St. L., I. M. & S. Ry. v. Worthen

Cockrill, C. J.

This appeal raises the question of the constitutionality of the provisions of the revenue act of 1883, creating the State Board of Railroad Commissioners for the assessment of railway property for taxation. Secs. 5647, et seq., Mansf. Dig. It is an attempt on the part of the railway to enjoin the collection of taxes on account of the invalidity or nullity of the assessment.

The legality of the proceedings of the Board in assessing railway property was affirmed by this court in the case of Ry. v. Worthen, 46 Ark., 312, and by the Supreme Court of the United States in Huntington v. Worthen, 120 U. S., 97; and thus the constitutionality of the act creating the board was impliedly recognized by both tribunals; but the question was not argued in either case, and we are now asked tp overthrow the act because (1), it authorizes the assessment of railways by a different instrumentality from that employed to assess other property; because (2), it authorizes the assessment of '• railway tracks ” (a term which includes the right of way) annually, whereas other real estate is assessed biennially; because (3), it is said the board meets without notice to the railways; and because (4), no appeal is provided from the assessment of the board, whereas that privilege is accorded to the owners of all other property.

Similar statutory provisions exist in many States of the Union, and numerous decisions are reported from various States and from the Supreme Court of the United States, affirming the validity of the acts, in some one of which every question here raised has been pressed upon the attention of the court, but no case is cited denying their legality.

1. taxation Valuation of property. 2. Same : same. The Constitution of this State provides that the value of property for taxation shall be ascertained in such manner as the General Assembly shall direct, making the same equal and uniform. Sec. 5, art. 16. There is nothing in this or any other provision of the Constitution which either expressly, or by necessary implication denies the Legislature the power to classify property for the purpose of taxation; Railway v. Worthen, 46 Ark., 330; and that classification is not .prohibited by the Federal Constitution, so long as the law operates equally and uniformly upon all property of like kind, is definitely settled by the Supreme Court of the United States. State Railroad Tax Cases, 92 U. S., 801; Cummings v. Bank, 101 ib., 100; Kentucky Railroad Cases, 115 ib., 321.

3-6. Same : Same: Assessment of railways. From the peculiar nature of railroad property, its dissimilarity in use and value from the mass of other property, and its continuous extent through different localities, it is commonly regarded by the States that it cannot, in justice to the owners, be as fairly and uniformly valued by the numerous local instrumentalities provided for assessing other property, as by a State board created for the purpose. The industry of the Attorney General has furnished us references to the statutes of a large number of States showing that the practice of assessment of railways as units by State boards is almost universal.

In considering a statute of the State of Kentucky, which pursued this system, the Supreme Court of the United States, in the case cited, says: “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 cirT cumstances. Theré is no objection, therefore, to the discrimination made as between railroad companies and other corporations in the method and instrumentalities by which the value of their property is ascertained. The different nature and uses ■of their property justify the discrimination, in this respect, which the discretion of the Legislature has seen fit to impose.”

In a like case in California it was said: “The Constitution of the State requires all property to be assessed at its actual value. We are unable to see how the fact that the value of one kind of property is to be ascertained by one officer or board, and the value of another kind of property by another officer or board — each clothed with the duty and responsibility of ascertaining the actual value — can be held to operate a deprivation of legal protection to the owners of either kind of property. The State board in the one case, the Assessors and county boards in the other, are but different instrumentalities through which the same result is reached; the fair and just valuation by reference to the same standard, and, therefore, the equal and uniform valuation of property for purposes of taxation.” Authorities might be multiplied to the same effect.

The objection of the railways to be placed in a class to be •dealt with separately by the Legislature is thus seen to be without foundation or authority. But the power thus to classify makes it competent for the Legislature to provide the periods for the assessment of each class, as well as the mode. It is competent to provide that one kind of property shall be assessed every year, while the requirement reaches another ■only once in two years. Such a distinction between real and personal property is made without objection; but the difference between a railway with its equipments and real estate is perhaps not greater than between real estate and some species ■of personalty. The fact that this statute denominates railway tracks as real estate, does not obliterate the difference between them and ordinary farm lands, any more than it would in fact convert railroads into personalty to call them so, as was done for the purpose of taxation by the Acts of 1871 and 1879. Acts 1871, p. 135; Acts 1879, p. 40. The nature of the property justifies classification and separation from the body of the real estate upon the grounds that justify the separate classification of realty and personalty. The requirement of an annual assessment of railways affords, therefore, no greater-cause for complaint than does the like requirement for personal property, and the complaint of discrimination is groundless. Railroad v. Board of Supervisors, 67 Iowa, 199.

7. Same: same. More baseless than either of these objections is the argument that the company’s property is taken without due process of law because no notiee is given the company and no-opportunity to be heard before the assessment becomes fixed. The time and place for the meeting of the board is fixed by the statute and notice by statute is practically sufficient, and all that can be required in such proceedings. Pulaski Equalization Board Cases, 49 Ark., 518. As was said in the State Railroad Tax Cases, 92 U. S., supra: “ This board has its time of sitting fixed by law. Its sessions are not secret. No obstruction exists to the appearance of any one before it to assert a right or redress a wrong; and in the business of’ assessing taxes, this is all that can be reasonably asked.”

8. Same: same. The objection urged here to the failure to provide for an appeal from the valuation fixed by the State board, was disposed of in the Kentucky Railroad Tax Cases, cited above; and what is there said of the relative rights of the owners o railways, and of the owners of other property, and of the power of the tribunals which fix .the values of the several classes of property for taxation, is so nearly applicable under the laws of this State, that we quote the language as disposing of the question. “ The final point of objection seems to-be reduced to this. In the case of ordinary real estate it is. said, when the Assessor has made his valuation, it is submitted to a board of supervisors, who may change the valuation, but not so as to increase it without notice to the tax-payer, and an opportunity for a formal hearing, upon testimony to be adduced under oath, and with a right of appeal on his part, first to a County Judge, and again, if the amount of the 'tax is-equal to fifty dollars, to the Circuit Court. This is contrasted with the proceedings in the case of railroad property before the board of railroad commissioners, in which it is alleged there is no notice of an intended -change in the valuation returned by the company, and no appeal allowed if it is increased.

“ The discrimination, however, is apparent rather than real. An examination of the statutes shows, that the original valuation of the Assessor, in case of ordinary real estate, is conclusive upon the tax-payer, no matter how unsatisfactory; and the appeal allowed is only from the action of the board of supervisors, in case they undertake to increase the valuation made by the Assessor. But in the case of railroad property no board has the authority to increase the original assessment made by the railroad commissioners, and there is, therefore, no case for an appeal similar to that of the owner of ordinary real estate.

“But were it otherwise, the objection would not be tenable. We have already decided that the mode of valuing railroad property for taxation under this statute is due process of law. That being so, the provision securing the equal protection of the laws, does not require in any case, an appeal, although it may be allowed in respect to other persons, differerently situated. This was expressly decided by this court im the case of Missouri v. Lewis, 101 U. S., 22, 30. It was there-said by Mr. Justice Bradley, delivering the opinion of the-court and speaking to this point, that ‘ the last restriction, as' to the legal protection of the laws, is not violated by any diversity in the jurisdiction of the several courts as to the sub— ject matter, amount, or finality of decision, if all persons within the territorial limits of their respective jurisdictions have an equal right, in like cases and under like circumstances, to resort to them for redress.’ The right to classify railroad property as a separate class, for purposes of taxation, grows out of the inherent nature of the property, and the discretion -vested by the Constitution of the State in its Legislature, necessarily involves the right, on its part, to devise and carry into -effect a distinct scheme, with different tribunals in the proceeding to value it. If such a scheme is due process of law, the details in which it differs from the,mode of valuing other ■descriptions and classes of property cannot be considered as .a denial of the equal protection of the laws.”

The provision contained in the Kentucky act for the enforcement of the tax by proceeding in an ordinary court of justice, does not alter the case as to the questions presented, for in such proceedings the valuation fixed by the board is -conclusive in the absence of a statutory provision authorizing inquiry into their finding, and it could not be assailed unless for fraud or want of jurisdiction (Ry. v. Stockey, 119 Ill., 182) —grounds upon which the court of equity could have acted in this case as readily as could the Kentucky tribunal in the case instanced. Ry. v. Donohoe, 122 Ill., 27; Ry. v. People, ib., 506.

9. Same : Same. Much complaint is made in the abstract and brief of appellant over the fact that having the same mileage in 1885 and 1886, the board nearly doubled the assessment of the former year in the latter. No fraud is charged; and it is notable in this case, as in those of the individuals who complained in the cases reported in 49 Ark., 518, that the board of equalization .had greatly increased their assessment, that there is not even ¿a charge of over-valuatiou of property. The only inference .to be deduced from the increase in the assessment, standing .alone, as was said in the case of The Railroad v. The People, 122 Ill., supra, would be that the assessment for the first year was too low or that the property had since increased in value, or that both facts existed.

A mere discrepancy in judgment, however, between the-members of the board and the Chancellor to whom the application may be made for injunction, would not warrant interference on the part of the latter.

The Chancellor was right in declining to interfere with the-collection of the taxes, and the decree is affirmed.