City of Columbia v. Tindal

1. Injunction — Opening and Reply. — On the hearing of a petition to this court for an injunction, and a return to the rule to show cause why the injunction should not be granted, the plaintiff is entitled to open and reply. 2. Ibid — Taxation op Municipal Property — Sale.—The State may tax the property of municipal corporations, and may tax a part and exempt other parts, but an injunction will be granted to restrain an officer of the State from proceeding under the general law to enforce the collection of taxes against a city hall by sale of the property in fee, where several rooms in the building are not subject to taxation, but exempt by law because used exclusively for public purposes.

1 This was an application to this court in its original jurisdiction, for an injunction. On the call of the cause for a hearing, both sides claimed the right to open and reply, and the court ruled that the petitioner was so entitled. The petition was as follows: To the Honorable the Chief Justice and Associate Justices of the Supreme Court of the State of South Carolina: The petition of the city of Columbia respectfully showeth to your honors: 1. That your petitioner is a municipal corporation of the State of South Carolina, having been originally chartered by the legislature of said State as the town of Columbia, in-the year 1824 (6 Stat., 240), and said charter having been from time to time renewed and amended, and its present charter, under the name of the city of Columbia, having been granted by said legislature on the 21st day of December, A. D. 1854 (12 Stat., 333). 2. That a lot of land within the limits of said city, on the north-west corner of Main and Washington streets, was vested in said municipality by authority of an act of the legislature in 1818 (6 Stat., 102), and by other acts of assembly, and has since been a part of its property. The said town of Columbia caused to be erected on said lot of land many years ago, its guard house and fire engine house, and also another building known as the town hall, but which was used also on its ground floor as the public market of the town. The large hall on the second floor was used for public town meetings, and was also rented out from time to time for exhibitions and entertainments. In this building were also the council chamber and clerk’s office, and in its tower was the town clock and lookout for the watchmen of the town. All of these buildings on said lot of land were totally destroyed by fire on the night of February 17-18,1865. 3. In the year 1866, the legislature confirmed to the city of Columbia its title to the lot of land aforesaid, and also vested in said city another lot of land adjoining on the west, known as the “jail lot;” upon a condition which was fully complied with by said city; but from the year 1865 to the year 1871, the said city council was without any public buildings of its own, to its very great inconvenience and expense. In the year last named a resolution was adopted by the city council of Columbia, looking to the erection of a city hall, and a committee was appointed, with instructions to call for plans for such a building. Plans were accordingly furnished by an architect, and under said plans the building hereinafter described as the “city hall” was erected, and now stands upon said lot of land, and is the property of the said municipality, the city of Columbia. At or about the same time a public market house for said city was erected at another spot, to wit: in one of the public streets of said city. 4. The said city council not having in hand the funds necessary for the erection of the desired buildings, and the cost thereof being in excess of any proper tax levy, in addition to what was required for the ordinary expenses of government, the said city couucil passed its resolution providing for a loan of $75,000, to be used in the erection of said city hall, and directed the issue of $250,000 in bonds of said city, to be used as a collateral pledge for the repayment of said loan. 5. On March 13, 1872, the General Assembly of the State of South Carolina passed an act authorizing the issue of bonds which, with the bonds then outstanding, and including the said city hall bonds, should not exceed the sum of $600,000, for the purpose of constructing the city hall and new market (15 Stat., 220); and by the tenth section of said act it was provided and declared that the income derived by the city of Columbia from rentals of any portion of said city hall, should be appropriated as a sinking fund for the ultimate redemption of the bonds so issued under said act. 6. The bonds so directed and authorized by the act of assembly were accordingly issued, and the provisions of the said tenth section of the act of 1872, were printed on the back of each and every of said bonds. And the bonds provided for by the said resolution of city council were taken up and retired, and all the moneys received from the sale or hypothecation of said statutory bonds were used in the erection of said city hall, and all bonds hypothecated were sold by the pledgees for the payment of the loans, for which they were hypothecated. 7. The city hall so erected contains the following rooms and apartments, to wit: (1) The council chamber of the city council, and so used. (2) The office of the clerk of council, and so used. (3) The office of the chief of police, and so used. (4) The police court room, and so used. (5) The tower, constantly used by the day and night watchmen of the city, and in which is hung a large bell used for striking the hours, and for a fire alarm. And from none of the rooms or apartments aforesaid has any rent ever been received. (6) A large room used for some time as the office of the city engineer, and of the board of trustees’of the Columbia Canal, but now rented to a military company of this city as an armory. (7) Four stores on the ground floor, which are and have been rented out. (8) A' small hall on the upper floor, occupied and rented by an association known as “The Knights of Pythias.” (9) A large room on the upper floor, rented to a military company of this city as an armory. (10) A large room, known as the opera house, with rooms appurtenant for players, and for the lessee and his family. This last named hall is rented for a consideration, the city reserving the right of its use to its citizens when required by them for any public or charitable meetings or educational celebrations of the citizens, on paying for lights. 8. That the said building was erected by the city of Columbia of very lasting materials at great cost, and with the hope and belief that the future growth of the city would demand larger accommodations for the city government, and with an earnest conviction that the city hall of the capital city of the State should be an ornament to the State, as well as to the city; and the construction and addition of rooms and apartments beyond the present demands of the city for the proper accommodation of the city government, was only incidental to its declared purpose of erecting a city hall for the public uses of the city government. 9. That some of the rooms and apartments in said building have been completed by the lessees thereof as the consideration for their lease, and parts of the interior of said building are still unfinished. During the whole time that the city have been in receipt of rents therefrom, the aggregate sum received up to December 31, 1893, inclusive, amounted to $48,694.50, and the aggregate disbursements on account of repairs and improvementshave amounted to$48,270.85, an excess of $423.65 of receipts over disbursements. 10. That your petitioner never paid any State or county taxes on the buildings on said lot which were destroyed by fire in February, 1865, and no such payment, was ever demanded, and has never paid any State or county taxes on said city hall building, conceiving that the said building was not specifically subject to taxation under any statute of this State, and not generally liable, as the said building was the property of one of the agencies of the State government. And your petitioners aver that it is not so subject to taxation. 11. But the honorable J. E. Tindal, who is secretary of the State of South Carolina, and agent of the commissioners of the sinking fund, being advised that the said city hall building is liable to the payment of State and county taxes during all the years that it has so failed to pay any taxes, has given notice to the said city of Columbia, that there is due to the State of South Carolina for State and county taxes, the tax levy of the year 1877, and every year thereafter, together with the legal penalty for non-payment, and threatens to collect the same by causing the said building to be seized and sold, under the terms of the act of 1892, entitled “An act to provide an additional remedy for the collection of taxes, costs, and penalties upon lands past due and unpaid for eight months.” (21 Stat., 82.) Whereas, your petitioner avers that the said building is not subject to taxation, and that there is nothing in the said act of 1892, or any other statute, which authorizes the secretary of state, as agent of the commissioners of the sinking fund, or any other officer of the State government, to take any steps whatsoever looking to the assessment and collection of any tax whatsoever on the said city hall building or any portion thereof. 12. That any further proceedings under the act of 1892 against the said property will deprive petitioner of possession thereof, and will cause irreparable injury to your petitioner, and cast a cloud upon its title, and involve it in vexatious litigation, and your petitioner has no remedy in law in the premises, but only by writ of injunction in equity. Wherefore, your petitioner, the said city of Columbia, prays that the said J. E. Tindal, as secretary of state of the State of South Carolina, and agent of the commissioners of the sinking fund, his successors in office, his and their agents and servants, be perpetually enjoined from proceeding any further under the said act of 1892, or any other now existing statute, to assess or collect any taxes for State or county purposes on the said city hall building of the said city of Columbia, and that the said building be declared [>y this honorable court not subject to taxation under the laws of this State. And your petitioner, as in duty bound, will ever pray, and so forth. [Verified.] The return'was as follows: James E. Tindal, as secretary of state and ex officio agent of the commissioners of the sinking fund, upon whom has been served an order requiring him to show cause why the injunction prayed for by the petitioner herein should not be granted, respectfully makes return to said rule, and for cause shows: 1. That your respondent admits the truth of the statements of fact contained in paragraphs 1, 2, 3, and 7 of the petition herein. 2. That your respondent has no knowledge or information sufficient to form a belief as to the truth of the statements of fact contained in paragraphs 4, 6, 8, and 9 of said petition, and, therefore, denies the same. 3. That as to the statements contained in paragraph 5 of said petition, your respondent admits that by section 10 of the act of the General Assembly, approved March 13, 1872 (15 Stat., 220), it is provided: “That upon the completion and occupation of the said city hall, the mayor and aldermen shall at once, by ordinance, make provision for a sinking fund, to be based upon the net annual income derived from such parts of the said city hall as may be leased from them, the proceeds of which sinking-fund shall be solemnly set apart for the payment of the debt and the interest thereon, contracted in the erection of the said city hall;” but your respondent has no knowledge of any such ordinance as that contemplated by said section having been passed, and, therefore, denies that the requirements of said section have been complied with. 4. That as to paragraphs 10 and 11 of said petition, your respondent denies so much of said paragraphs as alleges that said city hall building is not subject to taxation, and that the secretary of state, as agent of the commissioners of the sinking fund, is not authorized to collect any tax on said building. 5. That, as your respondent is informed and verily believes, the city hall building of the city of Columbia, referred to in said petition, is liable to the payment of State and county taxes, and is not exempt from taxation by the Constitution or Statutes of this State, the said building not being' “owned and used exclusively for public purposes.” 6. That, as admitted in said petition, the city of Columbia has never paid any State or county taxes on said city hall building, and, as your respondent is informed and verily believes, there is now due to the State of South Carolina for State and county taxes on said city hall building the tax levy of the year 1877 and every year thereafter. 7. That the notice referred to in paragraph 11 of said petition was given under and pursuant to an act of the General Assembly of this State, entitled “An act to provide an additional remedy for the collection of taxes, costs, and penalties upon lands past due and unpaid for eight months,” approved December 24th, 1892, a copy of which said act is attached to and made a part of this return; and your respondent prays reference thereto as often as may be necessary. 8. That at the time of the service of the notice above referred to, it was, and still is, the purpose of your respondent to conform strictly to the requirements and provisions of the said act of the General Assembly and other statutes of this State. Wherefore, the respondent, having made full return to the rule herein, prays that the same may be discharged with costs. [Verified.]