PROTEST OF ST. LOUIS-S. F. RY. CO.

PROTEST OF ST. LOUIS-S. F. RY. CO.
1930 OK 230
287 P. 1028
143 Okla. 105
Case Number: 20094
Decided: 05/06/1930
Supreme Court of Oklahoma

PROTEST OF ST. LOUIS-S. F. RY. CO.

ST. LOUIS-S. F. RY. CO.
v.
LEFLORE COUNTY.

Syllabus

¶0 Municipal Corporations--Computation of Tax for Sinking Fund--Deductions for Estimated Receipts.
In determining the amount to be raised by ad valorem taxation for a sinking fund there can be no deduction made for estimated receipts from sources other than ad valorem taxation.

Appeal from Court of Tax Review; T. G. Chambers, Hal Johnson, and Harve L. Melton, Judges.

In the matter of the protest of the St. Louis-San Francisco Railway Company against tax levies by the Excise Board of Le Flore County. Judgment for protestee, and protestant appeals. Affirmed.

E. T. Miller and Cruce & Franklin, for protestant.
ANDREWS, J.

¶1 This is an appeal from the judgment of the Court of Tax Review denying the protest of the St. Louis-San Francisco Railway Company against the rate of levy fixed by the excise board of LeFlore county for the sinking fund of the town of Talihina for the fiscal year beginning July 1, 1928.

¶2 The cause was submitted on an agreed statement of facts, from which it appears that the rate of levy for sinking fund purposes for the town of Talihina was fixed at 5,279 mills; that that amount was necessary for the purpose of paying the interest and accumulating a fund for the payment of the principal of an electric light bond issue of $ 15,000, which matures August 4, 1934; that in 1925 the town of Talihina sold its electric light plant to the McCurtain Light & Power Company under an agreement by which the purchaser assumed and agreed to pay the bonded indebtedness and interest aforesaid as the same became due and payable; that the purchaser paid the amount required to take care of the interest on the bonds from time to time, but has not paid the principal thereof for the reason that it is not yet due; that the purchaser is solvent, and that it has made no protest against performing its obligation.

¶3 The protestant contends that under this state of facts the excise board should not have made a levy for sinking fund purposes.

¶4 This court has heretofore held in Protest of Gulf, Colorado & Santa Fe Railway Co., 141 Okla. 34, 283 P. 1003.

"The interest on the notes given to evidence the purchase price of the water and light plant and the remainder of the purchase price when paid must be used, so far as is necessary, to pay the interest on the bonds issued for that purpose and to retire the principal of those bonds"

--and that under the authority of St. Louis-San Francisco Railway Co. v. Andrews, 137 Okla. 222, 278 P. 617, and Pitts v. Allen, 138 Okla. 295, 281 P. 126, estimated income cannot be considered in determining the rate of levy for sinking fund purposes.

¶5 The income to be derived from the performance of the condition of the contract of sale involved in this action is nothing more than estimated income and under the authorities above cited may not be considered in determining the rate of levy necessary for sinking fund purposes.

¶6 There is nothing in the decision in the case of Sutton v. Kalka, 141 Okla. 233, 285 P. 1, contrary to this holding. The income there considered was from a tax levied in lieu of ad valorem taxation.