Entertaining these views, it is unnecessary | 6. MUNICIPAL CORPORATIONS 974(3)-TAXfor this court to consider the validity of the ES-ASSESSMENT OF CORPORATE FRANCHISE -REVIEW BY COURT. order of the circuit court of December 1, 1913. For the reasons indicated, the judgment is reversed as to John W. Kaufman, with directions to enter judgment in favor of Mrs. Lowther for the entire property purchased by her at the commissioner's sale up on the payment by her of the sale bonds. The judgment is affirmed as to H. H. Rice.

KENTUCKY HEATING CO. et al. v. CITY finding is conclusive, and will not be reviewed

3. STATUTES 76(6) SPECIAL LAWS-MU-side, which grounds were not supported by the NICIPAL TAXATION CORPORATE FRANCHISES.

Where a taxpayer protesting before a city board of equalization against an assessment made by the assessor fails to point out and clearly show wherein the assessment is erroneous and give the board information to enable it to arrive at a correct valuation, he cannot complain in a subsequent action by the city to collect the tax assessed that the board fixed an excessive valuation of his property.

[Ed. Note.-For other cases, see Municipal Corporations, Cent. Dig. §§ 2111, 2112.]

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

11. MUNICIPAL CORPORATIONS 972(2) position of what is commonly called a franTAXES-FRANCHISE TAX ASSESSMENT-DUTY chise tax upon corporations engaged in the OF BOARD OF EQUALIZATION. manufacture and transportation of gas, and Where a taxpayer protests before a city board of equalization against a franchise tax also provides that the companies so engaged assessment made by the assessor, the board shall each year make reports to the assessing should furnish him with the facts and figures authorities. In attempted compliance with on which it proposes to estimate the value of the franchise and information as to its methods this statute requiring reports to be made, so that he may be prepared to challenge the the heating company in October, 1912, made facts and figures as well as the board's conclusion.

[Ed. Note.-For other cases, see Municipal Corporations, Cent. Dig. § 2085.] 12. MUNICIPAL CORPORATIONS

983-TAX

ES-FRANCHISE TAX-PENALTY. Ky. St. § 2998, prescribing a penalty of 10 per cent. on delinquent taxes, applies to franchise taxes assessed by a city under section 2984a, notwithstanding the provision of subsection 8 of the latter section that franchise taxes shall be collected "as now provided by law with respect to other tax bills due the city," and though no statute authorizing such a penalty was in existence when section 2984a was enacted.

its report for the year ending September 1,
1912, to the assessor of the city. This re-
port was verified by Donald McDonald, the
referred to.
president of the company, and will later be

The assessor of the city of Louisville fixed the value of the franchise of the company as of September 1, 1912, "after deducting the assessed value of all tangible property," at $1,500,000. The company, deeming this assessment excessive, prosecuted an appeal to the board of equalization of the city, and this board, which has authority to hear evidence offered by the complaining party and increase or decrease assessments made by the December,

[Ed. Note.-For other cases, see Municipal Corporations, Cent. Dig. §§ 2144-2146.] Appeal from Circuit Court, Jefferson Coun-assessor, at its meeting held in, ty, Chancery Branch, First Division.

Action by the City of Louisville against the Kentucky Heating Company and others. From a judgment for plaintiff, defendants appeal. Affirmed.

Matt O'Doherty, of Louisville, for appellants. George Cary Tabb and Pendleton Beckley, both of Louisville, for appellee.

CARROLL, J. In this suit by the city of Louisville to collect from the Kentucky Heating Company a franchise tax assessed against it as of September 1, 1912, there was a judgment in favor of the city for $26,648.95, and from the judgment the appeal now before us was prosecuted.

1912, reduced the assessment to $1,200,000, and to recover the taxes due on this revised assessment this suit was brought.

Counsel for the heating company urges two principal grounds for reversal that will be considered in the order named: (a) That the franchise assessment of the heating company for the city of Louisville should have been made by the state board of valuation and assessment, and not by the city assessor of Louisville or the board of equalization of the city; (b) that, if the assessor had power to make the assessment, he by mistake or oversight put an excessive valuation on the franchise, and the board of equalization by mistake or oversight placed an excessive val

uation on its franchise.

In sections 4077-4084, inclusive, of the

The Kentucky Heating Company is a Kentucky corporation engaged in the princi- Kentucky Statutes, provision is made for the pal business of obtaining and selling natural gas secured from gas fields owned by it in assessment by the state board of valuation Meade county, Ky., but it also manufac- and assessment of the franchise of certures artificial gas in Hardin county, Ky. tain named corporations engaged in business The natural gas is conveyed in pipes from in the state, including corporations doing the the Meade county fields to the city of Louis-business the heating company was carrying ville, in Jefferson county, as is the artificial on. But in 1898 the Legislature adopted an gas manufactured conveyed from Hardin act (Laws 1898, c. 38) that is now section county. It appears from the evidence taken 2984a of the Kentucky Statutes, authorizing in this case that it owns 18 miles of pipe line the assessment for city taxation by the city in Meade county, 3 miles in Hardin county, assessor of the franchise of certain compa22 miles in Jefferson county outside of the nies, including those engaged in the business city, and 70 miles in the city. There are a the heating company was carrying on. few persons in Hardin and Meade counties act, which contained 13 sections, applied onto whom it supplies gas, and in Jefferson ly to cities of the first and second class, county outside of the city it receives from the title of it reading, "An act concerning patrons annually for gas supplied about $1,- the assessment and valuation of corporate 400. But its principal business is confined to supplying gas to its patrons in the city of Louisville, and it supplies persons outside of the city more as a favor than as a matter

This

franchises and intangible property by cities of the first and second class." In 1900 (Laws 1900, c. 29) the first section only of this act was so amended as to make its provisions of business. embrace and apply to cities of the third class. The statute, which will be more particu- A few other changes not necessary to notice larly noticed hereafter, authorizes the im- were also made in this section by the

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

It

amendment. In 1904 (Laws 1904, c. 33, § 3), ment now for the first time presented. section 1 of the act was again amended by does not appear that the point now urged striking out the words "cities of the second was brought to the attention of the court and third class" so as to leave the act ap- in the Murphy Case, and so we will considplicable only to cities of the first class. er it.

[1] The form and substance of these amendatory acts are not objectionable, as it is allowable to amend by its re-enactment and publication one section of an act without reference to the other sections. Board of Penítentiary Comrs. v. Spencer, 159 Ky. 255, 166 S. W. 1017.

[2] But, when the title of the act of 1904 is looked to, some question might be raised as to whether the attempt to amend section 1 of the act of 1898 as amended by the act of 1900 was effectual, but upon this subject we express no opinion. The question is not here, and even if it should be admitted that the attempted amendment of 1904 was a nullity, the original act, as well as the amendment of 1900, would remain and leave the provisions of the act applicable to cities of the first class. Cities of the

first class were not taken, or attempted to be taken, out of the act by either the amendment of 1900 or the amendment of 1904. The act as it now appears in the 1915 edition of the Kentucky Statutes is the act of 1898, as it was amended by the act of 1900, with the exception that the first section of the act as it now appears in the Kentucky

Section 59 of the Constitution provides that:

* *

"The General Assembly shall not pass local or special acts concerning any of the following subjects, or for any of the following purposes, namely: * (subsection 15) To authorize or to regulate the levy, the assessment or the collection of taxes, or to give any indulgence or discharge to any assessor or collector of taxes, or to his sureties. * tion 29) In all other cases where a general law * * (subseccan be made applicable, no special law shall be enacted."

Section 60 of the Constitution also provides in part, that:

"The General Assembly shall not indirectly enact any special or local act by the repeal in part of a general act, or by exempting from the trict or county." operation of a general act any city, town, dis

And it is said that the legislation here

drawn in question was an attempt on the part of the Legislature in violation of the Provisions quoted to repeal, by a special or local act, the general law conferring on the state board of valuation and assessment the power to assess the franchises of corporations such as the heating company and to confer this authority by a local act on the

city assessor.

It is true that, if section 2984a of the Stat

Statutes is a copy of the amendment of section 1 by the act of 1904, which, as we have said, merely struck out the words "sec-utes, giving to the city assessor authority to ond and third class cities." So that we cannot agree with counsel that all of the act of 1898 (section 2984a) except section 1 has been repealed. We think the whole of the act as it now appears in the Kentucky Statutes is in full force and effect, unless it be that the act of 1904 is invalid, and if this were so, the only effect would be, as we have said, to restore the act of 1900 and make the act applicable to cities of the second and third class as well as cities of the first class.

assess the franchises of certain corporations, such as the heating company, had not been enacted, the franchises of all these corporations could and would have been assessed by the state board of valuation and assessment under the general law giving it authority to assess such franchises. But the Constitution erected certain classes of cities and gave to the Legislature authority to deal with these classes in so far as their municipal affairs were concerned by legislation applicable to these classes alone. And this legislative power has been recognized in great numbers of cases in which special laws applicable to the municipal affairs of cities alone have been upheld, although these special laws were in direct conflict with or modified in material respects general laws that would have been in force in the cities except for the enactment of this special legislation. The power of the Legislature to do this necessarily follows from the constitutional classification of cities and towns. The very purpose of putting them in classes was to enable the Legislature to deal with the municipal affairs of each class in a manner separate and distinct from the legislation applied to other classes and from the legislation enacted for the state at large.

[3] Another objection urged is that this | act is special legislation prohibited by section 60 and by subsections 15 and 29 of section 59 of the Constitution. We think it would be a sufficient answer to this argument to say that in Murphy v. City of Louisville, 114 Ky. 762, 71 S. W. 934, 24 Ky. Law Rep. 1574, the constitutionality of the act of 1898 was directly brought before the court and its validity upheld, and the only substantial difference between the act of 1898 and the present law as it appears in section 2984a of the Kentucky Statutes relates to the classes of cities to which the act applies. But counsel insists that the objection now urged that it violates section 59 of the Constitution, and subsections 15 and 29 thereof, was not brought to the attention of the But in some instances the Legislature has court in the Murphy Case, and therefore attempted to repeal or modify general laws that opinion should not be held to foreclose by special acts applicable to cities that did an inquiry into the soundness of the argu- not concern the municipal affairs of the city,

and in these instances the legislation was | Rep. 635; Marshall v. Donovan, 10 Bush, held invalid, not because the Legislature did 681. not have the right to legislate specially for cities and towns in matters relating to municipal affairs, but because the legislation designated as applicable to cities only was an attempt to enact special legislation, in contravention of the Constitution, under the pretense that it concerned only the internal affairs of cities, when the real purpose was not to regulate or control at all municipal affairs, but to exempt the cities from general laws. Illustrations of this class of legislation are to be found in Droege v. McInerney, 120 Ky. 796, 87 S. W. 1085, 27 Ky. Law Rep. 1137; Columbia Trust Co. v. Lincoln Institute, 138 Ky. 804, 129 S. W. 113, 29 L. R. A. (N. S.) 53; James v. Barry, 138 Ky. 656, 128 S. W. 1070.

The company may have and doubtless did furnish to the state board of valuation and assessment a report showing that it had a franchise subject to assessment in the counties of Hardin and Meade, and in Jefferson county outside of the city, but we are not here concerned with the reports made by this company to the state board of valuation and assessment, or the action taken by this board.

But the legislation authorizing the city assessor of certain cities to assess the franchise of designated corporations for taxation for municipal purposes plainly relates only to the municipal affairs of the city. The assessment for city purposes of the franchise of a corporation is clearly as much a municipal function as the assessment of any other class of property in the city, and there can be no doubt that the Legislature had the power under the Constitution to confer on the assessing authorities of the cities in any one or more classes the right to assess for taxaation for municipal purposes the franchise of corporations doing business in the city. Possibly it may not have been a wise thing for the Legislature to take away from the state board the right to assess the franchise of corporations like the heating company for municipal purposes as well as for state and county purposes, but this is a matter that addresses itself to the legislative department of the state.

The next ground urged for reversal is that the provisions of section 2984a were not followed by the assessor in making the assessment, and that both, the assessor and the board of equalization by mistake and oversight on the part of each fixed an excessive value on the franchise. The mistake and oversight said to have been so made grew out of the fact, as insisted by counsel, that both the assessor and the board of equalization assessed as taxable in the city of Louisville the whole franchise exercised by the company in the conduct of all its business, including that part of its franchise exercised in Hardin and Meade counties and in Jefferson county outside of the city, and the further fact that these authorities failed to deduct the value of its tangible property from the value of the capital stock in fixing the value of the franchise.

We might rest our answer to so much of this argument as relates to the assessment of the franchise said to have been exercised by the company outside of the city on what we have said touching the failure of the company to report any lines or franchise outside of the city. But, as the alleged failure to deduct the value of the tangible property must be considered, we will treat both questions as open for hearing and dispose of them together.

[4] A further objection urged to this leg islation is that it fails to provide a rule by So far as the mistake alleged to have been which the extent or proportion of the fran-made by the city assessor is concerned, we chise of a corporation exercised in several may dispose of it with the comment that taxing districts shall be ascertained and de- the heating company appealed from the astermined in each district so that the part sessment made by the assessor to the board so assessed shall not exceed the value of the of equalization, and it is upon the reduced whole. But we shall not extend this opin- assessment made by the board of equalizaion in answering, as we might do, this and tion that the tax here in question was sought other related constitutional objections urged to be collected. The statute, in subsection against the statute, because the heating com- 7 of section 2984a, gives this right of appeal pany is not in a position to raise the ques-in providing that: tion as to the constitutionality of the legislation on the ground mentioned, as it did not report to the assessor or the board of equalization any lines owned, leased, operated, or controlled by it outside the city or any franchise exercised by it outside the city. It has been settled by numerous decisions of this court that no person will be heard to question the validity of a statute unless his rights are affected by that part claimed to be invalid. Com. v. Goldburg, 167 Ky. 96, 180 S. W. 68; Burnside v. Lincoln County Court, 86 Ky. 423, 6 S. W. 276, 9 Ky. Law

"It shall be the duty of the city assessor, immediately after fixing such values, to notify the corporations, companies or associations of the fact; and all such corporations, companies or associations shall have at least ten days from the time of receiving such notice to go before the board of equalization of the city and ask a change of the valuation, and may introduce evidence, and the chairman of said board is hereby authorized to summon and swear witnesses, and after hearing such evidence, the said board may change the valuation as it may deem proper, and the action of said board shall be final."

[5] It is therefore obvious that whether the assessor did or did not make a mistake

is not so material, because the city is not valuation be lowered. At this hearing, if attempting to collect taxes on the assess- one is requested, the board has authority ment made by the assessor. The purpose of to summon and swear witnesses and hear allowing this appeal was to give complain- evidence. The statute further provides that ing taxpayers a remedy through which they "the action of the board shall be final." might have an erroneous assessment made It will thus be seen that there are three by the assessor corrected. And when a tax-assessing boards: The board of supervisors payer has availed himself of this remedy, for counties, with power to review assessand the board of equalization has acted on ment made by the assessor; the board of his appeal and made for itself an assess-equalization for cities, which may review ment, we cannot perceive how the taxpayer assessments made by the city assessor; and has any right to complain of what the as- the state board of valuation and assessment, sessor did. It is very plain that, in the ab- which makes an original and final assesssence of fraud, or some obstruction or ob- ment of the franchises of certain corporastacle that prevented the right to prosecute tions. The statute, as stated, allows an an appeal to the board of equalization, a appeal by the taxpayer, but not by the comtaxpayer who was dissatisfied with the as- monwealth, from the action of the board of sessment made by the assessor could not in county supervisors, and the right to review on behalf of the taxpayer the action of the county board of supervisors, as well as the right to review on behalf of the commonwealth or the taxpayer the action of the state board of valuation and assessment, has come before us in several cases. not, however, recall any case in which the right of the court to review the assessment of a city board whose action "shall be final" has been considered. The cases, however, view the action of the county board of supresenting the question of the right to repervisors, as well as the action of the state cially those dealing with the finding of the

the courts assail his assessment, when he had failed to avail himself of the remedy of appeal to the board of equalization given to

him by the statute.

Looking now to the assessment made by the board of equalization, the question is: Can the court in a collateral proceeding like this review or correct the assessment made by the board upon the allegation that its excessive assessment was due to fraud or mistake or other fault on the part of the board? It will be noticed that the board, although not a court, is a quasi judicial body; that is to say, the taxpayer is given a hearing before the board. He may intro

duce such evidence as he desires, and the board, in opposition to his contention, may hear other witnesses, and, after hearing the evidence introduced for and against the justness of the assessment, may, in its discretion, either raise or lower the assessment, and

its action "shall be final."

Now what meaning should be given to the words of the statute that "the action

on no

of said board shall be final"? Does it mean
that under no circumstances, and
state of facts, can its finding be reviewed
by the courts?

In the general revenue and taxation laws, in sections 4115-4128, provision is made for the appointment of a board of supervisors in each county, which has authority to review assessments made by the county assessor and increase or decrease the valuation fixed by him, and in these sections provision is made for an appeal by a taxpayer from the action of the board of supervisors to the quarterly court, and thence to the higher courts. So that by express statute the action of the board of supervisors is not final, but subject to review by the courts.

We do

board of valuation and assessment, and espe

action of which "shall be final," afford mastate board of valuation and assessment, the terial assistance in determining our right to review the finding of city boards of equalization, and these cases we will now examine.

Henderson Bridge Co. v. Com., 99 Ky. 623, 31 S. W. 486, 17 Ky. Law Rep. 389, 29 L. R. A. 73, was a suit by the commonwealth

to enforce the collection of a franchise tax assessed by the state board of valuation and assessment against the bridge company. The bridge company set up various defenses, and it appears that the circuit court reduced the valuation fixed by the state board of valuation and assessment. From this judgment both parties appealed, and the court, in considering the effect of the valuation made by the state board, which was assailed by the bridge company, although it did not hold that the finding of the board was conclusive and unreviewable by the courts, said:

"It should be further said that the findings of this board of valuation and assessment partake of a judicial nature. The defendant had its day in court. It did appear on notice before that board and on evidence made its deIn sections 4077-4091 of the general rev-fense. And on this hearing that board rendered enue laws provision is made for the orig- its decision in fixing the value of the franchise inal assessment of the franchise of certain of defendant, granted by authority of the state corporations by the state board of valuation and assessment, and in section 4083 it is provided that this board, after it has fixed the value on the franchise of a corporation, shall give it notice so that it may appear before the board if it so desires and ask that the

is entitled to a very high degree of consideraof Kentucky, and this finding, if not conclusive, tion and authority, and it should not be lightly set aside or disregarded by the courts, unless the board proceeded upon an erroneous princiestimating the value of the franchise, or unless ple or adopted an improper mode or manner of fraud is charged and shown to exist."