Yoes v. City of Fort Smith
Decision Date | 09 October 1944 |
Docket Number | 4-7302 |
Citation | 182 S.W.2d 683,207 Ark. 694 |
Parties | Yoes v. City of Fort Smith |
Court | Arkansas Supreme Court |
Appeal from Crawford Chancery Court; C. M. Wofford, Chancellor.
Affirmed.
Carl K. Creekmore and Partain, Agee & Partain, for appellant.
J Clib Barton, Pryor & Pryor and G. Byron Dobbs, for appellee.
This case presents the question, whether municipal property has been so used as to lose its right of exemption from taxation under art. XVI, § 5, of the Arkansas Constitution.
Pursuant to Act No. 131 of the General Assembly of 1933, and amendments, the City of Fort Smith (located in Sebastian county) purchased lands in Crawford county and constructed a lake and waterworks plant for the purpose of furnishing the inhabitants of Ft. Smith an adequate supply of water. This lake is about twenty-five miles from Ft. Smith. The taxing authorities of Crawford county placed a valuation on a part of the property for tax purposes, and attempted to levy and collect a tax based on that valuation. The City of Ft. Smith obtained an injunction, enjoining appellants herein, as the officials and taxing authorities of Crawford county, from levying or attempting to collect any tax on the property so owned by the City of Fort Smith; and from that injunction there is this appeal, in which appellants make the contentions which we list and discuss.
I. Appellants contend that the city of Ft. Smith has entered the field of a public utility, because the City is supplying water to (a) the City of Alma, (b) the City of Van Buren, and (c) Camp Chaffee.
Appellants cite art. XVI, § 5, of our Constitution, reading (as to what property is exempt from taxation), in part, as follows: "Public property used exclusively for public purposes." Appellants recognize the force of the holding of this court in Hope v. Dodson, 166 Ark. 236, 266 S.W. 68, to-wit: "It is generally held that a waterworks system owned and operated by a municipality is public property devoted to a public use, and, as such, entitled to exemption from taxation." But appellants claim that all of appellee's property in Crawford county is not being used exclusively for public purposes; and appellants state their contention in this regard in the following language: (i. e., liability of taxation on the property). Appellants thus concede, in this section of their argument, that appellee's property would be exempt from the taxation here sought to be imposed except for the contracts to furnish water to (a) Alma, (b) Van Buren, and (c) Camp Chaffee. We proceed to examine these situations:
(a) Alma. In the case of McGehee v. Williams, 191 Ark. 643, 87 S.W.2d 46, this court had before it the contract whereby the City of Ft. Smith was to sell surplus water to Alma; and Chief Justice Johnson, speaking for this court, said: "We conclude, therefore, that the City of Ft. Smith has the power in law to sell its surplus water to inhabitants located without the city limits, and to this end has power and authority to execute a contract." That case detailed the proximity of the Ft. Smith pipe line to the city of Alma, as well as other physical facts. There has been no substantial change in the situation from the time of that case to the time of the trial of the present case. In North Little Rock Water Co. v. Waterworks Commission of Little Rock, 199 Ark. 773, 136 S.W.2d 194, we again commented on the Alma-Ft. Smith water situation.
A city may sell surplus water without losing its right to tax exemption as public property used exclusively for public use. In 3 A. L. R. 1445, there is an annotation on whether public property is taxable where income is received incidental to public use; and the rule is stated: "As a general rule, it may be said that where the primary and principal use to which the property is put is public, the mere fact that income is incidentally derived from its use does not affect its character as property devoted to public use." The annotation is supplemented in 129 A. L. R. 485, and also in 101 A. L. R. 790, where the case of Hope v. Dodson, 166 Ark. 236, 266 S.W. 68, is cited to sustain the above-quoted rule.
In the case of Anoka County v. City of St. Paul, 194 Minn. 554, 261 N.W. 588, 99 A. L. R. 1137, the city of St. Paul supplied water from its municipal waterworks to the cities of West St. Paul and South St. Paul, each of which was a separate municipality. The Minnesota constitution has substantially the same language regarding tax exemption as the Arkansas constitution -- i. e., public property used exclusively for public purposes. The county of Anoka sought to collect a tax from the waterworks of the city of St. Paul, because the city was selling water to the other two, named, municipalities. Even though the Supreme Court of Minnesota held that the city of St. Paul might be carrying on a private business when it sold the water to the other municipalities (to which extent we do not go in this decision), nevertheless the Supreme Court of Minnesota said: In that case the Supreme Court of Minnesota held that the City of St. Paul had not lost its right to tax exemption on its waterworks. We likewise conclude that the sale of water by the City of Ft. Smith to Alma did not deprive the City of Ft. Smith of its right to tax exemption on its properties in Crawford county.
(b) Van Buren. The record shows that the twenty-seven inch pipe line from the lake to Ft. Smith passes through the City of Van Buren. In 1936, the City of Ft. Smith made a contract with the Water Improvement District of Van Buren to sell surplus water to that improvement district for a period of two years. Since the expiration of the written contract, the Improvement District has continued to receive water on a month-to-month basis. In all other respects, except as mentioned, the Van Buren situation is identical with the Alma situation; and we hold that the same result follows in this case.
(c) Camp Chaffee. In preparation against, or because of, World War II, the United States Government constructed, and now maintains Camp Chaffee, a large Army Camp about fifteen miles from Ft. Smith; and the City of Ft. Smith entered into a contract with the United States of America to furnish the Government with water at the Camp. This necessarily required that pipe lines be laid to the Camp, and that various other expenditures be made -- some of which may not be serviceable to Ft. Smith if the Camp is abandoned. Appellants contend that since the City of Ft. Smith is...
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