By the Constitution of California, two modes of assessment for
taxation are prescribed -- one by a State Board of Equalization,
the other by county boards and local assessors. All property is
directed to be assessed in the county, city, etc., in which it is
situated except that the franchise, roadway, roadbed, rails, and
rolling stock of any railroad operated in more than one county are
to be assessed by the state board and apportioned to the several
counties, etc. By an act of the legislature, the state board is
required to include in their assessment steamers engaged in
transporting passengers and freights across waters which divide a
railroad. This act was held by the Supreme Court of California, in
San Francisco v. Central Pacific Railroad Co., 63 Cal.
469, to be contrary to the constitution, and steamboats were held
to be assessable by the county
Page 127 U. S. 2
board, and not by the state board. This Court, following that
decision and that of
Santa Clara County v. Southern Pacific
Railroad Co., 118 U. S. 394,
holds that the assessment of the steamers of a railroad company by
the state board is in violation of the Constitution of California
and void, and, being inseparably blended with the other property
assessed, it makes the whole assessment void.
The State Board of Equalization of California having included in
their assessment all the franchises of a railroad company, amongst
which were franchises conferred by the United states, of
constructing a railroad from the Pacific Ocean across the state as
well as across the territories of the United States, and of taking
toll thereon,
held that the assessment of these franchises
was repugnant to the Constitution and laws of the United States and
the power given to Congress to regulate commerce among the several
states.
Franchises conferred by Congress cannot, without its permission,
be taxed by the states.
Congress has authority, in the exercise of its power to regulate
commerce among the several states, to construct or authorize
individuals or corporations to construct, railroads across the
states and Territories of the United States.
These cases were argued together. They all involved the
constitutionality of tax laws of the California, in many respects
the same constitutional questions being presented as those which
were argued (and not decided) in
Santa Clara County v. Southern
Pacific Railroad Company, 118 U. S. 394.
Each action was brought by the people of the California to
recover a tax assessed upon the property and franchises of the
defendant.
The provisions of the Constitution and laws of the California
authorizing the suits, and which were relied upon to sustain the
validity of the taxes, were stated in the brief of the Attorney
General as printed in the margin.
*
Page 127 U. S. 3
The answers of the defendants, although varying according to the
facts in each case, substantially agreed in setting up in
Page 127 U. S. 4
addition to general denials, that the tax as assessed against
each of them was not assessed in the same mode, and with
Page 127 U. S. 5
the same exemptions of their mortgaged property that was allowed
to private individuals and other corporations, and
Page 127 U. S. 6
that consequently they were denied the equal protection of the
laws, and further that it was assessed without the notice
Page 127 U. S. 7
given to individuals, and consequently that their property was
taken without due process of law. Some of them set up that
Page 127 U. S. 8
they enjoyed franchises conferred by the United States not
taxable without the assent of Congress, and others that
Page 127 U. S. 9
property had been included in the valuation in violation of the
provisions of the Constitution of California, thereby invalidating
the whole assessment.
Page 127 U. S. 10
All the suits were commenced in a court of the state, and were
removed on petition of the defendants to the Circuit
Page 127 U. S. 11
Court of the United States for what is now the Northern District
of California. In each, judgment was rendered for
Page 127 U. S. 12
the defendant, to review which the plaintiff below, in each case
sued out a writ of error.
Page 127 U. S. 26
MR. JUSTICE BRADLEY delivered the opinion of the Court.
These cases are substantially similar to those of
Santa
Clara County v. Southern Pacific Railroad Company and the
other cases decided at the same time and reported in
118 U.
S. 394. It will be unnecessary, therefore, to set out
any provisions of the Constitution and laws of the United States
and of California which are involved in the present cases in common
with those referred to. The actions were brought by the State of
California in the Superior Court for the County of San Francisco,
and were removed into the circuit court of
Page 127 U. S. 27
the United States, where a jury was waived in each case, and the
causes were tried by the court, whose findings of fact and
conclusions of law are contained in the respective records. One of
the cases (No. 660 on the docket) was brought against the Central
Pacific Railroad Company for the recovery of the state and county
taxes due upon the assessment of the company's property made by the
State Board of Equalization for the year 1883, said assessment
being $18,000,000, and the taxes amounting to $276,865.10, sixty
percent of which was tendered and paid without prejudice to either
party after the suit was brought. Another case (No. 1, 157) is an
action against the same company for the taxes of 1884, due upon a
like assessment of $24,000,000. A third (No. 664), against the same
company, is for the taxes of 1884, upon an assessment of
$22,000,000. No. 661 is a similar action against the Southern
Pacific Railroad Company for the taxes of 1883. No. 662 is a
similar action against the Northern Railway Company for the taxes
of 1883, No. 663 is a similar action against the California Pacific
Railroad Company for the taxes of 1883. Tender and payment of sixty
percent of the taxes were made in all the cases except 1,157, in
which the amount tendered and paid was fifty percent Similar
defenses were set up in these cases as in the cases reported in 118
U.S. It was claimed, as in those cases, that in making the
assessments, no deduction was made for the mortgages on the
companies' property, while such deduction was made on the property
of other citizens, by assessing to the mortgagees the amount of the
mortgages as an interest in real estate; thus discriminating
against the company, and denying to it the equal protection of the
laws, contrary to the Fourteenth Amendment of the Constitution. It
was also alleged in defense that the board of equalization included
in the assessments a valuation of rights, franchises, and property
which they had no authority to assess, as, for example, franchises
granted to the companies by the United States, and ferry boats,
fences, and other property subject to be assessed by the local
county boards, and not by the state board, and that the assessments
were for aggregate amounts, not showing on their face what part of
the valuation
Page 127 U. S. 28
represented the property illegally included therein, thus
rendering the entire assessment in each case void. It was on this
latter ground that the judgments for the defendants in the former
cases were affirmed. If these defenses, or either of them, are
supported by the facts, it is unnecessary for us to decide the
question raised under the Fourteenth Amendment of the Constitution.
The questions arising under that amendment are so numerous and
embarrassing, and require such careful scrutiny and consideration,
that great caution is required in meeting and disposing of them. By
proceeding step by step and only deciding what it is necessary to
decide, light will gradually open upon the whole subject and lead
the way to a satisfactory solution of the problems that belong to
it. We prefer not to anticipate these problems when they are not
necessarily involved.
The ground on which it is alleged that the assessments in
question were made to include property which the state board had no
authority to assess is to be found in article XIII, sections 9 and
10, of the state constitution. Those sections are as follows:
"SEC. 9. A State Board of Equalization, consisting of one member
from each congressional district in this state, shall be elected by
the qualified electors of their respective districts at the general
election to be held in the year one thousand eight hundred and
seventy-nine, whose term of office, after those first elected,
shall be four years, whose duty it shall be to equalize the
valuation of the taxable property in the several counties in the
state for the purposes of taxation. The comptroller of state shall
be
ex officio a member of the board. The boards of
supervisors of the several counties of the state shall constitute
boards of equalization for their respective counties, whose duty it
shall be to equalize the valuation of the taxable property in the
county for the purpose of taxation,
provided such state
and county boards of equalization are hereby authorized and
empowered, under such rules of notice as the county boards may
prescribe as to the county assessments, and under such rules of
notice as the state board may prescribe, as to the action of the
state board, to increase or lower
Page 127 U. S. 29
the entire assessment roll, or any assessment contained therein,
so as to equalize the assessment of the property contained in said
assessment roll and make the assessment conform to the true value
in money of the property contained in said roll."
"SEC. 10. All property, except as hereinafter in this section
provided, shall be assessed in the county, city, city and county,
town, township, or district in which it is situated, in the manner
prescribed by law. The franchise, roadway, roadbed, rails, and
rolling stock of all railroads operated in more than one county in
this state shall be assessed by the State Board of Equalization at
their actual value, and the same shall be apportioned to the
counties, cities and counties, cities, towns, townships, and
districts, in which such railroads are located, in proportion to
the number of miles of railway laid in such counties, cities and
counties, cities, towns, townships, and districts."
The last section shows explicitly that in regard to a railroad,
the state board has power to assess only five things -- the
franchise, roadway, roadbed, rails, and rolling stock. The county
boards are authorized to assess all the rest of the property. If
the state board includes in its assessment any more of the railroad
property than it is authorized to do, the assessment will be
pro tanto illegal and void. If the unlawful part can be
separated from that which is lawful, the former may be declared
void and the latter may stand, but if the different parts, lawful
and unlawful, are blended together in one indivisible assessment,
it makes the entire assessment illegal. This is so well settled
that it needs no citation of authorities further than to refer to
the opinion of this Court in the former cases (118 U.S.). In the
present assessments, all parts of the property are blended together
and are inseparable. If it be true, therefore, that property not
authorized to be included in the assessments is included therein,
the assessments must be declared void.
The Legislature of California, in passing laws for carrying out
the principles and methods of taxation laid down in the
Constitution, has deviated from its words and has adopted some
provisions which would seem to be a departure from it.
Page 127 U. S. 30
As the State Board of Equalization, in making the assessments in
question, undertook to follow the law, it will be necessary to
examine it. By § 3628 of the Political Code, as amended in 1880, it
was provided as follows:
"The franchise, roadway, roadbed, rails, and rolling stock of
all railroads operated in more than one county in this state shall
be assessed by the State Board of Equalization as hereinafter
provided for. Other franchises, if granted by the authorities of a
county, city, or city and county, must be assessed in the county,
city, or city and county, within which they were granted. If
granted by any other authority, they must be assessed in the county
in which the corporations, firms, or persons owning or holding them
have their principal place of business. All other taxable property
shall be assessed in the county, city, city and county, town,
township, or district in which it is situated. . . . The assessor
must, between the first Mondays of March and July in each year,
ascertain the names of all taxable inhabitants and all property in
his county subject to taxation except such as is required to be
assessed by the State Board of Equalization, and must assess such
property to the person by whom it was owned or claimed, or in whose
possession or control it was at 12 o'clock of the first Monday next
preceding."
By § 3665 of the same Code, as amended by the Act of March 9,
1883, it is, among other things, provided as follows:
"The State Board of Equalization must meet at the state capitol
on the first Monday in August, and continue in open session from
day to day, Sundays excepted, until the third Monday in August. At
such meeting, the board must assess the franchise, roadway,
roadbed, rails, and rolling stock of all railroads operated in more
than one county. Assessment must be made to the corporation,
person, or association of persons owning the same, and must be made
upon the entire railway within the state, and must include the
right of way, bridges, culverts, wharves, and moles upon which the
track is laid, and all steamers which are engaged in transporting
passengers, freights, and passenger and freight cars across
waters
Page 127 U. S. 31
which divide the road. The depots, stations, shops, and
buildings erected upon the space covered by the right of way are
assessed by the assessor of the county wherein they are situate.
Within ten days after the third Monday of August, the board must
apportion the total assessment of the franchise, roadway, roadbed,
rails, and rolling stock of each railway to the counties and cities
or counties in which such railway is located, in proportion to the
number of miles of railway laid in such counties and cities and
counties."
Here it will be perceived that the legislature undertakes to
define what things are and what are not comprised within the five
categories of railroad property assessable by the state board, and
declares that they include not only the entire railway within the
state, the right of way, bridges, and culverts, but also the
"wharves and moles upon which the track is laid, and all
steamers which are engaged in transporting passengers, freights,
and passenger and freight cars across waters which divide the
road."
This is clearly an enlargement of the terms of the constitution.
Steamers, at least, are not and have been held by the Supreme Court
of California not to be embraced in the five categories.
Now one of the grounds of defense set up by the Central Pacific
Railroad Company in Nos. 660 and 1,157, by the Northern Railway
Company in No. 662, and by the California Pacific Railroad Company
in No. 663, is that the value of their steam ferry boats was
blended by the State Board of Equalization with the other values
contained in the assessments. The Central Pacific Company, in its
answers (and the others contain similar averments), says:
"The western terminus of the said railroad of defendant is in
the City of San Francisco, on the west side of the Bay of San
Francisco. The distance across said bay is five miles, and the
whole thereof is part of the navigable waters of said bay. The cars
of the company are transported from the end of the railroad track
of said road on the eastern side of said bay to the end of the
railroad track on the western side of said bay, on steam ferry
boats belonging to the defendant, built, owned, and constructed for
that purpose, and are of great
Page 127 U. S. 32
value. For more than four years past, the defendant has been the
owner of two steam ferry boats, one of the tonnage of 1,566 tons
and one of the tonnage of 1,012 tons, and during the whole of that
time has used said boats for the purposes aforesaid. Said boats now
are, and for more than four years last past have been, of a class
which are by law required to be registered, and now are, and for
more than four years last past have been, duly registered and
enrolled in the City and County of San Francisco, State of
California."
"The State Board of Equalization, in making said pretended
assessment of the said roadway, roadbed, rails, and rolling stock
of defendant, did willfully and designedly include in the valuation
thereof the value of said boats, and the value of said boats is
blended in said pretended assessment with the value of said
roadway, roadbed, rails, and rolling stock, and there is no means
by which such value can be separated from the valuation placed by
said board upon said roadway, roadbed, rails, and rolling stock, or
either of them."
This allegation is sustained by the court below in its findings
of facts in the cases referred to. The finding in 660, and
substantially the same in the other cases, is as follows:
"That on the 18th day of August, 1883, the State Board of
Equalization of the State of California, pretending to act under
and by virtue of the powers conferred upon it by § 10 of article
XIII of the Constitution of the State of California, did make a
pretended assessment, for the purposes of taxation for the fiscal
year of said state then next ensuing, upon the franchise, roadway,
roadbed, rails, and rolling stock of said railroad against
defendant. Said pretended assessment was not made separately upon
the franchise, roadway, roadbed, rails, and rolling stock, or any
properties of said railroad, but all of said property was blended
together in making said assessment, which assessment was then and
there so entered upon the minutes of said board. Said assessment is
the assessment upon which the several taxes mentioned in the
complaint herein are based, and no other assessment than the
aforesaid was ever made of said property, or any part thereof, for
said fiscal year. Said assessment included all property and
kinds
Page 127 U. S. 33
of property mentioned in § 3665 of the Political Code of
California, as amended March 9, 1883, except depots, stations,
shops, and buildings erected upon the space covered by the right of
way, which last-mentioned property was assessed, as provided in
said section, by local assessors."
This is a clear affirmation of the allegation of the answer.
Section 3665 of the Political Code, as amended March 9, 1883,
requires the State Board of Equalization to include in their
assessment of railroad property "all steamers which are engaged in
transporting passengers, freights, and passenger and freight cars
across waters which divide the road." It is a matter of public
notoriety, as much so as the existence of the railroad itself, or
that of the Sierra Nevada, or any other geographical feature on the
route, that the railroad companies in the cases referred to have
steam ferry boats engaged in the transportation of passengers and
freight across the bay of San Francisco and the Straits of
Carquinez, and that, without such means of transportation, those
waters could not be crossed.
The question whether steamers and ferry boats should be included
in the property assessed by the State Board of Equalization, or in
that assessed by the county board, was distinctly raised in the
case of
San Francisco v. Central Pacific Railroad Company,
63 Cal. 469, and decided in favor of the county board. That was an
action brought by the City and County of San Francisco against the
company to recover taxes imposed upon it by virtue of an assessment
made by the county board upon the same ferry boats now assessed by
the state board. The company resisted the tax on the ground that
these boats were assessable by the state board, and not by the
county board. The Supreme Court of California decided against the
company. Its finding of facts was as follows, namely:
"That the defendant is a corporation existing under the law of
the United States, and of this state, . . . owner of a line of
railroad known as the 'Central Pacific Railroad,' extending from a
point in the City of San Francisco . . . to Ogden, in the Territory
of Utah; that the length of said road in the City and County of San
Francisco is four miles from a
Page 127 U. S. 34
point within said city to the eastern shore of the southern arm
of the Bay of San Francisco; that from said point on the eastern
shore . . . to a point on the western shore of said bay, where the
railway of defendant again commences, is about twelve miles; that
across said bay no line of railroad has been constructed, and
freight and passengers carried upon said road are taken across said
bay upon steam ferry boats; . . . that upon the decks of said
vessels are laid railroad tracks,"
etc. After giving judgment for the plaintiff upon these facts,
the court said:
"The sole question presented for decision herein is whether the
steamers
Thoroughfare and
Transit, mentioned in
the above findings, are to be assessed by the assessor of the City
and County of San Francisco or by the State Board of Equalization.
The property to be assessed by the board is defined in the 10th
section of article IX [XIII] of the constitution of 1879. It is the
franchise, roadway, roadbed, rails, and rolling stock of all
railroads operated in more than one county of the state. All
property other than the above mentioned is to be assessed by the
local assessors. Are the steamers above named embraced within the
category of property named in the section above referred to? The
relation of such steamers to the Central Pacific Railroad Company
is set forth in the findings."
The court then proceeds to show that the ferry boats cannot be
included in either of the five categories mentioned in the
constitution -- namely in either the franchise, roadway, roadbed,
rails, or rolling stock -- and concludes as follows:
"We are of opinion that the assessment of the steamers above
mentioned pertained to the local assessor, and was properly made by
the Assessor of the City and County of San Francisco."
This decision was made in June, 1883, and is a construction of
the Constitution of California. It follows that the Act of March,
9, 1883, as reproduced in § 3665 of the Political Code, departs
from the constitutional provision, and that the assessments, in
following the act, are also unconstitutional and void.
In No. 1,157, one of the cases against the Central Pacific
Railroad Company, being for the taxes of the year 1884, the court
finds that the State Board of Equalization, in making
Page 127 U. S. 35
the assessment, did knowingly and designedly include in the
valuation of the roadway the value of fences erected upon the line
between said roadway and the land of coterminous proprietors. This
brings that case precisely within the decision made in the former
cases reported in the 118th United States Reports.
Another defense set up by the Central Pacific Railroad Company
in the three cases against it -- namely Nos. 660, 664, and 1,157 --
and by the Southern Pacific Railroad Company in No. 661 is that the
State Board of Equalization included in their assessments in said
cases the value of the franchises conferred upon said companies by
the United States, which, it is contended, is repugnant to the
Constitution and laws of the United States and therefore void.
Thus, in No. 660, the Central Pacific Railroad Company, in its
answer, after reciting the various acts of Congress conferring
franchises and privileges and imposing duties upon the company,
avers that it is a federal corporation, and holds its corporate
powers and franchises under the government of the United States,
and that the said government has never given to the State of
California the right to lay any tax upon the franchise, existence,
or operations of the company. Similar averments are made in the
other cases, 664, 1,157, and 661. The court finds in each of these
cases that the assessment made by the State Board of Equalization
included the full value of all franchises and corporate powers held
and exercised by the defendant. The first question, then, is
whether the defendants in these cases held any franchises granted
to them by the government of the United States. Of this there can
hardly be a doubt.
The Central Pacific Railroad Company was constituted by the
consolidation of two state corporations of California, but derived
many of its franchises and privileges from the government of the
United States. The findings of the court below on this subject are
as follows, to-wit:
"That on the 28th day of June, 1861, a corporation was formed
and organized under the laws of the State of California, under the
corporate name of the Central Pacific Railroad Company of
California. Said corporation was formed
Page 127 U. S. 36
for the purpose of constructing, owning, and operating a line of
railroad and telegraph, commencing at the City of Sacramento in
said state and running thence through the Counties of Sacramento,
Placer, Sierra, and Nevada to the eastern boundary of said state in
the expectation that its proposed railroad would, when constructed,
constitute part of a line of railroad extending from the Missouri
River to the Pacific Ocean, which line it was then supposed was
about to be constructed under the legislative supervision and
authority of the government of the United States, and which line of
railroad was afterwards so constructed."
"That on or about the 1st day of July, 1862, the government of
the United States undertook to construct, or to cause to be
constructed, a line of railroad from the Missouri River to the
Pacific Ocean, and to that end Congress passed an act entitled"
"An act to aid in the construction of a railroad from the
Missouri River to the Pacific Ocean, and to secure to the
government the use of the same for postal, military, and other
purposes."
"12 U.S. Stat. 489."
"That to facilitate the construction of said road, the
government of the United States, by said act of Congress, conferred
upon the said Central Pacific Railroad Company of California the
same powers, and clothed it with the same privileges and
immunities, which it conferred upon and clothed the said Union
Pacific Railroad Company, except that the said Central Pacific
Railroad Company of California was to commence the construction of
said railroad at the Pacific Ocean and build east until it met the
said Union Pacific Railroad, building west."
"That on or about the 2d day of July, 1864, Congress passed an
act entitled"
"An act to amend an act entitled 'An act to aid in the
construction of a railroad and telegraph line from the Missouri
River to the Pacific Ocean, and to secure to the government of the
United States the use for the same for postal, military, and other
purposes,'"
"approved July 1, 1862. 13 Stat. 356, c. 216."
"That said Central Pacific Railroad Company of California filed
in the Department of the Interior its acceptance of the
Page 127 U. S. 37
terms and conditions of said Act of Congress of July 1, 1862,
within the time therein designated."
"That on or about the 31st day of October, 1864, said Central
Pacific Railroad Company of California sold and assigned all its
rights under the aforesaid acts to a corporation then existing
under the laws of the State of California, and known as the Western
Pacific Railroad Company, so far as said rights related to the
construction of said railroad and telegraph between the Cities of
San Jose and Sacramento, in said State of California. Said
assignment was ratified and confirmed by the United States by an
Act of Congress passed on the 3d day of March, 1865, entitled"
"An act to amend an act entitled 'An act to aid in the
construction of a railroad and telegraph line from the Missouri
River to the Pacific Ocean, and to secure to the government the use
of the same for postal, military, and other purposes,' approved
July 1, 1862, and to amend an act amendatory thereof, approved July
2, 1864."
"13 Stat. 504, c. 88."
"That the said line of railroad from the Pacific Ocean to Ogden,
in Utah Territory, was completed and put in operation in 1869, and
has been in operation from that time until the present, and still
is in operation, and the whole of the railroad mentioned in the
said acts of Congress has long since been completed, and is now, in
accordance with the spirit and intent of said acts of Congress,
operated as one continuous line from the Missouri River to the
Pacific Ocean, and is so operated and maintained for the uses and
purposes mentioned in said acts."
"That in August, 1870, acting under the said acts of Congress,
said Central Pacific Railroad Company of California and the said
Western Railroad Company formed themselves into one corporation
under the name of the Central Pacific Railroad Company. Said
company is the defendant herein, and has, from the completion of
said railroad as aforesaid until the present time, owned (except in
the respect hereinafter stated) and operated said railroad under
and by virtue of said acts of Congress, and for the uses and
purposes therein mentioned. "
Page 127 U. S. 38
If we turn to the acts of Congress referred to by the court, we
shall find that franchises of the most important character were
conferred on this company. Originally the Central Pacific Railroad
Company of California had only power to construct a railroad from
Sacramento to the eastern boundary of the state. Congress, by the
act of 1862, authorized the company (in the words of the act)
"to construct a railroad and telegraph line from the Pacific
Coast at or near San Francisco, or the navigable waters of the
Sacramento River, to the eastern boundary of California upon the
same terms and conditions in all respects as are contained in this
act for the construction of said railroad and telegraph line first
mentioned [the Union Pacific], and to meet and connect with the
first-mentioned railroad and telegraph line on the eastern boundary
of California."
Sec. 9. In the following section it was enacted that after the
completion of its road to the eastern boundary of California, the
Central Pacific might unite upon equal terms with the Union Pacific
Railroad Company in constructing so much of said railroad and
telegraph line, and branch railroads and telegraph lines, through
the territories from the State of California to the Missouri River
as should then remain to be constructed, on the same terms and
conditions as provided in relation to the Union Pacific Railroad
Company. Thus, without referring to the other franchises and
privileges conferred upon this company, the fundamental franchise
was given by the acts of 1862 and the subsequent acts to construct
a railroad from the Pacific Ocean across the State of California
and the federal territories until it should meet the Union Pacific,
which it did meet at Ogden, in the Territory of Utah. This
important grant, though in part collateral to, was independent of
that made to the company by the State of California, and has ever
since been possessed and enjoyed. The present company has it by
transfer from and consolidation of the original companies, by which
its existence and capacities were constituted. Such consolidation
was authorized by the sixteenth section of the Act of Congress of
July 1, 1862, and the sixteenth section of the Act of July 2, 1864,
taken in connection with the second section of
Page 127 U. S. 39
the Act of March 3, 1865, referred to in the findings of the
court. The last-named act ratified the transfer by the Central
Pacific to the Western Pacific of a portion of its road extending
from San Jose to Sacramento, and conferred upon the latter company
all the privileges and benefits of the several acts of Congress
relating thereto, and subject to all the conditions thereof. If,
therefore, the Central Pacific Railroad Company is not a federal
corporation, its most important franchises, including that of
constructing a railroad from the Pacific Ocean to Ogden City, were
conferred upon it by Congress.
It cannot at the present day be doubted that Congress, under the
power to regulate commerce among the several states as well as to
provide for postal accommodations and military exigencies, had
authority to pass these laws. The power to construct, or to
authorize individuals or corporations to construct, national
highways and bridges from state to state is essential to the
complete control and regulation of interstate commerce. Without
authority in Congress to establish and maintain such highways and
bridges, it would be without authority to regulate one of the most
important adjuncts of commerce. This power in former times was
exerted to a very limited extent, the Cumberland or National road
being the most notable instance. Its exertion was but little called
for, as commerce was then mostly conducted by water, and many of
our statesmen entertained doubts as to the existence of the power
to establish ways of communication by land. But since, in
consequence of the expansion of the country, the multiplication of
its products, and the invention of railroads and locomotion by
steam, land transportation has so vastly increased, a sounder
consideration of the subject has prevailed, and led to the
conclusion that Congress has plenary power over the whole subject.
Of course, the authority of Congress over the territories of the
United States, and its power to grant franchises exercisable
therein, are and ever have been undoubted. But the wider power was
very freely exercised, and much to the general satisfaction, in the
creation of the vast system of railroads connecting the east with
the
Page 127 U. S. 40
Pacific, traversing states as well as territories, and employing
the agency of state as well as federal corporations.
See
Pacific Railroad Removal Cases, 115 U. S.
1,
115 U. S.
14-18.
Assuming, then, that the Central Pacific Railroad Company has
received the important franchises referred to by grant of the
United States, the question arises whether they are legitimate
subjects of taxation by the state. They were granted to the company
for national purposes, and to subserve national ends. It seems very
clear that the State of California can neither take them away, nor
destroy nor abridge them, nor cripple them by onerous burdens. Can
it tax them? It may undoubtedly tax outside visible property of the
company situated with the state. That is a different thing. But may
it tax franchises which are the grant of the United States? In our
judgment, it cannot. What is a franchise? Under the English law,
Blackstone defines it as "a royal privilege, or branch of the
King's prerogative, subsisting in the hands of a subject." 2
Bl.Com. 37. Generalized, and divested of the special form which it
assumes under a monarchical government based on feudal traditions,
a franchise is a right, privilege, or power of public concern,
which ought not to be exercised by private individuals at their
mere will and pleasure, but should be reserved for public control
and administration, either by the government directly, or by public
agents, acting under such conditions and regulations as the
government may impose in the public interest, and for the public
security. Such rights and powers must exist under every form of
society. They are always educed by the laws and customs of the
community. Under our system, their existence and disposal are under
the control of the legislative department of the government, and
they cannot be assumed or exercised without legislative authority.
No private person can establish a public highway or a public ferry
or railroad, or charge tolls for the use of the same without
authority from the legislature, direct or derived. These are
franchises. No private person can take another's property, even for
a public use, without such authority, which is the same as to say
that the right of eminent domain can only be exercised by
virtue
Page 127 U. S. 41
of a legislative grant. This is a franchise. No persons can make
themselves a body corporate and politic without legislative
authority. Corporate capacity is a franchise. The list might be
continued indefinitely.
In view of this description of the nature of a franchise, how
can it be possible that a franchise granted by Congress can be
subject to taxation by a state without the consent of Congress?
Taxation is a burden, and may be laid so heavily as to destroy the
thing taxed or render it valueless. As Chief Justice Marshall said
in
McCulloch v.
Maryland, 4 Wheat. 316, "The power to tax involves
the power to destroy." Recollecting the fundamental principle that
the Constitution, laws, and treaties of the United States are the
supreme law of the land, it seems to us almost absurd to contend
that a power given to a person or corporation by the United States
may be subjected to taxation by a state. The power conferred
emanates from and is a portion of the power of the government that
confers it. To tax it is not only derogatory to the dignity, but
subversive of the powers, of the government and repugnant to its
paramount sovereignty. It is unnecessary to cite cases on this
subject. The principles laid down by this Court in
McCulloch v.
Maryland, 22 U. S.
Bank, 9 Wheat. 817, and
Brown v.
Maryland, 12 Wheat. 436, and in numerous cases
since, which have followed in their lead, abundantly sustain the
views we have expressed. It may be added that these views are not
in conflict with the decisions of this Court in
Thomson v.
Pacific Railroad, 9 Wall. 579, and
Railroad Co.
v. Peniston, 18 Wall. 5. As explained in the
opinion of the Court in the latter case, the tax there was upon the
property of the company, and not upon its franchises or operations.
18 Wall.
85 U. S.
35-37.
The taxation of a corporate franchise merely as such, unless
pursuant to a stipulation in the original charter of the company,
is the exercise of an authority somewhat arbitrary in its
character. It has no limitation but the discretion of the taxing
power. The value of the franchise is not measured like that of
property, but may be ten thousand or ten hundred thousand dollars,
as the legislature may choose. Or, without
Page 127 U. S. 42
any valuation of the franchise at all, the tax may be
arbitrarily laid. It is not an idle objection, therefore, made by
the company against the tax imposed in the present cases.
It only remains to consider whether the Southern Pacific
Railroad Company, as well as the Central Pacific, was invested with
any franchises derived from the government of the United States. Of
this we think there can be no question. The court below, in its
findings of fact in the
Southern Pacific case (No. 661),
finds that the defendant is a corporation existing under the laws
of California except insofar as its existence, rights, privileges,
duties, and obligations have been affected by various acts of
Congress. It then describes the course of the defendant's road,
which commences on the waters of the Pacific Ocean, in the City of
San Francisco, and extends thence southerly to Tres Pinos, in the
County of San Benito, from which place to Huron, a distance of
forty or fifty miles, a portion of the road is yet unfinished, and
the road of the Central Pacific Company is temporarily used in its
stead. From Huron, the route of the road extends easterly to
Goshen, and thence southerly to Mojave. At Mojave, it separates
into two main branches, one extending in an easterly direction to
the Colorado River, near the thirty-fifth parallel of north
latitude, where it meets and connects with the Atlantic and Pacific
Railroad, leading to Springfield, in the State of Missouri. The
other branch extends southerly to Los Angeles and thence easterly
to Fort Yuma, and connects with the Southern Pacific Railroad of
Arizona, and by means of other roads forms a continuous line to New
Orleans. The findings then continue to state as follows,
namely:
"That on the 27th day of July, 1866, the government of the
United States undertook to construct or cause to be constructed a
line of railroad from a point at or near the Town of Springfield,
in the State of Missouri, to the headwaters of the Colorado
Chiquito, and thence along the thirty-fifth parallel of latitude,
as near as might be found suitable for a railroad route, to the
Colorado River at such point as might be selected, and thence, by
the most practicable and eligible route, to the Pacific Ocean, and
to that end, Congress passed an act entitled
Page 127 U. S. 43
'An act granting lands to aid in the construction of a railroad
and telegraph line from the states of Missouri and Arkansas to the
Pacific Ocean,' which act was approved on said 27th day of July,
1866. 14 Stat. 292, c. 278. By said act, certain persons therein
named were made and erected into a corporation under the name and
style of the 'Atlantic and Pacific Railroad Company.'"
"That to facilitate the construction of said road, the
government of the United States, by said act of Congress, adopted
the defendant as the instrument or agent of the United States and
conferred upon defendant (the Southern Pacific Railroad Company)
the same powers and clothed defendant with the same privileges and
immunities which it conferred upon and clothed the Atlantic and
Pacific Railroad Company with, except that the said defendant was
to construct only that portion of said railroad between the
Colorado River and the City and County of San Francisco."
"That said Atlantic and Pacific Railroad Company organized under
said act, . . . and said company and defendant, immediately after
the passage of said act, accepted the terms and conditions thereof,
and have duly complied therewith."
"The said Atlantic and Pacific Company has fully completed the
whole of said road from Springfield to the Colorado River, and
defendant has constructed said road, as aforesaid, to Mojave, with
the exception hereinbefore set out."
"That on the 3d day of March, 1871, the government of the United
States undertook to construct or cause to be constructed a line of
railroad from Marshall, in the State of Texas, to San Diego, in the
State of California, and from said line of road at the Colorado
River, to construct, or cause to be constructed, a line of railroad
which would connect the road from Marshall to San Diego with the
line of road provided for in the Act of Congress of July 27, 1866,
hereinbefore referred to, and, by means of said connecting road, to
connect the road from Marshall to San Diego with the City of San
Francisco, and to that end Congress passed an act entitled 'An act
to incorporate the Texas Pacific Railroad Company, and to aid in
the construction of its road, and for other
Page 127 U. S. 44
purposes,' approved March 3, 1870, and subsequently, on the
second day of May, 1872, passed an act entitled"
"An act supplementary to an act entitled 'An act to incorporate
the Texas Pacific Railroad Company, and to aid in the construction
of its road, and for other purposes,' approved March 3, 1871. 16
Stat. 573, c. 122; 17 Stat. 59, c. 132."
"That immediately after the passage of said Act of March, 1871,
the Texas Pacific Railroad Company was organized in pursuance
thereof, and it and defendant accepted all the terms and conditions
of each of said acts of 1871 and 1872, and have fully and in every
respect complied therewith, and under them, and in compliance with
the spirit and intent of said acts, have completed the roads
mentioned in the third finding [to-wit, the line of the defendant's
railroads hereinbefore described]."
An examination of the acts referred to in these findings shows
that Congress authorized the Southern Pacific Railroad Company to
connect with the Atlantic Pacific Railroad at such point near the
boundary line of the State of California as it should deem most
suitable for a railroad line to San Francisco, and, to aid in the
construction of such a railroad line, Congress declared that the
company should have similar grants of land, and should be required
to construct its road on the like regulations, as to time and
manner, with the Atlantic and Pacific. Like powers were also given
to the Southern Pacific Railroad Company to construct a line of
railroad from Tehachapa pass, by way of Los Angeles, to the Texas
Pacific road at the Colorado River (Fort Yuma). The Southern
Pacific Company was not authorized by its original charter to
extend its railroad to the Colorado River, as we already know by
other cases brought before us and as appears by the act of the
state legislature passed April 4, 1870, which assumed to authorize
the company to change the line of its railroad so as to reach the
eastern boundary line of the state, thus duplicating the power
given to it by the act of Congress.
See the state act
quoted in
118 U. S. 399.
This state legislation was probably procured to remove all doubts
with regard to the company's power to construct such roads. It is
apparent, however, that the franchise to do so was fully conferred
by
Page 127 U. S. 45
congress, and that franchise was accepted, and the roads have
been constructed in conformity thereto. It conclusively appears,
therefore, that the Southern Pacific Railroad Company did receive
from the United States government, and still enjoys, important
franchises connected with its railroads.
It follows that in each one of the now before us, the assessment
made by the State Board of Equalization comprised the value of
franchises or property which the board was prohibited by the
constitution of the state from including therein, and that these
values are so blended with the other items of which the assessment
is composed that they cannot be separated therefrom. The
assessments are therefore void. This renders it unnecessary to
express any opinion on the application of the Fourteenth Amendment,
as the result would not be different whatever view we might take on
that subject.
The judgments in all the cases are affirmed.
* Sections 1, 2, 4, 9, and 10, of Article 13, of the
Constitution of California provide as follows:
"Section 1. All property in the state not exempt under the laws
of the United States shall be taxed in proportion to its value, to
be ascertained as provided by law. The word 'property' as used in
this article and section is hereby declared to include moneys,
credits, bonds, stocks, dues, franchises, and all other matters and
things, real, personal and mixed, capable of private ownership,
provided, that growing crops, property used exclusively for public
schools, and such as may belong to the United States, this state,
or to any county or municipal corporation within this state shall
be exempt from taxation. The legislature may provide, except in the
case of credits secured by mortgage or trust deed, for a deduction
from, credits of debts due to
bona fide residents of this
state."
"Section 2. Land and the improvements thereon shall be
separately assessed, etc."
"Section 4. A mortgage, deed of trust, contract, or other
obligation by which a debt is secured shall, for the purposes of
assessment and taxation, be deemed and treated as an interest in
the property affected thereby. Except as to railroads and other
quasi-public corporations, in case of debts so secured,
the value of the property affected by such mortgage, deed of trust,
contract, or obligation, less the value of such security, shall be
assessed and taxed to the owner of the property, and the value of
such security shall be assessed, and taxed to the owner thereof, in
the county, city, or district in which the property affected
thereby is situate. The taxes so levied shall he a lien upon the
property and security, and may be paid by either party to such
security; if paid by the owner of the security, the tax so levied
upon the property affected thereby shall become a part of the debt
so secured; if the owner of the property shall pay the taxes levied
on such security, it shall constitute a payment thereon, and to the
extent of such payment, a full discharge thereof, provided that if
any such security or indebtedness shall be paid by any such debtor
or debtors, after assessment and before the tax levy, the amount of
such levy may likewise be retained by such debtor or debtors, and
shall be computed according to the tax levy for the preceding
year."
"Section 9. A State Board of Equalization, consisting of one
member from each congressional district in this state, shall be
elected by the qualified electors of their respective districts at
the general election to be held in the year one thousand eight
hundred and seventy-nine, whose term of office, after those first
elected, shall be four years, whose duty it shall be to equalize
the valuation of the taxable property of the several counties in
the state for the purposes of taxation. The Controller of state
shall be
ex officio a member of the Board. The Boards of
Supervisors of the several counties of the state shall constitute
boards of equalization for their respective counties, whose duty it
shall be to equalize the valuation of the taxable property in the
county for the purpose of taxation, provided such state and county
boards of equalization are hereby authorized and empowered, under
such rules of notice as the county boards may prescribe as to the
county assessments, and under such rules of notice as the state
board may prescribe as to the action of the state board, to
increase or lower the entire assessment roll, or any assessment
contained therein, so as to equalize the assessment of the property
contained in said assessment roll and make the assessment conform
to the true value in money of the property contained in said roll.
[This section was amended May 20, 1884, and one of the Central
Pacific cases was commenced after the amendment took effect. But
the counsel on both sides cited the section as here printed.]"
"Section 10. All property, except as hereinafter in this section
provided, shall be assessed in the county, city and county, town,
township, or district in which it is situated, in the manner
prescribed by law. The franchise, roadway, roadbed, rails, and
rolling stock of all railroads operated in more than one county in
this state shall be assessed by the State Board of Equalization at
their actual valve, and the same shall be apportioned to the
counties, cities and counties, cities, towns, townships, and
districts in which such railroads are located in proportion to the
number of miles of railway laid in such counties, cities and
counties, cities, towns, townships, and districts."
"
Statutory Provisions"
Sections 3617, 3627, 3628, 3629, 3664, 3665, 3669, 3670, 3671,
3672, 3673, 3674, 8676, 3692, and 3693 of the Political Code of
California provide as follows:
Section 3617, third subdivision:
"The term 'improvements,' includes -- 1. All buildings,
structures, fixtures, fences, and improvements erected upon or
affixed to the land."
"Section 3627. All taxable property must be assessed at its full
cash value. Land and improvements thereon shall be separately
assessed. Cultivated and uncultivated land of the same quality and
similarly situated shall be assessed at the same value. A mortgage,
deed of trust, contract, or other obligation by which a debt is
secured shall, for the purposes of assessment and taxation, be
deemed and treated as an interest in the property affected thereby
except as to railroad and other
quasi-public corporations.
In case of debts so secured, the value of the property affected by
such mortgage, deed of trust, contract, or obligation, less the
value of such security, shall be assessed and taxed to the owner of
the property, and the value of such security shall be assessed and
taxed to the owner thereof, in the county, city, or district in
which the property affected thereby is situated. The taxes so
levied shall be a lien upon the property and security, and may be
paid by either party to such security; if paid by the owner of the
security, the tax so levied upon the property affected thereby
shall become a part of the debt so secured. If the owner of the
property shall pay the tax so levied on such security, it shall
constitute a payment thereon, and, to the extent of such payment, a
full discharge thereof. If any such security or indebtedness shall
be paid by any such debtor or debtors, after assessment and before
the tax levy, the amount of such levy may likewise be retained by
such debtor or debtors, and shall be computed according to the tax
levy for the preceding year, and every contract by which a debtor
is obliged to pay any tax or assessment on money loaned, or on any
mortgage, deed of trust, or other lien shall, as to any interest
specified therein, and as to such tax or assessment, be null and
void. [In effect March 7, 1881.]"
"Section 3628. The franchise, roadway, roadbed, rails, and
rolling stock of all railroads operated in more than one county in
this state shall be assessed by the State Board of Equalization as
hereinafter provided for. Other franchises, if granted by the
authorities of a county, city, or city and county, must be assessed
in the county, city, or city and county within which they were
granted; if granted by any other authority, they must be assessed
in the county in which the corporations, firms, or persons owning
or holding them have their principal place of business. All other
taxable property shall be assessed in the county, city, city and
county, town, township, or district in which it is situated. Land
shall be assessed in parcels or subdivisions not exceeding six
hundred and forty acres each, and tracts of land containing more
than six hundred and forty acres, which have been sectionized by
the United States government, shall be assessed by sections or
fractions of sections. The assessor must, between the first Mondays
of March and July in each year, ascertain the names of all taxable
inhabitants and all property in his county subject to taxation,
except such as is required to be assessed by the State Board of
Equalization, and must assess such property to the persons by whom
it was owned or claimed or in whose possession or control it was at
twelve o'clock M. of the first Monday of March next preceding, but
no mistake in the name of the owner or supposed owner of real
property shall render the assessment thereof invalid. In assessing
solvent credits not secured by mortgage or trust deed, a reduction
therefrom shall be made of debts due to
bona fide
residents of this state. [In effect March 22, 1850.]"
"Section 3629. He must exact from each person a statement under
oath setting forth specifically all the real and personal property
owned by such person or in his possession or under his control at
12 o'clock M. on the first Monday in March,"
etc. [In effect March 7, 1581.]
"Section 3664. The president, secretary, or managing agent, or
such other officer as the State Board of Equalization may
designate, of any corporation, and each person, or association of
persons owning or operating any railroad in more than one county in
this state shall, on or before the first Monday in April of each
year, furnish the said board a statement, signed and sworn to by
one of such officers or by the person or one of the persons forming
such association, showing in detail for the year ending on the
first Monday in March in each year:"
"1. The whole number of miles of railway in the state, and, when
the line is partly out of the state, the whole number of miles
without the state, and the whole number within the state, owned or
operated by such corporation, person, or association;"
"2. The value of the roadway, roadbed, and rails of the whole
railway, and the value of the same within the state;"
"3. The width of the right of way;"
"4. The number of each kind of all rolling stock used by such
corporation, person, or association in operating the entire
railway, including the part without the state;"
"5. Number, kind, and value of rolling stock owned and operated
in the state;"
"6. Number, kind, and value of rolling stock used in the state,
but owned by the party making the returns;"
"7. Number, kind, and value of rolling stock owned, but used out
of the state, either upon divisions of road operated by the party
making the returns, or by and upon other railways."
"Also showing in detail, for the year preceding the first of
January:"
"1. The gross earnings of the entire road;"
"2. The gross earnings of the road in the state, and where the
railway is let to other operators, how much was derived by the
lessor as rental;"
"3. The coat of operating the entire [road], exclusive of
sinking fund, expenses of Land Department, and money paid to the
United States;"
"4. Net income for such year, and amount of dividend
declared;"
"5. Capital stock authorized;"
"6. Capital stock paid in;"
"7. Funded debt;"
"8. Number of shares authorized;"
"9. Number of shares of stock issued;"
"10. Any other facts the State Board of Equalization may
require;"
"11. A description of the road, giving the points of entrance
into and the point of exit from each county, with a statement of
the number of miles in each county. When a description of the road
shall once have been given, no other annual description thereafter
is necessary unless the road shall have been changed. Whenever the
road, or any portion of the road, is advertised to be sold, or is
sold for taxes, either state or county, no other description is
necessary than that given by, and the same is conclusive upon, the
corporation, power, or association giving the description. No
assessment is invalid on account of a misdescription of the railway
or the right of way for the same. If such statement is not
furnished, as above provided, the assessment made by the State
Board of Equalization upon the property of the corporation, person,
or association failing to furnish the statement is conclusive and
final. [In effect March 9, 1883.]"
"Section 3665. The State Board of Equalization must meet at the
state capitol on the first Monday in August and continue in open
session from day to day, Sundays excepted, until the third Monday
in August. At such meeting, the Board must assess the franchise,
roadway, roadbed, rails, and rolling stock of all railroads
operated in more than one county. Assessment must be made to the
corporation, person, or association of persons owning the same, and
must be made upon the entire railway within the state, and must
include the right of way, bridges, culverts, wharves, and moles
upon which the track is laid, and all steamers which are engaged in
transporting passenger and freight cars across waters which divide
the road. The depots, stations, shops, and buildings erected upon
the space covered by the right of way are assessed by the assessor
of the county wherein they are situate. Within ten days after the
third Monday of August, the Board must apportion the total
assessment of the franchise, roadway, roadbed, rails, and rolling
stock of each railway to the counties, or cities and counties, in
which such railway is located in proportion to the number of miles
of railway laid in such counties, and cities and counties. The
Board must also, within said time, transmit by mail to the county
auditor of each county or city and county to which such
apportionment shall have been made a statement showing the length
of the main track of such railway within the county or city and
county, with a description of the whole of the said track within
the county, or city and county, including the right of way, by
metes and bounds or other description sufficient for
identification, the assessed value per mile of the same, as fixed
by a
pro rata distribution per mile of the assessed value
of the whole franchise, roadway, roadbed, rails, and rolling stock
of such railway within the state, and the amount apportioned to the
county or city and county. The auditor must enter the statement on
the assessment roll or book of the county, city and county, and
where the county is divided into assessoral townships or districts,
then on the roll or book of any township or district he may select,
and enter the amount of the assessment apportioned to the county or
city and county in the column of the assessment book or roll as
aforesaid which shows the total value of all property for taxation,
either of the county, city and county, or such township or
district. On the first Monday in October, the Board of Supervisors
must make and cause to be entered in the proper record book an
order stating and declaring the length of main track of the railway
assessed by the State Board of Equalization within the county; the
assessed value per mile of such railway, the number of miles of
track, and the assessed value of such railway lying in each city,
town, township, school and road districts or lesser taxing district
in the county or city and county through which such railway runs,
as fixed by the State Board of Equalization, which shall constitute
the assessed value of said property for taxable purposes in such
city, town, township, school, road, or other district, and the
clerk of the Board of Supervisors must transmit a copy of each
order or equalization to the city council or trustees, or other
legislative body of incorporated cities or towns, the trustees of
each school district, and the authorized authorities of other
taxation districts through which such railway runs. All such
railway property shall be taxable upon said assessment at the same
rates, by the same officers, and for the same purposes as the
property of individuals within such city, town, township, school,
road, and lesser taxation districts respectively. If the owner of a
railway assessed by the State Board of Equalization is dissatisfied
with the assessment made by the Board, such owner may at the
meeting of the Board, under the provisions of section thirty-six
hundred and ninety-two of the Political Code, between the third
Monday in August and the third Monday in September, apply to the
Board to have the same corrected in any particular, and the Board
may correct and increase or lower the assessment made by it, so as
to equalize the same with the assessment of other property in the
state. If the Board shall increase or lower any assessment
previously made by it, it must make a statement to the county
auditor of the county affected by the change in the assessment of
the change made, and the auditor must note such change upon the
assessment book or roll of the county, as directed by the Board.
[In effect March 9, 1883.]"
"Section 3669. Each corporation, person, or association assessed
by the State Board of Equalization must pay to the state treasurer,
upon the order of the controller, as other moneys are required to
be paid into the Treasury, the state and county, and city and
county, taxes each year levied upon the property so assessed to it
or him by said Board. Any corporation, person, or association
dissatisfied with the assessment made by the Board, upon the
payment of the taxes due upon the assessment complained of, and the
five percent added, if to be added on or before the first Monday in
February, and the filing of notice with the controller of an
intention to begin an action, may, not later than the first Monday
in February, bring an action against the state treasurer for the
recovery of the amount of taxes and percentage so paid to the
treasurer, or any part thereof, and in the complaint may allege any
fact tending to show the illegality of the tax or of the assessment
upon which the taxes are levied in whole or in part. A copy of the
complaint and of the summons must be served upon the treasurer
within ten days after the complaint has been filed, and the
treasurer has thirty days within which to demur or answer. At the
time the treasurer demurs or answers, he may demand that the action
be tried in the Superior Court of the County of Sacramento. The
Attorney General must defend the action. The provisions of the code
of civil procedure relating to pleadings, proofs, trials and
appeals are applicable to the proceedings herein provided for. If
the final judgment be against the treasurer, upon presentation of a
certified copy of such judgment to the controller, he shall draw
his warrant upon the state treasurer, who must pay to the plaintiff
the amount of the taxes so declared to have been illegally
collected, and the cost of such action, audited by the Board of
Examiners, must be paid out of any money in the general fund of the
treasury, which is hereby appropriated, and the controller may
demand and receive from the county or city and county interested
the proportion of such costs, or may deduct such proportion from
any money then or to become due said county or city and county.
Such action must be begun on or before the first Monday in February
of the year succeeding the year in which the taxes were levied, and
a failure to begin such action is deemed a waiver of the rights of
action. [In effect March 9, 1883.]"
"Section 3670. After the first Monday of February of each year,
the controller must begin an action in the proper court, in the
name of the people of the California, to collect the delinquent
taxes upon the property assessed by the State Board of
Equalization; such suit must be for the taxes due the state, and
all the counties, and cities and counties, upon property assessed
by the Board of Equalization, and appearing delinquent upon the
'Duplicate Report of Apportionment of Railway Assessments.' The
demands for state and county and city and county taxes may be
united in one action. In such action, a complaint in the following
form is sufficient:"
" (Title of court)"
"The People of the State of California"
" v."
"(Naming the Defendant)"
" Plaintiff avers that on the ___ day of ______ in the year
(naming the year), the State Board of Equalization assessed the
franchise, roadway, roadbed, rails, and rolling stock of the
defendant at the sum of (naming it) dollars. That the Board
apportioned the said assessment as follows: To the County of
(naming it) the sum of (naming it) dollars (and so on, naming each
county)."
" That the defendant is indebted to plaintiff for state and
county taxes for the year eighteen ___ in the following sums: for
state taxes, in the sum of (naming it) dollars, for county taxes of
the County of (naming it), in the sum of (naming it) dollars, etc.,
with five percent added for nonpayment of taxes. Plaintiff demands
payment for said several sums, and prays that an attachment may
issue in form as presented in section five hundred and forty of the
Code of Civil Procedure."
"(Signed by the controller or his attorney)"
"On the filing of such complaint, the clerk must issue the writ
of attachment prayed for, and such proceedings shall be had as
under writs of attachment issued in civil actions; no bond nor
affidavit previous to the issuing of the attachment is required. If
on such action the plaintiff recover judgment, there shall be
included in the judgment as counsel fees, and in case of judgment
of taxes after suit brought but before judgment, the defendant must
pay as counsel fees such sums as the court may determine to be
reasonable and just. Payment of the taxes on the amount of the
judgment in the case must be made to the state treasurer. In such
actions, the duplicate record of assessments of railways and the
duplicate record of apportionment of railway assessments, or a copy
of them, certified by the controller, showing unpaid taxes against
any corporation, person, or association for property assessed by
the State Board of Equalization, is
prima facie evidence
of the assessment, the property assessed, the delinquency, the
amount of the taxes due and unpaid to the state, and counties, or
cities and counties, therein named, and that the corporation,
person, or association is indebted to the people of the California,
in the amount of taxes, state and county, and city and county,
therein appearing unpaid, and that all the forms of law in relation
to the assessment and levy of such taxes have been complied with.
[In effect March 9, 1883.]"
"Section 3671. The assessment made by the county assessor, and
that of the State Board of Equalization, as apportioned by the
Board of Supervisors to each city, town, township, school, road, or
other district in their respective counties, shall be the only
basis for taxation for the county or any subdivision thereof except
in incorporated cities and towns, and may also be taken as such
basis in incorporated cities and towns when the proper authorities
may so elect. All taxes upon townships, road, school, or other
local districts shall be collected in the same manner as county
taxes. [In effect March 9, 1883.]"
"Section 3672. The board of supervisors of each county must meet
on the first Monday of July in each year to examine the assessment
book and equalize the assessment of property in the county. It must
continue in session for that purpose from time to time until the
business of equalization is disposed of, but not later than the
fourth Monday in July. [In effect January 1, 1873.]"
"Section 3673. The Board has power, after giving notice in such
manner as it may by rule prescribe, to increase or lower the entire
assessment roll, or any assessment contained therein, so as to
equalize the assessment of the property contained in said roll and
make the assessment conform to the true value of such property in
money. [In effect March 22, 1880.]"
"Section 3674. No reduction must be made in the valuation of
property unless the party affected thereby, or his agent, makes and
files with the board a written application therefor, verified by
his oath, showing the facts upon which it is claimed such reduction
should be made. [In effect January 1, 1873.]"
"Section 3676. Upon the hearing of the application, the Board
may subpoena such witnesses, hear and take such evidence in
relation to the subject pending as in its discretion it may deem
proper. [In effect January 1, 1873.]"
"Section 3692. The powers and duties of the State Board of
Equalization are as follows:"
"1. To prescribe rules for its own government, and for the
transaction of its business."
"2. To prescribe rules and regulations, not in conflict with the
constitution and laws of the state, to govern supervisors when
equalizing, and assessors when assessing."
"3. To make out, prepare, and enforce the use of forms in
relation to the assessment of property."
"4. To hold regular meetings at the state capitol on the second
Monday in each month and such special meetings as the chairman may
direct."
"5. To annually assess the franchise, roadway, roadbed, rails,
and rolling stock of all railroads operated in more than one county
in this state at their actual value, on the first Monday in March
at 12 o'clock M., and to apportion such assessment to the counties,
and cities and counties in which such railroads are located in
proportion to the number of miles of railway laid in such counties
and cities and counties in the manner provided for in section 3664
of said code."
"6. To equalize the assessment of each mortgage, deed of trust,
contract, or other obligation by which a debt is secured and which
affects property situate in two or more counties, and to apportion
the assessment thereof to each of said counties."
"7. To transmit to the assessor of each county or city and
county its apportionment of the assessments made by said board upon
the franchises, roadways, roadbeds, rails, and rolling stock of
railroads, and also its apportionment of the assessments made by
such Board upon mortgagee, deeds of trust, contracts, and other
obligations by which debts are secured, in the manner provided for
in § 3664 of said code.
"
"8. To meet at the state capitol on the third Monday in August,
and remain in session from day to day (Sundays excepted) until the
third Monday in September."
"9. At such meeting, to equalize the valuation of the taxable
property of the several counties in this state for the purpose of
taxation, and to that end, under such rules of notice to the clerk
of the board of supervisors of the county affected thereby as it
may prescribe, to increase or lower the entire assessment roll or
any assessment contained therein so as to equalize the assessment
of the property contained in said roll and make the assessment
conform to the true value in money of the property assessed and to
fix the rate of state taxation, and to do the things provided in §
3693 of said code."
"10. To visit as a board, or by the individual members thereof,
whenever deemed necessary, the several counties of the state for
the purpose of inspecting the property and learning the value
thereof."
"11. To call before it or any member thereof on such visit any
officer of the county, and to require them to produce any public
records in their custody."
"12. To issue subpoenas for the attendance of witnesses or the
production of books before the board, or any member thereof, which
subpoenas must be signed by a member of the board, and may be
served by any person."
"14. To appoint a clerk, prescribe and enforce his duties. The
clerk shall hold his office during the pleasure of the board."
"16. To report to the governor, annually, a statement
showing:"
"
First. The acreage of each county in the state that is
assessed."
"
Second. The amount assessed per acre."
"
Third. The aggregate value of all town and city
lots."
"
Fourth. The aggregate value of all real estate in the
state."
"
Fifth. The kinds of personal property in each county,
and the value of each kind."
"
Sixth. The aggregate value of all personal property in
the state."
"
Seventh. Any information relative to the assessment of
property and the collection of revenue."
"
Eighth. Such further suggestions as it shall deem
proper."
"16. To keep a record of all its proceedings. [In effect April
3, 1880.]"
"Section 3693. When, after a general investigation by the board,
the property is found to be assessed above or below its full cash
value, the board may, without notice, so determine, and must add to
or deduct from the valuation:"
"1. The real estate."
"2. Improvements upon such real estate."
"3. The personal property, except money, such percentum
respectively as is sufficient to raise or reduce to its full cash
value."
"[In effect April 3, 1880.]"