
    GULF, C. & S. F. RY. CO. v. EXCISE BOARD OF LOVE COUNTY.
    No. 20183.
    Opinion Filed Jan. 7, 1930.
    
      Rainey, Flynn, Green & Anderson and M. M. Gibbens for protestan!.
    W. B. Jones, Co. Atty., for protestee.
   ANDREWS, J.

The Gulf, Colorado & Santa Fe Railway Company, a corporation, protested certain tax levies made by the excise board of Love county for the fiscal year beginning- July 1, 1928, as illegal and excessive. An appeal was taken by protestant from the judgment of the Court of Tax Review.

The protestan! presents two propositions: First, in computing- the amount to be raised by taxation for the sinking- fund for the eity of Marietta an estimated income to that fund of $3,900 was disregarded, thereby increasing the amount of the tax levy for that purpose to that extent; and, second, in computing the amount to be raised by taxation for the general fund for the city of Marietta an estimated income to that fund of $3,900 was wrongfully included.

The record shows that the city of Marietta borrowed money and evidenced the same by public utility bonds. From the proceeds thereof a water and light plant was constructed for tho city, and the same was operated by the eity for a number of years prior to 1921. In 1921, the eity sold its water and light plant to a private corporation and received in payment thereof partly cash and notes evidencing the unpaid balance of the purchase price. Some of these notes mature in 3930, and some at a later date, and the interest thereon amounts to $3,900 per year. In 1924, the city council passed a resolution providing that tho interest on these outstanding notes should be credited to the general fund rather than to the sinking fund, and the interest has been so credited. The record shows that on the 30th day of June, 1928, there was a small deficit in the general fund and no balance in the sinking fund. In making the estimate for the general fund for the year in question the city council estimated that it would receive this $3,900 interest for the general fund, and the excise board made its appropriation on the basis of estimated receipts from other sources including this amount of $3,900.

Protestant contends that this $3,900 interest should have been credited as estimated income in the sinking fund and not in the general fund.

Under the provisions of section 27, art. 10, of the Constitution, there is no limitation on the indebtedness that may be contracted for tlie purpose of purchasing or constructing- public utilities except the assent of a majority of the qualified property taxpaying voters voting therefor. The bonds shown by this record were voted under section 27, art. 10, Id. Under section 16, art 10, “* * * the money so borrowed shall be used for no other purpose.” This is a direct limitation on the use of the money borrowed to purchase or construct a water and light plant. That money could be used only for tho purpose for which it was borrowed, and the eity was without authority to sell tho plant and then use the proceeds of the sale for other than the purpose for which the money was borrowed. 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 necessary to pay tho interest on tho bonds issued for that purpose and to retire the principal of those bonds.

To permit a transfer of money borrowed under section 27, art. 10, Id., to a fund authorized by section 26, art. 10, Id., would be in direct conflict with the rule announced by this court in Dickenson v. Blackwood, 76 Okla. 175, 184 Pac. 582, and Magnolia Petroleum Co. v. Sappington, 124 Okla. 16, 253 Pac. 483.

On the other hand, the records show that there was no balance in either the general fund or sinking fund, so that the interest must be considered for the purpose of this suit as estimated income. In St. Louis-S. F. Ry. Co. v. Andrews, 137 Okla. 222, 278 Pac. 617, it was held that there was no provision in the statutes or the Constitution prescribing the purpose to which profits derived from a municipally owned public utility must be appropriated. The record in this case does not show a profit derived from a utility, but shows a transfer from a. utility to promissory notes. To the same effect is Pitts v. Allen, 138 Okla. 295, 281 Pac. 126. In both of those cases it was pointed out that in making the levy for sinking fund purposes estimated income could not be included. We do not care to engage in a discussion of the reason for that rule. It is sufficient to state that the levy for the sinking fund is required to be made without the consideration of the $3,900 which the sinking fund will in all probability receive during the next fiscal year.

We therefore hold that the judgment of the Court of Tax Review in denying relief to the protestant on its first proposition is correct, and that judgment is affirmed.

On the second proposition it is contended that there has been included in the financial statement for the general fund $3,900 as estimated income that will never be received for the reason that if it is collected it will have to be credited to the sinking fund. We agree with that contention. The tax levy for the fiscal year in question is 6 mills and the deduction of the $3,900 estimated to be received from other sources will not change the amount of the levy, but it will reduce the appropriation.

The Court of Tax Review was in error in considering the $3,900 in making the appropriation for the general fund, and its judgment on that contention is reversed.

The cause is remanded to the Court of Tax Review, with directions to enter judgment reducing the appropriation for the general fund for the city of Marietta as herein directed.

MASON, C. J., LESTER, Y. C. J., and HUNT, CLARK, HEFNER, CULLISON, and. SWINDALL, JJ., concur. RILEY, J., absent.

Note. — See “Municipal Corporations,” 44 C. J. § 4031, p. 1108, n. 25.  