Court Opinion

ID: 7132383
Source: CourtListenerOpinion
Date Created: 2022-07-24 15:20:16.621265+00
Date Added: 2024-06-11T16:14:30.931209
License: Public Domain

Judge Prtor,
dissenting, delivered the following opinion:
In determining the constitutionality of the act in question, it is only necessary to consider sections one and two. Section one provides “that it shall be the *525duty of tlie 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.”
“Sec. 2. The sinking fund of Louisville being the owner of the stock of the Louisville Water Company, and the 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 all taxes, of all kinds, of whatever character, State, municipal and special.”
It is the settled doctrine of this State that no exemption of one’s property from taxation is valid where like property of another is taxed, unless the exemption proceeds from the consideration of public service. Such legislation, in the absence of this consideration, is in direct violation of the Bill of Rights that prohibits the granting of such a special immunity. Nor can it be maintained that the public service constituting the consideration for the exemption must be for the discharge of a duty for which an appropriation from the State Treasury might be made, or that the public •service should directly benefit the whole people of the State. If this be the correct rule, seminaries of learning and all charitable institutions could receive no support in the way of legislative exemption. It is not necessary, however, to review the cases on this subject, as the opinion of the majority of the court is based upon the idea that no consideration exists in this case for the exemption, and I shall, therefore, consider that question alone, being satisfied, after a careful examination of the record, that the exemption *526of the water .company is not only valid, bnt was an act of justice and right on the part of the law-making-power to the tax-payer of the city of Louisville. ■ It is admitted, or, if not, the fact exists, that the water company received payment for furnishing the.water to these public fire cisterns and fire-plugs up to the year 1882, and then the act was passed making the exemption.
The city of Louisville purchased all, or nearly all, of the stock of the water company, and was, at the time the exemption was made, the sole owner of the property, with the exception of one or two shares of the stock. It is, therefore, argued that because the city owned the entire stock it was immaterial whether it received a penny or thousands of dollars for furnishing this water; it was but a charge in the first place to the city, and then a payment back to it of the money expended, and for that reason the supply of water for public purposes could not have constituted the consideration for relieving the company from taxation, and the only motive inducing the Legislature to- grant the privilege consisted in the fact that the city owned the water company, as recited in the second section of the act.
It is further argued, and so adjudged in the principal opinion, that the city can only be regarded as a stockholder in a private corporation, and not as the owner • of this stock • in its governmental capacity. The city of Louisville contains near two hundred thousand inhabitants, and has within its corporate-limits public buildings belonging to the Federal Government, and its own court buildings and other prop*527erty necessary to the conduct of State affairs. It. acquired the stock of the water company from revenues collected from the tax-payers within its limits, and made expenditures of large sums of money for that purpose, that, when invested for both public and private use, is now sought to be made liable for taxes by the collecting officer, with the legislative exemption remaining in full force. It is not the water company or the sinking fund that is called on to pay these back taxes, amounting now to near seventy thousand dollars, but the tax-payer of the city, represented in name only by the two corporations. The tax-payer has been already taxed to enable the city to make the purchase of the water company or to pay for the stock in the corporation, and, after being-taxed for that purpose, is again taxed for the water he drinks and uses on his premises, receiving no other compensation whatever except this convenience, that becomes a necessity in every densely populated city. A plain distinction exists, therefore, between a private company furnishing water ■ to the city and its population at certain specified rates and the city taxing the property-owner in order that he may obtain water for his own use, and then applying the right to the use in part to the protection of the public property located within the city; or, if taxed for more than will supply the city, the additional tax finds its way to the sinking fund for the payment of the debts of the municipality. Nor is the protection afforded the public or the public buildings of the city merely incidental, as the act of April 22, 1882, makes, it the duty of this■ *528corporation to furnish the water to the public fire cisterns and public fire-plugs or hydrants free of ■charge. If this water company, therefore, owned by the city, should refuse or fail to furnish this water, and a public building is destroyed by fire by reason of this neglect, it is evident that the company would be responsible for the loss. A public duty required to be performed, for which an action would lie for a failure to discharge it, and still it is insisted that the reason prompting the Legislature to make the exemption was because the city of Louisville, in fact, owned the stock of the corporation. I have no doubt that ■such was the inducement; and why? Because the taxpayer had assumed heavy burdens to obtain the stock, and a portion of those burdens being used by the city for the protection of both public and private property, it was thought both equitable and proper that the exemption should be made. The city has assumed a duty that not only affords incidental protection, but by the express terms of the charter it is made obligatory on the city to discharge that duty; and in the very next section following the exaction of the duty is the recital that as the city owns the stock the water company is exempt from taxation. • Where there is :an exemption we look to the act to see if there is a public service to perform, and if none, the exemption must be held invalid. If there is such a consideration, the statute must stand, however impolitic the Legislature may be. After the exaction of this duty ■and its full performance by the city, the collector of taxes on behalf of the State levied on the property of the water company for the State taxes; levied the *529tax-writ upon property that the citizen had been taxed to purchase in order to supply an absolute want, that he is again taxed for as the water enters his dwelling, and required to maintain, by taxation under the power >of the municipal government, the existence of the water-works for the purpose of performing a public duty imposed by the act under consideration.
It seems to me neither just nor equitable to consider the municipality as the owner of a private corporation when attempting to impose such taxation on the tax-payer, who is the real party to this action, and who receives nothing but the water he uses and drinks in the way of private gain. The Legislature, viewing the question in this light, granted the exemption, and to make it binding on the State, at least so long as it stands unrepealed, required the performance of a public duty that the city has never failed to discharge.
The Supreme Court, in 115 U. S., 691, in the case of the Louisville Gas Co., held that the distribution ■of gas in densely populated districts was a matter of which the public could assume control, and in supplying it for public and private use was such a public service as authorized the grant of the exclusive privilege. The same doctrine was recognized by that court in the case of the New Orleans Water-works Co., 115 U. S., 674. Why the State may not impose upon a municipality the performance of a service for the public good I am unable to perceive. It is but a subordinate agency of the State government. Here the entire expense of furnishing water is placed upon the tax-payers of the city, and this is proper, because they are the real beneficiaries; but *530the Legislature, knowing the oppressive burdens that .pertain to the administration of municipal government in the imposition of taxes, has attempted to aid the tax-payer by releasing the State taxes upon a consideration resulting in the public good, and for a failure to comply with or construe the consideration prompting the exemption, if loss should occur, a legal liability would at once arise, and to discharge which a resort to the tax-payer must be again had. There can be no constitutional inhibition to such legislation, and to assign another motive on the part of the Legislature for the exemption than the consideration expressly stated in the act is no argument against its validity, or a sufficient reason for declaring the act of exemption unconstitutional and void. I am, therefore, unwilling to impose upon the tax-payer the sum of seventy-five thousand dollars in the way of back taxes in the face of a legislative exemption standing unrepealed, based upon a sufficient consideration, and made with a view of affording that legislative aid to the tax-payer upon his performing a public service.