
    John J. Dunnegan et al., appellants, v. J. H. Jensen, County Treasurer, appellee.
    Filed June 24, 1924.
    No. 22889.
    1. Taxation: Exemptions. Where a contractor agrees to install in and for a city a sewer system at a fixed price for the completed improvement, and obligates himself to provide at his own expense the necessary labor and materials therefor, the mere inspection and approval of unlaid sewer pipe, subsequently placed by the contractor above the ground in the streets but not yet a part of the completed sewer system, do not make such unlaid sewer pipe city property which is exempt from taxation.
    2. -: Unlaid Sewer Pipe. Unlaid sewer pipe above ground in a city on the first day of April is subject to taxation as property of a contractor who purchased it and placed it there in performing a contract to provide at his own expense the nec-. essary labor and materials and to install in and for the city a completed municipal sewer system at a fixed price for the entire improvement.
    Appeal from the district court for Kearney county: Lewis H. Blackdedge, Judge.
    
      Affirmed.
    
    
      C. P. Anderbery, for appellants.
    
      John L. McPheely, contra.
    
    Heard before Morrissey, C. J., Rose, Good and Thompson, jj;
   Rose, J.

This is a suit for an injunction to prevent the county treasurer of Kearney county, defendant, from collecting taxes alleged to have been illegally assessed. May 30, 1921, the assessor listed as property owned by plaintiffs in Min-den April 1, 1921, the following: Ditch-digging machine, $4,500; ditch-filling machine, $750; sewer pipe on hand in the city of Minden, $20,000; total, $25,250. On these valuations the taxes levied were $809.28. Plaintiffs were partners and resided at Shenandoah, Iowa. They pleaded in their petition that their digging and filling machines had been assessed for the year 1921 in Iowa and were not, therefore, subject to taxation in Nebraska, and that the sewer pipe listed by the assessor was exempt property of the city of Minden. Defendant by answer put in issue the' facts upon which plaintiffs relied for an injunction and defended the assessment as a valid exercise of the taxing power. Upon a trial of the case the district court found that plaintiffs’ digging and filling machines were not properly listed in Nebraska, because they had been assessed in Iowa for the same period; that plaintiffs owned in Minden, April 1, 1921, subject to taxation, unlaid sewer pipe of the value of $7,600, and that they are liable for taxes thereon to the extent of $243.58. The levy in excess of hat amount was enjoined as invalid. Plaintiffs have appealed, claiming they are not liable to Kearney county for taxes in any amount.

There does not seem to be any error in the judgment of the district court. It is conclusively shown that'the ditching and filling machinery was assessed in Iowa for 1921. Consequently it should not have been listed in Nebraska for that year. The question for determination is plaintiffs’ ownership of unlaid sewer pipe in Minden April 1, 1921. Plaintiffs had entered into a contract August 24, 1920, to install in and for the city of Minden a sanitary sewer system at a fixed price for the completed improvement. While plaintiffs were performing the contract there was on hand April 1, 1921, in the streets of Minden, unlaid sewer pipe of the value of $7,600. At that time whose property was it? It was then above the ground. It had not become a part of the completed sewer system which plaintiffs had agreed to install. It had been shipped to them and was in the streets to which they had access for the purpose of performing their contract. The city did not order or purchase the materials used. The obligation to pay for them had been assumed by plaintiffs. The city could not legally have taken the unlaid sewer pipe for other municipal purposes or have maintained replevin for it. On the other hand, plaintiffs, without violating the terms of their contract, could have removed it at will. The city had agreed' to pay plaintiffs a fixed sum for the completed sewer system, but had not obligated itself to pay for any materials used therein. It is argued, however, that the city exercised' the right of inspection and accepted the sewer pipe before it was unloaded from the railroad cars on which it had been shipped to Minden, and that thereafter it was owned by the city. The point does not seem to be well taken. In the contract the provisions relating to the inspection and approval of materials do not affect the question of title. It is apparent from the contract as a whole that inspection and approval of unlaid sewer pipe were conditions accepted by both parties for their mutual convenience. Plaintiffs and the city, for obvious reasons, would naturally seek to avoid inspection of sewer pipe after it had been laid in the ditches. It seems clear that the unlaid sewer pipe above ground in the streets of Minden April 1, 1921, belonged to plaintiffs.

Under the constitutional and statutory provisions relating to taxatiQn, nonexempt property should be listed by the owners. The sewer pipe in controversy was not exempt. It was the duty of the assessor to see that it was. listed. While he listed machinery not subject to taxation in Nebraska, plaintiffs, nevertheless, owned in Minden sewer pipe which they should have listed. Legally they were tax-debtors to the extent of $248.58. They sought and obtained affirmative relief in equity. As a condition of granting the injunction to prevent the collection of the illegal taxes, it was within the discretion of the court of equity to require plaintiffs to pay what they as tax-debtors justly owed Kearney county. The decree of the district court conforms to these views, and consequently is

Affirmed.

Note — See Taxation, 37 Cyc. p. 872 (1925 Ann.) ; p. 999 (1925 Ann.).  