Central Pacific Railroad v. California

Me. Chief Justice Fullee,

after stating the case, delivered the opinion of the court.

The assessment of the state Board of Equalization is not attacked on the ground of fraud, but it is contended that the value of the Federal franchise or franchises possessed by plaintiff in error was included therein, and that as the assessment embraced all the' property assessed as a unit, it was thereby wholly invalidated. Santa Clara County v. Southern Pacific Railroad, 118 U. S. 394; California v. Central Pacific Railroad, 127 U. S. 1.

By section 1 of article XIII of the constitution of California, it is provided that “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; ” and by section 10 that “ 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 Political Code provided that this must be, and the mode in which it should be, done.

Railway corporations were required to furnish the Board of Equalization, before it acted, and as of the first Monday of March in each year, a statement signed and sworn to by one of their officers, showing in detail the whole number of miles of railway in the State, and,, when the line was partly, out of the State, the' whole number of miles within and without, owned or operated by each corporation, and the .value thereof; the value of the roadway, roadbed and rails of the whole, and *113the value of the same within the State ; the width of the right of way; the rolling stock and value; the gross earnings of the entire road and of the road within the State; the net income ; the capital stock authorized and paid in; the number of shares authorized and issued, etc.

This verified statement for 1887 was made by plaintiff in error in due time, and purported to be a statement in relation to its property subject to taxation in the State of California owned by it for the year ending on the first Monday in March, 1887, and of all property used in operating its railway during such year.” And it was therein set forth, among other things: “ The value of the franchise and entire roadway, roadbed and rails within this State is $12,273,785.00.” The Board of Equalization determined “ that the actual value of the franchise, roadway, roadbed, rails and rolling stock of said company, within this State, at the said date and time in March, was and still is the sum of eighteen million dollars,” and thereupon assessed “ the said franchise, roadway, roadbed, rails and rolling stock for the year 1887 ” at that sum.'

By section 3670 of the Political Code, the duplicate record of assessments of railways, and the duplicate record of apportionment of railway assessments, or copies thereof, were made prima facie evidence of the assessment, and that the forms of law in relation to the assessment and levy of such taxes had been complied with, and these were put in evidence.

Under this state of facts, the presumption was that the franchise thus included by plaintiff in error in its return and by the board in its assessment was a franchise which was not exempt under the laws of the United States, and that the board had acted upon property within its jurisdiction rather than upon property which it' had no power to include in the assessment. Indeed, as the Supreme Court points out, when plaintiff in .error included the franchise in its statement, if there were two franchises, one of which could be assessed and the other could not, plaintiff in error ought not to be permitted to say. that the one which was not capable of assessment was intended by it to be or was included therein. People v. Central Pacifc Railroad, 105 California, 576, 592. And the *114court cited San Francisco v. Flood, 64 California, 504; Lake County v. Sulphur Bank Quicksilver Mining Co., 68 California, 14, and Dear v. Varnum, 80 California, 86, which rule that.a party who furnishes a list of property for taxation is estopped from questioning the sufficiency of the description so furnished in an action to collect the taxes. Undoubtedly if the Board of Equalization had included what it had no authority to assess, the company might seek the remedies given under the law to correct the assessment so far as such property was concerned, or recover back the tax thereon, or, if those remedies were not held exclusive, might defend against the attempt to enforce it. But where the property mentioned in the description could be assessed and the assessment followed the return, as it-, did here, the company ought, at least, to be held estopped from saying that the description was ambiguous.

It is said that plaintiff in error should not be bound by this statement because it was on printed blanks prepared by the board; but when plaintiff in error filled out and swore to the statement of its property “ as being subject to taxation,” and the blank form called on plaintiff in error to give a statement of the value of its franchise within the State for the purpose, of assessment and taxation, if it had intended to claim that its state and Federal franchises were so merged as to render the former not subject to taxation, or that it had'no franchise subject to taxation, it was its duty to so indicate in making the return. Nothing in the law and nothing in the blank form could have compelled it to make a statement contrary to the facts.

Plaintiff in error attempted to rebut the case made by introducing evidence which it claimed tended to show that the franchise assessed covered franchises derived from the United States as well as from the State, but the findings of fact of the trial court were to the contrary, and there being a Conflict of evidence on the point, the Supreme Court treated the findings as conclusive in accordance with the well-settled rule on the subject in that jurisdiction. In Reay v. Butler, 95 California, 206, 214, it was said: “It has been held here in *115more than a hundred eases, commencing with Payne v. Jacobs, 1 California, 39, in the first published book of reports of this court, and ending with Dobinson v. McDonald, 92 California, 33, in the last volume of said reports, that the finding of a jury or.court as to a fact decided upon the weight of evidence will, not be reviewed by this court.”

That rule is equally binding on us. Republican River Bridge Co. v. Kansas Pacific Railway, 92 U. S. 315; Dower v. Richards, 151 U. S. 658.

It was argued in the Supreme Court of California, as it has been here, that because the trial judge, after having determined as a fact from the preponderance of the evidence before him that the Federal -franchise was not assessed, stated that he thought that if the parol evidence offered had not weighed in plaintiff’s favor, and that if by a preponderance of such evidence defendants could have shown that the board intended to and did include a Federal franchise in the assessment, the court would have to disregard it as incompetent, because the effect would be to contradict the record, therefore the evidence had been disregarded by the court in making its decision, and that the rule in respect of the conclusivene'ss of a determination of facts on a conflict of evidence did not apply. Ve entirely concur with the disposition of this suggestion by the Supreme Court, which said: “.It clearly appears, however, that the court did not disregard the evidence, but that, after determining as a fact from the preponderance-of evidence before it that the Federal franchise had not been assessed, it stated that if the preponderance of evidence had been otherwise, it would have held as a matter of law that the assessment must be tested by its own language. The fact that a court, after giving its decision upon an issue, gives its opinion upon the manner in which it would have decided the issue under other circumstances, does not constitute an error to. be reviewed in this court.”

Counsel for plaintiff in error also urge that inasmuch as it appeared in the proceedings to assess for 1888 that the board placed “ the franchise of the Central Pacific company derived from the State of California ” at $1,250,000, and then assessed *116“ the franchise derived from the State of California, the roadway, roadbed and rolling stock of' said company within- said State at the total sum of $15,000,000,” it should be inferred from the difference in the language used in the assessment of 1887, and the difference in the total amount, that the franchise then assessed included the Federal franchise. But it also appeared that the return of the company for 1888 in respect of this matter was as follows:

“The value of the franchise derived from the State within this State. $25 00
“The value of' the entire roadway, roadbed, rolling stock and rails within this State is.. 9,376,607 00
$9,376,632 00”

And we think that neither the difference in valuation nor the difference in the mode of statement has a material bearing on the assessment of 1887. The proceedings in 1888 showed greater care on the part of the company in making the return and on the part of the board in making the assessment, and possibly if plaintiff in error had been equally careful in ■relation to the assessment in 1887, it might have resulted that the valuation would have been less, although it does not follow that the reduction in 1888 might not be attributed to a change of financial conditions.

After all, these are considerations which were presented to the trial judge, in connection with all the evidence, and they have been disposed of adversely to the company.

Exceptions were saved to the action of the trial court in respect of the exclusion of certain evidence, but we are unable to find in these rulings or in the decision of the Supreme Court thereon the denial of any title, right, privilege or immunity specially set up or claimed under the Constitution or laws of the United States.

The rulings passed on by the Supreme Court, and which we must assume were all that were called to its attention, relate to the-cross-examination of the witness Wilcoxen, as to statements previously made by him, which the Superior Court confined to the assessment for 1887, in respect of which he had *117.been examined in chief. The Supreme Court held that, under the circumstances disclosed by the record, tbe Superior Court did not err in this particular.

And also to the exclusion of the evidence of Maslin as to the conversations of members of the board, in making the assessment, in relation thereto. The Supreme Court held as to this that “the intention pf the board or of any of its members, or the signification to be given to the term ‘ franchise,’ as used in the assessment, could not be shown in this manner, and the evidence could not be used for impeaching purposes, unless the members of the board had been previously questioned thereon.”

The correctness of these rulings commends itself to us, but ' it is enough to say that it is impossible to predicate error raising a Federal question as to these or any of the rulings on evidence referred to by counsel.

Clearly no such error- was committed in the rejection of the general offers of proof if we should treat them as open to consideration notwithstanding the apparent abandonment of the exceptions in that regard in the Supreme Court. The issue was upon the assessment for the year 1887. The decision in California v. Pacific Railroad Company, 127 U. S. 1, was announced April 30, 1888, but the last of the judgments of the Circuit Court therein considered and affirmed was rendered July 15, 1886. And the action of the board in years prior to 1887, as sought to be shown, was not necessarily relevant or material. Offers of proof must be offers of relevant proof, specific, not so broad as to embrace irrelevant and immaterial matter, and made in good faith. The exercise of the discretion of the trial court in rejecting these offers cannot properly be reviewed by .us.

The errors assigned as to the non-deduction of outstanding mortgages from the valuation of the property are expressly waived, though it is assigned for error in the brief that the court erred in not holding that, as the state franchise Was subject to the lien of a mortgage to the United States, the assessment was invalid because in effect taxing the interest of the United States in that franchise created by the mortgage. *118As to this, no such question was raised or passed on in the state. court; and, moreover, the objection is without merit, on principle and authority, on grounds hereafter stated.

¥e are thus brought to the consideration of the real question in the case, presented in various aspects and argued with much ability by counsel for plaintiff in error, namely, that the company’s franchises are one and inseparable, constituting an indivisible unit, which cannot be subjected to taxation by the State of California because that would be necessarily to subject the Federal franchise to taxation.

The argument is that the franchise of railroads authorized by the state constitution and the provisions of the Political Code to be assessed is nothing but the right to operate the railroad and charge and take tolls thereon; that the right of the Central Pacific Eailroad Company to construct, maintain and operate its railroad in California was conferred upon that company by, and derived by it from,, the United States; and that the right is a single right, though granted also by the State.

The company is a corporation- of California, made up of two California corporations consolidated by articles of association entered into under the laws of California, and recognized as a California corporation by the acts of Congress through which it obtained Federal assistance and -Federal franchises, subsequently to its incorporation in 1861, act of July 1, 1862, c. 12Ó, 12 Stat. 489; act of July 2, 1864, c. 216, 13 Stat. 356; act of March 3, 1865, c. .88, 13 Stat. 504; act. of May 7, 1878, c. 96,-20 Stat. 56; and never otherwise regarded in the legislation of the State, Indeed, by the act of April 4, 1864, Stat. Cal. 1863-1864, c. 417, passed to “ enable the said company more fully and completely to comply with and perform the provisions and conditions of said act of Congress,” of July 1, 1862, California authorized the company to construct, maintain and operate the road and telegraph in the territory lying east of the' State, with the usual incidental rights, privileges and powers, also vesting in the company the rights, franchises and powers granted by Congress, with the express reservation that the company should be “subject to all the *119laws of this State concerning railroad and telegraph lines, except that messages and property of the United States, of this State, and of the said company, shall have priority of transportation and transmission over said line pf railroad and telegraph.” Sinking Fund cases, 99 U. S. 700, 754. Severance of the allegiance of the corporation to the State that created it, and deprivation or transfer of the powers and privileges conferred by the State, were not the object of the grant "by the United States, nor the consequence of the acceptance of that grant by the corporation as thereto authorized by the State. Pennsylvania Railroad v. St. Louis, Alton &c. Railroad, 118 U. S. 290, 296. But it was not contended at the bar that the company ever became a corporation of the United States, or that it is other than a state corporation.

Even in respect 'of railway corporations created by act of Congress the claim of an exemption of their property from state taxation has been repeatedly denied. This was so ruled in Railroad Company v. Peniston, 18 Wall. 5, 30, 36, and Mr. Justice Strong said,:

“ It cannot be that a state tax which remotely affects the efficient exercise of a Federal power is for that reason alone inhibited by the Constitution. To hold that would be to deny to the States all power to tax persons or property. Every tax levied by a State withdraws from the reach of Federal taxation a portion of the property from which it is taken, and to that extent diminishes the subject upon which Federal taxes may be laid. The States are, and they must ever be, coexistent with the National Government. Neither may destroy the other. Hence the Federal Constitution must receive a practical • construction. Its limitations and its implied prohibitions must not be extended so far as to destroy the necessary powers of the States, or prevent their efficient exercise. . . .
It is, therefore, manifest that exemption of Federal agencies from state taxation is dependent, not upon the nature of the agents, or upon the mode of their constitution, or upon the fact that they are agents, but upon the effect of the tax; *120that is, upon the question whether the tax does in truth deprive them of power to serve the government as they were intended to serve it,' or does hinder the efficient exercise of their power. A tax upon their property has no such- necessary effect. It leaves them free to discharge the duties they have undertaken to perform. A tax upon their operations is a direct obstruction to the exercise of Federal powers.
“ In this case the tax is laid upon the property of the railroad' company precisely as was the tax complained of in Thomson v. Union Pacific. It is not imposed upon the fran-. chises or the right of the company to exist and perform the functions for which it was brought into being. Ifo.r is it laid upon any act which the company has been authorized to do. It is not the transmission of dispatches, nor .the transportation of United States mails, or troops, or munitions of war that is taxed, but it is exclusively the real and personal property of this agent, taxed, in common with all other property of the State of a similiar character. It ,is impossible to maintain that ■ this is an interference with the exercise of any power belonging to the General Government,- and if it is not, it is prohibited by no constitutional implication.”

In Thomson v. Pacific Rai;lroad, 9 Wall. 579, 590, the Union Pacific Railway Company, Eastern Division, a corporation created by the legislature of Kansas, received government aid in bonds and land, and, thus aided, constructed its road to. become one link in the transcontinental line known as the-Union Pacific system, in accordance with the same acts- of Congress relating to plaintiff in error, and conferring the same functions and privileges. The State of Kansas having subsequently taxed the roadbed, rolling stock and certain personal property of the corporation, its stockholders sought to enjoin the collection of the tax on the ground that the property was mortgaged to the United States and that it was bound under the Congressional grant to perform certain duties and ultimately pay five per cent of its. net earnings to the United States, and that state taxation would retard and burden it in the discharge of its obligations to the general government. Rut the contention was overruled, and Mr. Chief Justice Chase said :

*121“ But we are not aware of any case.in which the real estate or other property of a corporation not organized under an act of Congress, has been held to be exempt, in the absence of express legislation to that effect, to just contribution, in common with other property, to the general expenditure for the common benefit, because of the employment of the corporation in the service of the government.
“ It is true that some of the reasoning in the case of McCulloch v. Maryland seems to favor the. broader doctrine. But the decision itself is limited to the case of the bank, as a corporation created by a law of the United States, and responsible, in the use of its franchises, to the government of the United States..
“ And even in respect to corporations organized under the legislation of Congress, we have already held, at this term, that the implied limitation upon state taxation, derived from the express permission to tax shares in the national banking associations, is to be so construed as not to embarrass the imposition or collection of state taxes to the extent of the permission fairly and liberally interpreted. National Bank v. Commonwealth, 8 Wall. 353.
“We do not think ourselves warranted, therefore, in' extending the exemption established by the case of McCulloch v. Maryland, beyond its terms. We cannot apply it to the case of a corporation deriving its existence from state law, exercising its franchise under state law, and holding its property within state jurisdiction and under state protection.
“. . . No one questions that the power to tax all property, business and persons, within their respective limits, is original in the States and has never been surrendered. It cannot be so used, indeed, as to defeat or hinder the operations of the national government; but it will be safe to conclude, in general, in reference to persons and state corporations employed in government service, that when Congress has not interposed to protect their property from state taxation, such taxation is not obnoxious to that objection. Lane County v. Oregon, 7 Wall. 71, 77; National Bank v. Commonwealth, 8 Wall. 353. We perceive no limits to the principle of exemp*122tion which the complainants seek to establish. It would remove from the reach of state taxation all the property of every agent of the government. ...
“The nature of the claims to exemption which would be set up, is well illustrated by that which is advanced in behalf of the complainants in the case before us. The very ground of claim is in the bounties of the general government. The. allegation is, that the government has advanced large sums to aid in the construction of the road; has- contented itself with the security of a second mortgage; hák made large grants of land upon no condition of benefit to itself, except that the company will perform certain services for full compensation, independently of those grants; and will admit the government to a very limited and wholly contingent interest in remote net income. And because of these advances and these-grants, and this fully compensated employment, it is claimed that this state corporation, owing its being to state law, and indebted for these benefits to the consent and active interposition of the state legislature, has a constitutional right to hold its property exempt from state taxation; and this without any legislation on the part of Congress which indicates that such exemption is deemed essential to the full performance of its: obligations to the government.”

In his dissenting opinion in Railroad Co. v. Peniston, 18 Wall. 5, 48, Mr. Justice Bradley distinguishes Thomson v. Pacific Railroad from that case thus: “ That was a state corporation, deriving its origin from state laws, and subject testate regulations and responsibilities. It would be subversive of all our ideas of the necessary independence of the national and state governments, acting in their respective spheres, for-the general government to take the management, control, and regulation of state corporations out of the hands of the ■State to which they owe their existence, without its consent, or attempt to exonerate them from the performance of any duties, or the payment of any taxes or contributions, to which, their position, as creatures of state legislation, renders them, liable.”

Both these cases were referred to with approval by Mr.. *123Justice Miller in Western Union Telegraph Co. v. Massachusetts, 125 U. S. 530, and by Mr. Justice Brewer in Reagan v. Co., 154 U. S. 413, 416. In the latter case it was contended that, as the Texas and Pacific Pailway was a corporation organized under the laws of the United States, it was not subject to the control of the State even as to rates of transportation wholly within the State. The argument was that the company received all its franchises from Congress-; that among those franchises was the right to charge and collect tolls, and that the State had not the power, therefore, in any manner to limit or qualify such franchise. But that position'was not sustained, and Mr. Justice Brewer, delivering the opinion, said “that, conceding to Congress the power to remove the corporation in all its operations from the control of the State, there is in the act creating the company nothing which indicates an intent on the part of Congress to so remove it, and there is nothing in the enforcement by the State of reasonable rates for transportation wholly within the State which will disable the corporation from discharging all the duties and exercising all the powers conferred by Congress.”

Although the Central Pacific company is not a Federal corporation, it is nevertheless true that important franchises were conferred upon the company by Congress, including that of constructing a railroad from the Pacific Ocean to Ogden in the Territory of Utah. But as remarked in California v. Central Pacific Railroad, 127 U. S. 1, 38, 40, 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.” That case came up from the Circuit Court of the United States for the Northern District of California, and the Circuit Court found 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; ” and as it could not be denied that that embraced franchises conferred by the United States, it was held that the assessment was invalid, but it was not held nor intimated that if the Board of Equali*124zation had only included the state franchise, the same result would have followed.

Mr. Justice Bradley, delivering the opinion of the court, said:

“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 compunja 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 within 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 power must exist under every form of society. They a.re 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 *125is the same as to say, that the right of eminent domain can only be exercised by virtue 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.”

Mr. Justice Bradley then referred to McCulloch v. Maryland, Osborn v. Bank of the United States, and Brown v. Maryland to the proposition that a power given to a person or corporation by the United States'cannot be subjected to taxation by a State, and added “ that these views are not in conflict with the decisions of this court in Thomson v. Pacific Railroad, 9 Wall. 579, and Railroad Company 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. 35, 37.”

Thus it was reaffirmed that the property of a corporation of the United States might be taxed, though its franchises, as for instance its corporate capacity and its power to transact its appropriate business and charge therefor, could not be. It may be regarded as- firmly settled that although corporations may be agents of the United States, their property is not the property of the United States, but the property of the agents, and that a State may tax the property of the agents, subject to the limitations pointed out in Railroad Co. v. Peniston. Van Brocklin v. Tennessee, 117 U. S. 151, 177.

Of course, if Congress should think it necessary for. the protection of the United States to declare such property exempted, that would present a different question. Congress did not see fit to do so here, and unless we are prepared to overrule a long line of well considered decisions the case comes within the rule therein laid down. Although in Thom.son’s case it- was tangible property that was taxed, that can make no difference in principle, and the reasoning of the opinion applies.

Under the laws of California plaintiff in error obtained from the State the right' and privilege of corporate capacity; to construct, maintain and operate; to charge and collect fares *126and freights; to exercise the power of eminent domain; to acquire and maintain right of way.; to enter upon lands or waters of any person to survey route; to construct road across, along or upon any stream, watercourse, roadstead, bay, navigable stream, street, avenue, highway or across any railway, canal, ditch or flume; to cross, intersect, join or unite its railroad with any' other railroad at any point on its route; to acquire right of way, roadbed and material for construction ;• -to take material from the lands of. the State, etc., etc. Stat. Cal. 1861, c. 532, 607; 2 Deering’s Annotated Codes and Stat. Cal. 114.

It is not to be denied that such rights and privileges have value and constitute taxable property.

• The general rule, as stated by Mr. Justice Miller, in State Railroad Tax cases, 92 U. S. 575, 603, is “ that the franchise, capital stock, business and profits of all corporations, are liable to taxation in the place where they do business and by the State which creates them, admits of no. dispute at this day.” And the constitution of California expressly declares that the word “ property ” as used in section 1 of article 13, providing that “ all property in the State, not exempt under the laws of the United States, shall be taxed in proportion to its value,” includes franchises as well as all other matters and things capable of private ownership.

The question here is not a question of the value of the state franchise, but whether that franchise existed, for if in 1887 plaintiff in error possessed any subsisting rights or privileges, otherwise called franchises, derived from the State, then they were taxable, and the extent of their value was to be determined by the Board of Equalization.

So far as the ability of the company to' discharge its duties ■ and obligations to the general government is concerned it is difficult to see that taxation of the state franchise would tend to impair that ability any more than taxation of the roadway, roadbed, rails and rolling stock. If the necessary effect of a tax on such tangible property is not to unconstitutionally hinder the efficient exercise of the power to serve the government, neither can it be so in respect of the state franchise. *127Indeed the taxation by the State of the franchise granted by it does not, and could not, prevent plaintiff in error from acting under its Federal franchise.

This was an action to recover judgment against the company under the statute, and the franchise was only an element in arriving at the valuation in making the assessment, but if the power to tax the state franchise involved the power to dispose of it at delinquent tax sale or on execution, such sale would be subject to the superior and independent rights of the United States, and the fact that this would affect the value is of no consequence. If the state franchise, should be voluntarily surrendered by the company to the State, or forfeited by the State, yet the United States through the Federal franchise could still operate the road in California. And, on the other hand, should plaintiff in error in any manner be deprived of its Federal franchise, it would not thereby be prevented from operating in California under its state franchise. The right and privilege, or franchise, of being a corporation, is of value to its members and is considered as property separate and distinct from the property which the corporation may acquire; but, apart from that, if the state franchise to be assessed were confined to the right to operate the road and take tolls, such a franchise was originally granted by the State to this company, and as such was taxable property. If the subsequent acts of Congress had the effect of creating a Federal franchise to operate the road, that merely rendered the state right subordinate to.the Federal right,, and did not destroy the state right nor merge it into the Federal right, and no authority is cited to sustain any such proposition. No act of Congress in terms attempted to bring about this result, and no such result can be deduced therefrom by necessary implication. Whether plaintiff in error now operates its road under the franchise derived from the United States or from the State is immaterial, as the Supreme Court well said. The right to operate the road is valuable, whether it is’ being exercised or not, and the question, we repeat, relates to the existence of the franchise, and not to the extent of its value.

When we consider that plaintiff in error returned its fran-*128oliise for assessment, declined to resort to the remedy afforded by the state laws for the correction of the assessment as made if dissatisfied therewith, or to pay its tax and bring suit to recover back the whole or any part of the tax which it claimed to be illegal, we think its position is not one entitled to the favorable consideration of the court; but, without regard to that, we hold, for the reasons given, that the state courts rightly decided that the company had no valid defence to the causes of action proceeded on.

Judgment affirmed,.

Me. Justice White concurred in the result.