Johnson v. City of Lexington , 53 Ky. 648 ( 1854 )

Judge Simpson

delivered the opinion of the court.

This case involves the question of the power of the mayor and councfimen of the city of Lexington to impose a tax upon the citizens, in the manner contemplated by so much of the following ordinance as requires them to list for taxation their money, notes, &c., which ordinance was adopted by the city council on the 24th day of March, 1854, viz:

2d. “That section 22, digested ordinances, be. so amended as to read at the end thereof, that it shall be the duty of the assessor of this city, after having taken the list of all the property required by said section to be specifically listed, to require each one to deliver, on oath or affirmation, a statement or list of all his or her furniture, machinery, fixtures, watches, clocks, gold and silver plate, pianos, and other musical instruments, of which he or she may have been in possession on the day on which this ordinance takes effect, as owner, hirer, or agent, within the city; and said assessor shall assess the fair specie value of each item of property in such statement or list, and enter the items, their value, and the total of the whole in separate columns, and opposite the names of their respective owners, hirers, and agents. After said list is taken, the assessor shall then ask what said person was worth, from all other sources within the city, including the value of money, notes, and other personal property that may have been temporarily out of the city, on the day on which this ordinance takes effect, and shall enter said amount in a separate column: Provided however, the assessor shall take from the value of said property, not specifically listed, the amount of his and her indebtedness, and one hundred dollars.”

The act to incorporate the city of Lexington was' passed on the 7th of December, 1831. In December, 1850, an act was passed “to reduce into one, amend, and digest the acts and amendatory acts incorporating the city of Lexington.” Both the original charter, and the act last referred to, contain the following provisions on the subject of taxation:

Sec. 12. “The mayor and couneilmen shall have the power and authority to assess, levy, and collect taxes, on such real and personal estate as they may designate; but such taxation shall be uniform on every description of property assessed.”

1. The 13th section of the act December, 1850, entitled, “an act to reduce into one, amend, and digest the several acts and amendatory acts incorporating the city of Lexington,” tho’ containing no express limitation, does not confer a power upon the city corporation to tax personal estate without the city, but is confined to property within the city.

Sec. 18. “ The city assessor may, with the advice and consent of the board of counciimen, appoint an assistant, if deemed necessary, and shall take in a list of all the taxable inhabitants within said city, separately, in each ward, and affix against each the amount of his, her, or their real estate within said city, and also the true and just value of such personal estate of each of said inhabitants, whether in goods, stocks, manufactories, or other property, that may be designated for taxation by the said mayor and counciimen, &c.”

These are the only provisions in the city charter from which the power of taxation, assumed by the. foregoing ordinance, is claimed to be derived.

By the first clause in the 13th section the real estate, to be listed for taxation, is expressly limited to that which is within the city. The second clause in the same section, which refers to the personal estate tobe listed for taxation, does not contain such an express limitation, but we entertain no doubt that the legislature intended to confine the power of taxation by the city, to such personal estate as might be within it. It cannot be presumed that the legislature intended to invest this municipal corporation with authority to impose a tax upon its citizens, which would extend in its operation, to the limits of the state, or even beyond them. A consideration of the object and design of the power granted, tends to exemplify the legislative intention, and renders it reasonably certain that the power conferred was only intended to embrace such personal estate as was within the city.

This construction is fortified by the language used in the two sections of the amended charier, which relate to the fire and school tax, the language used in each being identical with the other, and is as follows, viz:

“ That in addition to the taxes before provided, the mayor and council of the city of Lexington shall have the authority, in each year, to levy an additional ad valorem tax on the property within said city, not exceeding five cents on each one hundred dollars of assessed property, which shall be collected in the same manner as other taxes are, by law, collected in said city, and that the fund arising therefrom shall, &c.”

This additional tax on the property within the city was evidently intended merely as an increase of the tax, on the same property that was to be assessed under the general power of taxation, for the purpose of defraying the expenses of the city government. No discrimination was contemplated or designed to be made in the description or species of property to be taxed, but the same property was to be taxed for both purposes. As then this additional tax was expressly limited to the property within the city, the inference is very strong that the legislature understood the general grant of power on the subject of taxation, to be confined to the property within the city, and did not intend that the power should embrace any property situated elsewhere.

If then this be the proper construction of the charter, did the legislature intend that this power of taxation should extend to and embrace the money, notes, and choses in action of the persons residing within the city, without any regard to the residence of the debtors, or the place where the money might be deposited; or, in other words, that it should apply to any other estate or property than that which is visible, and that which is specified in the charter itself.

When the original charter was granted in 1831, the state had not adopted the principle of taxation by which tbe money and choses in action of the citizen are now made liable to taxation, sub modo, under the provisions of what has been denominated “the equalization law.” It cannot, therefore, be presumed that the state then intended to confer on the city authorities a power of taxation which it did not itself exercise. The first act to equalize taxation was passed in February, 1837. It required all persons, when giving in their lists of taxable property, to fix, on oath, a sum sufficient to cover what they were respectively worth, from all sources, on the day to which the lists related, exclusive of the property required by law to be listed for taxation, not computing the first three hundred dollars in value, nor lands not within this state, nor other property out of this state subject to taxation by the laws of the country where situated. The sum to be excluded from the computation has been reduced by subsequent statutes.

2. The power of the city to tax fov corporate purposes is the same as for fire and school purposes, upon the property ■within the city.

The charter, as amended, contains no other power with respect to the subject matter of taxation, than was contained in the charter of 1831. The language of both acts, so far as they relate to this matter, are the same, if this power was not conferred by the original charter, it cannot by any fair rule of interpretation, be assumed that it was conferred by the same language in the amended charter. There is nothing in the amended charter that indicates an intention on the part of the legislature to extend the power of taxation by the city authorities, over any other personal estate or property or choses in action, than they previously had. If such an intention existed is it not reasonable to presume that it would have been expressly conferred, and not left to be assumed as a matter of implication? Besides, as the power of taxing a sum which is sufficient to cover what the person is worth, from all sources, exclusive of the property required by law to be listed for taxation, is only exercised by the state itself, sub modo, and with qualifications, the presumption cannot be resisted, that the legislature would, had it intended to confer this power upon the city authorities, have prescribed the mode in which it was to be exercised.

In what manner is this power to be exercised by the corporation, in the absence of all directions in is charter on the subject? Is it to be done in analogy to the provisions of the law of the state regulating the same matter? If so, would not the residents of the city be required to fix a sum sufficient to cover what they were respectively worth, from all sources, exclusive of the property required by law to be taxed within the city? Would not this embrace all the estate, of every description, lands, slaves, and personalty out of the city, owned by them any where in the state? This would be in exact analogy to the provisions of the general law upon the subject, and it illustrates very forcibly the correctness of our conclusion, that the legislature would not have conferred such a power without defining it, and prescribing the manner in which it was to be carried into effect, and consequently that no such power was intended to be, or was in fact granted.

3. The power ffn-ed^by °th¡ legislature uplexingto'n^ext,ends only ,to the property within the city, p“0epaeDr! ty, actually sit-the* city,1 and nofc suel1 Pr?P‘ erty as has merely a legal g^atus^Hni which for some gavfedasbeing its owner, wherever he may be. 4. The terms personal estate, as used in the Lexmgton city charter, ®“¿ other choses in braceonly vlSble property. (4 B. Monroe. 449.)

We think the power of taxation conferred on the city authorities by the charter extends only to the property and estate within the city, and that the property referred to is visible property, actually situated within the city, and not such estate as has merely a , , . . • , legal or constructive status, and which is regarded, for some purposes, as being with its owner, wherever he is domiciled. Money and choses in action constitute estate of this character, and by a legal fiction, are considered as having a locality wherever the per-f r son resides to whom they belong. Debts, however, are not even now regarded as the subjects of taxation, properly speaking, but their intrinsic value only is liable to be taxed. No estate, except such as is actually within the city, or merely absent for temporary purJ , poses, which is visible m its character, or is specified in the charter, is in our opinion, subject to taxation by the city authorities.

Property and personal estate, according to the ordinary and popular signification of these words, do not mean money and choses in action, and they are „ , , . , , : , frequently used, even in legal instruments, without having any such meaning. An execution is directed to be levied on the defendant’s estate, yet the word estate, as here used, does not embrace choses in action, Many other similar examples might be given in which , J T , the terms personal property and personal estate are not regarded as including debts and other choses in action, and we think it very clear that these terms did not, as used in the original charter, mean anything but visible property; and as precisely the same Ianguage is used in the amended charier, wé think it should have the same meaning that it had when first used. In the case of the Bank of the United States, &c. v. Huth, 4 B. Monroe, 449, it was said by the court that the words “real or personal estate,” used in the statute requiring mortgages to be recorded, do not necessarily embrace choses in action, or claims for debts, and are often, used in common parlance, to express estate or property in possession in contradistinction to a right in action.

The justice or the expediency of the grant of a power to the city corporation, to impose a tax on the money, bonds, &c., of the citizens residing within its limits, is not "a question for our consideration; the only thing we have to determine is, whether such a grant has been made; and we are of opinion that the legislature did not intend to invest the city corporation with this power, by any of the provisions of its charter.

The question we have considered, was submitted by the parties to the judge of the Fayette circuit court, on an agreed case. That court decided that this tax was legal and valid, and that the city authorities had power to impose it. That judgment we deem erroneous.

Wherefore, the judgment is reversed, and cause remanded that a judgment may be rendered for the plaintiff, according to the agreement of the parties.