Court Opinion

ID: 9653297
Source: CourtListenerOpinion
Date Created: 2023-08-23 17:43:18.225227+00
Date Added: 2024-06-11T18:12:57.635140
License: Public Domain

HUXMAN, Circuit Judge
(dissenting).
In my view, the judgment of the trial court should be affirmed. Our only question is to determine whether the trial court abused its discretion in refusing to enter a temporary injunction. What constitutes an abuse of discretion in such a case has been clearly defined by the Supreme Court in Ohio Oil Co. v. Conway, 279 U.S. 813, 815, 49 S.Ct. 256, 73 L.Ed. 972, as follows : “Where the questions presented by an application for an interlocutory injunction are grave, and the injury to the moving party will be certain and irreparable, if the application be denied and the final decree be in his favor, while if the injunction be granted the injury to opposing party, even if the final decree be in his favor, will be inconsiderable, or may be adequately indemnified by a bond, the injunction usually will be granted.”
That the injury to the company will be certain and irreparable if it ultimately prevails, if the injunction is denied, must be admitted, because when once registered, sold and delivered, these bonds become legal and binding obligations of the city and a *903lien upon all the property in the city.1 On the other hand, while substantial loss could result to the city from the issuance of the injunction, if the company failed to establish its claim of invalidity, the city may be secured against such loss by an adequate bond. The decision in the ultimate, then, turns upon whether the allegations of the complaint present a substantial question as regards the company’s contention that the city may not levy an assessment on its property under the circumstances of this case.
For the purpose of this determination, the facts well pleaded in the complaint stand admitted, and are taken as being true. The facts from which the corporation’s right to enjoin the sale of these bonds must be established are these: It alleges that it is the owner of.property within the City of South Hutchinson which comprises approximately 22% of the total area of the city, and which constitutes 46% of the total assessed value of all property within the city; that these bonds were voted in an amount of $115,000 to finance a waterworks system for the city; that pursuant to the election and mandate of the voters, the bonds were issued and pro rata assessments of taxes on all property within the boundaries of the city, including the property of complainants, was made. The complaint then alleges the letting of the contract and states that such plans do not provide for a supply of water to any of the property owned by the complainant for any purpose whatsoever; that the nearest water pipe contemplated by the plans terminates about three-quarters of a mile from plaintiff’s property; that the additional cost of facilities for furnishing such plaintiffs with an adequate water supply would amount to not less than $70,000, and that such additional expenditure is not within the statutory limits imposed upon the city for such improvements, and that consequently the waterworks system when constructed will neither presently nor in the future furnish water or any other benefit to plaintiff’s property or the nearby dwellings.
The allegation that the construction will furnish no other benefit to such property or nearby buildings is not a statement of an ultimate fact, but is a conclusion of the pleader, and therefore does not stand as an admitted fact. The sole question, then, is whether there is any substantial legal question whether the Fourteenth Amendment to the United States Constitution prevents the city from taxing the company’s property on the same basis as other property is taxed for the construction of this general city improvement under these admitted facts. There is no claim here that the city proceeded in an unwarranted or arbitrary manner, or that it valued the company’s property for the purpose of these ’ assessments at a higher valuation than was placed on the property generally. Nor could the plaintiff support such a charge because in the recent case of Lewis v. City of South Hutchinson, 162 Kan. 104, 174 P.2d 51, the Supreme Court of Kansas, in a unanimous opinion, held that the applicable statutes empower the city to construct waterworks and tax the property within the city for the cost thereof. The court also established the validity and regularity of the election and of all of the bond proceedings leading up to the issuance of these bonds. The Kansas court answered every question, save the federal question, that is urged in this case. It specifically held that Kansas Statutes did not contemplate that one must receive a direct benefit from such an improvement before his property could be taxed for the payment thereof. The federal courts are replete with cases holding to the same effect.2 The majority opinion cites, with apparent approval, all of these authorities to the effect that property within a municipality must bear its share of local taxes although receiving little or no benefit therefrom, including the decision by the Supreme Court in Thomas v. Kansas City Southern R. Co., 261 U.S. 481, 43 S.Ct. 440, 67 L.Ed. 758, to the effect that “the legislative determination that the property taxed *904will be benefited by the public improvement for which it is assessed is ordinarily conclusive,” but then concludes that the petition presents a substantial legal question whether the company’s property, lawfully within the city, may be taxed for such a general purpose authorized by law, in this case, merely because it receives no direct benefit therefrom.
If a corporation or person having no children or not being a resident of the city must nevertheless pay its proportion of the school tax or its proportion of a police or fire tax, although it has no buildings or personal property within the city, or its proportionate share of a road tax, although it never uses the road,3 I can see no constitutional inhibition, even under the Fourteenth Amendment, which would relieve the plaintiff in this case from its obligation to pay its proportion of the cost of constructing a waterworks system, including sanitary sewers, merely because it’ receives no direct benefit therefrom. If the company is-correct in this position, then every owner of every single lot, parcel or tract in the city in a similar situation may likewise escape taxation for such improvement.
The only cases where the" Fourteenth Amendment has been successfully invoked against an assessment for a public improvement where the improvement was authorized by valid statute, are where benefit districts were authorized to construct an improvement for the special benefit of the property within the district. ' In a number of such cases the federal courts have held that where there was arbitrary, unreasonable or unwarranted action or conduct in the levy of the assessments, or inclusion of property within the district, such as some classes of property being assessed or valued at a different rate than others, or where it clearly appeared that property included in the district could not possibly receive any benefit from the improvement, that then the protection of the Fourteenth Amendment might be invoked. The distinction between such situations .and the ■one presented here is obvious, and needs no amplification.
The plaintiff’s property now pays its proportionate share of all city taxes, such as school taxes, police and fire taxes, taxes for salaries of city officials, as well as other taxes for general governmental functions. If its property may not be taxed for this purpose, it is difficult to see how the legality of any of these other taxes on its property can be sustained, because it likewise must pay 46% thereof. It receives no more direct benefit from any of these taxes than it does from the tax for the waterworks. It receives just as much benefit from the waterworks tax as it does from any of these other taxes. Followed to its ultimate conclusion, this would mean that the plaintiff company canijot be taxed for any of these purposes, because it receives no direct benefit from city government. If this is so, its remedy is to seek exclusion from the city limits rather than escape from such taxes by judicial decree. It may not escape its fair proportionate share of the general city taxes so long as it is a part of the city, merely because it receives no direct or special benefit therefrom.
"If a benefit is necessary, indirect benefits are sufficient to sustain the legality of general city taxes, fairly and equitably levied against all the property within the city. That is not seriously disputed. As stated, the allegations of the complaint that the company will receive no other benefit from this improvement is not "a statement of an ultimate fact, but a conclusion of the pleader. But if it is to be treated as a statement of fact, we take judicial notice that such statement is not correct. Courts take judicial notice of facts which are common knowledge of all men. It needs no proof to inform us that the construction of á waterworks system, with the additional fire protection, improvement in health and sanitation, not only makes the property which has the benefit thereof, but also other property, much more valuable than it was before. The construction of a waterworks system would add substantially to the assessed value of the property benefited thereby. This in itself inures to the benefit of the company’s property when further tax *905levies are fixed. Many other indirect benefits which will follow just as surely could be judicially noted and enumerated.
The crux of this entire controversy is that the plaintiff company is required to pay forty-six per cent of the costs of this improvement. I doubt if this case would be here if the company were called upon to pay only five per cent of the cost of the improvement. But the Fourteenth Amendment’s all-enfolding arms may not he protectively wrapped around this plaintiff merely because it pays forty-six per cent of the cost of this improvement. It owns forty-six per cent in value of all the taxable property in the city, and therefore should, under the due process clause, pay forty-six per cent of the cost of the improvement. Due process is satisfied when the same yardstick is applied to all property subject to the cost of an improvement. It would be arbitrary and unwarranted for the city authorities to assess the plaintiff company’s property for a less percentage of the cost of this improvement under the admitted facts as pleaded, and they would in such case stand convicted of violating due process in any similar action brought by an aggrieved, qualified taxpayer.
I not only fail to find any abuse of discretion in the trial court’s refusal to enter the temporary injunction, but am of the view that it entered a correct judgment.

 See Gen.Statutes of Kan., 1935, Sec. 10-112.

 See Gold Hill v. Caledonia Silver Min. Co., C.C.Nev., Fed.Cas.5512, 10 Fed.Cas. 550; Thomas v. Gay, 169 U.S. 264, 18 S.Ct. 340, 42 L.Ed. 740; Louisville & N. R. Co. v. Barber Asphalt Co., 197 U.S. 430, 25 S.Ct. 466, 49 L.Ed. 819; Missouri Pac. R. v. Road Dist., 266 U.S. 187, 45 S.Ct. 31, 69 L.Ed. 237; Kelly v. Pittsburgh, 104 U.S. 78, 26 L.Ed. 658; Illinois Central R. v. Decatur, 147 U.S. 190, 13 S.Ct. 293, 37 L.Ed. 132.

 Cooley on Taxation, Sec. 89, P. 214; Union Transit Co. v. Kentucky, 199 U.S. 194, 26 S.Ct. 36, 50 L.Ed. 150, 4 Ann. Cas. 493; Wagoner v. Evans, 170 U.S. 588, 18 S.Ct. 730, 42 L.Ed. 1154; Wight v. Police Jury, 5 Cir., 264 F. 705.