated by the tax amendment?

(4) Does the constitutional amendment require that the ratio of all levies should be the same as the ratio of maximum aggregate levies set up in the constitutional amendment, or may the ratio of levies established by the enactment, which differs therefrom, and is on the basis of 1, 2, 4, and 4, instead of on the basis of 1, 2, 3, and 4, be sustained as an exercise of legislative discretion in substantial conformity with the ratio of levies indicated by the tax amendment?

As to the first question, it is very strongly urged that the principle involved in dividing levies apportioned to the local units on the basis of approximately 30 per cent. for debt service and 70 per cent. for current expenses, is contrary to the decision of this court in the cases of W. E. Bee v. City of Huntington, O. O. Eakle v. County Court of Braxton County and Jess Snider v. W. M. Martin, Assessor, et al., 171 S. E. 539, heard together and decided September 19, 1933, and usually referred to as the Bee Case. The legislation before the court in the Bee Case (chapter 38 of the Acts of the Legislature of 1933, known as House Bill 314) was based upon a totally different conception of the tax amendment from that involved in the act now under consideration. No effort whatever was made in House Bill No. 314 to bring all the taxes to be assessed within the limitations. That act simply left the local units free to absorb for current expenses the entire levies apportioned to them, and then to add whatever they required for debt service without regard to the limitation. We held that act bad on that account, taking the view declared in the case of Finlayson v. City of Shinnston, 113 W. Va. 434, 16S S. E. 479, that the plain meaning of the tax amendment was that all taxes should be brought within the limitations, and that the amendment did not contemplate leaving that question to be determined by the levying bodies. We held that, under the plan of that bill, which left to the local bodies unregulated discretion, debt levies must be preferred in order to carry out the purpose of the tax amendment to limit the expenditures of local levying bodies. Following the course thus plainly indicated, the Legislature now asserts for the first time its power, under the amendment, to restrain the local levying bodies in the matter of governmental expense, and to make it obligatory upon them to lay levies for the payment of their debts and for governmental expense within the limitations assigned by the act. The exercise of this power is enjoined by the true meaning of the tax amendment How this can best be brought about is a matter for legislative, and not for judicial, determination. Whether the Legislature has exercised this power to the degree that it should is its own responsibility, provided its act does not appear to be arbitrary or capricious. If the plan adopted is workable as a whole, the fact that in special instances, as in the case before us, it does not bring about the desired result, does not invalidate the plan itself. An analogous rule has been laid down uniformly in the so-called "special assessment" cases. See Goldsmith v. George G. Prendergast Const. Co., 252 U. S. 12, 40 S. Ct. 273, 64 L. Ed. 427; Kansas City Ry. v. Road District, 266 U. S. 379, 45 S. Ct 136, 69 L. Ed. 335; Milheim v. Moffat Tunnel Imp. Dist, 262 U. S. 710, 43 S. Ct. 694, 67 L. Ed. 1194.

In the present act, the Legislature solemnly declares as a matter of fact, arrived at after careful analysis and consideration, that on a state-wide basis, 30 per cent. of the apportioned levies is reasonably sufficient to meet debt requirements in the levying units, and that 70 per cent. thereof is indispensably necessary to meet their current governmental expenses. That declaration is as follows: "Whereas, it has recently been judicially determined that under the tax limitation amendment due provision must be made for the payment of contractual indebtedness from the levies laid thereunder, the Legislature doth further find that on a state-wide basis approximately thirty per cent of said levies is reasonably sufficient to make provision for such indebtedness, and doth further find that approximately seventy per cent of said levies...