Minneapolis, St. Paul & Sault Ste. Marie Railway Co. v. Oppegard

Morgan, C. J.

During the years 1901 to 1904, inclusive, the State Board of Equalization assessed certain taxes against the plaintiff, upon property owned! and used by it in maintaining a telegraph line along and upon its right of way, and extending wherever its right of way and roadbed extends within the state. The assessment was miade at a specified sum per mile upon the franchise, and a specified sum per mile upon the other property of the plaintiff within the state. The assessment was not made, nor was the levy of the taxes made, directly upon the property, as the property of the plaintiff, but was .assessed and levied under various designations as to .the ownership of the property, such as “Soo Telegraph Company,” “Minneapolis, St. Paul & S. Ste. Marie Telegraph Company,” and “Operated and controlled by the Minneapolis, St. Paul & S. Ste. Marie Ry. Co., as the commercial department of said company.” The plaintiff company refused to pay the taxes -so assessed, claiming that the property taxed was a part of the roadway of its railway, and included within the tax levied' upon its railway property and paid by it during the years in question. The taxes so levied upon the so-called telegraph system of the Soo Railway Company, was certified to the auditor of Barnes county by the State Auditor, and was by the auditor of said county extended upon the tax rolls of the county. Upon the .refusal of the plaintiff to pay these taxes, the sheriff levied upon certain property of the plaintiff under a tax warrant, and advertised the same for sale to pay said faxes. The plaintiff paid the full amount of the taxes to the sheriff under protest, and brings this action against the county to recover back the money so paid, with costs. The jury found in favor of the defendant county, and judgment was rendered upon the verdict by the district court. The plaintiff has appealed from the judgment.

The plaintiff contends that the telegraph line was constructed, and during the years in question was used, as an indispensable means *4of operating its railway system and performing its duties ais a common carrier. There are certain undisputed facts in the record which should now be enumerated. The property which was assessed belonged to the plaintiff company. Plaintiff company is not shown to have.,a charter or franchise to carry on a telegraph business. The only charter it has is as a railroad company, so far as is shown by the record. The company operates a railway line across the state • from southeast to northwest, and a line across the state, or nearly so, from east to west, and numerous branch lines, and maintains a telegraph line wherever it has a railway line. It does all the commercial business that is offered to it at every public place along its railway line, and at one place at least, maintains an office for taking care of commercial business alone. It will not be disputed that a telegraph line, used exclusively for the moving of trains and the dispatching of railroad business, is not assessable independently or separately from the railroad property. In C. M. & St. P. Ry. Co. v. Cass County, 8 N. D. 18, 76 N. W. 239, the rule as to taxation of property owned by a railway company, and included as part of the “roadway,” as that term is used in section 179 of the Constitution, was laid down to the effect that the word “roadway” includes, “not only t)he strip of ground upon which the main line is constructed, but all grounds necessary for the construction of side tracks, turnouts, connecting tracts, station houses, freighthouses and all other accommodations reasonably necessary to accomplish the object of their incorporation.” The appellant contends that under this rule the property taxed in this case is exempt from separate taxation. It contends that the property is reasonably necessary for the operation of its railway. If the fact that the telegraph line is used for profit in handling commercial business could be eliminated from the case, this contention could be upheld as based upon reason and authority. While the business of a railroad company and the running of its trains require a telegraph line and equipment, and the same are reasonably necessary for these purposes, it is nevertheless a self-evident fact that it is not necessary for the railroad company to do commercial business for compensation in order to run its trains. What is the effect upon the taxability of this telegraph property that it has not been used exclusively for railroad business? The evidence is not satisfactory as to the amount of commercial business that is done by the telegraph department of the plaintiff company. By way of general conclusions it is stated by the officers of the *5company that the volume of commercial business was small, during these years, as compared with the business of running the trains and doing the other railroad business. No facts were given in evidence on which a conclusion could be formed as to the relative .amount or volume of work required to perform the two classes of business. The court will take judicial notice of the fact that the railroad runs through portions of the state that are thickly populated, and that there :ane many villages and cities on this road, and that, so far as population is concerned, the territory traversed by the plaintiff road is practically the same as the territory traversed by the railway lines operated through the Western Union Telegraph system. We do not think it material that the revenue from the telegraph business is not definitely given. The evidence will sustain a finding that the revenue derived from the use of the telegraph line for other than railway business is sufficiently large to warrant the conclusion that such telegraph property is not used .as reasonably necessary to carry out the object of the incorporation of the plaintiff as a railroad corporation. It is true, as stated before, that a telegraph system is necessary to operate a railroad, and to run its trains in a safe and orderly manner, but it does not appear to be shown or claimed that it was necessary for the plaintiff .company to build its own telegraph system, and from what other railroads are doing in that regard such a contention could not be sustained. The fact, therefore, that the ownership of the telegraph line by the railroad company was not necessary, and such ownership not indispensable to it for operating its railway system, does not exempt the telegraph property from taxation as a part of the railroad property, and the fact that the railroad company had paid its taxes for these years on its roadbed, right of way, rolling stock, and other railway property becomes immaterial. The property used for the construction and maintenance of the telegraph line was not included in the property of the railroad company taxed by the board of equalization. The use of the property in running a telegraph system for compensation cannot be said to be reasonably necessary to carry out the purposes for which the railroad compasny was formed. The following cases are in point as sustaining the taxation of property under similar circumstances: C. M. & St. P. Ry. Co. v. Board of Supervisors, 48 Wis. 666, 5 N. W. 3; M. & St. P. Ry. Co. v. City of Milwaukee, 34 Wis. 271; C. M. & St. P. Ry. Co. v. Crawford Co., 29 Wis. 116.

*6In the year 1900 an amendment to the Constitution of the' state was adopted, and under this amendment the board of equalization was empowered to assess “the franchise * * * and all other property of all telegraph or telephone companies, or corporations operated in this state and used directly or indirectly in the carrying of * * * messages.” Pursuant to this amendment the Legislature passed chapter 26, p. 30, Laws 1901. Under this chapter it is provided that the State Board of Equalization “shall * * * in each year assess at its actual value the franchise and all other property within the state, of all * * * telegraph or telephone companies.” Tlhe evidence in this case does not show that the plaintiff company was ever granted a charter or articles of incorporation or any express authority or franchise to carry on business as a telegraph company. The complaint alleges that the plaintiff is a duly incorporated company engaged in operating a railway in North Dakota. It is duly authorized to operate a railroad onlv, so far as this record shows. It is shown that, as such railway company, it has built, and now maintains and operates, a complete telegraph system, and operates the same for the accommodiation of the public for. compensation, in addition to using such telegraph equipment in directing the running of its trains and doing a purely railroad business. It is shown, as we have seen, that the company has carried on a telegraph business for compensation as fully as though it had a separate franchise or authority to do such telegraph business. The plaintiff does a general telegraph business to the same extent as a company expressly and solely authorized to do such business. The question is therefore presented whether the fact that plaintiff is not shown to be authorized by sovereign authority to do a telegraph business is a defense available to it to defeat the levy and collection of a tax upon its telegraph property by the State Board of Equalization, pursuant to said chapter 26, p. 30, Laws 1901. If the word “franchise” is to be taken as meaning simply a direct authority from the state to do business, then the record does not show that it possessed any authority to do a telegraph business independently of operating its railroad. The record fails to show that a franchise or right to carry on a telegraph business, for or upon the plaintiff’s railway line, was ever granted to any company or corporation. The plaintiff claims that this fact is fatal to the tax. The defendant claims that plaintiff should not be permitted to interpose that fact as ai defense, nor as a fact in an affirmative cause of action to recover *7back the money paid on account of said taxes. We think that the defendant’s contention should be sustained. The plaintiff is an incorporated railroad company carrying oni a distinct telegraph business in connection with its railroad business. The state has not objected or taken any steps to prevent the plaintiff from carrying on a business for compensation not directly connected with the business of a strictly railroad company. The carrying on of a telegraph business for compensation is not included within the duties or privileges of a company organized for railroad purposes. A company chartered to do a railway business has no authority, by virtue of such charter, to maintain a telegraph line independently of its railroad business. In Railroad Company v. Telegraph Company, 38 Ohio St. 24, the court said: “ Another view of the case leads to the same result. Neither the Marietta & Cincinnati Railroad Company, nor the plaintiff in error, ever had or have the capacity to engage in the telegraph business for the public generally, whether local or general in its character. The only extent to which either of them could engage in the business of telegraphy was such as might be necessary or convenient to the management of the railroad for its business. For this purpose only can a railroad company in this state erect and maintain a line of telegraph poles and wires. True, having built such lines for such use, it is competent for the railroad company to. grant to another, having such capacity to engage in the business, the right to use such poles and wires for the purpose of general telegraphy, and the right so transferable may be exclusive or partial as the .parties may agree.” The plaintiff has reaped the full benefit to be derived from operating a telegraph line, and the state has, by its inaction, impliedly assented thereto. The plaintiff, having carried on a general telegraph business in connection with its railroad business, cannot be heard to now say it had no franchise or authority' to do a telegraph business, for the purpose of defeating a tax levied upon its property that was used independently of any railroad business, and so used for compensation. The actual existence of a franchise from the state becomes immaterial, inasmuch as the plaintiff has actually assumed one. To permit it to defeat a tax now, on the ground that it has no franchise, or authority, as a matter of fact, to do a telegraph business, would be .permitting it to taire advantage of its 'Own wrong. The company will not now be heard to assert the fact that it had no authority to do a telegraph business. The company is estopped from showing such fact by reason of having *8assumed and! asserted that authority. The tax will be upheld, not as levied upon 'an actual or assumed franchise, but upon the ground that the plaintiff has estopped itself from asserting that it had no franchise. Adams Express Co. v. Kentucky, 166 U. S. 171, 17 Sup. Ct. 527, 41 L. Ed. 960.

(118 N. W. 830.)

The judgment is affirmed.

All concur.