White River Lumber Co. v. Arkansas Ex Rel. Applegate

*693Mr. Justice Sanford

delivered the opinion of the Court.

This case involves a question as to the constitutional validity of the back tax law of Arkansas. Section 1 of Act No. 169 of the Arkansas Acts of 1913 — which is set forth in the margin1 — provides that where, because of any inadequate or insufficient valuation or assessment, or undervaluation, of any property which belonged to any corporation at the time .taxes thereon should have been properly assessed and paid, there are overdue and unpaid taxes thereon owing to the State or a political subdivision thereof by any corporation, the Attorney General shall institute a suit in chancery in the name of the State for the collection thereof.

*694In July, 1925, the State of Arkansas, proceeding under this section, brought suit in a chancery court, on the relation of the Attorney General, against the White River Lumber Company, a foreign corporation doing business in the State, for the recovery of back taxes. The complaint, as amended, alleged that the Company owned large tracts of valuable timber lands in four counties of the State,2 which were worth from $30 to $50 an acre but had been undervalued and underassessed for taxation for the years 1915 to 1926, inclusive, at a valuation of about $4 per acre; and prayed judgment for overdue and unpaid taxes for those years at 50 per cent of their true value — the basis of valuation that had been fixed by an order of the State Tax Commission — less the assessments actually made. The Company, answering, denied that there had been any undervaluation; claimed that the lands had been valued on the same basis as like timber lands owned by other individuals and corporations; and alleged that section 1 of the law as attempted to be enforced against it, was repugnant to thé due process and equal protection clauses of the Fourteenth Amendment.

The chancery court — finding that for the years in question the value of the lands constituting the Big Island group,”3 was $50 an acre, and ^hat of the remaining lands $33.33 an acre, and that the aVerage assessments of other lands in these counties had been at approximately 30 per cent of their value — back assessed the Big Island group at $15 per acre, and the other lands at $10 per acre, less credits for timber stolen and sold and the valuations at which they had been originally assessed; and, declared a lien on the several tracts for the amount of the back taxes due on them, respectively, as thus reassessed.

Upon cross appeals the Supreme Court held that the fact that the statute authorizing suits for back taxes *695applied only to corporations, did not render it repugnant to the Fourteenth Amendment; that under it the State might maintain suit to recover additional taxes on the ground that there had been an inadequate or insufficient valuation or assessment of the corporate property; that in such case the reassessment should be on the same basis as that upon which the original and inadequate assessment should have been made; and that as it appeared that all other property-was assessed at an average of 30 per cent of its value, the Company’s lands, under the uniformity clause of the State Constitution, should be assessed at that per cent, despite the fact that the State Commission had fixed a higher basis. Applying these rules of law the court found from the testimony that it was not shown that there had been any inadequate or insufficient valuation of any of the lands except the Big Island group, but that this group was a body of lands that were unusually well timbered, had a value not possessed by the other timbered lands which were assessed at from $4 to $5 per acre, and “ were of an average value,. during the entire time covered by the-assessments in question, of $40 per acre, taking into account .the timber stolen and the timber sold.” And holding that they should be assessed at a valuation of 30 per cent of that amount, that is, $12 per acre, less the valuation on which the taxes had been paid, the decree of the chancery court was modified so as to permit a recovery of back taxes on the Big Island group only, and on those lands only to thé extent indicated. 175 Ark. 956.

1. It is urged here that the back tax act of Arkansas, in providing for the reassessment of property of corporations by judicial proceedings and the invposition of additional taxes thereon after the payment of the taxes assessed by the duly constituted' assessing authorities, and in not providing for such reassessment of property belonging to natural persons, denies to the Company and other *696corporations the equal protection of the laws in violation of the Fourteenth Amendment.

We cannot sustain this contention. It is unquestioned that the Arkansas statutes providing for the originar assessment of property for taxation make no distinction between the lands of corporations and those of natural persons and that it is the duty of the assessing officers to assess them in like manner, according to their value. And the question now presented is merely whether a statute authorizing the collection of back taxes on lands which have escaped their just burden of taxation, is invalid because it is limited to the recovery of additional taxes on the lands of corporations which have been assessed at an inadequate or insufficient valuation, and does not extend to the recovery of such additional taxes on the lands of natural persons, which may likewise have been assessed at an inadequate or insufficient valuation. The decision in Quaker City Cab Co. v. Penna., 277 U. S. 389, on which the Company chiefly relies, involved merely a question as to the invalidity of the discrimination made by a statute levying an original tax on the gross receipts derived by corporations from their operation of taxicabs. As there was no question whatever as to back taxes and no back tax act was involved, the decision is not controlling in the present case.

In Whitney v. California, 274 U. S. 357, 370, we said—citing various cases — that: “A statute does not violate the equal protection clause merely because it is not all-embracing ... A State may properly direct its legislation against what it deems an existing evil without covering the whole field of possible abuses . . . The statute must be presumed to be aimed at an evil where experience shows it to be most felt, and to be deemed by the legislature, coextensive with the practical need; and is not to be overthrown merely because other instances may be suggested to which also it might have been applied; that being a *697matter for the legislature to determine unless the case is very clear . . . And it is not open to objection unless the classification is so 'lacking in any adequate or reasonable basis as to preclude the assumption that it was made in the exercise of the legislative judgment and discretion.” These and like principles have been applied by this Court in four cases dealing directly with classifications- made in back tax statutes and similar legislation.

In Winona & St. Peter Land Co. v. Minnesota, 159 U. S. 526, 539, in which it was held that a state statute providing for the collection of back taxes on real property without including a like provision for collecting back taxes on personal property, should be sustained, the Court said: “ The case is different from that of an ordinary tax law in which there may be some foundation for the claim that the legislature is expected to make no discrimination . . . Eor this statute rests on the assumption that, generally speaking, all property subject to taxation has been reached and aims only to provide for those accidents which may happen under any system of taxation, in consequence of which here and there some item of property has escaped its proper burden; and it may well be that the legislature in view of the probabilities of changes in the title or situs of personal property might deem it unwise to attempt to charge it with back taxes, while at the same time, by reason of the stationary character of real estate, it might elect to proceed against that. At any rate, if it did so it would violate no provision of the Federal Constitution. . .

In New York State v. Barker, 179 U. S. 279, 285, a general state statute imposed a tax on the real estate of individuals and corporations upon its full and true value as found by the assessors. In the case of individuals no resort was permitted to any other proceeding by which the tax could be increased by any subsequent assessment on the difference between the assessed and the actual value. *698But in the case of corporations, if real estate should be mistakenly assessed at an undervaluation another statute afforded án opportunity to reach the difference between the assessed and actual value by making an assessment upon the actual value of the corporate capital, including the real estate. The only claim was that “ in this opportunity to correct a mistaken assessment upon its real estate in the case of a corporation when assessed upon its capital, which does not exist in the case of an individual, the corporation is denied the equal protection of the laws.” In overruling this contention the court said: “ The mere fact that the law gives the assessors in the case of corporations two chances to arrive at a correct valuation of their real estate, when they have but one in the case of individuals, cannot be held to be a denial to the corporations of the equal protection of the laws, so long as the real estate of the individual is, in, fact, generally assessed at its fuil valué.”

In Florida Central, &c. R. Co. v. Reynolds, 183 U. S. 471480, in which it was held that in so far as the Federal Constitution was concerned the legislature had the power to compel the collection of delinquent taxes from railroad companies for certain years, even though it made no provision for the collection of delinquent “taxes for those years on other property, the Court, quoting with approval from the Winona Land Co. case, said: “If the State, as has been seen, has the power, in the first instance, to classify property for taxation, it has the same right of classification as to property which in the past years has escaped taxation. We must assume that the legislature acts according to its judgment for the best interests of the Staté. A wrong intent cannot be imputed to it. It may have found that the railroad delinquent tax was large, and the delinquent tax on other property was small and not worth the trouble of special provision therefor. If *699taxes are to be regarded as mere debts, then the effort of the State to collect from one debtor is not prejudiced by its failure to make like effort to collect from another. And if regarded in the truer light as a contribution to the support of government, then it does not lie in the mouth of one called upon to make his contribution to complain that some other person has not been coerced into a like contribution.”

In Ft. Smith Lumber Co. v. Arkansas, 251 U. S. 532, 534, the State, proceeding under the statute, here involved, had brought suit against a corporation to recover back taxes alleged to be due upon a proper valuation of its capital stock by reason of the fact that in assessing its value there had been omitted the value of stock owned by the corporation in two other corporations, each of which had paid full taxes. The corporation defended “ on the ground that individuals are not taxed for such stock or subject to suit for back taxes, and that the taxation is double, setting up the Fourteenth Amendment.” This Court, in overruling the defense “ with regard to confining the recovery of back taxes to those due from corporations,” said: “It is to be presumed, until the contrary appears, that there were reasons for more strenuous efforts to collect admitted dues from corporations than in other cases, and we cannot pronounce it an unlawful policy on the part of the State. See New York v. Barker, 179 U. S. 279, 283.”

We see no ground for distinguishing the Ft. Smith Lumber Co. case from that now under consideration, and on that authority and for the reasons stated therein and in the earlier' cases which we have cited, hold that the back tax statute of Arkansas, although confined to the property of corporations, does not deny to them the equal protection of the. laws in violation of the Fourteenth Amendment.

2. It is also urged in behalf of the Company, that even if the back tax statute be valid on its face, it was so *700applied by the Supreme Court of the State in the present case, by selecting thirty-four tracts of land, constituting the Big Island group, and reassessing the same on the basis of their average value for twelve years on an average basis of assessment instead of assessing them in accordance with the Arkansas statutes according to the actual value of each separate tract for each separate year on the actual basis of assessment for that year, as to constitute a denial of the equal protection of the laws. It does not appear, however, from the record that this constitutional question was presented in or passed upon by the Supreme Court of the State'; and as it was sought to raise this question for the first time by assignments of error in this Court, it is' necessarily excluded from our consideration. Whitney v. California, supra, 316; and cases therein cited.

3. No other federal question is presented by the record for our consideration. The decree is

Affirmed.

This section amended § 1 of Act No. 354 of the Acts of 1911, so as to read: “Whére the Attorney General'is satisfied from his own investigations or it is made tp appear to him by the statement in writing of any reputable taxpayer of the State, that in consequence of the failure from any cause to assess and levy taxes, or because of any pretended assessment and levy of taxes upon any basis of valuation other than the true value in money of any property hereinafter mentioned or because of any inadequate'or insufficient valuation or assessment of such property, or undervaluation thereof, or from any other cause, that there are overdue and unpaid taxes owing to the State, or any county or municipal corporation, or road district, or school district, by any corporation upon any property now in this State which belonged to any corporation at the time such taxes should have been properly assessed and paid; that it shall become his duty to at-once institute a suit or suits in chancery in the name of the State of Arkansas, for the collection of the same, in any county in which the corporation owing such taxes- may be found, or in any county in which any part of such property as may be found, or in any county in which any part of such property as may have escaped the payment in whole or in part of the taxes as aforesaid may be situated ...” C. & M. Digest, § 10204. Tt was also provided by an earlier act that the State and its political subdivisions should have a lien-on the property for the payment of such overdue taxes, to be enforced by this suit, C. & M. Digest, § 10207.

These contained 41,500 acres.

These contained 7,964 acres.