City of Covington v. Commonwealth

CHIEF JUSTICE LEWIS delivered the opinion of the court. Tbe Commonwealth of Kentucky brought this action to recover possession of a tract of land held and claimed by the city of Covington, upon which had been erected waterworks. The facts upon which the right of recovery is based are, as¡ stated in the petition, that, the city of Covington having failed to pay the State and county taxes due on said property for 1895 at the assessed value, it was in December, 1895, duly and legally offered for sale by the ■ sheriff, who, no other person bidding, pur [682] chased it for the Commonwealth at the price of $2,189, the sum of taxes unpaid. It is stated in the answer, as defense, that for reasons set forth said property was exempt from all taxation, and consequently the assessment and sale under which the Commonwealth now claims title and right of possession were illegal and invalid. To that answer a demurrer wasi sustained, and judgment rendered in favor of the Commonwealth for a writ of possession. But, as recited in the judgment, counsel agreed the only question they wished decided is whether the property in question is liable to State taxes. The grounds upon which 3s based the claim of the city of Covington to exemption of the property from taxation are as follows: 1. That a provision is contained in “An act to amend the charter of the city of Covington,” approved May 1, 1886, in these words1: “Said reservoir or reservoirs, pumping house, machinery, pipes, mains and appurtenances, with the land upon which they are situated, shall be and remain forever exempt from State, county and city taxes.” In City of Louisville v. Commonwealth, 1 Duv., 295, [85 Am. Dec., 624], where the question arose as to exemption from taxation of various articles of property owned by that city, a distinction was expressly recognized between property owned and used for public purposes of a local government, or used in carrying on a municipal government, and property used, not for that purpose, but only for the convenience or profit of its citizens, individually or collectively. And in Commonwealth v. Makibben, County Judge, 90 Ky., 384, [29 Am. St. R., 382; 14 S. W., 372], where the [683] question was whether the waterworks property of the city of Newport was, in pursuance of a special act to that effect, exempt from taxation, i't was held not to be so, because not necessary or used to carry on the municipal government as a political power, but held and used merely for the convenience and profit of its citizens. Immediately following that case, in the same volume of Reports, page 515 [14 S. W., 502], is the case of William Clark v. Louisville Water Co., where the same question arose; and for the same reason it was held that an act exempting from taxation the property of the Louisville Water Company was in violation of the Constitution, and, moreover, that the fact that the water supplied by the water company might incidentally protect public buildings of the State and city did not have the effect to validate the statute. 2. It is argued that as, upon the faith and in pursuance of the special statute of May 1, 1886, the city of Covington, by taxation of the property of its citizens, purchased the land and erected thereon the waterworks in question at great expense, it has. acquired a contract right to the exemption now claimed. But it seemsi to us, if the General Assembly was, as we think, without constitutional authority to make the contract, assuming one was made, it is not, nor could be, valid or enforceable. Besides, by a general statute enacted February 14, 1856, and continued in force to the present time, the special act under which the exemption is now claimed, and all others like it, were rendered subject to repeal at the will of the General Assembly. 3. And thus we come to consider the third ground upon which the exemption is claimed; and that involves the inquiry whether section 170 of the present Constitution, and the statute passed in pursuance of it, operated to [684] repeal or continue in force that part of the special act of May 1, 1886, which exempts said waterworks property from taxation. The subject of section 170 is “Revenue and Taxation,” and so much of it as applies to this case is in these words: “There shall be exempt from taxation public property used for public purposes.” It was followed by necessary statutory enactments, which, however, could neither curtail nor enlarge exemption from taxation as prescribed by the Constitution. And accordingly, in section- 4026, Kentucky Statutes, adopted for the purpose of carrying out the provisions of section 170, is the identical language we have quoted. As it was manifestly intended by both the Constitution and statute to make subject to taxation all property not thereby in express terms exempted, it results that unless the waterworks property of the city of Covington be, in language or meaning of section 170, “public property used for public purposes,” it must be held, like similar property in other cities, subject to taxation, and the special act of May I, 1886, stands repealed. • Assuming, as a reasonable and' beneficial rule of construction requires done, that the phrase “for public purpose®” was intended to be construed find understood according to previous judicial interpretation and usage, there can be no doubt of the proper meaning and application of it; for in the' cases- cited, and others where the question of subjecting particular property of cities to taxation arose, the words “for public purposes” had been held by this court to mean, in that connection, the same as the words “for governmental purpose®;” and so property used by a city for public or governmental purposes was held to be exempt, while that adapted and used for [685] profit or convenience of the citizens, individually or collectively, was held to be subject to taxation. And, recognizing and applying that distinction, waterworks property of a city has been invariably treated by this court as belonging to the latter class, and consequently subject to State and county taxation. In our opinion the property in question is, under the Constitution, subject to taxation, and the statute enacted in pursuance of it operated to repeal the special act of May 1, 1886. Judgment affirmed.