The opinion of the court was delivered by
Hiller, J.Plaintiff is the appellant from the judgment denying the reduction claimed of the assessments for taxation for the year 1896, of the plaintiff’s franchise for operating a street railway.
*460Franchises with other property are subjected to taxation by our law, and v,he actual value of the property is to be ascertained in the mode pointed out by lawr and exhibited by the assessment. The revenue act, along with the duty to furnish the assessors with the returns of their business and condition, requires from the railway corporations a sworn statement of their earning capacity to serve as a basis to estimate the value of the corporate franchise. Constitution, Article 203, Act of 1890, No. 106, Ss. 1, 28.
In the protest against their franchise assessment of six hundred and fifty-eight thousand, three hundred dollars, the plaintiff claims that the net earnings of their road for 1896 were thirty-six thousand, six hundred and twenty-nine 85-100 dollars, and contend the amount capitalized to produce at six per cent interest per annum the sum of thirty-six thousand, six hundred and twenty-nine dollars should be deemed the value of the franchise. On this theory six hundred and ten thousand, four hundred and ninety-seven dollars capitalized, yielding at six per cent thirty-six thousand, six hundred and twenty-nine dollars, is assumed to represent the franchise and all the property of the corporation, and deducting two hundred and ninety-two thousand, eight hundred dollars, the value of the property taxed directly, leaves three hundred and seventeen thousand, six hundred and ninety-seven dollars, which it is insisted, should be accepted as the value of the franchise of a corporation with near a million of capital stock on which it declared a dividend^of six per cent. It is stated in the briefs for the assessors, that the plaintiff made no returns of earnings and expenditures. The assessors ascertained the franchise value by capitalizing the amount sufficient to produce the six per cent on the entire stock paid by plaintiff, deducting the value of the property directly taxed, and treating the residue, six hundred and fifty-eight thousand dollars, as the value of the franchise; in other words, the assessors adopted the capital of the company nine hundred and fifty-three thousand, three, hundred dollars as representing franchise and property; deducted the value of the property, two hundred and ninety-two thousand dollars, because directly taxed and assessed the residue ■as the franchise value. The difference between the plaintiffs and the assessors arises from the one insisting on the sum capitalized to produce thirty-six thousand dollars, as measuring the value of property and franchise; and the assessors’ adoption of the capital, nine hund■red and fifty-three thousand dollars, producing at six per cent, the *461dividends paid as fairly representing' franchise and property. The assessors’ method gives six hundred and fifty-eight thousand dollars as the franchise value, that of the plaintiff’s three hundred and seventeen thousand dollars.
The proposition of the plaintiffs that net earnings are the test to-ascertain the value of the franchise, it is claimed, is supported by the revenue statute. Net earnings are an element in the investigation of that value, but under the statute, is only- made “a basis.” Dividends-imply or are supposed to represent profits, not forced by borrowing or other expedient, to make the sum requisite, and when actually paid from earnings, the dividends furnish a reliable guide to ascertain earning capacity. That guide the assessors followed in this case, that is, the six per cent, dividend paid on nine hundred and fifty-three thousand dollars. We find in plaintiffs’ brief the statement that the shortage of earnings in 1896 to -pay the dividend was supplied by the sales of stock. It is to be inferred that if one annual dividend is paid by meeting a deficiency of earnings by a sale of the stock of the company, it is because the shortage is accidental, or due to some temporary cause, to account for that departure from the usual course of paying dividends only from earnings of the company. The circumstances under which the stock was sold to pay dividends might not reflect' at all on the management of the corporation, or affect the value ' of its stock or franchise, for the relation between the stock value and that of the franchise is obvious, in the revenue systems of some of the-States the excess in the market value of the stock, including the franchise, or stock alone, over the value of the corporate property, being the test to determine the value of the franchise. Hamilton Company vs. Massachusetts, 6th Wallace, 632. It may well be that the assessors in this case, exercising their best judgment, with due regard to all the elements that contribute to franchise value, fixed the valuation exhibited by the assessments. If our law made net earnings the exclusive test as is contended, we should have to apply it, but the law is careful not to use terms that limit the assessors in ascertaining the value of a railway franchise with some years to run, to the earnings of one year, whether due or affected by unexpected losses, accident or other temporary causes. While we attach deserved importance to that influence that actual earnings of the company must exert in fixing the franchise value, and which this court is prepared to enforce, we must recognize that our revenue statute has not imposed on the *462assessors that inexorable test that excludes cognizance o± all the facts .that should contribute in determining franchise value, save and ex.cept the test the argument insists is exclusive. Our previous decisions have dealt with other questions arising' with reference to franchise assessments; have discarded some tests that have been urged, and have accorded due weight to dividends declared and actually paid from the earnings of the company, but have abstained from maintaining the sole standard the plaintiffs’ argument seeks to uphold. Railroad Company vs. City and Board of Assessors, 44th Ann. 1058; Railroad Co. vs. City et als., 44th Ann., 1055; State ex rel Railroad Co. vs. Assessors, 48th Ann. 1157.
We have given attention to the argument that the tax of plaintiffs’ franchise is oppressive and violative of the rule of equality. No complaint in this respect can be urged against the law which requires all franchises to be assessed according to their value, and makes earning capacity a basis to ascertain that value. Constitution, Article 123; Act No. 106 of 1890, Ss. 1, 28. The argument rests on the method it is stated the assessors have assessed the franchises of other companies. It is claimed that the assessors, in instances stated in the brief, have not made capital stock to the full extent of the amount on which dividends have been paid, an element in ascertaining franchise value, and that in determining earning capacity of other corporations the assessors have not deemed interest paid on the bonded debts of such corporations the measure, to any extent, of earning capacity. As to interest on the bonded debt, we find the assessors have given to all these corporations the benefit of exclusion of that element, in ascertaining the value of the franchise. Plaintiff has not, it claims, had the same advantage in this particular, because its bonded debt is comparatively small. But it seems to us that these objections to the method of assessing other corporations, in reference to which we feel called on to express no opinion, does not furnish the plaintiff the cause of complaint he urges against the assessment of its franchise, based on the proportionate value of the franchise to that total value on which the company paid its dividend.
It is therefore ordered, adjudged and decreed that the judgment of the lower court be and it is hereby affirmed with costs.
Entry on the Minutes November 21st, 1898.
St. Charles Street Railroad Company, vs. Board of Assessors.
No. 12,754.
*463It is ordered that the rehearing applied for in this ease he granted on the question of the reduction of taxes,, in accordance with an agreement claimed to have been entered into, by the parties in interest.
Entry December 9th.
It is ordered that the rehearing applied for in this case by the plaintiff be refused so far as it affects the State of Louisiana.