Central Pacific Railroad v. California

RAILROAD v. PACIFIC CALIFORNIA. CENTRAL

Syllabus. — no constitutes the County pa/rt Galled Greer territory within included Texas belonging properly rightfully at the that State time admission into the Union, and is not within the limits nor under the jurisdiction of but is to the exclusive subject jurisdiction of States America. will Each its own pay party costs.

AIR. Justice not been a member of the Peckham, having' when this was took no in the court case decision. argued, part RAILROAD PACIFIC COMPANY v. CALI

FORNIA. OF THE THE SUPREME COURT STATE OF ERROR TO CALIFORNIA. Argued January 16, 1896. March 16, 1896. No. Decided Company, required being Railroad laws Cali- Central The property Equalization to the Board of returns to make fornia taxation, which, made a statement in purposes among verified other roadway, value of the franchise and-entire things, said: “The it was $12,273,785.” roadbed, State rails this The within Board of franchises, the actual value determined road- rails, roadbed, company way, stock of within paid $18,000,000. having not the taxes was that time at valuation, brought action this was the State on assessed Held, them. recover presumption franchise included was com- That '(1) exempt pany was not in its a franchise which under return was upon, had and that board laws of the United acted jurisdiction; property within its Equalization had included what it had no au- if Board That (2) assess, company might given seek the thority to remedies law, so far as such correct under or, thereon, concerned, if recover back the tax those reme- was exclusive, attempt against might defend held dies were it; enforce description assessed, could mentioned be (3) Where return, company ought the assessment followed CO tO of the Case.

Statement estopped description saying ambiguous, that the held was notwithstanding the fact that and this the statement made blanks, printed prepared by the board. Supreme findings decision of the Court of State that the The of the question of trial court on the whether the franchises taxed covered (cid:127) conclusive, from the United franchises derived States was and is bind- ing court. on this court, issue, giving gives The fact that a after its decision an its opinion upon it the manner which would have decided the issue under circumstances, other does not constitute an error to be in this reviewed court. company corporation California, a recognized The Central Pacific is as Congress granting conferring the acts of it aid and it franchises, object it and was not the acts to Federal those sever its powers allegiance privileges the State transfer derived it; consequences acceptance from nor did those result of the from.the corporation. grant corporation may of a of the States be taxed a United State, through not its but franchise. corporation Although may agent be-an may the United States a State property, subject pointed tax its to the limitation out in Rcdlmad v.Co. Peniston, 18 Wall. company operates It is immaterial in case this whether the railroad its road States, under the franchise derived from the United or under that derived from the State. company When is considered that the Central Pacific returned its fran- assessment, for remedy chise declined to resort to the afforded state laws for- the correction of the assessment as made if dissatisfied therewith, pay bring or to its tax and suit to recover back whole or any part position of the illegal, tax which it claimed to be is not one consideration; but, that, entitled favorable regard without holds, given, court for reasons rightly that the state courts decided pro- had no valid defence to the causes of action -on. ceeded This was an action in the name of the brought People State California the Central Pacific Eailroad Com- against in the Court pany Fran- Superior of San city county under cisco, section 3670 of the State, Political Code of that recover a certain sum of the State to be due money alleged to. and various other sums of due money alleged eighteen counties of the for taxes for State, the fiscal 1887 upon the state Board of judgment Equalization, demanded for the several being sums of state county taxes as stated in the delinquent unpaid complaint, with v. CALIFORNIA. RAILROAD PACIFIC of the Case.

Statement for added thereon delinquency non-payment, five cent per and also for ; time of such from the delinquency and interest law. as allowed fees, suit and attorneys’ costs of on the constitution subject The provisions and 10 XIII; 1, in article and sections 4, found revenue are 3665, 3668, 3666, 3667, 3669, that article sections of Ca'liforiiia are the Political Code given and 3671 the margin.1 State, exempt under the laws 1. All Section value, States, to be ascertained as proportion to its shall be taxed section, property,” provided by used in this article and law. The word credits, bonds, stocks, dues, franchises, moneys, hereby to include declared mixed, real, capable pri personal, things, other matters all crops, property exclusively Provided, ownership: growing used That vate State, schools, may public belong to the United and such as corporation county municipal be ex within this shall or to except may provide, empt legislature the case of from taxation. The deed, from credits by mortgage for a reduction or or trust credits secured residents of this State. debts due to bonafide contract, trust, obligation by or other mortgage, of i. A deed Section secured, purposes and shall, of assessment taxa- for the is which a debt thereby. property tion, affected in the and treated as an interest be deemed corporations, in quasi public case debts Except to railroad and other by mortgage, secured, deed of property affected such so the value.of security, contract, shall be trust, obligation, the value of such or less property, of such value taxed to the owner assessed and thereof, county, in the security owner and taxed to the shall be assessed thereby The taxes property is situate. city, affected or district which the paid by may security, and be upon property and shall be a lien so levied security, the paid by party security; if either to such owner part thereby a upon become shall affected tax so levied pay on secured; tax so levied shall if the owner of the debt so thereon, extent of and to security, payment it shall constitute a such security any Provided, if such discharge That payment a full thereof: such debtors, after assess- paid by any or shall b.e such or indebtedness debtor may levy likewise levy, be of such the tax the amount

ment and before according computed to the debtors, by be debtor or and shall such retained . levy preceding year. tax provided, except in this section property, as hereinafter 10. All. Section town, township, county, or county, city, city and in the shall be assessed by prescribed The fran- situated, law. in manner it is district which operated in roadbed, rails, all railroads chise, roadway, rolling stock state Board county in shall be assessed more'than one this State apportioned to the value, Equalization, shall the same at their actual

Statement tlie Case. contained nineteen counts on nineteen complaint alleged causes of each count averred the defendant action, and at all was, mentioned, times therein corporation organized cities, towns, counties, counties, townships, cities and and districts which located, proportion railway- railroads are of miles of such number counties, cities, towns, townships, counties, in such cities and laid districts. Provisions Political Code. president, secretary, managing agent, or 3664. The or such Section Equalization may designate any Board of cor- other officer as the state persons, person, owning poration, operating and each or association or State, shall, county in more than one on or before the railroad statement, April year, Monday in of each furnish the said board a first officers, person byor or one of the signed and one of such sworn association, year persons showing forming ending in detail for the such — Monday in March in each the first State, railway number of miles of in the the line 1. The-whole where State, partly number of State out of the the whole miles without the State, operated by corporation, such number within owned the whole person, or association: roadway, roadbed, railway, and rails of the whole 2. The value : of the same within the State and the value way': 3. The width corpora- rolling number of each kind of all stock used 4. The tion, person, operating railway, including or association in entire part without State: Number, kind, rolling operated in the 5. value stock owned State: Number, kind, rolling and value of 6. stock used but owned - party making the returns: Number, owned, kind, and value of stock but used out of the - operated by party making either divisions of road returns, railways. other — year preceding January showing in Also detail for the the first of earnings -gross entire road: 1. The State, railway earnings thq gross 2. of road in the and the is The where by operators, the lessor as rental: let to other how much was derived fund, sinking operating of (road), The of the entire exclusive 3. cost paid department, money expenses land and to the States: of of declared: 4. Net income for such and amount dividend Capital 5. stock authorized: n paid Capital in: 6. stock 7. Funded debt: ; of 8. Number shares authorized of of stock 9. Number shares issued: v. CALIFORNIA. RAILROAD PACIFIC of the Case. Statement of and California, laws of the State under the and existing than one of' in more in a. railroad county operating engaged of the state Board and that on that State; August may require Any Equalization : 10. other state Board of facts the road, description point giving 11. A the of entrance into and the point county, from a of the number of miles in of exit each with statement description county. given of once have each When a the road shall been description necessary, unless no other annual thereafter is the road shall portion road, road, changed. of been the or the is have Whenever sold, county, taxes, to be either state or no other advertised or is sold description given by, necessary the same is is than and conclusive description. upon, corporation, person, giving the the or association No misdescription railway the is invalid on account of a or the assessment way right of for the same. provided, is not the If such statement furnished as above Equalization.upon corpora- made state Board of tion,-person, failing or association tó the statement is furnish conclusive and final. meet at the The state Board must Section capitol open Monday August, on the first and continue session day, day Sundays excepted, Monday until the At .to third such August. franchise, roadbed, rails, roadway, meeting the and board must assess operated county. rolling of all one Assess- stock railroads in more than corporation, persons person, or association ment must be made to same, upon railway State, owning made within and must be the entire culverts, way, wharves, right bridges, must include the and moles and laid, engaged the track is and all are in trans- steamers which which passengers, freight porting freights, passenger cars across waters depots, stations, shops, buildings road. The erected divide which way, space right are assessed the assessors covered days county they Within ten the third wherein are situate. after apportion August, Monday the total assessment of the the board must rails, roadbed, railway franchise, roadway, rolling stock each railway located, ’counties, or and counties in such cities which counties, railway proportion laid such to the number of miles of time, also,-within said must transmit counties. hoard cities.-and city county, county county, auditor of each mail to the or made, showing length apportionment shall have been a statement county, city county,, railway or- main track of such within description-of county, city within the or of the said track a whole with bounds, county, including way, metes and other identification, per description value assessed mile of the sufficient for by pro per mile of same as fixed rata distribution assessed value franchise, roadbed, rails, roadway, stock of such the whole apportioned city railway county, and the amount within TERM, Statement of tlie Case. of state and Equalization, purposes, taxation county for the fiscal June assessed year 30,1888, ending defendant, then the owner-arid thereof in more one operator than county county. and enter auditor must the statement on the assessment roll county, city county, county or book of the or and where the is divided districts, townships into or any then roll or the. book of assessorial township select, may or district he and enter the amount of the assessment apportioned county, city county, to the or in the column of the assess- aforesaid, ment total book or roll as shows the value which of all taxation, city county, county, township either of the or such or .Monday October, supervisors district. the first in the board of On must make, book, proper and cause to be entered in the record stating an order declaring length railway main by track of the assesséd Equalization county; per state Board of within the the assessed value mile railway, track, of such the number of miles of and the assessed value town, township, railway lying each-city, district, in such school and road taxing county, city county, or through or lesser district which runs, railway by Equalization, as fixed the state Board of said.property purposes shall constitute value for taxable assessment road, town, school, township, city, district; or other 'in such and the clerk supervisors copy equali- must transmit a of the board of each order or trustees, council, city legislative, body to the or other zation of incor- towns, porated district, the trustees of cities or each school and the through of other taxation authorized authorities districts rail- which such railway property way assessment, All such shall be runs. taxable said rates, by officers, purposes,.as at the the same and for same the same road, city, town, township, school, property of individuals within such districts, respectively. railway lesser taxation If the owner of a assessed Equalization by the state Board dissatisfied with the assessment made by board, may', board, meeting pro- at such owner under the Code, thirty-six ninety-two hundred vision of section of the Political Monday August Monday Septem- the third the third between ber, apply any particular, have the same corrected in board may by it, correct and increase or lower the the board assessment made equalize with the assessment of so as to other same previously shall increase or If the board lower State. it, by county county it must make a statement to the made auditor of made, assessment; change change affected and the change auditor must note such the assessment book or roll of the county board. effect March as directed [In 1883.] prepare 3666. The state Board must each Section book, Railways,” be called Record of Assessment of in which must board; writing, each assessment made either in both entered printing. signed writing and Each assessment so entered must be apportionment and clerk. The.record assessments Chairman PACIFIC RAILROAD CALIFORNIA. the Case.

Statement of franchise, roadbed, rails said and roll- roadway, railroad, stock of defendant’s then situated and ing being within said at the sum of millions of dollars. eighteen counties, counties, by the made board to the and cities and must made be “ book, separate Apportionment Railway in a to be called of of Record Assessments.” In such last described book must be entered the of names railways by board, corporation which, the the names of assessed the the to whom, railway person of to each or the name the or association as- sessed, railway State, the the whole number of of the in the number miles county, county, city of miles thereof in each and the total of or assessment franchise, rails, roadbed, purposes roadway, for the and stock of taxation, apportionment the amount of the of such total assess- and city county, city county, county, county and ment each' and and and to Monday the taxation. the third October of each clerk of Before of Equalization prepare comp- transmit to the state Board of must and the State, duplicates Railways,” the of of of troller of the “Record Assessment “ Assessments,” Apportionment Railway each and Record of of certified board, by respectively and the chairman and clerk of the to be known “ “Duplicate Duplicate Railways,” as of of and Rec- Record Assessment Apportionment Railway In the last named ord of of Assessments.” added, comptroller duplicate' one the must be in of which two columns upon by due the assessment must enter state taxes the State whole association, corporation, county, person, and the other the or in each taxes, apportioned city county upon due the assessment each or and city county, by corporation, person, county, or- or association. and each duplicates comptroller to collect The two constitute the warrant prop- county, city county, and levied such the state and and taxes apportionment erty board, of of the assessed and the amount county, respectively. county, city effect and assessment each and [In 9, March 1883.} county, city supervisors each and of Section When board of apportioned Equalization county, has and the state Board of city county, railways or and of of shall fixed the rate assessment have supervisors county, taxation, must forthwith the clerk of board mail, comptroller postage paid, rate statement transmit city county, county, supervisors or for. taxation levied the board statement, comptroller such If fails to transmit taxation. the clerk from other sources. as rate of taxation obtain the information to such must comptroller compute must Monday before On the fourth of October or “ Appor- Duplicate separate Record of money in the and enter columns sums, respective Railway dollars tionment Assessments” corporation, person, paid cents, cent, rejecting of a to be fractions upon the total amount of the tax the state or association liable therefor apportionment county, assessment, city tax county, county, city county, assessment to each VOL. clxii —7 the Case.

Statement that within ten after then averred count days first the state Board of in August, Equaliza- third Monday total road- franchise, tion apportioned duplicate person, corporation, named said association assessed effect March record. [In 1883.] October, days Monday in ten after the fourth 3668. Within Section daily newspaper publish comptroller a notice for in one must two weeks capital, daily newpapers gen- general at the two circulation published Francisco, city specifying: of San eral circulation Dup- Board of he has received the state 1. That ” “ Duplicate Railways Record Record'of Assessments licate ” Assessments; Railway Apportionment of payable delinquent be on the last Mon- the taxes are now will 2. That next, paid and that unless to the state day p.m., at six o’clock in December prior thereto, per capítol to the' at five cent will added treasurer Monday year, the last at six December .each amount On .thereof. p.m. , unpaid delinquent, taxes all of are and thereafter there must o’clock proper or other officer the state treasurer an addition be collected centum, by per sum when collected must be set aside the treas- which five pay expenses contingent to the urer, fund which of actions as a with expenses by delinquents, against any the to audited of said be the board paid by any are to the taxes state treasurer order of the When examiners. apportioned by upon comptroller, and the made state Board assessments comptroller notify Equalization, the must forthwith auditor of the and county, city respectively county, each and taxes of and that such treasurer paid, county city to the amount thereof and of each and have been which portion county entitled. State’s The of the taxes must be and interested thereto, by portion to each fund entitled the treasurer and the distributed counties, fund, placed counties, and belonging the cities and to must be in a Fund,” “Railway city, county, Tax to the to called credit of each be and any placed Railway county taxes thereto. When are in and entitled the ” city county, county, comptroller, of a or to credit and the Tax Fund the by comptroller county, the at settlement with the of next treasurer such the treasurer, city county, to must draw and deliver or and such his warrant upon in the the the state treasurer amount to credit of such fund city county. county, March or and effect .[In 1883.] corporation, person, by or 3669. Each association the assessed Section treasurer, pay upon to the order of must the state Board required comptroller, paid moneys are the treas- of the as other to be into upon city county, year county, ury, and and and taxes each levied the state corporation, per- property Any said so to it or hiiri the assessed board- board, association, son, or the assessment made the dissatisfied with of, upon upon payment complained the and the of the taxes due assessment added, per added, Monday on or the first in cent if be before the five to. comptroller February, filing the of an intention to and the of notice with RAILROAD CALIFORNIA. PACIFIC of the Case. Statement of defendant to rails and stock the roadbed, way, in in located, which the in the State railway counties laid of in such to the number of miles railway proportion Monday action, may, February, bring begin the of an not later than first an recovery against of the amount taxes state treasurer for the of action the thereof, treasurer, part paid any in percentage the or and the so tax, complaint illegality may allege any tending the or fact to show levied, part. upon are or in of the taxes whole A the which upon complaint copy the of must be served the treas- of the summons filed, days complaint been and the treasurer urer ten after the has within thirty days At the time the within to demur or treasurer has which answer. Superior may the be tried in he demand that action the demurs or answers attorney general county must the of The defend the Court Sacramento. plead- provisions relating the Procedure Code Civil action. trials, appeals applicable proofs, proceedings ings, herein are treasurer, provided upon presen- judgment against for. the If final be comptroller, copy judgment of a he shall tation certified of such treasurer, plaintiff upon pay to his warrant the state must draw who collected, illegally amount been taxes so declared have examiners, paid action, be must the cost such audited the board treasury, any money hereby general which is out of fund county, appropriated, comptroller may from and receive and the demand costs, may proportion or city county, of such deduct interested county, proportion money to said such then or become due Monday city county. begun the first action on or before Such must levied, February year taxes succeeding rights begin action action. and failure to is deemed a waiver effect March 1883.] £In Monday February year, of each 3670. After the first Section court, comptroller proper begin in the name of the must an action délinquent people California, taxes to collect Equalization; such must be suit assessed state Board counties, counties, and cities taxes due all the appearing Equalization, delin- assessed Board of quent “Duplicate Railway Apportionment of Assess- of Record ments.” taxes, county may city The for and and and demands state county, following complaint form is united one In such action. action sufficient: of Title [ Court.] People The of the State of California vs. (Naming Defendant). , day (naming in the Plaintiff avers on the of franchise, roadway, year), the state Board of assessed of the Case. Statement so of the total assessment and the amounts appor- counties; and the number of counties, to those the board tioned spe- counties, laid said of defendant’s railway miles set forth. cifically rails, it) roadbed, (naming at the sum of the defendant and stock of apportioned as To the said assessment follows: the board dollars. That it) (and dollars so on nam- county (naming of (naming it) of the sum county). ing each county plaintiff and taxes for for state is indebted to the defendant That taxes, , following For state in the- sums: year eighteen in the county it), dollars; county (naming it) taxes (naming for sum dollars, etc., per non- cent added five (naming it) with for in the sum

- payment sums for said several and payment Plaintiff demands of taxes. prescribed may in section 540 of in form as -prays issue that an attachment Procedure. the Code of Civil comptroller attorney.) his or (Signed complaint, the clerk must issue the of attach- filing writ of such On the tor, proceedings be had under of attach- prayed and such shall as writs ment previous actions; issuing nor no bond affidavit in civil ment issued plaintiff required. judg- recover If in such action the is attachment fees, judgment and in case ment, as counsel be included there shall judgment, brought the defendant but before judgment after suit of taxes may fees, to be the court determine rea- pay such sum as counsel must as judgment Payment just. the taxes or the amount of the and sonable duplicate treasurer. In such actions made to state case must be apportion- railways duplicate and the record record of assessments assessments, them, comptroller, copy by railway or a certified ment of corporation, any person, unpaid against showing or association taxes Equalization, prima the state Board of assessed evi- facie assessed, assessment, delinquency, dence counties, unpaid-to cities and or taxes due and of'the amount named, corporation, pe.rson, or associa- and counties therein n California, people in the amount of -the State of is indebted to tion unpaid, city appearing county, county, taxes, therein levy of such in relation the assessment and that all the forms law complied effect March taxes have been with. [In 1883.] assessor, county that of assessment made 3671. Section super- Equalization, apportioned by as the -board the state Board of school, road, town, township, in their city, or other district to each visors counties, respective counties, only of taxa- basis or cities and shall be the thereof, incorporated except cities county, tion for the subdivision towns, incorporated may cities basis in also be taken as such townships, proper may so elect. All taxes when the authorities towns school, manner road, the same local districts shall be collected in other county taxes. effect March [In 1883.] RAILROAD CALIFORNIA. PACIFIC

Statement of the Case. : n count then as follows proceeded sifter third “V. That within ten Monday days said Board of did 1887, state. transmit August, Equalization of counties a to each auditors said statement county of the main track defendant’s length railway showing with a within the counties of auditors de- said respectively, track within of the whole of defendant’s scription railway of said counties auditors including respectively, value mile for the assessed identification, per sufficient way rata distribution mile of the as fixed same, per by saidyww franchise, assessed value of the whole roadway, roadbed, said in said rails railway stock of defendant’s said and the amount counties apportioned .auditors (cid:127) ... . . respectively. to the first That thereafter, “VI. Monday prior of said counties did auditor of each October, 1887, county to him enter assess- upon- said statement so transmitted said did enter assessment ment roll of his county, said roll of his the said amount appor- county Board of county tioned said state his Equalization his roll of county of the assessment the column of his value of all county showed the total property taxation. ... “ of Octo- Monday the first thereafter, VII. That of each counties ber, said board supervisors did of California tax said State the state according levy tax for the fiscal such .state to the rate theretofore fixed for Board of said state 30, 1888, Equaliza- June year ending in its county,, including taxable tion, upon its county of defendant assessed apportioned in all of said counties for and the taxes so levied aforesaid, of defend- said property of state taxation upon purposes assessed, as aforesaid was said counties ant apportioned the sum of $109,440. “ day VIII. September, That the seventeenth rate of state taxa- fix the said did Board rate of 30, 1888, at June tion for the fiscal ending $0,608 on hundred dollars. each one

Statement of the Case. at That has never IX. defendant time said state paid to said sum of nor tax, $109,440, thereof. amounting any part That said state tax became and was on the last delinquent six 1887, at o’clock December; and and p.m., Monday upon reason of such at the time of and five cent by delinquency per of said to the sum of tax, wit, $5472, was, state comp- to said State, troller of said added state and no tax, of part added for has said so ever been $5472, delinquency paid by defendant. “(cid:127) Tha,t to the third of X. October, .1887,the prior Monday did said Board of and transmit to Equalization prepare State a of of said record comptroller duplicate of, and a record of of rail- railways, duplicate apportionment assessments for the fiscal June both 30,1888, way ending certified chairman and clerk of said state Board of and which said records included the Equalization, duplicate of defendant’s said assessment said and the said property, of of the assessment defendant’s apportionment counties. said of “Before the fourth said October, 1887, Monday comp- did at the rates of troller taxation fixed and levied compute and enter in columns in the said aforesaid, separate money record of of assessments, apportionment duplicate railway sums, in dollars and to be defend- cents, respective paid by as the state tax the total ant amount of said assessment, as the tax of said assess- county apportionment ment each county,- city county, to defendant named in said assessed record. That duplicate -ten after the within fourth days October, Monday did- said for two weeks in news- one comptroller publish daily circulation at of the state paper general published capital said two State, circulation daily newspapers general in said San Erancisco city published county a notice that had he received from said state Board said record assessments Equalization duplicate railways, and said record of assess- duplicate railway apportionment ments, that the said taxes were then due and payable December, would become last Monday delinquent v. CALIFORNIA. RAILROAD PACIFIC the Case. Statement to the that unless state treas- o’clock p.m., paid at 6 cent five would be added thereto, per urer at the prior capital thereof. the amount for services a reasonable compensation legal “That in the institu- Miller, plaintiff, & attorneys Langhorne this cause is a sum action, tion equal prosecution in this- cause of action to be of the tax cent ten alleged per delinquent.” counts taxes in the followed county

Then eighteen in detail all with counties, averring compliance several in relation thereto. law the demurrer demurred was complaint,

Defendant various answered, defences, and defendant overruled, setting up franchise that the assessed defendant which was one of derived Board defendant the state of States the United certain the through same were used and that the of defendant acts Congress, of the Federal of the instrumentalities as one government, State; taxable the the was not assessment hence, and, so blended with whole franchise was assessment as of this and that the whole therefrom; to be assess- separable therefore void. ment was evidence Kecord of

The ppt “Duplicate plaintiff of of the state Board Assessments Railways by Equalization “ Record of and the of 1887,” for Duplicate Apportionment filed in the 1887,” for officeof Assessments Railway comp on the 11th of of the State of California October, troller admitted defendant’s These were The subject objection. of stated record of the assessments railways duplicate “ Board of session the state being this, Equalization all the members of 1887, thirteenth day August, being pres under consideration of and ent, having rails and stock of the franchise, roadbed, rolling roadway, within the Pacific Railroad for State, Central Company, board that and it this said com 1887, year appearing in the in March, on the first at 12 year 1887, Monday pany, owned, of- that still meridian, owns, and 719.50 o’clock, day, which at said time and State, of railroad within this miles day Case. Statement in more than is, one county; was,' operated in March still State, within of said' entire railway being is described same, with the way and which, right of line of follows description roadway, as follows:” [Here it “And rails- and roadbed, way.] appearing roadbed, rails value franchise,'roadway, the actual within this at the said said stock of company, (cid:127)rolling still the sum of date March, was, is, and time eighteen it is that the of dollars: ordered Therefore, hereby millions for stock, roadbed, said rails franchise, rolling roadway, same are assessed said 1887, hereby year at Pacific Railroad sum Central Company eighteen million-dollars.” n l’ecord mil assess- duplicate apportionment way 22, under date of “The 1887, stated: ments, August met this Board of All the members day. pres- ent. The board this the total assessment of day apportioned roadbed, rails and franchise, stock of roadway, each railroad assessed on the 13th day August, to the counties and city county of San Francisco number of miles of rail- proportion in each laid of San way county, county city Francisco, set out in the apportionment following table. The is based apportionment proportion number miles each aof county bears to the total railway number miles laid in the State.” railway The annexed table the name gave corporation which each railway assessed rail- the name each in this assessed, instance way Central Pacific Railroad ”; names counties and and Company city county, which the assessment was the- number apportioned; total road miles of State; the number of miles in each county and and ; the value city county mile; total assessment per of the franchise, roadbed, rails and stock roadway, each assessed; the railway amount to each county, apportioned and and city county, and and purposes city county rate of county taxation; taxation' for and each city county, and levied county, board of amount supervisors; RAILROAD CALIFORNIA. PACIFIC of the Case.

Statement and amount due of rate; at the state state taxes county, the assessment as taxes apportioned. city county, upon admitted that was made as the It was apportionment to be made, that Code Political mileage required stated. was correctly for each county under that the then taxes sued objection, Plaintiff proved, thereof. been Evidence was for had not any portion paid, of services of value counsel. also introduced regard witness C. M. called as a clerk of the Defendant Cogían, and identified the minutes of original Board Equalization, to the assessment of the board relating proceedings Railroad Pacific for the Central Company 1888. It date there- under August appeared year recommended to the board that attorney general from Pacific of the Central .Southern Pacific that the franchises be State, assessed, derived from that the companies,- in the record of be assess- stated, valuation thereof separately the board assess culverts ments; moles,.bridges of certain railroad each road respect separately, used that the steamers those declare operating companies the board assessed; proceeded roads were whereupon and ordered franchise assessment, make such derived from the State of Railroad Pacific Company, Central and that the at franchise of $1,250,000, be assessed California, from- Railroad Company, the Southern derived $1,000,000; at that the moles, be assessed California, State of which the wharves tracks culverts, bridges at $1,000,000; laid assessed Pacific are Central which the wharves trades of moles, culverts, bridges at $400,000. be assessed are laid the Southern Pacific of the Central Pacific Rail- record original made the board road Company, to the effect that the board and was evidence, offered in State of franchise derived California, assessed the stock of said roadbed and rolling roadway, of $15,000,000. at the total sum within said Mr. offered Cogían, plaintiff On the cross-examination under evidence, defendant’s admitted, and the court objec- TERM,. 1895. 106 the Case. Statement of to the state- defendant statements furnished tion, verified 1888, Board of 1887 during years 6. Exhibit four was 4 and were marked Exhibits plaintiff’s Pacific Railroad the return made the Central Company which read thus: “ answers The Central Pacific Railroad ques- Company And makes the follows: tions the board as propounded by taxa- its in relation to subject statement following California, end- it for owned year tion the State of .by and of all in March, on the first Monday ing used in year: operating railway during “ a system owned operated length railway 1344.14 miles. and out of the State.is track reduced double track, “Length sidings in the State, js-; miles-; track out of 597 single 747.14 miles. “ from the derived The value of franchise within State. $25 this roadbed, The value of the entire roadway, 9,376,607 and rails within this State is stock

rolling 00” $9,376,632 the road This list of the was followed aby mileage which it in each of the counties ran, California through schedules of stock; expenses earnings of the State; the road as a and out operat- system within and of the expenses ing expenses; earnings to. State. The return was sworn duly the return of the Exhibit six was other, as the This with the same statement opened owned oper- and after giving length railway double, of track, as a and the ated length single system fran- continued: “The value the-State, out of and and rails within and entire roadbed chise roadway, n and schedules The usual lists State is $12,273,785.00.” attached. merh- a Morehouse, as witness then called one Defendant tended evidence whose of the state Board ber Equalization, RAILROAD CALIFORNIA. 107 PACIFIC Statement Case. him

to show that for was intended by the assessment franchise, but that he to and did include Federal defendant’s franchise could not that the the value of Federal say operated on the in minds of the other of the board making up members the items of the offered to by valuation. Defendant prove 1888, Morehouse at that session from 1883 prior every of valuation of the board, assessment making of included the Central Pacific Kailroad Company, franchise held its total estimate the value of the Federal by to, that of virtue of the acts referred Congress company, by was blended and that franchise valuation of the Federal a manner into the assessment of that general company of to be separation. from it and indistinguishable .capable and immaterial, This was to as irrelevant objected incompetent, saved. sustained court, exception objection by Board of Maslin, E. W. Equalization state secretary at the 1880, to who was March, 1891, present April, board of its the record proceedings, meetings kept his that from testified called as witness defendant, by the road of the assessment with the acquaintance history franchise since relation to it with 1880, his respect members his with many conversation personal property, how mem- those two he had through years, knowledge that he arrived at their bers and the knowledge conclusions their arrived at he had as to three members how thought of value elements he what conclusions, he could state thought for the their estimate were considered the board in making witness the asked total values for defendant 1887. Thereupon following questions:

“Q. which you From the various sources knowledge elements were what to the court enumerated, have state please Board, taken into consideration the state Equalization the assessment this year making “ members Q. hear between Did conversation you when meeting state Board during Equalization was made year the assessment this company did to and reference to the with elements proposed they include in ?

Statement of Case. “ Q. At time that assessment of made 1887 was the state Board of of the Cen- Equalization tral Pacific Railroad what was said at done the. Company, of the state Board meeting Equalization day your ”? presence To each these plaintiff interposed questions objections, court, were sustained and defendant excepted. then made the Defendant offer: following in view of the court ISTow, on this we ruling subject, now offer to that from witness the time of the prove by Board in 1880 down organization to and that board had con- including every year — sidered value of the Federal franchise is, fran- chise derived from the United States the acts of Congress of belonging owned Pacific Railroad Central an ele- as Company, total ment of value in value of the of assessing n that in 1888, railroad in of company; consequence of decision Court the United States Supreme upon Board of for the first time subject, ceased to consider this Federal franchise as an element of value, reduced hence their valuation sum million three dollars on the Central Pacific Railroad Company’s property.” was This offer disallowed the court, defendant , excepted. Plaintiff called E. rebuttal C. Wilcoxen and Dunn, J. P. who were the board and members of participated .making the assessment of 1887, testified that they the Federal was not franchise included in the assessment that year. for. On the cross-examination of Mr. Wilcoxen an effort was made to introduce that he had before a committee testimony given of California in 1889, which the court general assembly as it excluded, so far related to the except year The statement on motion new for trial then continued: “In its' written which the opinion, upon findings based, the after fact, .court .a from a determining prepon- derance it, evidence before the Federal franchise the. of defendant was not assessed or included in the assessment-of RAILROAD CALIFORNIA. 109 .PACIFIC

Statement of the Case. of defendant the state Board of Equalization, : uses following year language ‘ if the did But evidence offered not parol weigh plain- and if favor, tiff’s of such evidence defend- by preponderance have ants could shown the State did intended include a Federal franchise I assessment, think the court would have to it as The effect disregard incompetent. of such evidence would be to contradict the parol record, cannot be done. ‘“ best and evidence acts intentions only of deliberative bodies must be drawn from the record of its intentions. . . . From both fact and standpoints must that a Federal law, franchise was findings- ” included these assessments.’ On 3 the Court made and filed its writ- February Superior ten of fact and conclusions of law. The findings findings fact included the following: That the 13th

“XXX. the state day August, Board of California, Equalization, did, of taxation for the fiscal assess as a unit, purposes and not the franchise, separately, roadway, roadbed, rails and stock defendant’s then railroad, and situate being within the the sum State, at and value mentioned in the amended and did then there enter complaint, said assess- ment and in minutes, its record of assessments. That such assessment is the one which the several taxes men- tioned in and no based, are other complaint assess- .herein ment than the one aforesaid ever made said Board or other assessor of said defend- Equalization property ant for said fiscal state That said Board year. Equaliza- tion did at the in in time and the manner the amended alleged and assessment transmit assess- complaint said apportion ment and the and and to the county city county apportionment and auditors, said and thereof assessment apportionment were entered rolls of said counties and assessment said as in said cities counties amended alleged complaint, as hereinbefore found. “ XXXI. That said in Board making Equalization,

no Case. Statement assessment, franchise, did roadway, roadbed, assess said rails, at their full railroad, defendant’s stock of cash and rolling therefrom the value without value, mortgage, deducting bonds issued the value of said under or thereof, or any part as thereon, aforesaid, existing said acts of Congress, given 'to the said holders of the'indebtedness of to secure board did assessment, said and, in said bonds, said making as an interest in treat said or bonds said deem nor mortgage said it' the whole value of but assessed property, it would in the same manner defendant have assessed done thereon. At the time said assess- there been no had mortgage said made as aforesaid state ment and apportionment or rolls for the the assessment books said Board Equalization had and were in existence, been fiscal year completed of defendant’s assessment valuation pur- of taxation fiscal had been ascertained and for said poses and' said said val- board, fixed as law, provided by making did all uation exercise necessary apportionment, powers of values for the relative purposes equalization taxation.” “ XXXIII. Said Board of state Equalization, making defendant’s did not include said assessment roadway, the value valuation of said fences erected roadway any land of did not coterminous value proprietors, at a than value of other said the value roadway greater prop- than situated its actual cash similarly value, greater erty blend in did not said assessment the value of fences. any board, in said its said That valuation making did not valuation therefor, which system operated adopt or which was intended did in man- any (cid:127)unequally, rule section 10 of 13 of ner violate article prescribed constitution, board, and said its said asséss- making did not therefor, and valuation value the stock ment defendant cent other above its at sixty (60) per and did nor value, not value defendant’s actual assess franchise of its actual in excess value. “ XXXIV. That in said assessment and valuation making said state Board of did not include therefor PACIFIC RAILROAD CALIFORNIA. HI

Statement of the Case. or value of assess steamboats nor blend boats, the value any steamboats or with the boats, assessment value of or any of defendant’s assessment roadbed and roadway, rails-, rolling stock.

“XXXY. That its assessment valuation making therefor defendant’s franchise said Board Equaliza- did tion assess or value franchise or include, any corporate held or exercised defendant under the acts of Con- hereinbefore under mentioned, or gress act any Congress whatever. And said said board, assessment and making valuation defendant’s therefor, franchise, roadbed, road- rails and for stock, taxation for way, rolling purposes fiscal did not include its said assessment and year valuation therefor Federal then any franchise, possesséd by nor defendant, franchise or -whatsoever, which said thing board could not include valua- legally tion. That the franchise, roadbed, rails and roadway, stock of railroad valued and defendant’s assessed said state Board of of taxation for the Equalization, purposes fiscal at their and in value, actual proportion their values respectively.”

The conclusions of law were that entitled to plaintiff recover sums with claimed, five cent interest per penalty, and counsel fees, stated, the amounts costs. being favor was rendered in-

Judgment plaintiff’s accordingly: On the 19th the statement, June motion for following, new as trial, was filed includ- record, part approved an of errors. The defend- assignment ing specification motion overruled, ant’s for a new trial was defendant the State from Court appealed Supreme judg- the motion for ment and from the order new trial. denying rendered 6,1895, the direct- Court January Supreme judgment, court below to there- ing striking modify judgment from the amount thereof, allowed for interest entry prior so that, modified, also certain counsel fees, trial should stand order a new affirmed. judgment denying Railroad, v. Central opinion reported People California,

Opinion of the Court. Ashton whom was Mr. Mr. J. Charles H. (with Hubley in error. Tweed on the plaintiff brief,) and Mr. J. H. Miller, Mr. J. P. whom- (with Langhorne of the State of Mr. W.F. was Fitzgerald, attorney general in on the for defendant error. California, brief,) after delivered case, Me. stating Fullee, Justice Chief of the court. opinion of is not The assessment Board it of but is contended that fraud, attacked on the ground franchise or franchises of the Federal value possessed by in and that as therein, error included the assess was plaintiff all the' a unit, ment embraced assessed as it was property Santa Clara v. invalidated. Southern thereby wholly County Railroad, 118 U. S. v. 394; Central Pacific California U. S. Railroad, 127 1 of article XIII of the constitution section of California, By in it is that “all State, provided property exempt- shall under the laws the United be taxed in proportion to its to be ascertained value, law. The word provided by ’ ‘ in as used this article and section is declared hereby include credits, bonds, stocks, dues, franchises and moneys, real, all other matters and and mixed, things personal capable ” “ section 10 private franchise, ownership; roadbed, stock rails railroads roadway, .all rolling oper- in ated more than one in this State shall be assessed county the state Board of at their actual value;” Equalization, and the Political Code that this must and the provided be, in mode which it should done. be, Railway corporations required furnish Board it acted, before and as of the first Equalization, Monday March in each a statement and sworn year, one signed of their officers, detail the whole number of showing miles State, and,, line railway when out partly, the' whole number of miles within and without, owned or thereof; each and the .value operated by corporation, value roadbed and rails of the roadway, whole, PACIFIC CALIFORNIA. RAILROAD

Opinion of the Court. of the same within the State the width of the ; value stock value; way; earnings gross road and of the the entire road within the net State; stock ; income authorized and num- in; the capital paid ber shares authorized and issued, etc. verified This statement for 1887 was made by plaintiff “ due time,

error in to be a in rela- statement purported tion to to taxation in State of Cali- property subject owned fornia on the first Monday ending March, all used its rail- operating And it was therein set forth, way during year.” among “ other The value of the franchise and entire things: roadway, roadbed and rails within this State is $12,273,785.00.” Board of that determined the actual value Equalization the franchise, roadbed, rails and stock roadway, rolling said within this in State, at said date time company, was and March, dollars,” is the sum of still million eighteen “ franchise, assessed the roadbed, said thereupon roadway, ” rails and stock for the 1887 at that sum.' section Code, 3670 Political record By duplicate assessments and the record of railways, duplicate appor- tionment were made assessments, thereof, railway copies evidence of and that forms prima assessment, facie in of law relation to the of such assessment taxes levy had been with, and in evidence. these complied put

Under this state of was that facts, the presumption franchise thus in in its included error return and by plaintiff the board in was a which was its assessment franchise not under the laws of the United and that the exempt board had acted within its rather upon property jurisdiction than in which it' had no to include upon property the assessment. Indeed, out, as the Court Supreme points when statement, in in its included the franchise plaintiff .error if there were which be assessed and franchises, two one of could the other to could not be not, error permitted ought plaintiff to the one which was say. capable v. was intended it to be or included therein. was People Central And the California, 105 Railroad, Pacifc

vol. CLxn —8

114 Opinion of the Court. California, 504; Lake Flood, v. San Francisco court cited 68 Cali Co., Quicksilver Mining Bank County Sulphur rule Varnum, California, 86, and Dear v. fornia, for taxation is a list who furnishes property that.a party from sufficiency description questioning estopped to collect the taxes. in an action Undoubtedly furnished so what it had no had included if the Board seek the remedies assess, the company might authority far as the assessment so the law to correct under given or, the tax thereon, or recover back concerned, property defend exclusive, not held remedies were might if those it. But where to enforce the attempt against be and the assess in the could assessed mentioned description it-,did as return, here, ought, ment followed to be held at least, saying description estopped was ambiguous. should not bound error

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

Plaintiff in error to rebut the case made intro attempted evidence which it claimed tended to show that ducing franchise assessed covered franchises derived from the United States as well as from the but the of fact of findings the trial court were to the and there a Con contrary, being flict of evidence on the treated the Court point, Supreme in conclusive accordance rule findings with well-settled on the in that In subject Butler, v. 95 jurisdiction. Reay California, 206, 214, it was said: “It held has been here CENTRAL PACIFIC v. RAILROAD CALIFORNIA. 115

Opinion of the Court. more than a hundred eases, with v. commencing Payne Jacobs, 1 in the first California, 39, book published reports with court, Dobinson v. ending McDonald, California, in the last volume said that the of a reports, finding as to a fact decided jury evidence weight or.court will,not be reviewed this court.” That rule is on us. River binding equally Republican Co. v. Kansas 92 U. S. Bridge 315; Dower Railway, Richards, U. S. 658. It Court of as it argued California, has Supreme here, been that because the trial deter- judge, having after mined aas fact from the of the evidence before preponderance him that the Federal -franchise was not stated that assessed, he that if the evidence offered had not thought parol weighed and that if a favor, such evi- plaintiff’s by preponderance dence defendants have shown that the board could intended to and did include a Federal franchise in the assessment, court would have to it as because the disregard incompetent, effect would be to contradict the therefore the evi- record, dence had been the court disregarded its deci- making sion, that the rule in conclusivene'ss a respect determination of facts on a conflict of did evidence not apply. Ve concur with the of this entirely disposition suggestion by Court, which said: “.It Supreme how- clearly appears, ever, the court did not evidence, but disregard that, after as a from the determining fact evi- preponderance-of dence before it that the Federal franchise had been as- sessed, it if stated that of evidence had preponderance been it would held otherwise, have as matter of law that the assessment must own be tested its The fact language. that a court, after issue, its decision an giving gives the manner which it would have decided the opinion upon issue under other does not constitute an error circumstances, be reviewed in this court.” to.

Counsel for in error also that inasmuch itas plaintiff urge for 1888 appeared to assess board proceedings “ the placed franchise of the Central Pacific derived ” the State at $1,250,000, California and then assessed 116

Opinion of the Court. from the State the road- California, derived franchise of' said within- said stock rolling roadbed way, it should inferred $15,000,000,” total sum State at in the used assessment difference from the language in total that the fran- amount, the difference 1887, it franchise. But also included the Federal assessed chise then for 1888 in the return that respect the company appeared was as follows: matter of this the franchise derived from the “The value 00 State. $25 within this roadbed, of' entire roadway, value “The within this State 9,376,607 and rails is.. stock 00”

$9,376,632 in difference valuation nor think neither the And we in the mode of statement has a material on bearing difference in The 1888 showed proceedings the assessment in care on re- company making part greater board assessment, on turn and part making had been careful in if error plaintiff equally possibly n relation it resulted assessment have to the might have been not fol- less, would does although the valuation not be attributed the reduction might low financial conditions. change all, considerations which were these are presented After evidence, in connection with all the the trial they judge, to the adversely have been company. disposed to the action of the trial court in were saved Exceptions are evidence, exclusion of certain but we unable respect inor Court in these the decision to find Supreme rulings the denial of title, privilege immunity thereon right, or claimed under the or laws of set Constitution up specially States. the United and which Court, passed rulings Supreme all assume were that were called to its attention,

we must as to Wilcoxen, to the-cross-examination of the witness relate made him, which the Court Superior previously statements had he respect confined RAILROAD v. CENTRAL PACIFIC CALIFORNIA. 117 Opinion of the Court. in chief. The held

.been examined Court that, under Supreme disclosed the record, the circumstances tbe by Court Superior in not err did particular.

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

' it is to that it is enough say impossible error rais- predicate a Federal toas these or ing question on rulings evidence referred to counsel. no such error- committed in was

Clearly rejection offers of if we should treat them as general proof open consideration abandonment of notwithstanding apparent in that Court. exceptions regard The Supreme issue was the assessment for The de- year 1887. cision in Railroad 127 U. S. Company, California 1, was announced but 30, 1888, the last of April the judg- ments of the Circuit Court therein considered and affirmed was rendered And 1886. the action of July in board to 1887, as to be shown, was not years prior neces- sought relevant or material. Offers of must sarily be offers of proof relevant so broad as to embrace irrelevant proof, specific, and immaterial matter, and made in faith. The exercise good discretion of the trial court these offers rejecting cannot be reviewed by properly .us.

The errors as to non-deduction of assigned outstanding from the valuation of the are mortgages expressly it is waived, error the brief that though assigned court erred in not as the that, state franchise Was holding to the lien of a to the subject United States, the mortgage assessment was invalid because effect the interest of taxing the United States in that franchise created mortgage. TERM,

Opinion of the Court. to this, As no such question raised on in the passed moreover, state. is court; and, without merit, objection on hereafter authority, stated. grounds principle ¥e are thus consideration of the real brought ques- case, tion various with presented aspects argued much counsel for in error, ability plaintiff namely, franchises are one and constitut- company’s inseparable, unit, an indivisible cannot be to taxation ing subjected the State of because that would California be necessarily the Federal franchise taxation. subject is that franchise of railroads authorized argument constitution Political provisions Code to assessed but nothing operate and take thereon; railroad and tolls that charge of right Eailroad to construct, Central maintain Company and railroad California conferred that operate and derived it from,, by company by, States; is a also single right, though granted by State. is a California, of made of company corporation- up

two California of consolidated articles associa- corporations by tion entered under into of California, laws and recognized as a California of corporation by acts Congress through franchises, which it obtained Federal assistance and -Federal to its act 1861, 1862, of incorporation subsequently July 1, c. 12 act 12Ó, 489; Stat. c. 2, 1864, 216, 356; Stat. July 13 1865, act of March c. 13 3, .88, 504; 7, Stat. May act. 1878, 96,-20 56; c. Stat. in the never otherwise regarded State, the act of 1864, legislation Indeed, 4, by April c. 1863-1864, 417, Stat. Cal. to enable the com- passed said more with and pany fully completely comply perform and conditions of said act provisions Congress,” 1, California 1862, construct, authorized the July company maintain and the road and operate territory telegraph State, east of the' with the usual incidental lying rights, privi- also leges powers, vesting company rights, franchises and with the powers granted by Congress, express reservation that should be to all company “subject RAILROAD PACIFIC CALIFORNIA. 119

Opinion of the Court. of this railroad and laws concerning telegraph lines, of the United messages property except States, and of the said shall have company, priority pf and transmission over said line transportation railroad U. cases, Fund 99 S. Sinking 700, 754. telegraph.” Sever ance allegiance corporation State that or it, created transfer deprivation powers the State, conferred were not the privileges object the United States, grant "by nor consequence ac of that ceptance grant by corporation thereto au thorized the State. Pennsylvania Railroad v. St. Louis, Alton &c. S. Railroad, 290, U. it But was not con tended at the bar that ever became a cor of the United is other a poration than state corporation.

Even in 'of created respect railway corporations act of the claim an Congress their exemption state taxation has been denied. This was so ruled repeatedly in Railroad Peniston, Wall. Company v. 36, Mr. said,: Justice Strong “ It cannot that a state tax which affects the remotely efficient exercise of a Federal is for that reason power alone inhibited the Constitution. To hold that would be all States tax deny persons property. tax levied State withdraws Every a from the reach of Federal taxation from which it is portion taken, and to that extent diminishes the subject upon Federal taxes laid. The States must may are, they ever be, coexistent with the National Government. Neither the Hence other. the Federal may destroy Constitution must (cid:127) receive a construction. Its limitations and its practical im- must not be extended so far as to plied prohibitions destroy the or their States, necessary powers efficient prevent . exercise. . .

“ It is, therefore, manifest that exemption Federal agen- cies state taxation is not the dependent, nature of upon or the mode their upon or agents, constitution, upon but the fact are effect of they upon agents, tax; Opinion of the Court. tax whether the does in truth is, de- upon question to serve the them of as government they prive or does hinder the it,' to serve efficient exercise intended their A tax has such- no upon their neces- property power. free It leaves them to the duties effect. sary discharge they A tax undertaken to their is perform. upon operations have to the exercise Federal direct obstruction a powers. the tax is laid this case rail- In upon property tax as was the of in road' complained company precisely It is v. Union imposed Thomson fran-. Pacific. to exist or chises company perform it which it was into is laid Ifo.r brought being. functions to act which the has been authorized do. nor .the is not the transmission dispatches, transportation It of war that is mails, States munitions troops, of United but it is real and exclusively taxed, personal property taxed, with in common all other property agent, n ,is It a maintain that similiar character. impossible with exercise of an interference any power this is belong- and if it Government,- is not, General prohib- ing no constitutional implication.” ited by 590, Union Rai;lroad, Wall. Thomson In Pacific Division, Eastern Railway Pacific Company, corporation Kansas, aid received legislature created by land, and, to. aided, thus constructed road in bonds link in transcontinental line known the- one become in accordance with the same acts- of Union system, error, same conferring relating plaintiff Congress subse State Kansas functions privileges. having stock and taxed the certain roadbed, rolling personal quently its stockholders enjoin corporation, sought of the tax on that the was the collection ground and that it to the United States was under mortgaged bound certain duties and ultimately to perform Congressional grant net five cent of earnings its. per pay retard burden it the discharge state taxation would conten Rut the of its general government. obligations : and Mr. Chief Justice Chase overruled, said tion v. PACIFIC RAILROAD CALIFORNIA. 121 Opinion of the Court. not But we are aware of real case.in estate

or other of a not an act under property corporation organized has been held be the absence of Congress, exempt, to that in com- effect, contribution, express legislation just mon with other to the property, general expenditure common benefit, because of the employment corpora- in the service tion government. “ It is true some of in the case McCul reasoning loch v. seems to favor the. broader doctrine. But Maryland decision itself is bank, limited to the case as a cor created a law the United poration respon sible, in use of its to the franchises, United States.. “ And even under the respect organized corporations at this legislation held, we have Congress, already term, that the taxation, state derived from limitation implied in the national tax shares express permission banking is to associations, not to embarrass the im- so construed as collection of to the extent position taxes state per- mission National Bank fairly v. liberally interpreted. Commonwealth,8 Wall. 353.

“We do not think in' ex- warranted, therefore, ourselves the case of McCulloch tending exemption established v. Maryland, beyond its cannot terms. case We apply of a exercis- corporation law, its existence from deriving its franchise ing under state law, holding within state and under state jurisdiction protection.

“. . . No one all that the to tax questions prop business and erty, limits, within their persons, respective It States and surrendered. can original has never been not be so used, hinder indeed, as to defeat operations the national government; but it will be safe to conclude, general, reference to em and state persons corporations ployed has that when government service, Congress interposed their from state protect taxation, taxation is not obnoxious Lane to that County objection. Oregon, Wall. 77; v. Commonwealth, Bank National 8 Wall. 353. We no limits to the perceive exemp- principle

Opinion of the Court. seek to would re- establish. It which the tion complainants taxation all the the reach state move from ... every government. agent of the claims to which be would “The nature exemption that illustrated which is advanced behalf well set is up, case before us. ground very complainants The. is in the bounties of claim general government. has advanced sums to that is, large allegation itself road; has-contented with aid the construction hák made of a second mortgage; large grants security that itself, no condition of benefit to except land upon certain for full will services compensation, perform company admit the of those will grants; govern- independently interest in re- to a limited ment wholly contingent very income. And because advances and mote net of these these- it is claimed fully compensated employment, grants, its law, to state that this state corporation, being owing to the consent and active for these benefits indebted interposi- has to hold a constitutional tion of the state legislature, right without from state and this taxation; any its exempt indicates such on the part Congress legislation essential the full its: deemed to performance exemption to the government.” obligations Railroad Co. v. Peniston,

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

Both RAILROAD v. CALIFORNIA. PACIFIC Opinion of the Court. Co. v. in Western Union Massach

Justice Miller Telegraph Brewer in usetts, S. and Mr. Justice Reagan 125 U. 416. In . 154 U. S. the latter case , Co as the Texas was that, Pailway was contended under the laws of the United States, organized corporation the State even as to rates not control of it was subject the State. The within argument transportation wholly franchises from that the received all its Con those franchises was charge among gress-; there and that the State had not and collect tolls, power, franchise. But to limit or manner fore, qualify de Brewer, and Mr. Justice sustained, position'was the said “that, conceding Congress livering opinion, in all its from the remove operations corporation power there is the act control company creating which an intent on the indicates Congress nothing part the enforcement it, so remove there is by nothing within the of reasonable rates wholly State transportation from which will disable corporation discharging conferred all the by all the duties and exercising powers Congress.” is not a Federal Pacific the Central company

Although franchises it true that is nevertheless important corporation, conferred Congress, including were company by a from the Pacific Ocean railroad constructing But as remarked Cali- of Utah. Territory Ogden “40, S. Railroad, U. Central Pacific fornia to, collateral was independent important grant, though part California, the State that made to the of, by case That came since been has ever enjoyed.” possessed of the United States North- the Circuit Court up Court found that and the Circuit District California, ern the state Board made the assessment full all franchises and “included the value of corporate ” it and as could defendant; held exercised by powers, franchises that that conferred by not denied embraced invalid, it that the assessment was was held States, United if the Board it not held nor intimated that Equali- but was TERM, 1895. Opinion of the Court. zation had included the state the same result franchise, only have would followed.

Mr. Justice court, Bradley, delivering opinion said: then, Central Railroad Com-

“Assuming, has received franchises referred pany important arises whether grant question they are of taxation legitimate subjects They State. for national and to subserve granted compunja purposes national ends. It seems clear that the State of Cali- very fornia can neither take them nor nor destroy away, abridge nor them, them onerous burdens. it tax them ? Can cripple It tax outside visible of the com- may undoubtedly situated within the State. That is a different pany, thing. it tax “But franchises which are the may grant United States? In our What is a cannot. fran- judgment, chise? Under law defines it as Blackstone ‘a English or branch subsist- royal privilege, King’s prerogative, in the hands of a 2 Bl. Com. ing Generalized, subject.’ and divested form which it under a assumes special monarchical based on feudal a fran- traditions, government chise right, privilege concern, public to be exercised individuals at their ought by private will and mere but should be pleasure, reserved for public control and either administration, di- or under such conditions and rectly, by public agents, acting n regulations as the in. the in- government may impose public for terest, and the public Such and security. rights power must exist under form of every a.re society. always They and educed laws customs of Under community. our their existence and system, are under the control disposal legislative and department government, they be assumed cannot or exercised without legislative authority. can No establish a or a private person public highway, public or railroad, tolls for ferry, same, the use of the charge without authority direct or derived. legislature, are These franchises. No can take another’s private person even for a use, without such property, public authority; v. RAILROAD CALIFORNIA. PACIFIC 125

Opinion of the Court. that the eminent domain can as to say, is the same of a This is a exercised virtue .grant. be legislative only can make themselves a franchise. body corporate No.persons without authority. Corporate capacity legislative politic list be continued is a franchise. indefinitely.” might v. then referred McCulloch Mr. Justice Mary Bradley United Brown v. States, Osborn Bank land, a to a power given person Maryland proposition States'cannot be the United subjected corporation “ that these are not in a and added views taxation by court Thomson v. decisions of this with the conflict v. Peniston, and Railroad Railroad, 9 Wall. Company 579, the court As opinion 18 Wall. 5. explained of the com there was the tax case, property latter franchises or its Wall. operations. pany 37.” a it corporation was reaffirmed property Thus taxed, be its franchises, the United States though might and its to transact capacity instance corporate not be. It therefor, could business charge its appropriate as- settled although corporations firmly may regarded their is not the States, of the United property bemay agents but the property agents, property tax the agents, subject and that may Peniston. out Railroad Co. v. the limitations pointed S. U. Tennessee, Brocklin v. Van think for. the if should course, necessary pro- Of Congress to declare property exempted, tection of the United States did not see a different Congress that would question. present to overrule a unless we are so here, prepared fit to do case within decisions the comes considered line of well long in Thom.son’s case laid down. Although the rule therein that can make no taxed, that was it- was tangible reasoning opinion difference principle, applies. in error of California laws obtained plaintiff

Under corporate capacity; from the State right' privilege fares collect maintain charge construct, operate; TERM, 1895.. 126 Opinion Court to exercise the of eminent to domain; freights; power and maintain to enter lands or way.; acquire right to route; waters to survey construct road any person or across, stream, watercourse, any roadstead, along stream, or street, avenue, bay, across navigable highway any flume; ditch or to canal, cross, intersect, railway, join unite its with other railroad railroad at any' any point its to roadbed route; and material for way, acquire ;(cid:127) construction -to take material from the lands the State, of. etc., etc. 607; Stat. Cal. c. 532, Annotated Deering’s Codes and Stat. Cal. 114.

It is not be denied that such have rights privileges value and constitute taxable property. (cid:127) The as stated rule, Mr. Justice Miller, general “ Railroad Tax 92 U. S. cases, 575, 603, is that the franchise, business and stock, all capital profits corporations, are liable to taxation where do business and they place the State which creates admits them, of no. at this dispute And the constitution of California day.” declares expressly ” “ that the word as used in section 1 article property all State, under providing exempt the laws of the shall be taxed in proportion value,” its includes franchises as well as all other matters capable private things ownership. here is not a question value of the state question

franchise, but whether that franchise for if in existed, in error plaintiff possessed any subsisting rights privileges, otherwise called derived franchises, then they taxable, the extent of their value was to be deter- mined the Board of Equalization. n So far as the to' ability duties discharge obligations is concerned general government difficult to see that taxation of the state franchise would tend more than taxation impair ability roadway, roadbed, rails and If stock. effect necessary tax on such is not tangible unconstitutionally hinder the efficient exercise serve gov- ernment, neither can it be so of the state franchise. respect PACIFIC RAILROAD CALIFORNIA. Opinion of tlxe Court. taxation

Indeed the the State of the franchise by granted by does and could not, it in not, error from act- prevent plaintiff its under Federal franchise. ing an

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

When we in error returned its consider that fran- plaintiff Field, Opinion; afforded declined to resort assessment, remedy for oliise as made of the assessment for the correction the state laws tax and suit bring if therewith, dissatisfied pay tax which claimed back the whole any part recover entitled to think its one to be we position illegal, without but, the court; regard favorable consideration the state courts the reasons we that, hold, given, no valid defence to had that the decided rightly on. causes of action proceeded affirmed,. Judgment in the result. concurred Me. Justice White Me. Justice Field dissenting. in their -unable to concur with associates

I am my opinion in the case. or present judgment the on writ of error to case comes before us Supreme The the California, Court- of judgment Superior affirming an order the of San Francisco, of Court county city the trial in an action court, by of new brought that denying Com State, the Pacific Railroad the Central of State against people due be to recover moneys by alleged pany made of assessments for taxes the fiscal of Court of The the state Board Supreme Equalization. Court affirmed the Superior against judgment estab my long disregard, opinion, of court, of this lished doctrine powers general- into called of and the instrumentalities cannot of those exercise enforcement powers, impaired action taxation other their lessened by efficiency has This doctrine been constantly of the State. part its when called opinion asserted this court express illustri most thereon, pronounced by being judgment concur with the unanimous ous Chief its history Justice has become a principle, rence his It associates. recognized decision country made familiar in courts 316, and v. 4 Wheat. court Maryland, in McCulloch 9 Wheat. Bank, disregard States 738. Osborn v. United PACIFIC RAILROAD CALIFORNIA. Opinion: Reid, J. doctrine in the case recalls the of this present aphorism with but not more force, Coleridge, equal applied applicable, “ to moral he of all others the Truths,” principles. says, often most awful are too considered as so true interesting, of truth lose all and lie bed-ridden in they with soul, side side the most dormitory despised errors.” It would seem that the truth of the exploded lost force constitutional doctrine has some of its the' very that it fact has heretofore been so true as never to considered be questioned. the act of c. 1, 1862, 120, Stat. July

By Congress Pacific Railroad Union Con- Company organized by out, and authorized and empowered gress, lay construct, maintain furnish and a continuous railroad and telegraph, with the from a on the 100th meridian appurtenances, point from Greenwich, west between the south longitude margin of. River the north valley Republican margin of the Platte River, Nebraska, valley Territory to the western of Nevada and was boundary Territory; all the vested with and immunities neces- powers, privileges into effect the act. aid In sary carry purposes work thus great inaugurated, railway corporations by States which the overland railroad was to through projected were called into existence. If pass rights, powers, privileges and immunities were conferred state these authority upon state constituted a of their fran- corporations, they portion subordinate to chises, those the conferred by general gov- ernment, and with those of an comprised essential of the means for the part usefulness efficiency of the auxiliary corporations.. conferred immunities the powers, privileges upon

state the United States were corporations by necessarily para- mount to those derived from the When the State. powers, and immunities of were such state privileges corporations derived from the of the State were solely authority they gen- when the state as erally designated, collectively, spoken franchise or franchises the of the when corporation, and immunities were to be rights, powers, privileges supposed VOL. CLXII ^[9] — Opinion: Field, States from they generally

derived solely as the Federal fran- when of collectively, spoken designated, When no of the indication or franchises corporation. chise or was of the franchise franchises source specified, of the immunities in involved powers, privileges rights, the deféndant were as the held usually designated term without or franchises of company franchise specifically, included and the other powers, privi- description, term conferred both immunities Federal leges all The term embraced those duties powers, authority. conferred, be con- immunities which were supposed for its the railroad ferred, operation upon or from both sources. either source,' above, óf mentioned 9 of the act section general By Bailroad was authorized to con- Pacific Central Company coast, at railroad and line from Pacific struct a telegraph Francisco, San waters Sacra- or near navigable .the California, the eastern Biver, boundary mento in all and conditions were contained terms respects same of the overland railroad and tele- the act for the construction connect to meet and with the railroad and line, and graph of California. line on the eastern Each boundary telegraph to file its required acceptance companies of the Interior within conditions of act Department months after passage. six tenth section act Pacific Central general

By after its road across the State Bailroad completing Company, authorized to continue California, was construction the territories railroad and telegraph through Biver, to the Missouri branch United States including indicated, the routes the act, roads specified terms, act relation to and conditions provided until meet the roads should Union Pacific Bailroad Company, line and branches and the whole railroad connect, should be completed. telegraph mentioned, 16 of the act was given section By the other named with companies consolidate Central therein. RAILROAD v. CALIFORNIA. PACIFIC Opinion: Meld, it that in case section 17 was

By the provided failed with and conditions of the terms companies comply com- the an the act, act to insure Congress speedy might pass of the road and same branches, repair put pletion and direct the income of railroad and use, telegraph line to be thereafter devoted to States; the use that if the roads were not further, mentioned completed so as a to the to form continuous line from the Missouri River 1, 1876, waters the Sacramento River navigable by July the whole of the and to be constructed railroads mentioned under the with all their of the act, provisions prop- together kind to and forfeited erty should every character, taken the United States. possession the net section that when earnings eighteenth provided road entire should reach certain percentage if un- cost, thereon, of fare reduce the rates Congress might and establish same amount, reasonable fix might better declared by law; accomplish interest act, public object namely, promote line, welfare of the railroad construction telegraph to the and to secure order, and to the same working keep in time of all war) at times (but particularly and other for use and benefits the same military postal, due regard at time, having purposes, Congress might, amend or to, alter, add named, rights companies to make were and the act, required repeal companies to the Secretary annual as to the mentioned matters reports Treasury. 356, c. Stat. 216, 2,1864, the act of By July Congress additional powers, act of July amendatory granted immunities rights, privileges, work proposed in the national great companies engaged to secure comple- former in order act, by Congress of imminent time, at work, tion of that which, necessity. that should 16 of act it was section this last provided

By its line the Central Pacific complete Railroad Company line of before eastern State of California boundary Opinion Field, Dissenting : J. Railroad shall have been Pacific extended west the Union of the to meet the line first named so as ward company, d its line eastwar one extend hundred and company might route so as to meet miles on the established and connect fifty the Union Pacific Railroad, with the line of all complying restrictions the act as to with provisions respects and when was Railroad, Pacific should the Union completed -and benefits conferred all the privileges rights, enjoy the latter act on company. that the Pacific the court Central Railroad

It is found of the acts of 1862 and provisions Company accepted 21, 1864, on or about October and that 1864; Pacific Railroad to the Western Company, corpo- assigned then under the laws of California, created and ration existing the acts of so far as related under all its Congress, they rights of the railroad and line between to the construction telegraph and Sacramento,in California; of San José and that the cities ratified confirmed was Congress, assignment to amend the acts of 1862 of March 3, 1865, act constituting and 1864. 1865; 5U4, c. 13 Stat.

The act of March 3, provided be so modified 2, 1864, 10 of the act of should July section as to allow the Central Pacific Railroad Com- and amended Pacific the Western Railroad- Cali- Company pany, Railroad the eastern fornia, the Union Company, all the Union Pacific Railroad other division of Company, in the act of second, July companies provided eighteen to issue their six centum hundred and sixty-four, per thirty interest lawful bonds, money payable years’ their roads. And the separate companies to issue their bonds to authorized thereby respectively miles in of a continuous the extent of one hundred advance made construction, line of assignment completed Railroad California the Central Pacific Company Railroad Western Pacific Company of the railroad construct all that portion telegraph rati- Sacramento, of San José to was thereby city city to the Western Pacific Railroad fied and' confirmed Company, RAILROAD v. CALIFORNIA. PACIFIC Field, Opinion: with, acts and benefits several of Con- all privileges to the conditions thereof. thereto, relating subject gress Pacific Railroad empowered,by Central Company to construct within its limits various the State California es- them with the lines of railroad, equip appurtenances It and usefulness. efficiency sential to give their operations until the Central Pacific Rail- is conceded that 4,1864, April other, railroad road corporations Company what are termed the franchises of exercised and enjoyed and immu- is, powers, privileges rights, corporations, and also them state various nities conferred authority, conferred them and immunities duties, privileges powers, and which are termed their Federal government, general 1864, on that the 4th of date, franchises. But legis- April, those of the state franchises of. lature California abrogated in their and substituted by place adoption corporations, in force ever since. which have remained Federal franchises of of 1, 1862, The of the act July provisions .Congress distinctness the of entire 2, 1864, with rights, July rail- of the and immunities duties, principal powers, privileges — — of roads Pacific road of Union auxiliary are the essential features The most therewith. connecting following: authorized the Union Pacific 1862,

I. The act of July 1, it with all road, Railroad construct vesting Company it to trans- for powers necessary requiring purpose, This a of war. was mails, and munitions plain' port troops ” “ roads to establish exercise post express power of roads. military to construct implied power Pacific Railroad act Central

II. The same authorized the and condi- terms road on the same construct its Company the U Pacific. tions as those of nion 2, 1864, The section of the act of July provided

III. third both for the exercise companies the usual form for the construction of Federal way right right acquire roads. these military post thus made the IY. Central Pacific company constitutional its exercise agent government TERM, 1895. Opinion: Field, to establish roads and power post roads. FTostate military law could have obstructed or the Federal impeded in the exercise of this or in whatever have any degree limited or facilitated Central company of the Federal franchise thus enjoyment conferred.

IfY. consent State was to the estab- necessary lishment this road the United States it bewill found in the statute California 1852, which, independent enacted of its reads follows: preamble,

“ Seo.' 1. The right this State is way through hereby to the United States granted purpose constructing railroad to the Atlantic Pacific Oceans.” Statutes ch. California 77, 1, p. § If consent of the State was to the necessary complete substitution of the Federal franchise then existing state franchise for construction road, it will be found in the act of the of the State of California legislature after a 1864, which, April grant comprehensive of all company necessary privileges powers, including of eminent domain, State’s as the act made, recites, - said more enable com- fully completely and conform to the with condition ply provisions said act of concludes with the lan- Congress,” following “ : to and Hereby said guage confirming vesting all the franchises, con- rights, privileges, authority ferred or vested in said to, said upon, granted company by act of all laws and of Congress; hereby laws repealing parts with inconsistent or conflict the of this act provisions herein Statutes of Cali- privileges granted.” rights the In 1863-64, 417, c. fornia, 1, p. opinion § delivered court, Chief is majority by Justice, said that the rule Mr. Miller Justice expressed by general Tax 92 cases, 575, State Railroad U. S. “that business and all franchises, stock, of capital profits corpora- are taxation in the tions liable to where do busi- place they ness and the State which creates them,” admits no dis- by this and then the at adds that day, pute opinion question a here is the value but state question franchises, CENTRAL PACIFIC RAILROAD CALIFORNIA. Opinion: Field,

n whetherthose franchises for if existed, plaintiff in error Central Pacific Railroad (the Company) possessed any otherwise called de- subsisting franchises, rights privileges, rived from the then State, extent taxable, they of their value was to be determined Board Equali- zation. A answer complete ground opinion found in the act of California of legislature April Í864, before to which I twenty-three have passed years above which the state franchises referred, abrogated pre- in their viously substituted the Federal existing, place franchises.

The Federal franchises for the construction of the Central Pacific Railroad from the Pacific coast to the eastern boun- line of California as a dary the continuous part military road to the Missouri River established post by Congress could háve had ho rival in a state franchise for the construc- tion of the same but in order that road; this never be might of the State questioned, of California obliter- legislature ated its own franchises when it ratified and confirmed franchises the Federal to the Central given Pacific Railroad then How can the State Company. twenty- three later tax years franchises claimed its alleged authorities to underlie the Federal franchises? Suppose state franchises should be sold for alleged tax delinquent thereon under the an authority attempt should be made to a Federal place purchaser possession, would, course, be for an judge applied injunction, would and the shade undoubtedly shadow granted, of the state franchises would no more. appear

But, of the state notwithstanding express abrogation franchises, that the duties, meaning by powers, rights, privi- immunities the state conferred leges corporations of the State of and the substitution legislature California, thereof-of franchises place conferred the general the State of California has since the government, abrogation of the state franchises and the fran- substitution of the Federal chises in franchises, various that railroad and ways subjected whether derived state or Federal authority, Field, Opinion: of the road the successful into

essential working brought Federal existence burdens government, heavy and thus an additional taxation, obstacle to way imposed of the Central Pacific Railroad in the execution efficiency of the of the overland railroad. operations general . the burden The whether thus question presented imposed rails and stock of rail- franchises, roadbed, or not in than one whether more can roads, operated county, n them be assessed when constitute the lawfully they or an essential of, general government, part grant are the franchises of the state appurtenant corporation as an which is used overland road. The instrumentality Board has assessed the state franchises of the in distinct element State as a estimate the valuation to an estimate railroad, enormous sum in carrying inas, case, to the sum instances, present many eighteen at the same time it has assessed the Federal millions, fran- th¿ those derived from is, chises, general government, element in a distinct the estimate of' the valua- separate tion of the blended railroad, has the two' in franchises the valuation of the railroad for the determining purpose taxation. to me as an

It seems if not an absurd extravagant position, in the face of the specific legislation by State, abrogating its franchises Central Pacific Railroad Company, the Federal in franchises their to contend substituting place, that the franchises still exist and state can be enforced and be made estimate the valuation of the railroad subject The Federal franchises, taxation. cannot alone, standing hampered impeded way legislation. follow This would had not the itself expressed it has done: to and emphatic way “Confirming vesting all said rights, privileges,-franchises, powers conferred to or vested said com- authority grant said act of all laws and pany hereby Congress, repealing of laws inconsistent or in conflict with the parts provisions of this or the act, herein rights privileges granted.” state franchises thus and discarded cannot be abrogated again BAILROAD v. PACIFIC CALIFORNIA. 137 Field, Opinion:

Dissenting J. to life mere however often words, restored repeated asseveration made. The whatever dishonored with franchises forever. are gone view, two the so franchises, Independently

n called and the state franchise so-called Federal if franchise, exist at the same are to be treated time, both as necessarily that cannot be so blended together they separated given distinct valuation in the total And a estimate. even when were that the inevitable follows possible, separated, blending moment the value of the railroad becomes a matter of serious consideration the amount of purpose fixing the assessment. I construe the state Federal franchises conferred as them to being simply upon complete the road. And whatever the state or Fed- operate part eral franchises have this result, may played accomplishing effect of either cannot be separate distinguished to each and mile of the other, road. The two apply every franchises have interlaced each other at of their ex- everjr step ercise. It follows that the estimation of the taxation separate as which, of the so called state franchises when existed, they ap- a and, limited was for only period, impossible, pears, we will it was reasons, which never intended state, many franchises and taxed a such state should assessed sepa- in the rate estimate of the value of railroad. entity In the case of v. S. Railroad, 1, 34, 127 U. California Pacific that, this court decided as the assessments the state Board the Central Pacific Railroad Company Equalization against 1883 and and the the Southern 1884, assessment against Pacific Railroad included the franchises 1883, Company conferred the United States those re corporations, upon were void as assessments spectively, repugnant Constitution and laws United States the power commerce the several States. Congress regulate among 41, S. 127 U. 42,

It record that the this action appears by complaint contains nineteen number counts, the same alleged causes of action. The first count is for state taxes; the other counts are for taxes. county Opinion: Field, Co., California, Railroad Central In People of the State Court it was held Supreme form Code, of its-Political prescribing special

section 3670 with and that a was in conflict its constitution, of complaint, to recover taxes levied a railroad in an action complaint of action in favor several counties causes could not join that is not the road runs. But material through action. present counts the defendant

Each of the eighteen alleges and under the laws Cali- a existing corporation organized in in one a railroad more than fornia, engaged operating a, The sets forth its claims for of the State. . State county for in its favor asks for the several and judgment recovery, stated franchises, assessments some against portion a of the which constitute thereof, general grant government, the state ren- grant appurtenances corporation, and useful it efficient as an dering instrumentality undertaken road, overland work great by general The in its several counts complaint alleges government. 1887, which, above, in stated was twenty-three August, the state been after franchises to defendant had years annulled, the for and state Board of abrogated Equalization, of state taxation the fiscal for purpose county year June 'the assessed then defendant, ending thereof in more than one owner operator county franchise, stock State, roadbed, rails and roadway, rolling of the defendant’s at the sum railway, then within of dollars; millions that within ten after days eighteen the third of that the board Monday August appor- total assessment of roadbed, tioned the the franchise, roadway, rails and stock defendant to the counties in which defendant’s was located, railway proportion of miles of the number laid defendant’s railway amounts counties; and the of the total thus assessment appor- board, tioned to the counties respectively, miles of laid counties number of defendant’s-railway respectively..

The concludes a demand with for complaint judgment RAILROAD CENTRAL PACIFIC CALIFORNIA. Opinion: Field, J. the defendant several sums state and against county tax as stated delinquent therein, alleged unpaid to. the sum of with $295,740.71, five cent thereon aggregating per for with interest at the non-payment, rate of delinquency two cent the amount the last per December, 1887; for also the costs of suit fees. attorney’s To the demurrer, complaint general special, inter- the defendant. Court overruled Superior the de- posed murrer with leave to the defendant to answer the complaint.

The answer of defendant in issue most of the puts material sets allegations complaint, and various up defences. One of those affirmative defences special ” franchise assessed defendant the state Board of was derived from the certain acts of States through Congress (commonly known as the Pacific Bailroad that the same is held Acts); and used the defendant as one the means and instrumen- talities of and was, the Federal therefore, not government, taxable that the assessment State; and franchise sowas blended with the whole assessment as not to be sep that the whole therefrom; was, arable there .and fore, void. the of the

On trial the issues the presented by pleadings, was court, the the allowed complainant against objection the introduce in evidence the defendant, (1) to. .of duplicate record of assessment the state Board of of.railways by Equali- zation for in office of the of 1887, filed the the comptroller of the State of October 1887. The court California, 11, over- ruled the the defendant and admitted the of objections paper in and an taken to the of evidence, was the ruling exception court. The record of of assessment duplicate railways by the state 1887, Board of for which was dated Equalization the 13, 1887, states that defendant owns a cer- August simply tain in in the more than one State, railway operated county, in the of the State, entire the being railway company then follows this in without evidence any paragraph, support of its averment:

“ And it of that the actual value the franchises, appearing Field, Opinion: of stock said rails roadbed, rolling roadway, date time, at was is the said and still State, within therefore, million dollars; it is hereby the sum eighteen franchise, rails and roadbed, the said roadway, that ordered be, and the same are 1887, for stock, year hereby, rolling Pacific Railroad at the Central to the said Company assessed million dollars.” sum eighteen in the mentioned record of assess- The evidence duplicate offered was only proof plaintiff ment of railways that it evidence, of its causes of action, in of any support in the entitled to determination any not was weight plain, other evidence. case, being supported was to show the defendant evidence offered On the part included Board of knowingly Equalization ” “ franchise Federal assessment question, value which was afterwards before in the assessment it had done as Rail void, declared this court, California road, other assessments. Company, as to .Court, allegations Superior findings to counsel true, were they except the complaint, that a reasonable was found as to fees, compensation of two of counsel per employed for services 7i third cent for the recovered, amount cent on the per counsel. court answer, affirmative

As allegations found : other among things the 13th state Board August, That day California did, State of the purposes assess, as a and not unit, the fiscal taxation for sep- rails and roadbed, franchise, roadway, arately, then within railroad, situate defendant’s stock being value amended the sum and mentioned at did and there enter such then assessment upon complaint, assessment; in its record such assess- its minutes and which the several taxes ment is the one mentioned and no are other assessment than based, herein complaint ever made Board of one aforesaid ; for the defendant fiscal other assessor RAILROAD PACIFIC CALIFORNIA. 141 Opinion: Field, at time and in the manner that the board did, alleged the'amended assessment and transmit complaint, apportion it and and the county apportionment city county auditors, and the assessment and' the apportionment thereof were entered the assessment rolls counties upon cities and counties as in the amended alleged as complaint, found. hereinbefore “ That board of making assessment, equalization, did roadbed, assess the rails and franchise, roadway, full stock defendant’s at their cash value, without railroad. therefrom the value of the or any deducting mortgage part value of the bonds issued under the thereof, acts of thereon, secure Congress, aforesaid, given existing the indebtedness of holders of the bonds, and, did the board not deem nor making treat the an or bonds as interest but mortgage property, it assessed the whole value as assessed to de- fendant in the have same manner would done had there been no thereon.” mortgage

The conclusions of from the law findings plaintiff was entitled to the several recover for judgment principal sums of found in the record of taxes,- assess- county ments of to be also interest railways delinquent unpaid; upon December, sums from the 27th principal day at the rate of seven .cent annum, the date of per up per n also to five judgment; recover cent per penalty upon sums; also rendered herein principal fees services legal two of the a counsel, sum one-half cent seven per equal on the amount third a sum recovered, counsel two equal one-half cent of that amount. per was entered Judgment favor findings, plaintiff, and motion for a new sums trial mentioned, was overruled. in their Court'of majority Supreme

opinion, sustained the contentions of the ques- tions with the presented, exception questions respect to interest on the amount of the fees of one taxes, counsel, and affirmed the entered. judgment

142 Field, Opinion:

Dissenting J. dissented from the Mr. Justice McFarland opinion so court. This fully clearly dissenting opinion expresses the views which I that are entertain, satisfactorily they in full: set forth McFarland, 598, “In Justice my opinion,” says pp.. in is void under the question [that 1887] Court the United States in the

decisions of Supreme v. Central Railroad cases of Company California Railroad U. S. because it 127 Company, Southern Pacific and thus to tax one of franchise, includes a Federal -attempts or instrumentalities United States employed tÓe means by into effect its for carrying. sovereign powers. done a State has. been be the established this cannot by That Court the decision McCulloch since Supreme law ever in 1819. The was 4 Wheat. 316, fully principle v. Maryland, this court San Benito v. and declared County recognized and in California, 518, San Railroad, 77 Southern Pacific 96 Co., California, v. Western Union Telegraph Francisco the cases in U. S. and difference between “The only court found that that in the former trial at bar is the case included in the assessment the the state Board Equalization ‘ held and exer- value of all franchises corporate powers defendant.,’ at bar the court while case cised that the board the assessment found said making below ‘ did not its said assessment Fed- include any franchise,’ in both instances was But the assessment eral In ‘the franchise’ the railroad.. same, namely, exactly it that the trial court cases does not former appear ‘ to what the fran- on the as received evidence question ’ was based- and it is ; included finding probable chise In case at of the assessment alone. the language the members bar the court receive evidence as what did it franchise,’ words ‘the the board intended in the record that the after concluded court, appears having before it the Federal that ‘from a of evidence preponderance included franchise was not assessed of défendant or. ‘ if assessment,’ preponderance say proceeded the State defendants could have such evidence shown PACIFIC RAILROAD CALIFORNIA. 143 Opinion: Field, did include the Federal to' and franchise in the .intended the court I think would have to assessment, disregard effect of evidence would be to parol incompetent. Now, contradict the which cannot done.’ if it record, to introduce to show intent testimony competent board when made the members of the then assessment, they the court erred in out certain evidence offered ruling clearly on that . . . point appellant. “ On the other if the hand, record board should alone ’ ‘ then it that considered, the franchise was simply appears and I cannot see how that assessed; can be possibly phrase than the construed to mean else franchise of anything whole — the railroad all of the It to it. franchise means belonging it what the lower court has found mean, above just ’ ‘ said cases U. The the 127 S. words franchise quoted, include the of clearly, my judgment, right appellant the — and', do that businéss the whole of That is a right. unit and The court below found inseparable. finding [see 30] ‘ that the board did assess as a unit, the separately, And cannot franchise, etc. I conceive how a court roadway,’ if it it can, first, it, second, how could or, could, separate which the Moreover, determine throw main part away. foundation of the doctrine of McCulloch v. Maryland, Wheat. is that the tax includes the 316, to' power, under of thus a State the destroy; might, guise taxation, an Federal destroy materially cripple instrumentality And that in case not manifest at government. bar that here involved from instrumentality principle protects or destruction under that' that injury pretence only part is taxed Are not comes from the State unity ?. effects and ? the same consequences

“In adds the my therefore,” Justice, opinion, dissenting “without involved, the other discussing judg- questions ment should be reversed.”

To review and Court, reverse judgment Supreme Court for the affirming judgment city Superior n county of'San error writ of Court Francisco, Supreme of the State was sued out of this court, and several assign- TEEM, 1895. OCTOBEE Field, Opinion: were filed for its consideration. attention of error My

ments to those deemed the most confined will be important. Court should have reversed the 1st. Supreme judgment for the of San Court Francisco city county of the Superior of facts in the record the on the finding ground ” “ franchise of the Central Pacific de- Bailroad, value of called Federal the United was- franchise, rived from the franchise, in the assessment of roadbed, included roadway, stock of the made the state Board railroad, rails and rolling and was there- inseparable the whole of the assessment was therefore from; under the void Constitution laws the United illegal States. Court should reversed the

2d. The have Supreme judgment- found Court, because that-court that the state of the Superior for 3; 1887, did, Board Equalization August purpose unit, fiscal assess as a and not- year, taxation franchise, roadbed and stock roadway, separately, then Bailroad, Avithinthe State- Central being of California. should

3d. The Court have reversed the Supreme judgment tha Court ground Superior Pacific Bailroad the fran- the Central Company, including of the of franchise the railroad was and chise, every part the lien of the of the United States subject mortgage the indebtedness of that to it, and the United secure an had and have interest and the States therein to ownership the lien, and, of the franchise of railroad therefore, extent the not and cannot be taxed or assessed for the could taxation by of under the Constitution and of the California, laws States. 4th. Court should have the Supreme reversed judgment- Court on the admitted that that court Superior ground in the evidence record of assessment portion duplicate the state Board of of of railways by year Equalization to the assessment of the the of relating plaintiff for that in error without year its correctness. proof of are The facts Avhich the basis of the of several assignments PACIFIC RAILROAD CALIFORNIA. Field, Opinion: contained error are or authorized legislation statements or of States mentioned, in the Congress findings of the court. Their are legality validity thereby fully established.- I legislation Congress have

By referred, as well the State legislation by California, is plain Central Pacific Railroad Company made one means work accomplishing great Congress, whenever, act of the state authorities by any of California, franchise Central Pacific Railroad Was Company of the franchise, included roadway, roadbed, rails stock of that there was rolling company, necessarily included the franchise thus derived from the legislation Indeed, franchise of the Congress. treating railroad as its to construct the work meaning power contemplated to conduct its it is difficult see re- operations, how, any franchise be treated its could other than spect, as one entire whole. Its to construct the road authorized by and to on its could not be government, carry operations, under the control of the state authorities so as to interfere with the full exercise of the any respect powers, privileges and immunities granted Congress.

And’ it was found the court in its thir- below, specially tieth state Board of fact, finding for 13, 1887, taxation the fiscal' August purpose 1887,assessed'as road- unit, separately, franchise, It roadbed, rails and stock. un- was, therefore, way, lawful that its taxation State should any respect retard or the exercise of the conferred impede, powers delay Pacific Railroad Central Congress Company defeat action. Nor could any part powers, privi- railroad be immunities conferred leges separated (cid:127)from so as to treated as’ an rest, independent part thereof, and considered as the special grant part to or the control any way superior impairing thereof to their United States pursuant legislation.

It also from the of that the legislation Congress appears of was authorized to did the issue and Treasury Secretary VOL. CLXII —10

Dissenting Opinion: Field, J. of Pacific Railroad bonds .the Central Company to the issue amounts to aid in mile, States, designated per United which bonds interest were road, of construction at their and that, maturity, by company, to be repaid United States- to hold lien such repayment, secure of the railroad to the extent company all the property of thus taxation or issued. Any the bonds property of Pacific Railroad without of Central Company, franchises hence of of an consent impairment Congress, invalid. States, and, therefore, of the United lien of of San Francisco county Court city The Superior in evidence portion duplicate erred receiving Board the state the assessment railways by record to the for the relating error, obvious reason plaintiff in no established the way that such duplicate legality assessment. Validity in the case of Railroad court, This California S. that the State of California 127 U. adjudged

Companies, to tax the no without consent of had Congress, power, derived Central Pacific Railroad franchises Company franchise States, from the the United any on it fran- conferred any part government, to that chise United States. company by granted of the court was delivered Mr. Justice Bradley. opinion “ he Pacific Railroad said, Central Assuming,” has referred to received franchises important Company United arises whether by grant question are taxation State. subjects They they legitimate and to national were granted company purposes national It clear the State ends. seems subserve very can -nor California neither take them nor away, destroy nor burdens. Can it them, them onerous abridge cripple ? It tax them tax outside visible may undoubtedly situated within the a different State. That is it tax But franchises which are the may thing. grant States? In our What is a fran- cannot. judgment . ? . . arid Generalized, chise divested of the form special v. CALIFORNIA. RAILROAD PACIFIC U7 Field, Opinion:

Dissenting J. based on under a monarchical which it assumes government or is a feudal a franchise traditions, right, privilege power be not to exercised which by private concern, ought public but should be at their mere will individuals pleasure, either control and administration, reserved for. public or under such by public agents, acting government directly, as the conditions and may impose government regulations Such and for the interest, security. rights public public form of exist under Under every society. must powers are under the control their existence and our disposal system, government, they department legislative or exercised without cannot be assumed legislative authority. can a or a No establish highway, public public private person same, tolls for the use of the or railroad, ferry, charge direct or without from the derived. authority legislature, can take another’s These are franchises. No private person even for a without use, authority; property, public of eminent domain can is the same as to that say, be virtue of a This is a exercised by legislative grant. only a franchise. can make themselves No body corporate persons arid without authority. Corporate capacity politic legislative be continued is a franchise. The list indefinitely. might of the nature of a franchise, In view of this description a franchise how can it be granted by Congress possible a without the consent of can Le to taxation subject laid, be so burden, is a ? Taxation may heavily Congress it As or render valueless. Chief taxed, destroy thing v. ‘the Maryland, Justice Marshall said McCulloch power funda tax destroy.’ Recollecting involves power Constitution, laws treaties of mental principle law of seems to land, are the United States supreme to a that a us to contend person almost absurd power given to taxation the United States may subjected corporation and is a from, emanates The conferred por State. power it. To confers tion of, but subversive tax it, is not dignity, only derogatory to its repugnant para powers government, cases on this cite unnecessary mount It is sovereignty. 148 Opinion: Field, laid down this court McCulloch

subject. principles 4 v. Wheat. Osborn v. 316; The Bank Maryland, 9 738; Wheat. Brown v. 12 Maryland, since which have Wheat. numerous cases followed in lead, their sustain views we have abundantly expressed. be added that views are not in It these conflict with the may decisions this court in Thomson v. Railroad, Wall. Railroad Wall. 5. As ex Peniston, Co. court in in the the latter case, tax plained opinion not there was upon its company, upon or franchises 18 Wall. operations. “ taxation of a such, The franchise merely corporate a in the unless charter of the pursuant stipulation original is the exercise anof somewhat company, authority arbitrary It its character. has no limitation but the discretion of the The value of the franchise is measured taxing power. like that of but be ten or ten hun- thousand property, may dred thousand dollars, as choose. legislature may Or, without valuation of the franchise at the tax be any all, may laid. It idle is not an therefore, made arbitrarily objection, tax by case.” against imposed present

The important cases bearing upon subject intervening between the Bank cases v. great Thomson Rail Peniston, road and Railroad v. were Westonv. The Company 2 Pet. Charleston, 449, 467; Dobbins City v. Commissioners Erie 16 Pet. 435 Bank County, Commercev. New York ; 2 Black, The v. City, 620; Banks The Wall. 7 Mayor, Bank National v. and in Commonwealth, 353; Wall those cases the doctrine was and enforced consistently maintained that a State cannot a tax which a lay bears power National Government, or, court, may judgment “ ” hinder, impair burden Government, of that any operation ” “ or interfere with or affect the efficiency any agency the National Government functions by performing which it is serve United designed States. In Westonv. The City Charleston, this court declared

tax on the stock of the United States, to be unconsti- involved, “ ” because it tutional, to borrow operated upon PACIFIC RAILROAD CALIFORNIA. Field, Opinion: States,'and the credit was deemed money “ “ a burden, however the court to inconsiderable,” on the of government.” operations Chief Justice court, Marshall, case, speaking by that the State declared cannot taxation, or other- again “ burden or in

wise, retard, manner control the impede, any of the- constitutional laws enacted operation by Congress into execution vésted the General Govern- carry powers ment.” The case of Dobbins v. The Erie Commissioners County, a state tax on an officer the United States,

adjudged (cid:127) fpr his because of office, emoluments, void, mainly ” “ its interference with the constitutional means employed to execute its powers. The court, Mr. Justice said: "Wayne, Does not speaking a tax a State office, diminishing recompense, conflict with the laws the United secures it effect; to the officer in its ? has such an It certainly entirety law of a State such a tax cannot be consti imposing because it with law of made in tutional, conflicts Congress of the Constitution.” pursuance

The declared Weston v. The Charleston principles City of the decisions of the court in Bank Commercev. governed of New York The Banks v. The which ad City Mayor, that the bonds other securities the United judged “ States are as of the much States beyond taxing power as the in furtherance which themselves operations they were issued.”

The interfer- court that declared, cases, those again ence to the tending interruption governments or in of, of, full exercise derogation legitimate Government was to the National powers prohibited granted the Constitution. was that the The the court below of the theory majority two fran- into franchise of this railroad can be segregated the fran- franchise. But chises, a state franchise and a Federal chise of the or railroad, operate the right company its soever sources is a how railroad, from many single right, TERM, Opinion: Field, from the and, derived National

derived; Government, being that could not be assessed taxation, agreeably right of the States, whether or not Constitution the right also to had been State the railroad granted company. of the franchise The into two dis- theory separation of taxation tinct California is effect- purpose rights at McFarland, Mr. Justice the close of ually disposed in these few words: his opinion, the board court below found that 'did assess as a unit, the franchise, and not etc. v. Cent. roadway,’ People separately, 599. I Co., California, cannot conceive how Pac. Rd. or if it how it first, it, second, could, court could can, separate which to throw Moreover, main determine part away. of the doctrine of foundation McCulloch is that Maryland tax includes-the thus a power destroy, under the taxation, guise destroy might, materially the Federal an Government. And instrumentality cripple that in the case at bar that is it not manifest principle pro here involved tects the instrumentality injury destruc under the only tion pretence part unity ? from the State is taxed Are not comes the effects and con ” same % sequences The fact each has does granted right, create two The two taken confer rights. grants together than each more of them conferred. A tax nothing separately franchise” of Central “the Pacific Railroad, being nor tax more less than a on the nothing right is a its road, tax on its railroad operate operate the United or on the franchise granted by granted by that government.

How is that the State part to. franchise'granted by from that the General granted by separated part Govern- ? ment What the life at part being mercy the State ? what of its member the tax col- Upon body may his death % execute judgment lector If consider the we should the Central Pacific Rail- right road, to derived from road its the State, as operate Company derived from one the United States same-right thing, CENTRAL PACIFIC RAILROAD CALIFORNIA. 151 Opinion: Field, as another and or what results will distinct, different, thing, ? follow these. Plainly

If the State can tax the so derived from it can right itself, a it tax as sell the levy pleases, may assessed, right in case of of the tax. There can be no such non-payment taxable as. which cannot be thing property tax, sold and the title to which be cannot transferred to purchaser. sale such a will from By pass delinquent aIf sale could be made purchaser. particular then the Pacific Central would lose right, and the right, would it. purchaser gain .

It is that the obvious its railroad cannot, operate virtue of the State’s be taken from the taxing powers, Central Pacific Railroad or conferred Company, upon any other or individual. would then, corporation Nothing, pass sale, a and as there to sell there transfer, nothing be can to assess. nothing

If the asserted in error, defendant the State position of California of the State, both ex- people (considering as same meaning substantially pressions contesting organi- so called state franchise of Central Pacific zation,) be Railroad can the Federal franchise of that separated valued, and company, taxation, be separately subjected maintained, destructive would will consequences follow, seen from brief consideration. In Northern Railroad v. Trail 115 U. S. County, e

600, 610, th to a court, sale, for referring taxes, lands to a railroád said: A valid sale for belonging taxes company, exercise highest the State being sovereign power must the title to the if it carry does not sold, do it is because the so, assessment is It if void. follows that these taxes stated to (those have been previously levied the lands of the is valid and company) the'pro well conducted, the sale confers a title ceedings paramount all others, lien of thereby the United destroys States for the costs of these If, lands. on the other surveying hand, the sale would not confer such a it is because there title, exists no it.” There authority make would to be seem no doubt, Field, Opinion:

Dissenting J. be held had the cannot to have that the State therefore, power of the franchise Pacific Railroad so the so called state tax to and and it of validity, previously as was subsequently any long no such the plainly possessed its to State abrogation to decide as the effect of the court is expressly, unless prepared intended should that the State that Congress the legislation, that to of trans- franchise, to divest the be able company' the the as title of a tax sale the franchise purchaser fer by the that States; United both the company against of and interest of the the government to destroy right way and conclu- There is clear in the franchise. States the United that Railroad Congress the Pacific evidence legislation sive as re- called state so franchise, so long intended not be to state of should value, legislation, any subject mained interest of the States therein, United not be should value, of any destroyed by whilst 5 of its For of section exercise taxiing power. example, that the issue and of' 1, 1862, provides delivery act July, to bonds the and de-' issue company, referring bonds act, were authorized shall of which ipso livery facto on the a first whole line railroad constitute mortgage with the fixtures and stock, together and telegraph, kind and and on the refusal or of every description, to redeem bonds, any part failure when Treasury them, required Secretary then the road, with with act, provisions accordance immunities thereunto functions, appurtenances all rights, all lands to the also granted company by belonging, States, may possession by Secretary United taken and benefit for the use of the United States. the Treasury made in this se- provision The change regard only bonds is section the United States subsidy curity-of which is “the lien of the United the act 10 of shall be subordinate that of the bonds -any bonds States issued to be of said authorized hereby either companies roads, except their respective equipments, of the sixth section of to which act, provisions amendment transmission an relating dispatches, act PACIFIC RAILROAD CALIFORNIA. Field, Opinion: war, mails, munitions transportation troops, stores for the of the United supplies public States.” bonds are, therefore, sub- subsidy mortgage of the railroad, franchise be taken

sisting may for the use and possession by Secretary Treasury benefit of the on. refusal or failure of the or to redeem the bonds, them, when company any part of the mani- Secretary required Treasury. Congress intended that the United States'under this festly rights in to the state if such franchise, mortgage, respect any existed, should not be or the State in disturbed the exer- destroyed cise of its other If the so called taxing power, any power. state franchise of railroad is a as value, the assess- thing inment cases these claims it to the estimation of be, state Board of ais valuable of the Equalization, part security of the United States of the redemption subsidy bonds, which the has the of the to take Treasury Secretary right of in the mentioned the act. The possession contingency if it franchise, value, cannot, existed therefore, possessesany be taken from under the and trans- my opinion, mortgage, ferred to a at the State of a tax sale California. bjr purchaser fund

Take, of the act-of 7, May again, provisions sinking which com- appropriates applies earnings in the exercise of all the franchises for pany and in the named. In manner the face of that purposes it cannot act, be believed that there Congress supposed was reserved to the to-control or affect its inter- est or in the franchises of railroad, franchise or so right as it- or value. long they possessed any n There can be no doubt levied on the tax to be so called state was a franchise, existence, it was tax whilst an effects its instrumentality by and a tax of that objects, operations instrumentality, within the doctrines of this court in the cases to which great I have referred.

The United States selected this as an corporation agency out a national of the cor- carrying object, right TÉKM, OCTOBEK Field,

Dissenting Opinion: in other its fran- railroad, or, words, operate poration whether conferred national railroad, state or chise Nation, both the State and is an instrumen- authority, its which the effects tality by objects. United.States franchise of the Pacific Eailroad tax Central As a on. nor more less than a tax on in existence nothing while such a tax railroad, of the company operate right its railroad derived tax on its right was a operate and, the United uncon- therefore, the government stitutional. an no

There are operations corporation, agency which are performed exclusively government, franchise in connection with its railroad, any exercise franchise, but all its the existence any opera- assuming tax exercise of its entire and a are in the franchise, tions on state franchise is, therefore, levied purporting the exercise on the a tax corporation operations fran- and a tax Federal franchise, directly the Federal itself. chise Commonwealth, v. The Bank where

In National of the national banks was. tax shares the States to of of the conceded that the it was reaffirmed, expressly agencies are uncontrollable state National. Government legislation in interfere their it or with, far as impair, efficiency, so may or are service, functions, the the which they performing to or perform. designed employed, in case of California the of San Benito Court The Supreme ac v. Railroad, California, Southern 77 County Pacific of the of this in court, decision authority cepted California S. and held that Railroad U. an v. Companies, Pacific of San Benito County of the board ordinance supervisors en tax or individuals a license upon corporations imposing for hire in the or business carrying persons freight gaged it in the was so far as assumed void, railroad cars county the tax Pacific Eailroad the Southern to affect Company, of the to be levied the use franchise deemed upon granted was the> the United or the States, the company by to operations the exercise that franchise railroad u PACIFIC RAILROAD CALIFORNIA. ]?ield, Opinion: franchise, (cid:127)It determined that tbe of that company or State, its use were beyond taxing equally to the decision of subdivisions, of its any agreeably political which this court Railroad Companies, California to court felt constrained obey. ” of a is railroad, The franchise contemplated by to be for taxation authorized assessed constitution, state is but the Board nothing right Equalization, the incidental railroad, including right charge operate tolls like. thereon, take constitution to all whether railroads, The equally applies or associations and the individuals, owned by corporations for is owner- wholly independent provided of the railroad or the character of ship ownership prop- assessed. erty tax the constitution is

The consequently proposed by railroad, a tax operations necessarily exercise the franchise right operate property. to con- Pacific Railroad The of the Central Company right in the State of Cali- railroad, its maintain and struct, operate derived it was conferred fornia, company by States, assess- from the maintain its ment of the operate company right under void, for. state railroad, taxation, whether or not Constitution and laws of the United the State from received the same right company California. railroad the- operate right company whether a thing,

State is right, single single one or more than one gov- was derived State to taxation and it cannot be ernment, subjected of California. that the all controversy, conclusion,

In beyond appears, the exer- taxation, upon burdens, imposed way of.the the Congress cise conferred by and privileges powers Railroad Company the Central States upon and privi- State, powers other rights, companies of. object great in furtherance leges granted .156 TERM, Opinion: Field, in the creation and the overland Congress operation.of and also burdens taxation railroad, imposed by the mort- held the United States as for the gage security subsidy to the bonds issued And for such company. irregular Court of.the State illegal judgment Supreme action.the be reversed. should

I have shown that the franchises State granted by to the Pacific Bailróad California Central were ab- Company and annulled of the State on by express legislation rogated the 4th of and that the was taxation April, subsequently made the railroad an assessment of the against company upon value of its franchises thus discarded thrown away, after the Federal franchises, is, franchises derived by of the United had States, been substituted in their grant place and confirmed with a release of State, all inconsistent with the thus conflicting provisions rights privileges granted. have also shown that

I the assessment of the defendant made in was after the twenty-three years law passed franchises of the abrogating annulling which the valuation for taxation was made. also,shown that the I have United States hold a con- lien, a first on. the whole line stituting mortgage railroad with the telegraph, together stock, fixtures and kind and every for certain description, security bonds issued and on the subsidy refusal or company, failure of the to redeem such bonds, any part when them, the' required Secretary Treasury, accordance with the then provisions act, road, with all functions, immunities and thereunto rights, appurtenances also all lands the'United belonging, granted company by taken might possession Secretary use benefit of Treasury the United States. - If the taxation levied in case can be enforced present in face of defendant, against facts thus there stated, will be a new and unknown of taxation developed pos- sessed existence of- which I shall not will- believe. ingly RAILROAD CALIFORNIA. PACIFIC Harlan, Opinion:

Dissenting J. at the taxa- as the sun thiat clear me, noonday, It seems of California exercise the State tion imposed and immunities privileges constituting powers, rights, or of the State to the over- States, franchises of its land auxiliary companies, any railroad company, railroad and its overland con- to aid in construction inimical to the and interests roads, directly rights necting that the the franchises blending of the United of the United States subjection if' must follow the taxa- and to which sale, either to taxation to the direct and lead tion be would valid, necessarily speedy and thus we should roads; see, the different destruction of this of our which enterprise the same greatest century undertaken its carried was country and successful enterprise utterly operation, completion of the ruin marked by completeness being destroyed —the construction and successful the contrast with oper- original the more and de- its destruction significant ation, rendering plorable. Court of that the Supreme

I am judgment opinion Court of Superior California judgment affirming Francisco, and an order of that of San and county city trial in an action a new brought by people court denying should be re- of the State corporation, against plaintiff in that action and a new trial versed, granted. HaelaN

Me. Justice dissenting. court of this in the state ju- the trial of case original On Board of of the state Equalization, risdiction, secretary a witness called as 1891, March, from April, that he was His examination showed present the defendant. of its the record of that board and pro- at the kept meetings of what passed said that from his He knowledge ceedings. value were he could what elements state at such meetings for the total estimate board in their considered making He was sepa- asked following questions values 1887. you the various sources knowledge : From rately TERM, Opinion: Harlan, have enumerated, to the court what elements please taken into consideration the state Board of Equal- ization assessment of this making year company ” “ Did hear conversation you 1887? between the mem- bers of state Board of meeting during when was made for the with reference to the elements that they proposed did include in the assessment?” “At that the time was made state Board of by Equaliza- tion of the Central Pacific Railroad Com- upon property what was said and done at the of the state pany, meeting ” on in Board ? Equalization day your presence The State to each as it was objected question, propounded, and its sustained, defendant objection excepting.- n “ then made the offer: in Now, following view of the the court on this now offer we ruling subject, this witness that from the time of the by prove organiza- tion Board of in 1880 down to and' Equalization 1887, board had year considered including year every — of the Federal value franchise the franchise is, de- rived from the United States the acts by Congress to and owned by belonging the Central Pacific Railroad as an element of value Company, the total value of the of that railroad assessing and that in 1888, in decision company; consequence Court the United States Supreme upon subject, state Board for. the first time ceased to con- Equalization this Federal sider franchise as an and hence element value, reduced their valuation the sum of three million dollars by on the Central Pacific Railroad This property.” Company’s offer was and the disallowed, company duly excepted. court, this action of the the State was

Notwithstanding who board, two members of the permitted by par- prove in the assessment of that the Federal franchise 1887, ticipated was not included that assessment. One of of fact was these words: That in findings its assessment and valuation of defendant’s therefor making franchise said state Board of did not include, RAILROAD CALIFORNIA. CENTRAL PACIFIC Harlan, Opinion: held or exer- assess or value franchise any corporate power cised under the acts of hereinbefore defendant Congress And act of whatever. mentioned, or under Congress any said valuation therefor, said assessment board, making roadbed, rails and roll- franchise, defendant’s roadway, ' for the fiscal did for- of taxation stock, ing year purposes valuation not include in assessment and therefor its said any nor defendant, Federal then fran- franchise, possessed could chise or said board whatsoever, legally thing include in That the franchise, such assessment or valuation. stock of rail- rails defendant’s roadbed, roadway, road were state Board of valued and assessed said Equaliza- for of taxation for the fiscal at their tion, purposes actual and in to their values value, proportion respectively.”

A new trial and filed statement, motion, was ap- In that will be found the fol- court. statement proved “: In its which the written lowing findings opinion, from a fact, the court after as a based, preponder- determining ance of the evidence that the Federal franchise of it, before defendant was not included the assessment of assessed or of defendant the state Board of Equalization, ‘ the But if the uses the following language: if favor, in evidence offered did not parol weigh plaintiff’s a could defendants have such evidence preponderance a Federal shown that the did include to and intended have to in would franchise the think the court I assessment, evidence it of such as The effect disregard parol incompetent. be done. would be to which cannot record, contradict the intentions of de- best and acts and The evidence of the only record of its inten- liberative from the bodies must be drawn of fact and the law, tions. . . .' From both standpoints in not included be that was must a Federal franchise findings ” these assessments.’ (cid:127) the State to It thus that the trial court permitted appears did not include board oral the prove by testimony denied to the de- assessment, the in but Federal franchises its kind of evi- fendant the same the privilege showing, dence, fact,. included- in the were, that' in such franchises TERM. 1895. Opinion': Harlan, This,

assessment. was error, my judgment, directly affected the determination of the Federal proper question. The recital board records were not conclusive did Federal the board include the If, fact, question. franchise its the defendant should have been assessment, allowed to the best evidence prove being capable it would be without otherwise, remedy against produced; a false statement records of the board. of the court be- of this error,

Independently judgment the franchises of low should be reversed ground to Pacific Eailroad are not Central subject Company visible taxed.at all some of its State, although in former decisions announced may, according principles court,, of this be taxable for state purposes.

In this cases, 700, 710, 727, Fund 99 U. S. Sinking court, Chief Waite, Justice speaking by referring Pacific Eailroad Central said: the act of Company, “By this a to build a road Congress granted corporation right San or the waters of the Francisco, Sacramento navigable the eastern thence Eiver, boundary the territories of it met the the United States until through road of the Union Pacific For this all Company. purpose and franchises were this rights, privileges company given that were to the Union granted except Company, franchise as were and such others being corporation, incident to the merely organization company. were, and the land bonds this grants subsidy Pacific, same in character and to the Union those quantity and the same of amendment Each of was reserved. was the In- to file in the required companies Department terior it could before conditions acceptance imposed become act. This entitled benefits conferred by done Central Pacific promptly company, submitted itself way corporation voluntarily under control as reserved was legislative by Congress of amendment. . . . But for the corporate powers and financial aid it is granted Congress probable would road have been built.” v. PACIFIC RAILROAD CALIFORNIA. 161 Harlan, Dissenting Opinion: In Railroad U. S. Compamy, 1, California Pacific 38, this court, Railroad the Pacific so far as acts, referring related to the Central they Pacific said: Railroad, “Thus, without to the other franchises and con referring privileges ferred this the fundamental franchise was company, the act of given by 1862 and the acts to construct subsequent a railroad from the Pacific Ocean across State California and the Federal Territories until meet it should the Union which it did Pacific, meet at in the of Utah.” Ogden Territory In the case of United States v. U. S. Stanford, “ decided, we said recently : In States v. Union Pacific by Railroad 91 U. S. Company, court, Mr. speaking Justice held Davis, that the construction of a railroad con the Missouri necting River Pacific Ocean with the was'a national because work, such a a road would be national great under national highway, that the scheme estab control; lishing in national highway necessities, originated country involved at the time a civil war which being threatened the Union, disruption endangered of our that the on the' enter safety possessions Pacific; national prise because required assistance, private capital for an It of such inadequate magnitude. appears undertaking the face of the act the act of amended 1862, as 1864, that had in Congress view public promotion interest and welfare a railroad and the construction of line that could at telegraph be used all. government times, but war,-for particularly military postal, time.of other and the purposes, that, so far were public concerned, such road and telegraph (cid:127)as one ends were operated continuous These line. be. attained created Con through agency corporation and of certain under state laws gress, corporations organized selected to be Congress as instruments employed in accomplishing public legislation.” objects specified in the Rail Again, same case: the Central Although road under of California artificial Company became an being, the laws of State, its its existence road. owes national all government; for, that was accomplished

VOL. CLXII —ll

162 Harlan, Opinion: Dissenting «T. and aid because of the by, exercise granted privileges United States. . . . The from, be- derived relations State the California and the no tween corporation at the time to the national concern purpose the continent formed to establish across great highway and use. chose this public Congress existing governmental Pacific Eailroad as an Central Company] artificial being [the ends, and the to relations instrumentality accomplish national and to States corporation between ought establish the enactments .which those rela- be determined by tions.” as to this railroad well relations between company is shown and the State act

United States legisla- c. entitled An 4,1864, 417, California, ture of April approved “ out Pacific Eailroad provisions to act aid carrying and other act matters Congress and Telegraph relating 1864, That statute referred to Stat. Cal. thereto,” c. and 1, 1862, Stat. 489, the act of July Congress Pacific Eailroad therein the Central Company, to enable to and and with completely per- named, fully comply more that com- conditions, and provided form provisions authorized and and are right, hereby empowered, pany and conferred to, hereby and granted privilege them, construct, maintain and the said vested operate in.the line, California, and State only railroad telegraph and in the said territories east of between said lying but also Eiver, the Missouri with such branches and exten- and and or either line, them, as of said railroad telegraph sions and deem also necessary said may proper; company and for said railroad line over telegraph any way right and on, over and lands belonging along rivers, and water roads, streams, water streets, highways, to be so constructed as not obstruct but the same courses, also same; or navigation passage destroy said use of to condemn company appropriate as franchises privileges rights, property, private or convenient for the necessary purposes be may proper, therefor compensation railroad telegraph, said PACIFIC RAILROAD CALIFORNIA. Opinion: Harlan, under and by special proceedings, ^ascertained paid in the act of rail- providing incorporation prescribed twentieth, hundred May eighteen road approved companies, acts sixty-one, supplementary amendatory all to be the laws thereof; said of this subject n State concerning lines, railroad tnat telegraph except State, n messages the of this and and n the said shall have and priority transportation company over said line of railroad and transmission telegraph; hereby and in said all the to rights, vesting privi- (cid:127)confirming company conferred franchises, upon, granted power authority leges, act of to or vested in said said Congress; hereby company inconsistent or conflict all laws and laws .repealing parts the act, the of this or with rights privileges provisions herein granted.” the most at favorable to the light

Looking question it be said that the franchises which railroad State, may n n companypossesses, the construction with reference to came California, of its within from jointly road .maintenance and the State. If the the United States rights., privileges to United States company franchises granted (cid:127)not all that was needed accomplishment objects construction of a national be- had view by highway Ocean, Missouri River and the Pacific tween the into the charter enactment carried company, at the a state all the as looking company simply corporation, the United States. franchises granted by powers been If had separately upon question from its as visible property company, distinguished a different case have would aspect; franchises, presented reexamine then have been to .and we should compelléd the extent to com- to question designed by used accomplishing objects Congress, pany, as the court could be taxed the State. But, opinion franchise, road- shows, the assessment was upon present rails and stock of without roadbed, company way, That which their was values. stating separately respective cannot be from that which valid.- So invalid separated TERM, 1895. 16é Opinion: Harlan, whether is for presented question competent to sell'for its taxes the franchise of the If.it company. the whole assessment is void. Santa cannot, Clara County 118 U. S. Railroad, v. South. The court the railroad obtained from says the State to' privilege corporate capacity; maintain, and to construct, road; and col- operate charge lect fares and to exercise eminent freights; and maintain domain; to enter acquire right way; construct, or route; lands waters any person survey road across, stream, watercourse, road- along upon any street, stead, stream, avenue, bay, navigable highway, ditch or canal, flume; across any cross, intersect,, railway, or unite its railroad with other railroad at join any point, on its route; roadbed material way, acquire right to take from construction; material the lands of the.- etc., etc. did it not But those rights acquire privileges-also ? Did not the United States the United States grant ” to fundamental franchise construct maintain a railroad from San Francisco across the State and the terri through until it met the Union Pacific Railroad ? If tories, that fran the State for taxes, chise be sold how are the national to be ? What objects contemplated by Congress accomplished becomes of of the United States the entire mortgage of the roadbed, company, stock, right way, rolling houses, etc., station which was in order to mortgage taken of the secure bonds issued the United payment under the acts of ? What becomes of Congress power United States reserved acts of Congress General certain take Government, contingencies, posses to sion of this railroad % In Northern Railroad v. Traill Pacific as, 115 County, U. S. where the was 600, 610, question of a State -or to tax certain lands that had Territory been to in- aid the construction of' granted by Congress the Northern Pacific Railroad Mr. Justice Miller, Company, for court, said : “No sale of land for no taxes, speaking taxes can be but virtue of the- assessed any property, PACIFIC RAILROAD CALIFORNIA. Harlan, Opinion:

. it is done. whose If not sovereign authority jurisdiction, act of it itself, assessed direct to be must, legislature under a law done enacted valid, such authority legis- A taxes, lature. valid sale, therefore, being highest exercise must the title State, sovereign power carry it is sold, this, to if does not do because is if the the assessment void. It follows that assessment of well these taxes is valid conducted, proceedings others, sale a title to all confers de- paramount -thereby for the cost of lien United States stroys surveying on the would not confer hand, these lands. other sale If, a no title, it is because there exists make it.” authority the State It be said the franchise sell may may which But the state franchise is that which was it. is granted by so distinct and from the franchise granted by separate that it can the fran- United States be sold separately me chise It seems to that the United States? granted by railroad franchise a from San build, and maintain operate with the Union Pacific Rail- Francisco .of junction point road is a and that unit, it is utterly separate impracticable (cid:127) came from and sell so much of that franchise originally which derived from the leave intact that was do States. The State cannot anything lawfully derived franchise, privileges impair rights cripple said in Railroad from the United States. 'What to the relations Removal in reference cases, U. S. 1, and certain between the Railroad- Company Union Pacific with company, consolidated corporations authority here: The whole being, capacities, applicable are so based consolidated thus obligations company re- acts Congress upon, permeated by enveloped far as to, operations ferred that it is so impracticable, concerned, to disentangle are transactions their source those have which qualities capacities, are from which derived foundation in those acts, these state or territorial authority.”. Pacific Rail-

This that the Central court often has declared that had been road instrumentalities was one of the Company Opinion: Harlan, selected and was being United employed by States in national to which accomplishing important objects, the United States is under the Constitution. competent the fran- Upon chises, and all the of that upon rests corporation, to secure the mortgage government against liability corporation. bonds it issued to that "With the consent of the if such State, consent was has necessary, re- corporation ceived of land the condition that it large grants would meet and all the perform obligations imposed acts of I cannot Congress. agree franchise which has received from the United States corporation and the State can be assessed the State for taxation, with its along and then roadbed, etc., sold. That is way, taxation one instrumentalities the National .Government, no State do without the may consent of the Congress States. Of course, corporation ought due share to contribute its support government of each within whose limits its is situated and But exercised. it is for privileges Congress prescribe of taxation to be at rule least applied franchises .to which, created corporation although as much a if Federal it had been created a agency corporation national It enactment. has never heretofore been recog- could, nized that a State without the assent of sell, Congress, for its taxes, franchises, rights privileges, employed, under the- of the National Government, to authority accom- national where such plish objects, particularly franchises, rights are under secure the privileges, mortgage liabilities. against specified I

For the reasons dissent from stated, opinion judg- ment of the court.

Case Details

Case Name: Central Pacific Railroad v. California

Court Name: Supreme Court of the United States

Date Published: Mar 16, 1896

Citation: 162 U.S. 91

Docket Number: 559

Court Abbreviation: SCOTUS