Paducah Street Railway Co. v. County of McCracken

JUDGE GUPPY

DELIVERED THE OPINION OP THE COURT.

By agreement these appeals are heard together. It was sought by the appellants in the court below to perpetually enjoin and restrain appellee from the collection of tax claimed by it. The court below sustained a demurrer to the petitions, and dismissed the actions, and from that judgment the appellants have appealed. The real question presented for decision is as to the constitutionality of sections 4077-4079, Kentucky Statutes. In other words, the contention of appellants is that the State hoard of valuation and assessment, created and provided for by the statute for the purpose of valuing the franchise of appellants, is unconstitutional, and that the valuation or assessment thereof can not be legally made by said board, and that the valuation made and referred to in the petitions is illegal and invalid, and consequently an attempt to collect the tax under such valuation is unlawful.

It is insisted for appellants, among other things, that the act is invalid, because private corporations are not required to pay upon the value of their franchises. This contention, however, is not tenable, and the reverse has been recently decided by this court in the case of Louisville Tobacco Warehouse Co. v. Com., [48 S. W., 420].* It is also contended that the board should have deducted' the indebtedness of the appellants, *476and the cost of operating their business, from the value of the franchises, as well as several other things not necessary to mention. No such rule of valuation is applied to any other property. The farmer or merchant might as well claim that the criterion for valuing his farm or goods is the amount of net profits he can make after deducting his indebtedness from the value of his property. The claim of double taxation is not tenable. It is a well-known fact that the vendee of a farm may owe all of the purchase money, and yet he must list his land at its fair cash value, while the vendor is also required to pay tax upon the purchase-money notes.

Some allegations are made in the petitions tending to show that at some time, not definitely stated, the assessor of McCracken county, and perhaps others, only valued the property listed for taxation at two-thirds of its value. If any such valuation has been adopted or acted upon by any of the assessors of the State since the adoption of the present Constitution and the Acts of 1891, etc., they simply acted in direct violation of the Constitution and of the law, because both the Constitution and the Acts of 1891, etc., require all property to be listed for taxation at its fair cash value; and, if any assessor has not so listed or valued the property, the same is an illustration of the wisdom of the legislature in devolving upon the State board of valuation and assessment the duty of valuing the franchises of corporations. But we deem it unnecessary to discuss the question involved upon these appeals at length, because the validity of the act in question, as well as the .basis upon which the valuation complained of was made, has been often upheld by this court. Henderson Bridge Co. v. Com., 17 Ky. Law Rep., 389 [31 S. W., 486]; Com. v. Louisville Water Co., 18 Ky. Law Rep., 670 [37 S. W., 576]; *477South Covington & C. St. Ry. Co. v. Town of Bellevue, (decided Jan. 13, 1899), [49 S. W., 23]; Louisville & J. Ferry Co. v. Com. (decided Nov., 1898), [47 S. W., 877]; Louisville Tobacco Warehouse Co. v. Com. (decided Dec., 1898), [48 S. W., 420]; Stone, Auditor, v. Wilson, 19 Ky. Law Rep., 126 [39 S. W., 49]; Com. v. E. H. Taylor, Jr., Co., 19 Ky. Law Rep., 552 [41 S. W., 11].

The fact that there is no appeal given from the decision of the State board is no argument against the validity of the act, as the right to an appeal from any judgment or decision of a tribunal is purely statutory, and there are many important duties devolved upon different officers from whose decisions no appeal is allowed.

Section 172 of the Constitution provides that all property not exempt from taxation shall be assessed for taxation at its fair cash value, estimated at the price it would bring at a fair voluntary sale; and it is further provided that every officer or other person authorized to assess values for taxation, who shall commit any willful error in the performance of his duty, shall be deemed guilty of misfeasance, and upon conviction thereof shall forfeit his office, and be otherwise punished as may be provided by law. This provision imperatively requires that all property should be assessed at its fair value, and also provides that any person willfully failing to perform such duty shall be punished.

It has been suggested that section 4077 of the Kentucky Statutes is in conflict with section 181 of the Constitution, which provides that the General Assembly shall not impose taxes for the purposes of any county, city, town, or other municipal corporation, but may, by general laws, confer on the proper authorities thereof, respectively, the power to assess and collect such taxes. It is manifest that the stat*478ute, supra, does not impose any tax for county or city purposes, but merely provides the mode by which the value of .certain franchises is to be determined, and it is then the province of the county or city authorities to levy such tax as they deem necessary, within the bounds, authorized by law. It is true that the section, supra, provides that each corporation therein named shall annually pay a tax on its franchise, and a local ,tax thereon to the county, incorporated city, or town, or 'taxing district where its franchise may be exercised. This provision is in no sense levying or imposing a tax for counties, etc., but is merely a repetition of the provisions of section 172 of the Constitution.

It is true that the valuation fixed by the State board is conclusive as to the value for the purpose of taxation in counties, etc., but it in no sense levies or imposes any tax for county purposes; and unless the local authorities levy a tax upon other property, none would ever be levied or collected upon the valuation certified by the State board of valuation and assessment, and the rate so levied by local authority must,- of necessity, be uniform upon all property subject to taxation as is provided for in section 171 of the Constitution.

It is also provided in section 174 of the Constitution that all property, whether owned by natural persons or corporations, shall be taxed in proportion to its value unless exempt by this Constitution; and all corporate property shall pay the same rate of taxation as paid by individual property. For the reasons stated, the judgments appealed from are each affirmed.

On rehearing the court reconsidered its first ruling in the Tobacco Warehouse Co. case and held the appellant not liable for franchise tax. Page -7- this volume. — The Reporter.