A state statute may be unconstitutional because conflicting with
the constitution of the state or with that of the United States,
but all objections
Page 201 U. S. 246
to its validity, whether state or federal, may be presented in a
single suit, and call for consideration and determination, and as a
federal court has the jurisdiction, it may be its duty, when the
question is properly presented, to pass upon an alleged conflict
between a state statute and the state constitution even before the
question has been considered by the state tribunals. It will,
however, be reluctant to do so, especially when the statute is one
affecting public revenues of the state.
There is no general supervision by the Nation over state
taxation, in regard to which the state has, generally speaking, the
freedom of a sovereign both as to objects and methods.
While there is always a possibility of misconduct on the part of
officials, legislation may proceed on the assumption of their
properly discharging their duties.
Where a legislature enacts a specific rule for fixing a rate of
taxation, by which rule the rate is mathematically deduced from
facts and events occurring within the year, and created without
reference to the matter of that rate, there is no abdication of the
legislative function, but, on the contrary, there is a direct
legislative determination of that rate.
Unless there is some specific provision in the state
constitution compelling other action, a state may treat its entire
territory as composing but a single taxing district, and deal with
all property as within the district and subject it to taxation
accordingly.
This Court may, in a case of this nature, take judicial notice
of the fact that the Michigan is traversed in almost every
direction by railroads, and that the county in which there are no
railroads, if any there be, is an exception.
Nothing in the federal Constitution prevents a state from
separating a particular class of property and subjecting it to
assessment and taxation in a mode and by a rate different from that
imposed on other property and applying the proceeds to state,
rather than local, purposes.
One hearing is sufficient to constitute due process, and a state
statute giving a state assessing board power to correct valuations,
naming time and place at which any person interested may be heard,
does not deprive the persons assessed of their property without due
process of law because those parties do not have further
opportunities to be heard by a court or the legislature.
A legislature is not bound to impose the same rate of tax upon
one class of property that it does upon another; it is sufficient
if all of the same class are subjected to the same rate and the tax
is administered impartially upon them.
This Court generally accepts the finding of a trial court upon a
question of fact when the evidence is conflicting, and so
held in this case as to a charge of systematic
undervaluation which the trial court found against.
Act No. 173, Michigan Laws of 1901, imposing upon railroad and
corporate
Page 201 U. S. 247
property the average rate of tax upon other property subject to
ad valorem taxes, applying the proceeds to state purposes,
and providing for ascertaining the rate by mathematical
computations by the state board of assessors based upon reports
from the local assessors, does not conflict with the constitution
of the state or with that of the United States.
This suit was brought in the Circuit Court of the United States
for the Western District of Michigan to restrain the respondent,
the Auditor General of the state, from enforcing against the
appellant the provisions of Act No. 173 of the Michigan Laws of
1901, an act to provide for the assessment of the property of
railroad and certain other companies, for the levying of taxes
thereon by a state board of assessors, and for the collection of
such taxes. The taxes involved in the suit are those for 1902,
resulting from the first assessment under the statute. Prior to the
year 1900, the Constitution of Michigan contained, in Art. XIV, the
following sections applicable to taxation:
"SEC. 10. The state may continue to collect all specific taxes
accruing to the treasury under existing laws. The legislature may
provide for the collection of specific taxes from banking,
railroad, plank road, and other corporations hereafter
created."
"SEC. 11. The legislature shall provide a uniform rule of
taxation, except on property paying specific taxes, and taxes shall
be levied on such property as shall be prescribed by law."
"SEC. 12. All assessments hereafter authorized shall be on
property at its cash value."
"SEC. 13. The legislature shall provide for an equalization by a
state board in the year one thousand eight hundred and fifty-one,
and every fifth year thereafter, of assessments on all taxable
property except that paying specific taxes."
"SEC. 14. Every law which imposes, continues, or revives a tax
shall distinctly state the tax, and the object to which it is to be
applied, and it shall not be sufficient to refer to any other law
to fix such tax or object. "
Page 201 U. S. 248
In that year sections 10, 11, and 13 were amended so as to read
as follows:
"SEC. 10. The state may continue to collect all specific taxes
accruing to the treasury under existing laws. The legislature may
provide for the collection of specific taxes from corporations. The
legislature may provide for the assessment of the property of
corporations at its true cash value, by a state board of assessors,
and for the levying and collection of taxes thereon. All taxes
hereafter levied on the property of such classes of corporations as
are paying specific taxes under laws in force on November sixth,
A.D. nineteen hundred, shall be applied as provided for specific
state taxes in section 1 of this article."
"SEC. 11. The legislature shall provide an uniform rule of
taxation, except on property paying specific taxes, and taxes shall
be levied on such property as shall be prescribed by law:
Provided, That the legislature shall provide an uniform
rule of taxation for such property as shall be assessed by a state
board of assessors, and the rate of taxation on such property shall
be the rate which the state board of assessors shall ascertain and
determine is the average rate levied upon other property upon which
ad valorem taxes are assessed for state, county, township,
school, and municipal purposes."
"SEC. 13. In the year one thousand nine hundred and one, and
every fifth year thereafter, and at such other times as the
legislature may direct, the legislature shall provide for an
equalization of assessments by a state board, on all taxable
property, except that taxed under laws passed pursuant to section
10 of this article."
This change in the Constitution was doubtless owing to a
decision of the supreme court of the state,
Pingree v. Auditor
General, 120 Mich. 95, of date of April 26, 1899, holding
unconstitutional an act passed in 1881 in respect to the assessment
and taxation of telegraph and telephone lines. An Act 19 of 1899,
passed March 15, 1899, and commonly called the "Atkinson Bill," was
subject to the same objections as the
Page 201 U. S. 249
act of 1881, and was evidently regarded as equally
unconstitutional. Indeed, though not directly involved in that
suit, it was referred to in the opinion of Mr. Justice
Montgomery.
The act in controversy, Pub. Acts 1901, act No. 173, provides
that the board of state tax commissioners shall constitute a state
board of assessors, who are to assess the railroad and certain
other corporate property in the state. Section 5 contains the
following:
"SEC. 5. The term 'property' as used in this act shall be deemed
to include all property, real or personal, belonging to the
corporation subject to taxation under this act, including the right
of way, roadbed, stations, cars, rolling stock, tracks, wagons,
horses, office furniture, telegraph or telephone poles, wires,
conduits, switchboards and all other property used in carrying on
the business of said corporations or owned by them respectively,
and all other real and personal property and all franchises, said
franchises not to be directly assessed, but to be taken into
consideration in determining the value of the other property:
Provided, however, That this definition shall not include,
apply to, or subject to taxation such real estate as is owned and
can be conveyed by such corporations under the laws of this state
which is not actually occupied in the exercise of their franchises
or in use in the proper operation of their roads or their corporate
business; but such real estate so excepted shall be liable to
taxation in the same manner and for the same purposes and to the
same extent and subject to the same conditions and limitations as
to the collection and return of taxes thereon as is other real
estate in the several townships or municipalities in which the same
may be situate. The terms 'company,' 'corporations,' or
'associations,' wherever used in this act, shall apply to and be
construed as referring respectively to any railroad company, union
station and depot company, express company, car-loaning company, or
refrigerator or fast freight line company, and any and all other
corporations subject to taxation under this act. The term 'property
having a situs in this state' shall include all the property, real
and personal,
Page 201 U. S. 250
of the corporations enumerated in this act, owned, used, and
occupied by them within the limits of this state, and also such
proportion of the rolling stock, cars, and other property of such
corporations as is used partly within and partly without this
state, as herein provided to be determined."
By sections 6 and 7, the several corporations are required to
furnish information as to various matters of fact bearing on the
matter of assessment. By section 8, property is to be assessed at
its "true cash value" on the second Monday of April of each year,
and, for the purposes of the assessment, the board of assessors is
authorized to make personal inspection of the property, to take
into consideration the reports filed under the act, and such other
evidence as may be obtainable bearing thereon. In respect to the
property of railroads running partly within and partly without the
state, the board is directed to be guided in respect to the matter
of taxation of property within the state by the relation which the
number of miles of main tract within the state bears to the entire
mileage of the main track, both within and without the state. By
section 10, the board is required to meet at the capitol at Lansing
on the third Monday of December, and continue in session so long as
may be necessary, not later than January 15 next thereafter, for
the purpose of reviewing the assessment roll, and any person or
company interested has the right to appear during said period and
be heard by the assessors, and they are authorized on such
application, or on their own motion, to correct the assessment or
valuation. Sections 11 and 12 prescribe the method for fixing the
rate of tax, the purpose being to impose upon the railroad property
the average rate of taxation levied upon other property upon which
ad valorem taxes are assessed. This method is accurately
described by counsel for the railroad company in these words:
"The new and peculiar feature of the statute lies in the
application to corporate property of a special rate of tax, known
as the 'average rate,' which is derived by the following process:
the total
ad valorem taxes for all purposes -- state,
county, city,
Page 201 U. S. 251
township, village, and school district -- paid by property in
Michigan which is taxed otherwise than under act 173, are divided
by the total assessments of such property, whether made by one or
another assessor, and the quotient resulting from this process of
division is the rate of tax applied to corporate property under Act
173."
By section 16, the taxes collected from corporations under this
act are to
"be applied in paying the interest upon the primary school,
university, and other educational funds, and the interest and
principal of the state debt, in the order herein recited, until the
extinguishment of the state debt other than the amounts due to
educational funds, when such taxes shall be added to and constitute
a part of the primary school interest fund."
After a full hearing upon pleadings and proofs, the circuit
court entered a decree dismissing the bill, 138 F. 223, whereupon
the plaintiff appealed directly to this Court, under section 5 of
the Circuit Court of Appeals Act.
Page 201 U. S. 290
MR. JUSTICE BREWER delivered the opinion of the Court.
The unconstitutionality of a statute may depend upon its
conflict with the constitution of the state or with that of the
Page 201 U. S. 291
United States. If conflict with the state constitution is the
sole ground of attack, the supreme court of the state is the final
authority,
Merchants' Bank v. Pennsylvania, 167 U.
S. 461, and cases cited in the opinion, while in the
other case the ultimate decision rests with this Court. The
validity of this act has not been directly presented to or
determined by the state court, but the first attack by the parties
interested is made in the federal court and by this suit, and
conflict with both constitutions is alleged. Undoubtedly a federal
court has the jurisdiction, and, when the question is properly
presented, it may often become its duty, to pass upon an alleged
conflict between a statute and the state constitution even before
the question has been considered by the state tribunals. All
objections to the validity of the act, whether springing out of the
state or of the federal Constitution, may be presented in a single
suit, and call for consideration and determination. At the same
time, the federal courts will be reluctant to adjudge a state
statute to be in conflict with the state constitution before that
question has been considered by the state tribunals. Especially is
this true when the statute is one affecting the revenues of the
state, and therefore of general public interest.
Coulter v.
Louisville & Nashville R. Co., 196 U.
S. 599,
196 U. S. 609.
And this reluctance becomes more imperative when the statute has
been before the highest court of the state, and a decision rendered
upon the assumption that it is valid, and this although the direct
question of validity was not presented nor determined.
In the case at bar, the rate of taxation imposed upon the
railroad and other corporate property is the average rate of
taxation upon other property subject to
ad valorem taxes,
and that average rate is ascertained by dividing the total tax levy
on all such property by the value of the property. In
Board of
Education v. State Assessors, 133 Mich. 116, the following
case arising under the statute was presented (p. 117):
"This is an application for a mandamus. It sets out in substance
that the state board of assessors, in levying the tax upon the
railroad property of this state, has assumed to fix the rate
Page 201 U. S. 292
of taxation by dividing the total tax levy on all property other
than railroad property by the value of such other property, as
determined by the defendant board, by adding to the actual assessed
value of such property as fixed by the local assessors and by the
board of state tax commissioners, acting under the authority of the
law relating to the assessment of taxes, the sum of $296,748,142,
thus making the aggregate divisor in determining the rate of
taxation that much in excess of the assessed valuation, thereby
reducing the rate to be levied upon the railroad property of the
state, and thus reducing the amount which the relator would receive
as its portion of the tax assessed against railroad property by a
very substantial sum."
This application was sustained, the court holding that the state
board of assessors had no power to increase the value as returned
to them by the local assessors and board of state tax
commissioners, and saying (p. 119):
"A fair reading of this language of the statute, we think, leads
to the conclusion that the board of assessors has imposed upon it
the duty, ministerial in character, of determining by a computation
from data, which the law provides for placing in its hands, the
rate of taxation which other property in the state is subjected to,
as it appears by assessment rolls which are supposed to contain an
accurate and true assessment of all property at its full cash
value."
While this case did not directly determine the constitutionality
of the statute, a fair implication is that it was not regarded as
obviously in conflict with the state constitution, for in that
event the court would scarcely have taken time to consider the
validity of proceedings under its authority.
We therefore proceed to inquire whether the provisions of this
act and the method of taxation therein prescribed are open to any
constitutional objection. We have had frequent occasion to consider
questions of state taxation in the light of the federal
Constitution, and the scope and limits of national interference are
well settled. There is no general supervision
Page 201 U. S. 293
on the part of the nation over state taxation, and, in respect
to the latter, the state has, speaking generally, the freedom of a
sovereign, both as to objects and methods. It was well said by
Judge Wanty, delivering the opinion of the circuit court in this
case (p. 232):
"There can at this time be no question, after the frequent and
uniform expressions of the federal Supreme Court, that it was not
designed by the Fourteenth Amendment to the Constitution to prevent
a state from changing its system of taxation in all proper and
reasonable ways, nor to compel the states to adopt an iron rule of
equality, to prevent the classification of property for purposes of
taxation, or the imposition of different rates upon different
classes. It is enough that there is no discrimination in favor of
one as against another of the same class, and the method for the
assessment and collection of the tax is not inconsistent with
natural justice.
Bell's Gap Railroad Company v.
Pennsylvania, 134 U. S. 232;
Giozza v.
Tiernan, 148 U. S. 657,
148 U. S.
662;
Adams Express Company v. Ohio State
Auditor, 165 U. S. 194,
165 U. S.
228;
Magoun v. Illinois Trust & Savings
Bank, 170 U. S. 283;
Billings v.
Illinois, 188 U. S. 97;
Merchants' Bank
v. Pennsylvania, 167 U. S. 461;
Kentucky
Railroad Tax Cases, 115 U. S. 321;
Home
Insurance Company v. New York, 134 U. S.
594;
Gulf, Colorado & Santa Fe Railroad Company
v. Ellis, 165 U. S. 150;
Clark v.
Titusville, 184 U. S. 329;
American
Sugar Refining Company v. Louisiana, 179 U. S.
89;
New York v. Barker, 179 U. S.
279;
Charlotte, &c. Railway Company v.
Gibbes, 142 U. S. 386;
Travelers'
Insurance Company v. Connecticut, 185 U. S.
364;
Kidd v. Alabama, 188 U. S.
730;
Turpin v. Lemon, 187 U. S.
51;
Florida &c. Railroad Company v.
Reynolds, 183 U. S. 471."
The first and principal matter of attack is the "average rate."
It is contended that the fixing of the rate of taxation is a
legislative function; that, in ascertaining the average rate by the
method described, there is no exercise of the legislative judgment,
but that it is determined by the action of the various local
assessing and taxing boards, who, though charged with no
Page 201 U. S. 294
duty of inquiry as to the necessities of the state or the proper
rate of taxation of railroad property, are in fact the only
officials exercising any discretion and judgment.
There might be a question whether, even if there were a clear
delegation of legislative functions to other departments of the
state government, it would be void under the federal Constitution.
Whatever, in view of the distinct grant in the federal Constitution
to the President, Congress, and the Judiciary of separately the
executive, legislative, and judicial powers of the nation, may be
the power of Congress in the delegation of legislative functions, a
very different question is presented when the restrictions of the
federal Constitution are invoked to restrain like action in a
state. Crimes against the nation must be prosecuted by indictment,
yet a state may proceed by information. Suppose a state, by its
constitution, grants legislative functions to the executive, or to
the judiciary, what provision of the federal Constitution will
nullify the action? Will the grant work an abandonment of a
republican form of government, or be a denial of due process, or
equal protection?
But it is unnecessary to enter into a discussion of this
question, for in the case at bar there is no abandonment by the
legislature of its functions in respect to taxation. The statute
prescribes, as the rate of taxation upon railroad property, the
average rate of taxation on all other property subject to
ad
valorem taxes. It provides the most direct way for
ascertaining such average rate -- deducing it from a consideration
of all the other rates. No authority is given to the local
assessors to apply their judgment to the question of the railroad
rate. Their authority in respect to the matter of taxation is
precisely the same as it was before and independently of this
statute. Their duty is to act according to their judgments in
respect to local taxes committed to their charge. When they have
finished their action, taken, as it must be assumed to have been,
in conscientious discharge of the duties assigned, from it, by a
simple mathematical calculation, the average rate of taxation is
determined. If the legislature should be convened after they
Page 201 U. S. 295
have finished their action and then prescribe the average rate
thus mathematically deduced as the rate of railroad taxation, no
question could be made of its validity. It would be obviously a
legislative determination of the rate of taxation. Is it any the
less a legislative determination that it assumes that the various
local officials will discharge their duties honestly and fairly,
with reference to local necessities and independently of the effect
upon the railroad rate, and directs that the mathematical
computation be made by a board of ministerial officers, and, thus
made, shall become the railroad rate of taxation? Why is it
necessary that the legislature be convened to add its formal
approval of the integrity of the action of the local officers? May
it not entrust the mathematical computation to the state board of
assessors, and if so, may it not likewise act upon the assumption
that the local assessors will discharge their duties with an eye
single to those duties, and irrespective of the effect upon the
railroad rate? It is true there is a possibility that some local
board may be actuated by other than a sense of duty to the
community for which it is acting, and have a thought of the
ultimate effect upon the railroad rate. There is always a
possibility of misconduct on the part of officials, but legislation
would be seriously hindered if it may not proceed upon the
assumption of a proper discharge of their duties by the various
officials. And it must be remembered that, in view of the vast
multitude of local taxing boards (as stated in one of the briefs of
counsel for appellant, there are about 1,300 local assessment
districts), the action of any single board could have but little
influence upon the railroad rate. Beyond the assumption that these
local officers will act from a sense of duty is the further fact
that their action affects directly and principally the special
communities for which they act, and that, generally speaking, is a
sufficient guaranty. As said by Mr. Chief Justice Marshall, in
M'Culloch v.
Maryland, 4 Wheat. 316,
17 U. S.
428:
"The only security against the abuse of this power is found in
the structure of the government itself. In imposing a tax,
Page 201 U. S. 296
the legislature acts upon its constituents. This is, in general,
a sufficient security against erroneous and oppressive
taxation."
And again, in
Providence Bank v.
Billings, 4 Pet. 514,
29 U. S.
563:
"This vital power may be abused, but the Constitution of the
United States was not intended to furnish the corrective for every
abuse of power which may be committed by the state governments. The
interest, wisdom, and justice of the representative body, and its
relations with its constituents, furnish the only security, where
there is no express contract, against unjust and excessive
taxation, as well as against unwise legislation generally."
Maine v. Grand Trunk Railway Company, 142 U.
S. 217, is worthy of consideration on this question of
legislative determination. The Legislature of Maine graded the rate
of an excise tax imposed upon railroads by the amount of their
gross transportation receipts, and provided that, when a railroad
was partly within and partly without the state, the gross receipts
chargeable to the road within the state should be ascertained on
the mileage basis. The court below held that, as the Grand Trunk
Railroad was partly within and partly without the State of Maine,
the imposition of the tax was a regulation of commerce, and
therefore in conflict with the exclusive power of Congress over
interstate and foreign commerce, and rendered judgment for the
company.
But this Court, reversing that judgment, held that the reference
to the receipts was simply to ascertain the value of the business
done by the corporation, and thus obtain a reasonable conclusion as
to the amount of tax which should be levied, saying (p.
142 U. S.
229):
"If the amount ascertained were specifically imposed as the tax,
no objection to its validity would be pretended. And if the inquiry
of the state as to the value of the privilege were limited to
receipts of certain past years, instead of the year in which the
tax is collected, it is conceded that the validity of the tax would
not be affected, and if not, we do not see how
Page 201 U. S. 297
a reference to the results of any other year could affect its
character."
See also Home Insurance Company v. New York,
134 U. S. 594, and
cases cited in the opinion. Of course, a passenger on the Grand
Trunk Railroad knew that the fare he was paying was increasing the
gross receipts, and therefore indirectly affecting the amount of
the tax collectible under the statute. But it was not to be assumed
that he would travel and pay fare with that object in view. No more
can it be assumed in the present case that the local taxing
officers, although knowing that an increase in their local tax levy
will increase the tax rate upon railroads, will be led by that
knowledge to forget their single duty to the community for which
they are acting. No one pays money for the mere sake of compelling
others to pay. Some personal advantage must be intended. No more
will local tax officers levy a tax upon their neighbors, those who
have placed them in position, for the mere sake of increasing the
tax burden upon railroads, especially when the local levy is not
followed by an equal increase in the amount of the burden cast upon
railroads, and but a trifling fraction of that increase inures,
either directly or indirectly, to the benefit of the taxpayers of
the locality. The total value of other property in Michigan subject
to
ad valorem taxes was, according to the record, in the
neighborhood of $1,500,000,000. A tax levy in the City of Detroit
for local purposes of $1,500,000 would therefore increase the rate
of taxation on railroad property only one mill, and that increase
would profit Detroit but little, as the railroad tax is
appropriated for state purposes only.
It may be laid down as a general proposition that where a
legislature enacts a specific rule for fixing a rate of taxation,
by which rule the rate is mathematically deduced from facts and
events occurring within the year and created without reference to
the matter of that rate, there is no abdication of the legislative
function, but, on the contrary, a direct legislative determination
of the rate.
Again, it seems more reasonable that the average rate should
Page 201 U. S. 298
be fixed by this mathematical computation from the other rates
already established than for the legislature to prescribe in
advance that which it may hope will be such rate. In the one case,
the exact average is determined; in the other, an estimate is made
which may turn out to be more or less than the average.
While the peculiar method of ascertaining the average rate
prescribed by this statute may be new, yet the application of an
average rate to the taxation of railroads in not new, nor confined
to Michigan.
See § 1, c. 64, Public Statutes and Session
Laws of New Hampshire of January 1, 1901, section first enacted in
1878; 1 Mass.Rev.Laws (1902) c. 12, § 93, p. 227; c. 14, §§ 37, 40,
pp. 266, 268, incl., taken from laws of 1864, 1865, and 1880; 2
Mo.Rev.Stat. (1899) §§ 9363, 9364, pp. 2175, 2176; Wis.Laws (1903)
c. 315, §§ 7-14, incl. pp. 496-499;
Railroad v. State, 60
N.H. 87;
State ex Rel. Brown v. Missouri Pacific Ry. Co.,
92 Mo. 137;
Chicago & Alton R. Co. v. Lamkin, 97 Mo.
496;
State ex Rel. Gottlieb v. Metropolitan Street Ry.
Co., 161 Mo. 189, 199.
We have thus far assumed that there was equity and justice in
applying to railroad property the average rate of taxation imposed
upon other property. But this assumption is challenged. For
instance, the Chicago & Northwestern Railroad Company's
property is situate in the Upper Peninsula of the State of
Michigan- -
"and yet the average rate of tax applied to its property depends
upon, and increases with, the taxes raised on all the counties of
the 'Lower Peninsula' of Michigan, and in all the cities, towns,
villages, and school districts of those counties, for purely local
purposes. If Detroit spends $10,000,000 for local government, the
Northwestern Railway Company has to pay proportionately more tax on
its property in northern Michigan than if Detroit's tax for local
government were $5,000,000; and, beyond that, if Detroit spends
$1,000,000 or $5,000,000 for purely domestic or private
enterprises, such as
Page 201 U. S. 299
gas works, waterworks, street railways, parks, baths, libraries,
etc., the Northwestern Railway's tax on its property (though wholly
outside of Detroit -- in the 'Upper Peninsula') is proportionately
larger on that account."
"
* * * *"
"It may well be that (as respects the immediate point) the unity
of railroad property would justify a statute requiring a railroad
to pay taxes to the state at a rate derived by averaging the taxes,
state and local, paid by others in the same taxing jurisdiction;
but the question before the court is whether it can be made to pay
a tax directly dependent upon, and measured by, the local taxes of
counties, cities, towns, villages, and school districts where it
has no part of its property and no office. Such a plan operates to
tax the railroad because of the expenses (public and private) of
local communities whose benefits it does not enjoy."
But these considerations appeal mainly to the discretion of the
legislature, and do not make against its power. Unless there be
some specific provisions in the state constitution compelling other
action, the state may treat its entire territory as composing but a
single taxing district, and deal with all property as within the
district, and subject to taxation accordingly. There is no magic in
county organization, no inherent necessity of dividing the state
into small taxing districts. Frequently railroads are separated
from other property, assessed by a state board, and the taxes
collected therefrom applied to the general purposes of the state.
Sometimes, it is true, a portion of the taxes thus collected is
distributed
pro rata to the counties along the lines of
the roads, but the power of the state to apply the taxes from
railroad property to only state purposes cannot be doubted, and is
often exercised. If it may take all the taxes received from
railroad property and apply it to general state purposes, and, to
that extent, relieve counties in which there is no railroad
property from their contribution to the support of the state, it
has equal power to say that the average rate of taxation shall be
determined not by the rates upon other
Page 201 U. S. 300
property in the immediate localities in which the railroads are
located, but by those upon all property wherever situated in the
state. We do not mean to hold that cases may not arise in which
enforcing this method of taxation works such injustice to a
railroad as to call for judicial interference. But we do hold that
the mere fact that all the property in the state is taken into
account in determining the average rate does not carry with it such
proof of injustice and inequality as to compel the courts in all
cases to strike the latter down. From the cases that are before us
involving this statute, it appears that there are many railroad
companies in the state, and we may fairly take judicial notice of
the fact that the state is traversed in almost every direction by
railroads. And while it is possible that there may be a county or
two without one, yet it is an exception, and to hold that for each
railroad the average rate must be determined from the property in
the localities immediately contiguous or through which its road
passes might well introduce into the matter of taxation a confusion
and inequality resulting in far greater injustice than the
uniformity established by the present system.
Further, it must be borne in mind that the taxes collected from
railroads in Michigan are, by sec. 16 of the act, applicable to
state purposes, and while it is doubtless true that the
appropriation of these taxes to state purposes diminishes the tax
burden which will fall upon other property, yet the case presented
is one in which the legislature, taking a class of property,
imposes upon it through state authorities a state tax for strictly
state purposes. That, so far as the restraints of the federal
Constitution are concerned, it is within the power of a state to
separate a particular class of property, subject it to assessment
and taxation in a mode and at a rate different from that imposed
upon other property, and apply the proceeds to state, rather than
to local purposes, is not open to question.
Kentucky Railroad
Tax Cases, 115 U. S. 321, is
directly in point. By the legislation of Kentucky railroad
companies and their property were separated from other
Page 201 U. S. 301
property, subjected to different means and methods for purposes
of taxation, and upon this the Court said (p.
115 U. S.
337):
"But there is nothing in the Constitution of Kentucky that
requires taxes to be levied by a uniform method upon all
descriptions of property. The whole matter is left to the
discretion of the legislative power, and there is nothing to forbid
the classification of property for purposes of taxation and the
valuation of different classes by different methods. The rule of
equality, in respect to the subject, only requires the same means
and methods to be applied impartially to all the constituents of
each class, so that the law shall operate equally and uniformly
upon all persons in similar circumstances."
See also Pittsburgh &c. Railroad Company v. Backus,
154 U. S. 421;
Florida Central &c. Railroad Company v. Reynolds,
183 U. S. 471;
Coulter v. Louisville & Nashville Railroad,
196 U. S. 599.
That no provision is made for a general equalization of railroad
with other property in the state does not vitiate the assessment.
See Cummings v. National Bank, 101 U.
S. 153, in which the question was distinctly presented
and determined, the Court saying (p.
101 U. S.
161):
"While it may be true that this system of submitting the
different kinds of property subject to taxation to different boards
of assessors and equalizers, with no common superior to secure
uniformity of the whole, may give opportunity for maladministration
of the law and violation of the principle of uniformity of taxation
and equality of burden, that is not the necessary result of these
laws, or of any one of them, and a law cannot be held
unconstitutional because, while its just interpretation is
consistent with the Constitution, it is unfaithfully administered
by those who are charged with its execution. Their doings may be
unlawful, while the statute is valid."
While there may be no provision for an equalization of railroad
with other property, it will be perceived that the statute names
the time and place for the sessions of the assessing board, gives
to any person or company interested the right
Page 201 U. S. 302
to be heard, and also authorizes the board to correct the
valuation. So that it cannot be objected that the railroad
companies are precluded from a full hearing on the matter of
valuation, and, as has heretofore been said by this Court, one
hearing is sufficient to constitute due process.
Other questions are discussed by counsel in their briefs, but in
view of the exhaustive and well considered opinion of the trial
judge, with the general trend of which we concur, it is unnecessary
to further extend this discussion. It is sufficient to refer to
that opinion for a consideration of those questions. We have
noticed those which seem to us paramount and controlling.
It is charged in the bill that there was a systematic
undervaluation of other property in the state, which resulted in
denying to this plaintiff the equal protection of the law. The
trial court found against this charge. It is enough to say that
generally we accept the finding of a trial court upon a question of
fact when the testimony respecting it is conflicting. It may also
be said that a legislature is not bound to impose the same rate of
tax upon one class of property that it does upon another. As it may
exempt all of one class, so it may impose a different rate of
taxation. It is sufficient if all of the same class are subjected
to the same rate and the tax is administrated impartially upon
them.
Affirmed.
Cases on the docket, numbered from 462 to 487, inclusive, are
suits brought by different railroad companies against this
appellee, and are submitted on the same record. This same decree
will be entered in each of them.
*
* The numbers and docket titles of the cases referred to are as
follows:
462.
Detroit & Mackinac Railway Co. v. Powers.
463.
Chicago & Northwestern Railway Co. v.
Same.
464.
Toledo, Saginaw & Muskegon Railway Co. v.
Same.
465.
St. Clair Tunnel Co. v. Same.
466.
Michigan Air Line Railway Co. v. Same.
467.
Grand Trunk Western Railway Co. v. Same.
468.
Ann Arbor Railroad Co. v. Same.
469.
Cincinnati, Saginaw & Mackinaw Railroad Co. v.
Same.
470.
Chicago, Detroit & Canada Grand Trunk Junction
Railroad Co. v. Same.
471.
Munising Railway Co. v. Same.
472.
Lake Superior & Ishpeming Railway Co. v.
Same.
473.
Marquette & Southeastern Railway Co. v.
Same.
474.
Chicago, Milwaukee & St. Paul Railway Co. v.
Same.
475.
Sault Ste. Marie Bridge Co. v. Same.
476.
Mineral Range Railroad Co. v. Same.
477.
Duluth, South Shore & Atlantic Railway Co. v.
Same.
478.
Detroit, Grand Haven & Milwaukee Railway Co. v.
Same.
479.
Pontiac, Oxford & Northern Railroad Co. v.
Same.
480.
Minneapolis, St. Paul & Sault Ste. Marie Railway
Co. v. Same.
481.
Copper Range Railroad Co. v. Same.
482.
Gogebic & Montreal River Railroad Co.
v.Same.
483.
Manistee & Southeastern Railroad Co. v.
Same.
484.
Escanaba & Lake Superior Railroad Co. v.
Same.
485.
Grand Rapids &Y Indiana Railway Co. v.
Same.
486.
Wisconsin & Michigan Railway Co. v. Same.
487.
Lake Shore & Michigan Southern Railway Co. v.
Same.
