State Railroad Tax Cases
92 U.S. 575

Annotate this Case

U.S. Supreme Court

State Railroad Tax Cases, 92 U.S. 575 (1875)

State Railroad Tax Cases

92 U.S. 575

Syllabus

1. while this Court does not lay down any absolute rule limiting the powers of a court of equity in restraining the collection of taxes, it declares that it is essential that every case be brought within some of the recognized rules of equity jurisdiction, and that neither illegality or irregularity in the proceedings,

Page 92 U. S. 576

nor error or excess in the valuation, nor the hardship or injustice of the law, provided it be constitutional, nor any grievance which can be remedied by a suit at law, either before or after the payment of the tax, will authorize an injunction against its collection.

2. This rule is founded on the principle that the levy of taxes is a legislative, and not a judicial, function, and the court can neither make nor cause to be made a new assessment if the one complained of be erroneous, and also in the necessity that the taxes, without which the state could not exist, should be regularly and promptly paid into its treasury.

3. Quaere whether the same rigid rule against equitable relief would apply to taxes levied solely by municipal corporations for corporate purposes as that here applied to state taxes. Probably not.

4. No injunction, preliminary or final, can be granted to stay collection of taxes until it is shown that all the taxes conceded to be due, or which the court can see ought to be paid, or which can be shown to be due by affidavits, have been paid or tendered without demanding a receipt in full.

5. While the Constitution of Illinois requires taxation, in general, to be uniform and equal, it declares in express terms that a large class of persons engaged in special pursuits, among whom are persons or corporations owning franchises and privileges, may be taxed as the legislature shall determine, by a general law, uniform as to the class upon which it operates, and under this provision a statute is not unconstitutional which prescribes a different rule of taxation for railroad companies from that for individuals.

6. Nor does it violate any provision of the Constitution of the United states.

7. The capital stock, franchises, and all the real and personal property of corporations, are justly liable to taxation, and a rule which ascertains the value of all this, by ascertaining the cash value of the funded debt and of the shares of the capital stock as the basis of assessment, is probably as fair as any other.

8. Deducting from this the assessed value of all the tangible real and personal property, which is also taxed, leaves the real value of the capital stock and franchise subject to taxation as justly as any other mode, all modes being more or less imperfect.

9. It is neither in conflict with the Constitution of Illinois nor inequitable that the entire taxable property of the railroad company should be ascertained by the state board of equalization, and that the state, county, and city taxes should be collected within each municipality on this assessment, in the proportion which the length of the road within such municipality bears to the whole length of the road within the state.

10. The action of the board of equalization in increasing the assessed value of the property of a railroad company or an individual above the return made to the board does not require a notice to the party to make it valid, and the courts cannot substitute their judgment as to such valuation for that of the board.

11. The Supreme Court of the State of Illinois having decided that the law complained of in these cases is valid under her constitution, and having construed the statute, this Court adopts the decision of that court as a rule to be followed in the federal courts.

Page 92 U. S. 577

These were bills of injunction to restrain the collection of taxes assessed on certain railroads in the State of Illinois, and, as they raised the same questions of law, were heard together. The complainants in the first-mentioned case are trustees and mortgagees of the Toledo, Peoria & Warsaw Railroad Company; in the second, stockholders in the Chicago & Alton Railroad Company; and in the third, stockholders in the Chicago, Burlington & Quincy Railroad Company.

To a proper understanding of the questions raised, reference is necessary to the following provisions of the Constitution and statutes of the State of Illinois.

Secs. 1, 6, 9, and 10 of art. 9, and sec. 10 of art. 11, of the constitution, declare:

"ART. 9, SEC. 1. The general assembly shall provide such revenue as may be needful by levying a tax, by valuation, so that every person and corporation shall pay a tax in proportion to the value of his, her, or its property -- such value to be ascertained by some person or persons, to be elected or appointed in such manner as the general assembly shall direct, and not otherwise; but the general assembly shall have power to tax peddlers, auctioneers, brokers, hawkers, merchants, commission merchants, showmen, jugglers, innkeepers, grocery keepers, liquor dealers, toll bridges, ferries, insurance, telegraph, and express interests or business, vendors of patents, and persons or corporations owning or using franchises and privileges, in such manner as it shall, from time to time, direct by general law, uniform as to the class upon which it operates."

"SEC. 6. The general assembly shall have no power to release or discharge any county, city, township, town, or district whatever, or the inhabitants thereof, or the property therein, from their or its proportionate share of taxes to be levied for state purposes; nor shall commutation for such taxes be authorized in any form whatever."

"SEC. 9. The general assembly may vest the corporate authorities of cities, towns, and villages, with power to make local improvements by special assessment or by special taxation of contiguous property, or otherwise. For all other corporate purposes, all municipal corporations may be vested with authority to assess and collect taxes; but such taxes shall be uniform in respect to persons and property within the jurisdiction of the body imposing the same. "

Page 92 U. S. 578

"SEC. 10. The general assembly shall not impose taxes upon municipal corporations, or the inhabitants or property thereof, for corporate purposes, but shall require that all the taxable property within the limits of municipal corporations shall be taxed for the payment of debts contracted under authority of law, such taxes to be uniform in respect to persons and property within the jurisdiction of the body imposing the same."

"ART. 11, SECT. 10. The rolling stock and all other movable property belonging to any railroad company or corporation in this state shall be considered personal property."

"An Act for the assessment of property and for the collection of taxes," approved March 30, 1872, in force July 1, 1872, among other provisions contains the following:

"SEC. 3. Personal property shall be valued as follows:"

"First, all personal property, except as herein otherwise directed, shall be valued at its fair cash value."

"Second, every credit, for a sum certain, payable either in money or labor, shall be valued at a fair cash value for the sum so payable; if for any article of property, or for labor, or services of any kind, it shall be valued at the current price of such property, labor, or service."

"Third, annuities and royalties shall be valued at their then present total value."

"Fourth, the capital stock of all companies and associations now or hereafter created under the laws of this state shall be so valued by the state board of equalization as to ascertain and determine respectively the fair cash value of such capital stock, including the franchise, over and above the assessed value of the tangible property of such company or association. Said board shall adopt such rules and principles for ascertaining the fair cash value of such capital stock as to it may seem equitable and just, and such rules and principles, when so adopted, if not inconsistent with this act, shall be as binding and of the same effect as if contained in this act, subject, however, to such change, alteration, or amendment as may be found from time to time to be necessary by said board, provided that in all cases where the tangible property or capital stock of any company or association is assessed under this act, the shares of capital stock of any such company or association shall not be assessed or taxed in this state. This clause shall not apply to the capital stock, or shares of capital stock, of banks organized under the general banking laws of this state. "

Page 92 U. S. 579

"SEC. 6. Personal property shall be listed in the manner following:"

"* * * *"

"Eighth, the property of a body politic or corporate, by the president, or proper agent or officer thereof."

"SEC. 7. Personal property, except such as is required in this act to be listed and assessed otherwise, shall be listed and assessed in the county, town, city, village, or district where the owner resides. The capital stock and franchises of corporations and persons, except as may be otherwise provided, shall be listed and taxed in the county, town, district, city, or village where the principal office or place of business of such corporation or person is located in this state."

"SEC. 26. Whenever the assessor shall be of opinion that the person listing property for himself, or for any other person, company, or corporation, has not made a full, fair, and complete schedule of such property, he may examine such person under oath in regard to the amount of property he is required to schedule, and for that purpose he is authorized to administer oaths, and if such person shall refuse to answer under oath, and a full discovery make, the assessor may list the property of such person, or his principal, according to his best judgment and information."

"SEC. 40. Every person, company, or corporation, owning, operating, or constructing a railroad in this state, shall return sworn lists or schedules of the taxable property of such railroad, as hereinafter provided. Such property shall be listed and assessed with reference to the amount, kind, and value on the first day of May of the year in which it is listed."

"SEC. 41. They shall, in the month of May of the year eighteen hundred and seventy three, and at the same time in each year thereafter, when required, make out and file with the county clerks of the respective counties in which the railroad may be located, a statement or schedule showing the property held for right of way, and the length of the main and all side and second tracks and turnouts in such county, and in each city, town, and village in the county, through or into which the road may run, and describing each tract of land, other than a city, town, or village lot, through which the road may run, in accordance with the United States surveys, giving the width and length of the strip of land held in each tract, and the number of acres thereof. They shall also state the value of improvements and stations located on the right of way. New companies shall make such statement in May next after the

Page 92 U. S. 580

location of their roads. When such statement shall have been once made, it shall not be necessary to report the description as hereinbefore required, unless directed so to do by the county board; but the company shall, during the month of May, annually report the value of such property by the description set forth in the next section of this act, and note all additions or changes in such right of way as shall have occurred."

"SEC. 42. Such right of way, including the superstructures of main, side, or second tracks and turnouts and the stations and improvements of the railroad company on such right of way, shall be held to be real estate for the purposes of taxation, and denominated 'railroad track,' and shall be so listed and valued, and shall be described in the assessment thereof as a strip of land extending on each side of such railroad track and embracing the same, together with all the stations and improvements thereon, commencing at a point where such railroad track crosses the boundary line in entering the county, city, town, or village and extending to the point where such track crosses the boundary line leaving such county, city, town, or village or to the point of termination in the same, as the case may be, containing ___ acres, more or less (inserting name of county, township, city, town, or village, boundary line of same, and number of acres, and length in feet), and, when advertised or sold for taxes, no other description shall be necessary."

"SEC. 43. The value of the 'railroad track' shall be listed and taxed in the several counties, towns, villages, districts, and cities in the proportion that the length of the main track in such county, town, village, district, or city bears to the whole length of the road in this state, except the value of the side or second track, and all turnouts, and all station houses, depots, machine shops, or other buildings belonging to the road, which shall be taxed in the county, town, village, district, or city in which the same are located."

"SEC. 44. The movable property belonging to a railroad company shall be held to be personal property and denominated, for the purpose of taxation, 'rolling stock.' Every person, company, or corporation, owning, constructing, or operating a railroad in this state shall in the month of May annually return a list or schedule, which shall contain a correct detailed inventory of all the rolling stock belonging to such company, and which shall distinctly set forth the number of locomotives of all classes, passenger cars of all classes, sleeping and dining cars, express cars,

Page 92 U. S. 581

baggage cars, house cars, cattle cars, coal cars, platform cars, wrecking cars, pay cars, hand cars, and all other kinds of cars."

"SEC. 45. The rolling stock shall be listed and taxed in the several counties, towns, villages, districts, and cities in the proportion that the length of the main track, used or operated in such county, town, village, district, or city, bears to the whole length of the road used or operated by such person, company, or corporation, whether owned or leased by him or them, in whole or in part. Said list or schedule shall set forth the number of miles of main track on which said rolling stock is used in the State of Illinois, and the number of miles of main track on which said rolling stock is used elsewhere."

"SEC. 46. The tools and materials for repairs, and all other personal property of any railroad, except 'rolling stock,' shall be listed and assessed in the county, town, village, district, or city wherever the same may be on the first day of May. All real estate, including the stations and other buildings and structures thereon, other than that denominated 'railroad track,' belonging to any railroad, shall be listed as lands, or lots, as the case may be, in the county, town, village, district, or city where the same are located."

"SEC. 47. The county clerk shall return to the assessor of the town or district, as the case may require, a copy of the schedule or list of the real estate (other than 'railroad track'), and of the personal property (except 'rolling stock'), pertaining to the railroad; and such real and personal property shall be assessed by the assessor. Such property shall be treated in all respects, in regard to assessment and equalization, the same as other similar property belonging to individuals; except that it shall be treated as property belonging to railroads, under the terms 'lands,' 'lots,' and 'personal property.'"

"SEC. 48. At the same time that the lists or schedules are hereinbefore required to be returned to the county clerks, the person, company, or corporation, running, operating, or constructing any railroad in this state, shall return to the auditor of public accounts sworn statements or schedules, as follows:"

"First, of the property denominated 'railroad track,' giving the length of the main and side or second tracks and turnouts, and showing the proportions in each county, and the total in the state."

"Second, the 'rolling stock,' giving the length of the main track in each county, the total in this state, and the entire length of the road."

"Third, showing the number of ties in track per mile, the

Page 92 U. S. 582

weight of iron or steel per yard, used in main and side tracks; what joints or chairs are used in track; the ballasting of road, whether graveled or dirt; the number and quality of buildings or other structures on 'railroad track;' the length of time iron in track has been used, and the length of time the road has been built."

"Fourth, a statement or schedule showing:"

"1. The amount of capital stock authorized, and the number of shares into which such capital stock is divided."

"2. The amount of capital stock paid up."

"3. The market value, or, if no market value, then the actual value, of the shares of stock."

"4. The total amount of all indebtedness, except for current expenses for operating the road."

"5. The total listed valuation of all its tangible property in this state."

"Such schedule shall be made in conformity to such instructions and forms as may be prescribed by the auditor of public accounts."

"SEC. 49. If any person, company, or corporation, owning, operating, or constructing any railroad, shall neglect to return to the county clerks the statements or schedules required to be returned to them, the property so to be returned and assessed by the assessor shall be listed and assessed as other property. In case of failure to make returns to the auditor as hereinbefore provided, the auditor, with the assistance of the county clerks and assessors, when he shall require such assistance, shall ascertain the necessary facts, and lay the same before the state board of equalization. In case of failure to make said statements, either to the county clerk or auditor, such corporation, company, or person shall forfeit, as a penalty, not less than one thousand nor more than ten thousand dollars for each offense, to be recovered in any proper form of action, in the name of the 'People of the State of Illinois,' and paid into the state treasury."

"SEC. 50. The auditor shall annually, on the meeting of the state board of equalization, lay before said board the statements and schedules herein required to be returned to him, and said board shall assess such property in the manner hereinafter provided."

"SEC. 51. The county clerk shall procure, at the expense of the county, a record book, properly ruled and headed, in which to enter the railroad property of all kinds, as listed for taxation, and shall enter the valuations as assessed, corrected, and equalized, in the manner provided by this act, and against such assessed, corrected, or equalized valuation, as the case may require, the county clerk

Page 92 U. S. 583

shall extend all the taxes thereon, for which said property is liable; and, at the proper time fixed by this act for delivering tax books to the county collector, the clerk shall attach a warrant, under his seal of office, and deliver said book to the county collector, upon which the said county collector is hereby required to collect the taxes therein charged against railroad property, and pay over and account for the same in the manner provided in other cases. Said book shall be returned by the collector, and be filed in the office of the county clerk for future use."

"SEC. 78. The assessor or his deputy shall . . . call at the office, place of doing business, or residence of each person required by this act to list property, and list his name, and shall require such person to make a correct statement of his taxable property in accordance with the provisions of this act; and the person listing the property shall enter a true and correct statement of such property, in the form prescribed by this act, which shall be signed and sworn to, to the extent required by this act, by the person listing the property, and delivered to the assessor; and the assessor shall thereupon assess the value of such property, and enter the same in his books."

"SEC. 79. If any person required by this act to list property shall be sick or absent when the assessor calls for a list of his property, the assessor shall leave at the office, or usual place of residence or business of such person, a written or printed notice requiring such person to make out and leave at the place named therein the statement or schedule required by this act. The date of leaving such notice, and the name of the person required to list the property, shall be carefully noted by the assessor in a book to be kept for that purpose."

"SEC. 82. When the personal property of any person is assessable in several school districts, the amount in each shall be assessed separately, and the name of the owner placed opposite each amount."

"SEC. 86. In counties under township organization, the assessor, clerk, and supervisor of the town, shall meet on the fourth Monday of June, for the purpose of reviewing the assessment of property in such town. And on the application of any person considering himself aggrieved, or who shall complain that the property of another is assessed too low, they shall review the assessment, and correct the same as shall appear to them just. No complaint that another is assessed too low shall be acted upon until the person so assessed, or his agent, shall be notified of such complaint, if a resident of the county. "

Page 92 U. S. 584

"SEC. 97. The county board, at a meeting to be held for the purpose contemplated in this section, on the second Monday in July, annually, after the return of the assessment books, shall:"

"* * * *"

"2. On the application of any person considering himself aggrieved, or who shall complain that the property of another is assessed too low, they shall review the assessment and correct the same as shall appear to be just. No complaint that another is assessed too low shall be acted upon until the person so assessed, or his agent, shall be notified of such complaint, if a resident of the county."

"* * * *"

"4. . . . If the county board of any county shall find the aggregate assessment of the county is too high or too low, or is generally so unequal as to render it impracticable to equalize such assessment fairly, they may set aside the assessment of the whole county, or of any township or townships therein, and order a new assessment, with instructions to the assessors to increase or diminish the aggregate assessment of such county or township, as the case may be, by such an amount as said board may deem right and just in the premises, and consistent with this act."

"SEC. 100. The state board of equalization shall, at the expiration of the term of office of the members now forming said board, consist of one member from each congressional district in the state, elected as hereinafter provided, and the auditor of public accounts."

"SEC. 101. The qualified electors of each congressional district shall, at the general election in November, 1872, and every four years thereafter, elect one of their number to serve as a member of said board of equalization, who shall hold his office for four years, and until his successor is elected and qualified."

"SEC. 105. Said board shall assemble at the state capital on the second Tuesday in the month of August, annually, and examine the abstracts of property assessed for taxation in the several counties of this state, as returned to the auditor, and shall equalize the assessments as hereinafter provided; but said board shall not reduce the aggregate assessed valuation in the state; neither shall it increase said aggregate valuation, except in such an amount as may be reasonably necessary to a just equalization, and not exceeding one percent on such aggregate assessed valuation; but this rule shall not apply to railroad property."

"SEC. 106. Said board, in equalizing the valuation of property as listed and assessed in the different counties, shall consider the

Page 92 U. S. 585

following classes of property separately: viz., personal property; railroad and telegraph property; lands, and town and city lots; and, upon such consideration, determine such rates of addition to or deduction from the listed or assessed valuation of each of said classes of property in each county, or to or from the aggregate assessed value of each of said classes in the state, as may be deemed by the board to be equitable and just -- such rates being in all cases even and not fractional, and such rates, as finally determined by said board, shall not be combined."

"SEC. 108. The state board of equalization shall assess the capital stock of each company or association, respectively, now or hereafter incorporated under the laws of this state, in the manner hereinbefore in this act provided. The respective assessments so made (other than of the capital stock of railroad and telegraph companies) shall be certified by the auditor, under direction of said board, to the county clerk of the respective counties in which such companies or associations are located; and said clerk shall extend the taxes for all purposes on the respective amounts so certified the same as may be levied on the other property in such towns, districts, villages, or cities on which such companies or associations are located."

"SEC. 109. Said board shall also assess the railroad property denominated in this act as 'railroad track' and 'rolling stock,' and said board is hereby given the power and authority, by committee or otherwise, to examine persons and papers. The amount so determined and assessed shall be certified by the auditor to the county clerks of the proper counties. The county clerk shall, in like manner, distribute the value, so certified to him by the auditor, to the county and to the several towns, districts, villages, and cities in his county entitled to a proportionate value of such 'railroad track' and 'rolling stock.' And said clerk shall extend taxes against such values, the same as against other property in such towns, districts, villages, and cities."

"SEC. 110. The aggregate amount of capital stock of rail road or telegraph companies assessed by said board shall be distributed proportionately by said board to the several counties in like manner that the property of railroads denominated 'railroad track' is distributed. The amount so determined shall be certified by the auditor to the county clerks of the proper counties. The county clerk shall, in like manner, distribute the value, so certified to him by the auditor, to the county and to the several towns, districts, villages, and cities in his county entitled to proportionate value of such capital stock. And said clerk shall extend taxes

Page 92 U. S. 586

against such values the same as against other property in such towns, districts, villages, and cities."

"SEC. 114. When said board shall have completed its equalization of assessments for any year, the chairman and secretary shall certify to the auditor the rates finally determined by said board to be added to or deducted from the listed or assessed valuation of each class of property in the several counties, and also the amounts assessed by said board; and it shall be the duty of said auditor, under his seal of office, to report the action of the board to the several county clerks, immediately after the adjournment of said board."

"SEC. 126. Said clerks shall extend the rates of addition or deduction ordered by the county board and state board of equalization, in the several columns provided for that purpose. The rate percent ordered by the state board of equalization shall be extended on the assessed valuation of property, as corrected and equalized by the county board; except that, in the case of railroad property denominated 'railroad track' and 'rolling stock,' said rates shall be extended on the listed valuations of such designated property."

Rev.Stat. of Illinois, 1874, p. 857 et seq.

The state board of equalization, for the purpose of ascertaining the fair cash value of the capital stock and franchises of corporations in excess of the value of their tangible property, adopted the following rules:

"WHEREAS, the fourth clause of sec. 3 of 'An Act for the assessment of property, and for the levy and collection of taxes,' approved March 30, 1872, in force July 1, 1872, provides as follows:"

" SEC. 3. . . . Fourth, the capital stock of all companies and associations now or hereafter created under the laws of this state shall be so valued by the state board of equalization as to ascertain and determine, respectively, the fair cash value of such capital stock, including the franchise, over and above the assessed value of the tangible property of such company or association. Said board shall adopt such rules and principles for ascertaining the fair cash value of such capital stock as to it may seem equitable and just; and such rules and principles, when so adopted, if not inconsistent with this act, shall be as binding, and of the same effect, as if contained in this act, subject, however, to such change, alteration, or amendment as may be found, from time to time, to be necessary by said board, provided that in all cases where the tangible property or capital stock of any company or association is assessed under this act, the shares of capital stock of any such company

Page 92 U. S. 587

or association shall not be assessed or taxed in this state. This clause shall not apply to the capital stock or shares of capital stock of banks organized under the general banking laws of this state;"

"therefore be it"

"Resolved, that for the purpose of ascertaining the fair cash value of the capital stock, including the franchise, of all companies and associations now or hereafter created under the laws of this state, and for the assessment of the same, or so much thereof as may be found to be in excess of the assessed or equalized value of the tangible property of such companies and associations, respectively, we, the state board of equalization, hereby adopt the following rules and principles, viz.:"

"First, the market or fair cash value of the shares of capital stock, and the market or fair cash value of the debt (excluding from such debt the indebtedness for current expenses), shall be combined or added together; and the aggregate amount so ascertained shall be taken and held to be the fair cash value of the capital stock, including the franchise, respectively, of such companies and associations."

"Second, from the aggregate amount ascertained as aforesaid there shall be deducted the aggregate amount of the equalized or assessed valuation of all the tangible property, respectively, of such companies and associations (such equalized or assessed valuation being taken, in each case, as the same may be determined by the equalization or assessment of property by this board), and the amount remaining, in each case, if any, shall be taken and held to be the amount and fair cash value of the capital stock, including the franchise, which this board is required by law to assess, respectively, against companies and associations now or hereafter created under the laws of this state."

The bill, in the first mentioned case, alleges that the Toledo, Peoria & Warsaw Railroad Company returned to the clerks of the respective counties in which said railroad was located, and to the auditor, sworn lists or schedules of all its property, as required by law; that after said schedules were filed with the respective county clerks, the town and county assessors, without authority of law and without notice to the company, made additions to the schedules of property returned by it. That the respective county boards of equalization made further additions, and caused equalized assessments, made by them, to

Page 92 U. S. 588

be returned to the respective county clerks, who certified an abstract thereof to the auditor; that said returns were by the auditor laid before the state board of equalization; that said state board added to and deducted from the assessed valuations of personal property and lands, returned to said auditor, without making any re assessment of said property; that the only reason for making said additions and deductions was to equalize the assessed value of said property with the assessed value of the same class of property in other counties, which valuation so made without regard to the value of such property separately from the class in which the same was placed is charged to be in violation of the state constitution; that the value of said "railroad track," as returned to the county clerks and auditor, was $648,436.41, which was distributed to the several counties in which said railroad track is located, according to the value of the same in each of said counties; that the state board of equalization assessed the value of said "railroad track" at $1,629,556, and pretended to distribute the same to the several counties, without regard to the actual value of said property in said several counties, but according to the length of the track in the same; but, in fact, distributed the said sum neither according to the actual value in the several counties, nor according to the length of the main track in the same; that the value per mile of the right of way, iron and steel rails, bridging &c., is different in different counties, and that by reason of the distribution of the assessed value of said railroad track as made by the said state board, said railway company is liable to be taxed in one county on property owned in another; that the taxes in different counties, towns &c., are widely different, and cannot be made on an assessment as made by the state board, so as to be uniform as to property within the jurisdiction imposing the same, as required by the state constitution; that the aggregate listed value of the rolling stock as returned to the auditor was $388,039, and the aggregate value of same as assessed by state board of equalization was $1,000,110, distributed among the several counties on the mileage principle; that the bonded debt of said railway company on the 1st of May, 1873, was $7,184,719.37; that said board of equalization assessed said railway company the sum

Page 92 U. S. 589

of $2,003,415 as and for the value of its capital stock, including its franchise over and above the assessed value of its tangible property, and distributed the same to the several counties on the mileage principle; that said board of equalization, in ascertaining the value of said capital stock and franchise, included the debt of said railway company, in accordance with the rule adopted by said board; that all of said pretended equalizations of tangible property, and assessments by said state board of equalization, were made without notice to said railway company; that the general assembly of the state could not delegate its authority to prescribe a rule uniform in operation for the taxation of franchises to the state board of equalization in the manner provided by the statute, nor provide for the election of persons to ascertain the value of the property of one class of persons, and elect or appoint other persons to ascertain the value of the property of other classes of persons; that said act allowed the equalization to be made by vote of a minority of the members of said board, and in these respects is in violation of the state constitution; that said franchise was not assessed apart from the capital stock, but is so intermingled therewith that the same cannot be separated, which makes the entire assessment void; that the capital stock and capital of a corporation are distinct and different; that the capital stock belongs to the stockholders, and cannot be assessed against the corporation, but said act requires not only the capital of corporations to be assessed, but their capital stock to be assessed to the corporation in addition thereto, and that the distribution of the amount required to be assessed for capital stock, as required by said act, is in violation of the constitution requiring county, city &c., taxes to be uniform within the jurisdiction of the body imposing the same. The bill further alleges that such proceedings have taken place; that the collectors of the various counties are threatening to collect the taxes assessed against said railway company as aforesaid; that the capital stock of said railway company on the first day of May, 1873, was worthless; that the complainants are willing to pay so much of said taxes as have been legally assessed against said company, but they are unable to ascertain such amount; that they are trustees for the holders of certain bonds

Page 92 U. S. 590

mentioned in a deed of trust or mortgage given by said Toledo, Peoria & Warsaw Railway Company upon its property; that on the third day of February, 1874, in pursuance of the terms of said trust deed, they took possession of said railway and its other property, and on the 14th of February, 1874, filed their bill to foreclose said mortgage, in this Court, which suit is still pending. The bill alleges that other liens are also existing against said railway company; that its bonded debt, secured by mortgages, amounts to $6,450,000; that its entire franchises and property are not worth to exceed $1,088,749; that its net earnings have never been sufficient to pay the interest on its debt; that its capital stock is of no real value, and the assessment thereof at $2,013,415 is illegal and void; that the said board of equalization did not equalize the property of said railway company with all other personal property in the state of like character, nor its lands, lots, right of way, and other real estate, with all other lands, lots, and real estate of like character in the state, but pretended to equalize said personal property owned by like corporations, and said real estate owned by like corporations; that the rates of taxation are different in each and all of the counties, towns, and municipalities through which the said railway runs; and prays that the said railway company may be enjoined from paying, and the other defendants from collecting, any of said taxes.

The defendants, except the railway company which was defaulted, filed an answer denying that in the lists and schedules filed by the railway company its property was valued at its fair cash value; or that it was listed and scheduled in the manner required by law, in this, that certain real estate was listed and scheduled as railroad track, which was used for stations or other purposes than railroad track, which real estate was subsequently assessed by the local town and county assessors, as was their duty, as real estate other than railroad track; and said assessors in like manner assessed the tangible personal property of said railway company, and none other, in their respective localities, which did not form part of the rolling stock of said company. Defendants deny that any portion of the property of said company was doubly assessed; admit the equalization by the county and state boards, but deny that

Page 92 U. S. 591

the state board, in the assessment of the right of way or railroad track and improvements thereon, took into consideration the increased value of such right of way, arising from the fact that the same had been graded, and bridges and culverts built thereon, as it was believed such increased value could be more fairly and equitably ascertained in the assessment of capital stock; deny that the state board distributed the assessed value of said railway track among the various counties &c., in any other manner than as required by law. Defendants admit that the rate of taxation for local purposes is different in the different municipal corporations through which the road passes; that the state board of equalization adopted and acted on the rules set forth in the bill in the assessment of the capital stock, including the franchises of said railway company; and that said board did not attempt to make an assessment of the value of the franchises as separate from the assessment under the designation "capital stock," but that the same was included in said assessment under that designation; admit no other notice was given of the proceedings of said board, than such as the law gives; deny that said state board made an arbitrary addition or deduction to the assessed value of the property in the respective counties without any regard to the actual value, and allege that said board examined the abstracts of property assessed for taxation by the various local assessors of the state, as returned to the auditor, and ascertained as nearly as was practicable the necessary rates of addition and deduction to be made to the assessed value of the several classes of property as equalized by the various county boards, to made a just equalization of the assessed value of property between the respective counties throughout the state; deny that said state board distributed to any county any greater portion of the aggregate value of the railroad track of said company than the value of the portion of such track actually situated in such county, and deny that the action of said state board resulted in the assessment of property of said company for taxation in one county, which was in fact situate in another county; admit that such proceedings have taken place, that the taxes as alleged in said bill have been extended upon said equalized assessments, and that the collectors in the various counties threaten to collect

Page 92 U. S. 592

the same, except as to 7/36 of the state tax levied and extended upon said assessment, under the Act of April 16, 1869, entitled "An Act to fund and provide for the paying of the railroad debt of counties, townships, cities, and towns," which 7/36 of the state tax was after the same was levied and extended in a case involving the validity of the Act of April 16, 1869, held by the supreme court of the state to be unconstitutional and void, since when the defendants have disclaimed all right to collect said 7/36 percent of said state tax, and have made no effort to collect the same, and in cases where said 7/36 of said tax had been collected, the same has been refunded in pursuance of an act of the general assembly in force March 26, 1875. A replication was filed, and the case was heard on bill, answers, replication, an agreed state of facts, and exhibits therein referred to, and the report of the examiner, and a decree entered perpetually enjoining the collection of the taxes, or any of them in the bill mentioned. The defendants, who are the collectors in the various counties through which the road runs, bring the case to this Court.

It is not deemed necessary to make any special statement in regard to the two other cases, as the facts in them are substantially the same as those above given.

Page 92 U. S. 601

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