Opinion
Decided March 9, 1928.
Appeal from Ohio Circuit Court.
BARNES SMITH, D.B. RHODES and GILMORE KEOWN for appellants.
OTTO C. MARTIN and HEAVRIN HEAVRIN for appellees.
Reversing.
In July, 1923, the town of Beaver Dam, then a city of the sixth class, purchased of the Obenchain Boyer Company a motor driven fire truck and apparatus for the sum of $2,472, of which $472 was paid in cash, the balance being payable in four equal annual installments, due one, two, three, and four years from the date of the purchase, each installment bearing interest from the date of the purchase until paid. This purchase was made pursuant to chapter 136 of the Acts of 1922, now section 3704al et seq. of the Statutes. In 1924 Beaver Dam was raised to the fifth class of municipalities, but seems not to have discovered this increase of dignity until some time after June, 1926. In 1927 there was still due and owing on the fire truck above mentioned the sum of $1,500. The city council in that year passed an ordinance levying in addition to the tax of 75 cents on the $100 of taxable property in the town, as authorized by section 157 of the Constitution, a tax of 25 cents on the $100 of such taxable property for the purpose of liquidating the indebtedness yet due on this purchase of the fire apparatus. This suit was thereupon brought by some citizens and taxpayers of the town to enjoin the collection of this 25 cents additional tax. A demurrer having been sustained to the answer of the defendants below, appellants here, and they declining to plead further, a judgment was entered enjoining the collection of the tax, from which judgment this appeal is prosecuted.
The petition is very inartfully drawn and contains nothing but conclusions of the pleader. It was plainly demurrable. Whether or not the answer of the appellants supplied any missing data on which the court could properly enter a judgment enjoining the tax, we do not at this time decide. The appellee's theory of this case was, first, that the indebtedness created in the purchase of the fire truck was void from its inception because incurred in violation of constitutional limitations, and, secondly, the appellant town had no right to levy any tax beyond the 75 cents provided for in section 157 of the Constitution. Manifestly, the rights of holders of the indebtedness incurred in the purchase of the fire apparatus are vitally involved if the appellees prevail on either theory of the case. In the case of Fiscal Court of Carter County v. Strother, 199 Ky. 824, 251 S.W. 1003, certain citizens and taxpayers of Carter county sought and were granted a mandamus directing the fiscal court to elect a county treasurer in the manner provided by the Statutes then in force. From the pleadings it appeared that the fiscal court had already elected a county treasurer who was performing the duties of the office, but it was alleged in the petition as amended that his election was not in conformity with the Statutes. We said that, in deciding the case below, the court necessarily held that the election of the county treasurer then in office was invalid, and that as his rights were involved the court should not have proceeded to judgment until he was made a party to the action. We further said:
"Section 28, Civil Code, is as follows:
" 'The court may determine any controversy between parties before it, if it can do so without prejudice to others; if it cannot do so, it must require such other persons to be made parties, or must dismiss the action without prejudice.'
"In construing this section it has been held that, although a failure to object for defect of parties is a waiver so far as the defendants are concerned, yet, where the cause is such that the court cannot render a decision between the parties without injuriously affecting the rights of others who are not before the court, it ought not to proceed until such other persons are made parties to the action. Johnson v. Chandler, 15 B. Mon. 584."
And so in the case before us, in granting the injunction sought by the appellees, the court necessarily held either that the creation of the indebtedness incurred when the fire apparatus was bought was invalid, or that the method by which the holder of the indebtedness so incurred was to be paid was unauthorized, or both. In any such event, the rights of such holder were vitally affected, and the court should not have proceeded to judgment until such holder was made a party to the action and given an opportunity to be heard. When this case is returned to the circuit court, we suggest that the petition be amended so as to show accurately the possible revenue of the town of Beaver Dam from all sources during the year 1923, including license taxes, poll taxes, franchise, and all ad valorem taxes, its indebtedness, if any, which had been created prior to the purchase of this fire apparatus, and all other pertinent facts which will enable the court to say what was the financial condition of the town at the time this fire apparatus was bought. Pending the trial of this action in the lower court, it will temporarily restrain the collection of this tax on such terms as to bond that court may direct.
The judgment is reversed and cause remanded for proceedings consistent with this opinion.