183 Ky. 749 | Ky. Ct. App. | 1919
Opinion of the Court by
Affirming
These four actions were instituted in the Franklin circuit court by the Kentucky Highlands Railroad Company to obtain.injunctions against the” Board of Valuation and Assessment and its members, restraining it and them from assessing* its franchise and capital stock at greater sums than those fixed in the four petitions. The first action was brought on October 31, 1913, to enjoin Auditor Bosworth and the other members of the Board of Valuation and Assessment from fixing- the value of its franchise at $473,755.00, or any sum in excess of $64,635.00, which the petition alleged was the fair cash value thereof. A general demurrer was interposed to the petition and, after hearing, was overruled, and the defendant Board of Valuation and Assessment declining to plead further, a decree was entered in favor of the plaintiff perpetually enjoining the board from fixing the franchise of the plaintiff company at any amount in excess of $125,000.00, and fixing said amount as the value -of plaintiffs’ franchise for the purposes of taxation for the year 1913. No objection was made to or exception taken -or saved by either.party to this judgment, which was entered January 28, 1916. As the alleged value of the franchise was only $64,635.00, and there was no answer or other response to the petition except the general demurrer, we are at a loss to understand how the court entered a judgment fixing the value of the franchise at $125,000.00, unless it was by agreement or consent of the parties, and this we are assured is the fact by appellee railroad company. If that be true, then this appeal should not have been prosecuted by the special attorney for the Commonwealth.
The second case was instituted July 24, 1914, and' the allegations of the petition are in substance the same
The third suit was commenced on June 19, 1915, and the prayer is for a perpetual injunction restraining the Board of Valuation and Assessment from fixing the value of its capital stock at $700,000.00, or any amount in excess of $125,000.00, which it alleges is the fair cash value of its franchise. While no general demurrer to the petition was offered or filed, the decree treats the proceedings as though one had been so filed and overruled, and the defendant board, for the third time, declining to answer or plead further a decree was entered granting the relief sought, and enjoining the board from fixing the valuation of the capital stock at any sum in excess of $175,000.00. No objection was made or exception saved to this judgment by appellants.
The fourth action was instituted on September 18, 1916, and is in substance the same as the other three.The prayer, however, asks an injunction, restraining the board from fixing the value of the capital stock of the railroad company at “$898,294.00, or any amount in excess of that which, deducting the value of its tangible property, will leave the value of its franchise at $175,000.00, which plaintiffs aver is in excess of the actual value of its franchise, but upon which plaintiff is willing for the assessment to be made.” No demurrer or answer was filed by the board to this petition and the board, failing to plead, the petition was taken for confessed, and a decree entered in accordance with the prayer of the petition, fixing the value of the franchise at $175,000.00, and enjoining the board from fixing the value of the franchise at $898,294.00. The appellants objected and excepted to this judgment and prayed an
Appellee company has filed its written motion in each of said cases to dismiss the appeals on the ground that “the judgments rendered herein were rendered by consent of the appellee and the Honorable M. M. Logan, representing the appellants, who was then the duly qualified and acting Attorney General of the Commonwealth.” It also filed a verified “answer to the appeal” in each case in which it says, “that although it may appear from the judgment herein that an exception was reserved by the defendants, said judgment was rendered with the full consent of the Honorable M. M. Logan, who was then the Attorney General of the Commonwealth of Kentucky, after a full hearing before the Franklin circuit court, and that afterwards this appeal was prosecuted by the Honorable John C. Duffy, styling himself the Special Assistant to the Attorney General, and without, as the appellee believes, being especially authorized therein by the Attorney General. ’ ’ The judgments in the fir'st three cases appear to have been entered by consent of all parties. There is no objection or exception to the decrees, and no appeal asked or granted. Then, too, it appears that the amount at which the value of the franchise was fixed in the first suit was $125,000.00, whereas the allegations and prayer of the petition would have justified a judgment for only $64,635.00. From these •facts we are persuaded that the judgment must have been entered by consent of the parties, although this is denied by special counsel for the Commonwealth, but we find no denial by Honorable M. M. Logan, who was Attorney General of the Commonwealth at the time and later chairman of the Tax Commission of the Commonwealth, and therefore, a party to this action.
Passing the motion to dismiss the appeals, and all other preliminary questions, we will consider only the main question in all of the cases: Did the petitions state causes of action? If they did, the general demurrers were properly overruled; if they did not, then the court erred to the prejudice of appellants in overruling the general demurrers. The petitions are almost identical, and what may be said of one may be said of all. Let us consider1
It is the contention of appellant that the proper mode to arrive at the value of the franchise of the railroad
The value of the franchise of a domestic corporation is the difference between the fair cash value of the capital stock and the assessed value of its tangible property. To arrive at the value of the franchise the value of the tangible property must be deducted from the fair cash value of the capital stock of the concern. Kentucky Heating Co. v. City of Louisville, 174 Ky. 142.
By sections 4079 and 4080, Kentucky Statutes, the mode of finding and fixing the value of a franchise of a railroad, organized under the laws of this Commonwealth, is pointed out though not as clearly as it could or should have been. Beading these two sections together, we conceive the fair import to be, the Board of Valuation shall fix the value of the capital stock by capitalizing the net income derived from the business in this state and from the amount thus fixed shall deduct the assessed value of all tangible property assessed in.this state, and the remainder thus found shall be the value of the corporate franchise sub j ect to taxation.
The method of ascertaining and fixing the value of the franchise of appellee company is not set forth in the petitions nor was it necessary to do so, but the value of the franchise is definitely alleged at so many dollars for each year. The averments of the petition as to the value of the franchise are direct and certain. "[Incontroverted these allegations were properly accepted by the trial court as the basis for the decrees entered. The petitions stated a cause of action entitling the railroad to the relief prayed, and the general demurrers were properly overruled. . -
Judgment affirmed.