Bond v. City of Corbin

Opinion op the Court by Judge Richardson Affirming. Corbin, Ky., is a city of the third class. The appellant is a resident and taxpayer of that city. In June, 1931, the board of commissioners of the city adopted an ordinance providing for the issuance and sale of $25,-000.00 bonds of the city, bearing 6 per cent interest, pay *664 able semiannually on June 3 and December 1, eacb year, interest evidenced by coupons attached and numbered 1 to 25 of $2,000 each, and maturing June, 1941 to 1948, inclusive, and the $3,000, on June 1, 1949 to 1951, both interest and principal payable at the Central Hanover Bank & Trust Company, in the city and state of New York. The ordinance provided for the levy and collection of an annual tax on all taxable property within the corporate limits of the city, including the property of the appellant, sufficient to pay the interest and principal of the proposed issue of $25,000. It was recited in the ordinance that the city had issued, and there were outstanding against the city, $84,000 bonds and $75,000 funding bonds, aggregating $159,000, as its bonded indebtedness of date June 1, 1931; that there had accumulated and was in the hands of the treasurer of the city a sinking fund of $39,349.27, ‘which, when deducted from the bonded indebtedness of the city, left owing by it on its bonded indebtedness, $118,560.73. It was further recited that the assessed valuation of the taxable property within the corporate limits in the year 1930 was $2,930,-333.53, and that its estimated assessable value of 1931 would equal its assessed value of 1930; that the city was authorized legally to levy and collect a special tax of 20 cents on each $100 of taxable property within the corporate limits, and by statute it was authorized to levy the regular rate of 75 cents per $100 thereon for the purpose of paying the cost of administration of the affairs of the city and interest on its bonded indebtedness and to create a sinking fund for the purpose of taking care of its bonds, including the proposed issue of $25,000. It was also set out in the ordinance that the city’s indebtedness of $25,000 was incurred in the purchase of a building situated within the corporate limits of the city for the purpose of holding circuit courts, and that in the year 1930 it had paid of this sum $13,000, leaving a balance of $12,000 due of the original $25,000; that, by paying the $13,000 thereof, there was caused to be an outstanding indebtedness of $13,000, incurred in 1930 by the city in the payment of its current expenses which in effect left unpaid the $25,000, the contract price of the property purchased for the purpose of holding circuit courts in the city. The appellant attacked the ordinance on the ground that its execution by the city will result in the city exceeding the constitutional limitation against incurring *665 indebtedness by a city. Tbe circuit court dmussed his petition, and appellant appeals from tbis order. Tbe appellant does not allege or prove tbat any portion of the existing* indebtedness of the city or tbe indebtedness tbat will be incurred by tbe sale of the bonds to pay sucb existing indebtedness, .was illegally contracted. In tbe absence of sucb allegation and showing by appellant, it must be taken for granted by tbis court tbat sucb indebtedness was legally contracted. Bradford v. City of Glasgow, 143 Ky. 401, 136 S. W. 647. Tbe validity of tbe indebtedness is not disputed. Tbe amount thereof is not controverted. Tbe estimated taxable value of tbe property within tbe corporate limits of tbe city is conceded. Tbe 75 cents tax rate authorized to be collected by tbe city is admitted. A mere addition of tbe indebtedness and a calculation of tbe estimated taxable property by tbe rate of tax of 75 cents per $100 conclusively show that tbe city by tbe issuance of the $25,000 bonds will not exceed the limitation imposed by sections 157 and 158 of tbe Constitution. It is suggested in brief tbat sections 4281u-l to 4281u-6, Ky. Stats., forbidding tbe governing body of tbe city to ‘ ‘ expend any money in excess of tbe amount annually levied and collected for tbat year by sucb . . . city,” controls tbis case, and tbat tbe limitation of tbe city’s indebtedness, as fixed by tbe Constitution, renders invalid tbe indebtedness sought to be bonded, and therefore tbe bonds should not be issued. A sufficient response to tbis contention is .that nowhere in tbe pleading is it alleged, nor by tbe proof is it shown, tbat the indebtedness sought to be incurred by tbe bonds comes within tbe meaning of sections 4281u-l * to 4281u-6, or within tbe inhibition of tbe Constitution. While it is true tbat by applying* $13,000 of tbe taxes collected in 1930 to tbe payment of the $25,000, thereby a like amount of current expenses of tbe city for 1930 remained unpaid and tbis sum is necessary to be considered to make tbe $25,000, tbe amount desired to be evidenced by tbe bonds of the city. It is alleged and not controverted tbat tbe current expenses so remaining unpaid and necessary to be considered to make tbe $25,000 were valid claims against tbe city. Tbe $25,000 to be covered by tbe issuance of tbe bonds in effect is tbe debt owing by tbe city for tbe purchase of property which tbis court held valid in Masonic Widows’ & Orphans’ Home et al. v. City of Corbin, 229 Ky. 375, 17 S. W. (2d) 215. Therefore there *666 is no premise for insisting’ the debt to be bonded is invalid for any reason. The ease of Vaughn v. City of Corbin, 217 Ky. 521, 289 S. W. 1104, is conclusive of this one. The opinion in the Vaughn case has been approved in the following- cases. Wilson v. City of Covington, 220 Ky. 798, 295 S. W. 1068; Davis v. City of Newport, 224 Ky. 546, 6 S. W. (2d) 693; Baker et al. v. Rockcastle County Court, 225 Ky. 99, 7 S. W. (2d) 846; Rowland v. City of Paris, 227 Ky. 570, 13 S. W. (2d) 791; City of Frankfort v. Fuss, 235 Ky. 143, 29 S. W. (2d) 603; Hogan v. Lee Fiscal Court, 235 Ky. 100, 29 S. W. (2d) 611; Elliott v. Fiscal Court of Pike County, 237 Ky. 797, 36 S. W. (2d) 619; Hall v. Fiscal Court of Fleming County, 239 Ky. 425, 39 S. W. (2d) 656; and Pace v. City of Paducah, 568 Ky. 241, 44 S. W. (2d) —, decided Dec. 18, 1931. Wherefore the judgment is affirmed.