delivered the opiirioit of the court.
The real estate and improvements thereon of the appellee, the Louisville Water Company, were assessed for State and county taxes for the year 188?, at the value of two million two hundred and fifteen thousand dollars. The taxes amount to eleven thousand three hundred and seventy-one dollars and seven cents; and the tax-bills therefor being in the hands of the sheriff, and he about to seize and sell thereunder certain property of- the appellee in use in its business, it, by this suit, enjoined him from so doing, the principal ground upon which it claims relief being that its property is by law exempt from assessment and taxation. This • claim is based • upon an act of the Legislature of April 22, 1882, and which reads as follows:
“1. That it shall be the duty of the Louisville Water Company to furnish water to the public fire cisterns and public fire-plugs or hydrants of the city of Louisville for fire protection free of charge.
“2. The sinking fund of the city of Louisville' being *518the owner of the stock of the Louisville Water Company, and said water company, by virtue thereof, is the property of the city of Louisville, therefore, the Louisville Water Company is hereby exempted from the payment of taxes of all kinds, of whatever character, State, municipal and special.”
Upon the hearing in the lower court the appellee moved to make the temporary injunction, which had been granted, perpetual, while the appellant, inasmuch as the property of the company in use can not be seized and sold, thus depriving the local public of the benefits derived from it, moved that it be compelled by rule to pay the taxes into court, or failing to do so, that its property be placed in a receiver’s hands until enough should be realized to pay them. This relief was also asked in the answer, to which a demurrer was sustained. The motion of the appellant was overruled, and the injunction perpetuated, the court not only holding that the property of the company could not be seized and sold, but that it was not liable for the taxes.
The constitutionality of the act supra is involved. It is claimed for the company that it has a vested right to the exemption resting in contract. That by the passage of the act of the Legislature, and its acceptance by the company, a contract was entered into ■which entitles it to the exemption. As such a privilege is in derogation of the common right; as the exemption of one person from taxation places an additional burden upon the other tax-payers of the State, it will not be presumed, but must appear by clear grant.
*519It is true, as has often been said, that exemption is the exception and not the rule. Upon the other hand, however, where the Legislature clearly grants this privilege, or attempts to do so, its action must be presumed constitutional.
As the language of the act in this case is plain, it becomes the delicate duty of this court, keeping in mind the presumption in favor of legislative action, to determine whether, in its enactment, the Legislature has gone .beyond the constitutional limit.
The first section of our Bill of Rights provides that “no man or set of men are entitled to exclusive, separate public emoluments or privileges from the community, but in consideration of public services.”
The appellant contends, first, that if it were true the Legislature was moved to the passage of the act upon the idea of the rendition of a public service, yet, in fact, the company renders no such public servicé as the Constitution contemplates; and, second, that this was not the reason for its enactment, and that it is altogether unsupported by any valid consideration, or such as the Constitution recognizes.
We shall pass- by the question whether the rendition of a local public service, as to furnish the city of Louisville with water, is a valid consideration for an exemption from State taxation, thereby imposing an additional burden upon all the balance of the people of the State, or whether it is a governmental duty of the State to furnish to a city water for fire protection and sanitary purposes free of charge, either by direct taxation upon all the people of the State, or indirectly by an exemption from taxation in favor *520of the one doing so ; and if so, being, therefore, a valid consideration for such an exemption. This is a question as to which there is a difference of opinion; and in view of the conclusion we have reached as to the second position taken by the appellant, it is unnecessary to consider it.
We think it evident that the furnishing of water by the company to the city for fire protection free of charge was not what induced the passage of the. act. Its recitals, aside from the express statement in it of the reason, make this quite plain. It says:
“The sinking fund of the city of Louisville, being the owner of the stock of the Louisville Water Company, and said water company, by virtue thereof j, is the property of the city of Louisville, therefore, the Louisville Water Company is hereby exempted from the payment of taxes of all kinds, of whatever character, State, municipal and special.”
According to the legislative recital the sinking fund of the city owns the entire stock of the water company. There is nothing in the record showing otherwise, and it must, therefore, be assumed to be true. While the sinking fund department is a separate corporation from that of the city proper, yet it is merely the moneymaking branch of the municipal government. It has charge of its funds and its investments, whether in bank, railroad, water company stocks, or other valuable and money-making securities.
We see, therefore, that the property and rights of the water company belong to the city. While, therefore, the act recites that it shall be the duty of the water company to furnish water to the public fire *521cisterns and public fire plugs or hydrants of the city for fire protection, yet this could not have been the consideration that induced the passage of the act, since it made no difference to the city whether a million of dollars or a penny might be paid for this service, because it was the owner of the rights and property of the water company, and it would, therefore, be but a payment to itself. It can not be supposed, therefore, that the Legislature intended to relinquish over ten thousand dollars of taxes annually in consideration that the city would not charge itself for water furnished by itself. It is useless to inquire why the act declared that the water company should furnish water to the city free of charge. Perhaps, as suggested by counsel, it was merely to avoid the trouble of keeping an account between the sinking fund department and the city proper. The reason which induced the attempted granting of the exemption must, therefore, have been, as indeed the act recites, that the sinking fund of the city, or in other words the city itself, owned all the water company stock. It says: “The sinking fund of the city of Louisville being the owner of the stock of the Louisville Water Company, and said water company, by virtue thereof, is the property of the city of Louisville, therefore the Louisville Water Company is hereby exempted from the payment of taxes of all kinds, of whatever character, State, municipal and special.”
We have, therefore, an express recital by the Legislature of its reason for the attempted exemption, and that this was the true and only one is confirmed *522beyond question by the other recitals of the act. The question, therefore, is, did the fact that the sinking fund, or, in other words, the city, owned the water company stock, constitute a valid consideration for the exemption?
A municipal corporation has a double character. In one it acts strictly in its governmental capacity. In the other for the profit or convenience of its citizens. Considered in the latter light, it occupies the attitude of a private corporation merely, while in the former it is an arm of the State government, or a part of its political power. It is an imperiuvi in imperio. The property necessary to the exercise of those duties which are strictly governmental is exempt from taxation, but this is not so of that which is held by the municipality for the comfort of its citizens, individually or collectively, or for money-making purposes merely. While the sinking fund of the city of Louisville is a distinct corporation, yet it is owned by the city, and merely controls its funds. It discharges no governmental duties, and was created merely to make money for the city. It may invest the funds in stocks of any character, if they are likely to bring good returns, like any other private corporation. It will hardly be contended that if it were to invest surplus money in a private manufacturing company, that the Legislature could constitutionally exempt that company from taxation. In short, the city in its private and not its governmental character owns the stock and property of the water company, and this ownership is not necessary to the execution of its duties as a political or governmental *523power. This being so, it stands upon the same footing as would any individual or body of persons if like privileges had been conferred upon them, and can not be constitutionally exempted from State taxes save in consideration of public services. The fact that the furnishing of the water may incidentally protect from fire the public buildings of the State will not support the exemption. The privilege was .not conferred, as the Legislature declared, and, as we have otherwise shown, for governmental purposes, but merely for a reason which will not support it. It arose out of considerations relating to the private and pecuniary advantage of the city, and in which ■the State at large had no interest.
It was said in Bailey v. City of New York, 3 Hill, 539: “But if the grant was for purposes of private advantage and emolument, though the public may derive a common benefit therefrom, the corporation ■(the city), quoad hoc, is to be regarded as a private company. It stands on the same footing as would .any individual or body of persons upon whom the like special franchises had been conferred.”
If it be said that the exemption should be upheld if it be, in fact, supported by any valid consideration, although the recited one be invalid,, we reply that the real consideration, and the one which moved the parties to the transaction, is to be regarded. The one acted upon by the Legislature, and expressed in the act, and which must have been understood by the city, was the simple fact that it owned the stock in the water company. This was not a valid consideration, and we have already seen that mere incidental pro*524tection of the public buildings does not aid the matter. The so-called contract was, therefore, void at its inception. Instead of being impaired in any way forbidden by law, it never had any existence; and it seems to us well that we feel at liberty to so declare, because we have a general law taxing water companies, and if one company be exempt, that of any other city has an equal right to ask the privilege. A statute exempting one is certainly open to the objection of impolicy, if, indeed, it be not such unequal and partial legislation as is forbidden by law.
The appellee, by this suit, came into court asking equitable relief by injunction or the exercise of an extraordinary remedy. Asking equity, it may well be required first to do equity; and being in court, and liable for the tax, and the chancellor being in possession of the case, while its property in use in its business could not be seized, it should have been required to pay the taxes into court; or failing to do so within a reasonable time, the management .of it should have been intrusted to a receiver until enough was realized to pay them and the costs of the proceedings. (Louisville Water Company v. Hamilton, 81 Ky., 517.)
The judgment is reversed, and cause remanded, with directions to render a judgment as above indicated.