Board of Council v. Frankfort Safety Vault & Trust Co.

Opinion of the court by- JUDGE NUNN Affirming. This action was brought by appellant against the appellees to recover taxes upon $160,000' mortgage bonds. The language of the petition, so far as is necessary to quote, is as follows: ' “The plaintiff says the Frankfort Safety Vault & Trust Company, both individually and as trustee for certain persons now unknown to plaintiff, is indebted to the city of Frankfort in the sum of $2,320, city taxes for the year 1899, and interest from August 1, 1899, until paid. The said indebtedness arose as follows: On the 10th day of January, 1899, said company, as trustees for certain persons now unknown to plaintiff, held, owned, and controlled in the city of Frankfort property situated in said city of the value of $160,000, subject to taxation for purposes of [663] said city, which property has been legally and regularly assessed as of January 10, 1899, for taxation under ad valorem levies of said city for the year 1899. Said property consisted of one certain mortgage executed in trust by the Frankfort & Cincinnati Railway Company to the Frankfort Safety Vault & Trust Company, dated December 2, 1898, and bonds and other obligations secured thereby. The appellant made other allegations to the effect that the city assessor had failed to assess this property, and that the tax collector had reported the property for taxation to the city clerk, and that the council of the city had reported' the matter of assessment to the finance committee, which committee, after" investigation thereof, after notice to the Frankfort Safety Vault & Trust Company, recommended to the council that the list reported by the tax collector be confirmed, and that the council at a regular meeting confirmed the assessment, and the assessment was duly certified by the city clerk to the tax collector for collection; that he made an effort to collect it, but could not. find any property upon which to make a levy; that he tendered a tax receipt for same, and demanded payment, which was refused, and the collector made a return, in substance, of “No property found,” and on the 24th day of July, 1899, this action was filed. The appellees demurred to the petition, and the special judge agreed on to try the demurrer sustained it for the reason, in his opinion, the action was prematurely brought, and, in his opinion, stated that the statute seemed to contemplate that the collector shall not make a return of “No property” until the expiration of his term of office. We are incluined to the opinion that the lower court was mistaken in its construction of the statutes. Section 3424 of the Kentucky Statutes of 1899 says: “After the collector [664] shall make his return of no property found as to any unpaid taxes, it shall be lawful for the city to institute proceedings by petition, in any court having jurisdiction thereof, against such delinquent tax-payer for the satisfaction of such taxes. . . .” ' As will be seen, there is nothing in this section limiting the time of his making a return of “No property found” until his term of office expires, and such a construction would be unreasonable. To so construe it would give delinquent taxpayers every opportunity to dispose of, or get out of the reach of tax gatherers and courts, all the property subject to taxation. The two preceding sections of the statutes have reference to and deal with settlements with the collector and his sureties. Section 3422 provides that the collector, in all cases in which he shall be unable to find property to pay the taxes, shal1 make a return at the end of his official term of “no property found,” and, if this be true, then he shall receive credit for same in his settlement with the council. Section 3423 says, if the collector fails to collect all taxes, and to return, in substance, “No property found,” on those he fails to collect, then his sureties shall be liable on his bond to the city for the amount of such tax. From a careful reading of the last two sections, it is evident that they have no application to the time when the city may institute* proceedings against delinquent taxpayers for the collection of taxes. The court is of the opinion that, under the authority of 111 Ky., 667, 23 R., 908, 64 S. W., 470, the lower court should have sustained the demurrer, for the reasons in that opinion given. The petition does not state who owned the mortgage, or any bond or bonds secured thereby, and there is no allegation that the owners of them had failed to pay the taxes thereon; and it must be presumed, without an allegation [665] to the contrary, that the citizen has complied with his duty in the payment oí his taxes. The appellee trust company may have held them for others, but it must be presumed that the owners hatre paid the taxes. If the trust company owned the bonds or any part thereof, then it is not liable under an assessment made by the city assessor or tax collector. It is presumed to have been assessed under sections 4078 and 4077 by the auditor, treasurer and secretary of State. Wherefore the judgment of the lower court is affirmed.