149 Ky. 149 | Ky. Ct. App. | 1912
Opinion of the Court by
Affirming.
Some years ago, the Globe Refining Company operated a factory in Louisville. It was not successful and transferred the property to the Globe Refinery Company, which operated it until March, 1904, when it ceased operations and turned over its property to the Fidelity Trust Company as liquidating agent. The Fidelity Trust Company placed a watcjiman in charge of the factory, and made different efforts to sell the property which were unsuccessful. In July, 1904, five stockholders of the Globe Refinery Company incorporated the Victor Cotton Oil Company, with the view of purchasing the factory of the Globe Refinery Company. They began negotiations with the Fidelity Trust Company looking
Section 170 of the Constitution provides:
“The General Assembly may authorize any incorated city or town to exempt manufacturing establishments from municipal taxation, for a period not exceeding five years, as an inducement to their location.”
Pursuant to this provision of the Constitution, the Legislature enacted the following in the laws governing cities of the first class: (Ky. St., Sec. 2980a.)
“That the general council shall have power by ordinance to exempt from municipal taxation, for a period not exceeding five years, manufacturing establishments, as an inducement to their location within the city limits.”
The general council of the city of Louisville, pursuant to the statute, enacted an ordinance, which so far as material, is as follows:
“Whereas, the city of Louisville has the power under the law to exempt from municipal taxation, for a period of five years as an inducement to location, manufacturing establishments, and,
“Whereas, it is deemed the wisest policy to thus foster the manufacturing interests of the city by exercising this power to induce the location of new manufacturing enterprises in the city, and to induce the owners of others located in the territory sought to be annexed to the city to abandon opposition to annexation, thereby, voluntarily locating their establishments within the city; therefore,
*151 “B$ it ordained by the general council of the city of Louisville:
“1. That in order to induce the location of more manufacturing establishments within the city limits, any such establishment, owned and operated by any person, persons, firm or corporation, which shall have been after the passage of the act authorizing this ordinance permanently located and conducted within the limits of the city of Louisville, shall be and the same is hereby exempted for a period of five years after such location and the commencement of the business of manufacturing thereat from all taxation whatever by the city of Louisville, on all property, real or personal, tangible or intangible, owned, employed and used by such person, firm or corporation in conducting business of such manufacturing establishment, and which would otherwise be subject to city taxation.”
The factory was located in Louisville by the Globe Befining Company. Both that company and its successor, the Globe Befinery Company, enjoyed immunity from taxation for five years. The Victor Cotton Oil Company, while a distinct organization from the Globe Befinery Company, was organized by five stockholders of the Globe Befinery Company, for the purpose of buying the old plant and operating it. Stock in the old corporation was exchanged for stock in the new corporation, and a considerable amount of new capital was added by means of which the plant was much improved, and a working capital provided. There is no doubt that the Globe Befinery Company had ceased to do business finally, and but for the reorganization of the Victor Cotton Oil Company, the plant would have been dismantled or passed into other hands. While it is true that the plaintiff was a wholly new corporation, and some new capital was invested in it, the old business was simply revived, and it cannot be said that the manufacturing establishment was brought to Louisville by reason of the inducement of immunity from taxation for five years. If an exemption was sustained under such circumstances, as the chancellor well said, less scrupulous men would avail themselves of immunity from taxation indefinitely, by shutting down at the end of every five years and reorganizing in the name of a new corporation: We do not see that this case can be distinguished from Continental Tobacco Co. v. City of Louisville, 128 Ky., 173;
Judgment affirmed.