DocketNumber： No. 38
Citation Numbers： 34 F.2d 357
Judges： Lewis, Phillips
Filed Date： 7/29/1929
Status： Precedential
Modified Date： 7/23/2022
Fairfax Drainage District of Wyandotte County, Kansas, organized under the laws of Kansas, brought this action in January, 1928, against Kansas City, Missouri, to recover $12,860.50, with accrued interest and penalties, assessed as special benefits by the drainage district on 54 acres owned by the city. The acreage lies along the bank of the Missouri River in Kansas, all within the drainage district. The complaint alleges that on the land so owned by Kansas City, Missouri,
“There is now and was at all times herein mentioned located the waterworks plant of Kansas City, Missouri. That this waterworks plant is at the present time the sole source of water supply for Kansas City, Missouri, and the cost of maintenance of said waterworks plant is paid by charges collected from consumers in proportion to the amount of water consumed.
“Plaintiff alleges that during the years 1923, 1924 and 1925, certain special improvements were made by the Fairfax Drainage District of Wyandotte County, Kánsas, for the purpose of protecting said District and the lands contained therein from overflow from the Missouri River and for the purpose of preventing said lands in said District from being flooded by the surface water, and for the further purpose of furnishing drainage to that District.
“That said special improvements consist of the following, to wit:
“(a) A dyke extending around the said Drainage District on the north, east and south.
“(b) What is known as the foot hill ditches and laterals to prevent the surface water from the surrounding territory overflowing the lands in said District and for the purpose of carrying said water through said ditches into the Missouri River.
“(c) The construction of a sewer and laterals and pump house and equipment for the purpose of draining surface water from out of said District, and conveying the same into Jersey Creek and the Missouri-River.
“That the cost of the above mentioned special improvements were assessed according to law, against the lands contained in said Drainage District, on an acreage basis. That the aggregate cost of all of said improvements amounted approximately to the sum of $1,074,812.58. That these costs were paid for by the issuance and sale of bonds of said Fairfax Drainage District, said bonds being serial bonds maturing over a period of twenty years from the date of their issue. That each year, beginning with the year 1923, there was certified to the county clerk of Wyandotte County, Kansas, by the Board of Directors of the said Fairfax Drainage District, an amount sufficient to pay the interest and the bonds falling due in that particular year. That these amounts were assessed equally upon all the lands lying within the said Fairfax Drainage District, on an acreage basis, including the lands owned by the defendant, Kansas City, Missouri, as hereinbefore described. That the Board of Directors of said Drainage District continued to certify said assessments to the said County Clerk for the years 1924, 1925, 1926 and 1927. That the defendant, Kansas City, Missouri, has failed, neglected and refused to pay its special assessments as aforesaid assessed against its property located within said District, and that there now is due to the Fairfax Drainage District from the defendant, Kansas City, Missouri, as shown by the tax records in the office of the County Treasurer, a sum aggregating $12,860.50, including interest and penalties as provided by law.”
The complaint was challenged by demurrer, on the ground that it did not state facts sufficient to constitute a cause of action, which was overruled. Defendant objected and excepted to the order of the court overruling its demurrer, and declined to plead further; and thereupon the court, over de
The chief point raised by the demurrer is the claim that a compact and agreement between the two States, made with the consent of Congress (Const. TJ. S. art. 1, § 10), exempted defendant’s property from the assessment, thus: <
“Be it resolved by the Legislature of the State of Kansas, the Governor concurring, that
“Whereas, The cities of Kansas in Wyandotte County, Kansas, and of Kansas City in Jackson County, Missouri, are contiguous and adjoining and each own and operate waterworks plants, the intake portions of which are on the banks of the Missouri River in Kansas City, Kansas, and contiguous to each other; and
“Whereas, For the protection of each city in the event of a breakdown of its plant, a conflagration, epidemic, or other exigency, it is vitally important that its water plant have connection with and access to- the facilities of the other; and it is, and has been in the past, of material benefit to each city that both contribute to a common fund in protecting the banks of the Missouri River in the vicinity of said plants and further upstream from breaking over and destroying the plants, or changing its course so as to leave the intake so far from the stream as to render it impossible to obtain an adequate flow of water therefrom; and
“Whereas, The water plants of both cities are connected at various points so that they can, in the future as they have in the past, supply each other with water, thereby preserving the health and protecting the property of each; and
“Whereas, The plant of the City of Kansas City, Missouri, is now, and will of necessity continue to be for a long period in the future, the only source of water supply to the City of Rosedale, in Wyandotte County, Kansas, and the maintenance of this supply is of vital importance to the health and property protection of the citizens of said municipality; and
“Whereas, The contour of the territory of each city is such that, to reach and serve certain districts, it is necessary that portions of the service mains and plants occupy or run through the territory of the other State; and
“Whereas, Kansas City, Missouri, is about to invest many millions of dollars in the betterment of its plant in the immediate future, and the City of Kansas City, Kansas, will invest in the future large sums in extending its plant; said extensions of each municipality necessitate large investments in the territory of the adjacent state, and to raise the funds for the purpose of making these investments it is vital to each city that each plant be free from assessment and taxation in the other state:
“Now, Therefore, by reason of the advantages accruing to the municipalities of each state and the inhabitants thereof hereinbefore recited, and other advantages not herein enumerated, the states of Kansas and Missouri hereby enter into the following compact and agreement:
“(1) The State of Kansas, nor any county, township or municipality located within said state, or any official thereof shall ever assess, levy or collect any taxes, assessments or imposts of any kind or character whatsoever on the portion of the waterworks plant of the municipality of Kansas City, Missouri, now or hereafter located within the territory of the State of Kansas.
“(2) That the State of Missouri, nor any county, township or municipality located within said state, or any official thereof shall ever assess, levy or collect any taxes, .assessments or imposts of any kind or character whatsoever on the portion of the waterworks plant of the municipality of Kansas City, Kansas, now or hereafter located within the territory of the State of Missouri.
“The right of eminent domain for the purpose of acquiring property, rights and easements for a waterworks plant, including mains, water pipe lines or extensions, or any part thereof, in either state, is hereby given and granted to each state and to Kansas City, Kansas, and Kansas City, Missouri, and may be exercised by Kansas City, Kansas, in the State of Missouri, and by Kansas City, Missouri, in the State of, Kansas, for said purposes.
“To the faithful observance of this compact and agreement each state, by the adoption of this resolution, pledges its good faith.
“This compact and agreement shall be in force and take effect from and after its passage by the House and Senate, approval by the Governor of the State of Kansas, and publication in the official state paper, and its proper adoption and approval by the legislative and executive authority of the State of Missouri, and upon its receiving the consent of the Congress of the United States of America.
“Approved March 18, 1921.”
The resolution, set forth above, adopted
“The state constitution exempts property of various kinds from taxation, such exemptions being ‘justified * * * upon the theory of peculiar benefits received by the •state from the property exempted.’ Washburn College v. County of Shawnee, 8 Kan. 344, 349. The enlargement of these exemptions by the Legislature is not expressly forbidden and is upheld where the same condition is met, that is, where the property exempted benefits the public in a way different from other property (Wheeler v. Weightman, 96 Kan. 50, 60, 61, 149 P. 977, L. R. A. 1916A, 846), and the legislative power is not ‘used in such a way as to introduce a system of taxation substantially different from that contemplated by the constitution.’ ”
The court then, after setting forth the recital of facts preceding the resolution on which its adoption was based, said further:
“By the action referred to the Kansas Legislature has in effect declared that upon the grounds indicated the exemption of the waterworks plant in Wyandotte County, owned by the City of Kansas City, Mo., is of peculiar publie benefit. This decision of the legislature, having been made in the exercise of its proper functions and being based upon grounds that the court cannot pronounce to be capricious or without foundation in reason, is beyond judicial interference.”
While that case presumably dealt only with general taxes, nothing is said in the opinion that indicates a belief that the exemption extended only to that character of taxation. It had previously held, in Chicago Great Western Ry. Co. v. Kansas City North Western R. Co., 75 Kan. 167, 88 P. 1085, 12 Ann. Cas. 588, as stated in the syllabus, that:
“The word ‘taxes’ has two well-recognized meanings, one inclusive and the other exclusive of special assessments for local improvements. Which meaning is intended where the word is used in a written contract must be determined by the context.”
See also Rogers v. Dockstader, 90 Kan. 189, 133 P. 717, 4 A. L. R. 663.
In Fallbrook Irrigation District v. Bradley, 164 U. S. 112, 126, 17 S. Ct. 56, 69 (41 L. Ed. 369), the'court said:.
“Although there is a marked distinction between an assessment for a local improvement and the levy of a general tax, yet the former is still the exercise of the same power as the latter, both having their source in the sovereign power of taxation.”
Still if the compact and agreement in granting the exemption had used only the word “taxation,” or “taxes,” it might be seriously doubted whether the claimed exemption from the assessments in this ease could be sustained. Illinois Central R. R. v. Decatur, 147 U. S, 190, 13 S. Ct. 293, 37 L. Ed. 132. But here the numbered paragraphs 1 and 2 of the compact and agreement leave no doubt in our minds that it was clearly the purpose to exempt also the properties of each city in the other State from assessments for local improvements — shall never “assess, levy or collect any taxes, assessments or imposts of any kind or character whatsoever on the portion of the waterworks plant of the municipality of Kansas City, Mo., now or hereafter located within the territory of the State of Kansas”; and likewise as “to the waterworks plant of Kansas City, K&n., within the State of Missouri. This conclusion, we think, is strengthened and fortified by the preceding recitals, particularly: “Said extensions of each municipality necessitates large investments in the territory of the adjacent state, and to raise the funds for the purpose of making these investments it is vital to each city that each plant be free from assessment and taxation in the other state.” The word “assessments,” when used
Perhaps the most forceful insistence of appellee’s counsel is, that there is no exemption from assessments for local improvement by a drainage district, “drainage district” is not named in paragraphs 1 and 2 and is not included in “municipality” as that word is ordinarily defined. In considering the point it is well to keep in mind that the compact and agreement was not made by the political subdivisions of the two States. It was made by the States that created them and had plenary power over them, and if they clearly expressed in the compact and agreement their intention and purpose to exempt from these assessments the subdivisions of every kind and character are bound. Speaking of towns and counties, applicable also to drainage districts, the court, in Laramie County v. Albany County, 92 U. S. 307, 312 (23 L. Ed. 552), said: “They are but subdivisions of the state, deriving even their existence from the legislature. Their officers are nothing more than local agents of the state; ® * ® ” and by the express terms of the compact and agreement the officers of each state and of its municipalities are prohibited to ever assess, levy or collect any taxes or assessments of any kind or character whatsoever on the waterworks plant of the municipality of the other State. In Illinois Central Ry. Co. v. Decatur, supra, pages 203, 204 of 147 U. S. (13 S. Ct. 293), the holding of the Illinois supreme court that the exemption there under consideration extended to all general municipal taxation, was approved; although no municipality or other subdivision of any kind was named in the Act which granted the exemption. This was put upon the ground that the Act provided that it should be favorably construed for all purposes expressed in it. Attentive reading of the whole of the compact and agreement, with a mind free from narrow technical objections, leaves no doubt that it was the in-j tention of the twp States to exempt from taxation and assessments of every kind and character whatsoever, and to its faithful observance each State pledged its good faith. An obligation of fidelity extends not only to things expressed, but equally so to those that are implied. It is not believable the two States would otherwise deal with each other.
But let us see whether this specific contention for appellee, that a drainage district is not included in “municipality,” as here used, is tenable. The statute of Kansas on drainage districts denominates a drainage district a body politic and corporate and gives it broad powers — to adopt a seal; sue and be sued in its corporate name; purchase, hold, sell and convey such real and personal property as may be deemed necessary or convenient to enable it to properly cany on the purposes of its organization; to exercise the right of eminent domain; to maintain in any court of competent jurisdiction suits to enforce the reasonable orders of its directors; to annually levy and collect a general tax not exceeding five mills on the dollar on all taxable property within the district, to create a general fund; to levy assessments and special taxes if deemed expedient by the directors, upon all of the real estate in the district that may be benefited, to defray the cost of the construction and maintenance of levees or other works or improvements to prevent the overflow of natural water courses or the drainage of overflowed lands therein, or that may be conducive to the publie health, convenience or welfare; to issue negotiable bonds to pay the cost of such structures when authorized by vote of the taxpayers; to make all contracts and do all other acts in relation to the affairs of the district necessary to the proper exercise of its corporate, legislative or administrative powers and to the accomplishment of the purpose of its organization; to do all other acts that may be necessary to execute the general powers to it granted, although not specifically enumerated. A petition signed by the requisite number of taxpayers residing within the boundaries of a proposed district must be. presented to the board of county commissioners and it becomes incorporated and organized on favorable action by the board. The district has a board of directors and officers who direct and control its action. Under some contingencies improvements made are to be paid for by general taxation,, under others the cost of such improvements are to be met by levying special assessments upon all the real estate in the district that will
“The district [road] when organized is a municipal corporation, not in the limited sense applied to certain cities, but in the general sense in that it exercised governmental functions. It is a political subdivision of the State.”
The statutes did not declare a drainage district or road district to be a municipal corporation, in express terms, but to be a corporation for public purposes. How stands the compact and agreement, then, with Missouri? Clearly, the word “municipality” would, under the authorities cited, include a drainage district.
'In State ex rel. v. Bismarck Drainage District, 102 Kan. 575, 171 P. 634, the Kansas supreme court said this:
“The drainage districts provided for in the Act are municipal corporations, and their officers are vested with many important functions, including the condemnation of private property for a public purpose and the levy of taxes on the property within the district.”
In State ex rel. v. Drainage District, 123 Kan. 191, 254 P. 372, 373, that court said: “While drainage districts are not mentioned in our Constitution, it has been held that a drainage district is properly classified as a quasi-municipal corporation.” Under the Kansas statute a city is denominated a body politic and corporate. Of course, the strict definition of “municipality” includes only cities and towns, political organizations exercising to some degree the powers of self-government, but it frequently has a broader meaning when viewed with the context. Counties and townships do not come within the strict definition. But in Haddock v. McDonald, 98 Kan. 628, 159 P. 402, the question was whether a county was subject to garnishment. The Kansas Legislature had exempted municipal corporations from garnishment, and it was held that under that statute counties and similar bodies were also exempt. In Rathbone v. Hopper, 57 Kan. 240, 45 P. 610, 34 L. R. A. 674, that court had under consideration an act entitled: “An act to enable counties, municipal corporations, the boards of education of any city and school districts, to refund their indebtedness.” Laws Kan. 1879, e. 50. It was held that the term “municipal corporations” in the title included townships. In the discussion it was said: “In this state, each organized township is a body politic and corporate, with power to make all contracts that may be necessary and convenient for the exercise of its corporate powers, and, in its proper name, may sue and be sued. A township is generally spoken of as a municipality or municipal corporation. * * * ” It was further said in that ease that a township as an organization was on the same plane as counties and school districts. On this point it is our conclusion that drainage districts of each State are included in “any municipality,” as those words are found in numbered paragraphs 1 and 2.
Appellee also relies on this clause in the Kansas statute (Rev. St. Kan. 1923, 24— 434): “ * * * And no suit to set aside any general or special tax or assessment or to enjoin the making or collection of any assessment or installment thereof, and no defense of any kind to the validity of any improvement bond or assessment to pay the same, shall be allowed unless brought within thirty days after the confirmation of the assessor’s report.” The Supreme Court of Kansas answered this claim in the negative in Randall v. Arkansas City, 114 Kan. 178, 217 P. 298, when it ruled that the thirty-day limitation does not apply to a special assessment where there is no authority whatever to make it and it is entirely illegal.
The defendant also challenged by its demurrer plaintiffs right to maintain this suit. The action is said, to be in assumpsit, and personal service could have been had on defendant through one of its agents in charge of its waterworks plant in Kansas. Baker v. Kansas City, Missouri, 118 Kan. 27, 233 P. 1012. However, it entered its general appearance when it filed its demurrer without reservation. It seems to be the rule in Kansas and elsewhere that assessments for special
The judgment is reversed with directions to vacate it and to sustain defendant’s demurrer to the complaint.