16 Iowa 348 | Iowa | 1864
Lead Opinion
The judge making this decision below, is now a member of this Court and adheres to his former opinion, having with him the concurrence of one other member of this Court, whilst the two remaining members are of the opinion that such power is wanting and cannot be exercised in the manner proposed. The effect of this division of sentiment is to affirm the judgment below. As the Court, however, unite in holding that the plaintiff has no power to tax the rolling stock of said company for revenue purposes (although upon different grounds), it will be necessary to overrule the plaintiff’s appeal, for which we assign the following reasons, which may be taken as alike applicable to the road bed and depot grounds, so far as the writer of this opinion, and one other member of the Court are concerned.
First. We say that the rolling stock of a railway is part and parcel of the road itself. The machinery by means of which it becomes vital and operative for the objects intended, and to this end is constantly passing to and fro, from one terminus to the other of the entire line of road constructed so that it has no such local position or situs in the city of Davenport, as to entitle said city more than any other town or city through which it passes, to tax the same for municipal purposes. In this respect the claim or right of each town to or through, which the rolling stock might go or pass, would be alike equal and valid. But that all. of them should exercise this right to tax the same property, would be too unreasonable a proposition to merit
Now, if it was allowable to indulge in this presumption against known- facts, still, it would not relieve us of the difficulty.
The facts agreed on in this case are, that the rolling stock of the company is in a constant state of transition, having no local existence in one place more than another; that it is employed to operate the whole length of the road 170 miles long, only two miles of which are within the limits of Davenport, so that, as a matter of fact, it is for a very large proportion of the time elsewhere than in the city of Davenport. It is therefore difficult to see in what sense it is to be considered, as having its local existence on the two miles in Davenport to the exclusion of the 168 miles outside of that city. Eor these reasons, without stating others in effect, the Court below said this rolling stock could not be taxed for city purposes. But that these reasons did not apply to the road bed and depot grounds and buildings which had a permanent place in the city, and therefore taxable.
We now propose to show that neither description of property, as such, is subject to taxation in the manner proposed for other and different reasons. We premise, first, that this railroad enterprise, in all its appointments and accessories, as a great public improvement, is an entirety, that the two miles of road bed in Davenport is only one link of a long line stretching through several counties, indispensable to the whole; that the depot grounds in Davenport are only one'of a series of stations along the railway, each alike essential to the enterprise; that the
Hence, the Legislature, with a wisdom that is “first pure, then peaceable, gentle and easy to be entreated,” thought it best, in order to reduce this difficulty to a level with the demands of the constitution (which requires the property of corporations, for pecuniary profit, to be taxed), to adopt a different method of taxation from that which is prescribed for other property, namely, that of taxing the property of railway companies through the shares of the stockholders. This was accordingly done, as early as the year 1851, and continued to be the only method of taxation (with -a slight modification made in 1858) down to April, 1862, when the Legislature changed the rule, to the effect following: That the Treasurer of the State should levy a tax of one per centum annually upon the gross receipts of said railways, without deduction of expenses, one-half of said taxes so levied and collected to be equally apportioned by the State Treasurer to the several counties through which the said roads respectively run, in proportion to the number of miles of main track of road in each county. The act further expressly provides that the tax therein provided for should be in lieu of all taxes, for any and all purposes, on the road bed, track, rolling stock and necessary buildings for operating the road. See Session Laws of 1862, page 227.
This law had taken effect and was in force when the
Usually, this rule is severely adhered to by the courts. In Connecticut, it was held that a by-law of a borough prohibiting the taking of oysters from the waters within the borough, during a certain period of the year, under a penalty therein prescribed, which the borough was authorized by its charter to make, is abrogated by a general law of the State, passed subsequent to the granting of the charter prohibiting the doing of the same act under a penalty prescribed in the statute, so far as such by-law prohibits the act whether such by-law was made before or after the passing of the general law; and therefore no action for the doing of the act, after the passing of such general law, can be maintained upon the by-law. Southport v. Ogden, 23 Conn., 128.
The truth is, taxation is a great governmental attribute, emanating alone from the controlling power of the State, and cannot be interfered with by the local authorities.
Yet, whilst the Legislature may distribute the exercise of this power among the counties, towns and school districts, for certain defined and local purposes, they, on the
Again, it is no less competent for the Legislature, in its discretion, to vary the rule or method of taxation in respect to different descriptions of property, than it is to exempt one class altogether and tax others. Upon this subject the Constitution is silent, and one is no greater stretch of power than the other. ■
In 1851, the General Assembly of the State conferred upon the city of Davenport the power to levy and collect taxes upon all taxable property within the city, as revenue, we suppose for municipal purposes, although that is not stated in the law. At the same session of the Legislature a general revenue law was passed, exempting some, and subjecting other classes of property to taxation. In regard to the property of corporations for pecuniary profit, the same law, section 452, Code of 1851, makes a special rule for taxing the same, not applicable to other property. There being no exceptions to the contrary, this rule was alike binding upon all the authorities of the State. They eould no more disregard its provisions, than the one in relation to the exemption of property.
We need not determine whether the city of Davenport eortld or eould not have levied and collected a tax through the shares of the stockholders of said road, under this law, for the reason that no question arises under the same in this ease. It is now repealed, and in doing so, the Legislature has not only ordained an entirely new rule for taxing this description of property, but has taken even from the counties all^ power to tax the property of railway companies for any purpose whatever, and confines the exercise
Again, under this law, it is to be levied and collected for two objects only, namely, for State and county purposes, and for no other; and this is agreeable to the 7th section of the 7th article of the new Constitution, which reads as follows:
“ Every law which imposes, continues, or revives a tax, shall distinctly state the tax, and the object to which it is to be applied; and it shall not be sufficient to refer to any other law to fix such tax or object.”
Now, upon what principle, in. the face of this clause of the Constitution, and the law just referred to, passed in conformity thereto, can the plaintiff levy and collect a tax upon the property of the defendant, not only in a different mode than that prescribed, but for an object not contemplated by or specified in 'the law ? Certainly none whatever.
'The revenue law, in respect to counties, confers upon them the power to levy and collect upon all taxable property a certain per centum for county purposes, in like manner as it does the city of Davenport. But will any one say, on that account, the counties may disregard the law referred to, regulating the manner of taxing railroad property ? If not, we ask upon what higher or better ground do the towns of the State stand, that they may do so? We think none.
The true doctrine is, that the powers of both are in subordination to the general law of the State, as it respects the matter of taxation; subject to be enlarged, diminished, or taken away altogether. It seems that the Legislature has deemed it expedient to reserve to the State the exclusive right to levy and collect taxes upon railroad property; and
"What we have thus far said, has exclusive reference to taxes for revenue purposes, and does not apply to another class of special charges or assessments, which cities are frequently authorized in their charters to make against particular pieces of property for sidewalks or other improvements made in front of the same, intended mainly for the local advantage of the property itself, rather than'' the convenience of the public. Between this special police power and that of taxation for revenue, the courts have recognized a clear distinction, as involving in their exercise essentially different attributes or principles, the one being an ordinary tax for defraying the expenses of the municipal government, and the general improvement thereof, whilst the other is a special imposition or liability arising out of the benefit conferred upon the property assessed.
The same principle or right to make these special assessments for sidewalks, was recognized by the Court in the case of The Burlington and Missouri River Railroad Company v. Spearman, as city collector of Mount Pleasant. In that case it was held that the plaintiff was bound to pay, or that their depot grounds were liable to pay for sidewalks constructed adjoining the same. "Whatever else was said on the subject of taxation, must be considered as referring to this class of special taxes. If, however, there is language susceptible of a wider range, the same is a mere dictum, having neither the authority or quality of precedent.
It is suggested that the act of April, 1862, authorizing a tax upon the gross receipts of the railroad company, is unconstitutional: first, because not upon the property, and, secondly, because it is not uniform.
In principle, the tax upon the gross receipts, and one upon the shares of the stockholders, will not differ. Yet we have several times held, that it was competent for the Legislature to authorize the latter to be levied. Faxton v. McCash, 12 Iowa, 527; City of Davenport et al. v. The Mississippi and Missouri R. R. Company, 12 Iowa, 527; Tallman v. Treasurer of Butler County, 12 Iowa, 531.
Either of these methods of taxation is virtually the same
As to the second objection, that the law being of a general nature, and not having a uniform operation, the same is very well answered by the reasoning in the case of McCormick v. Rusch, 15 Iowa, 127.
Judgment affirmed.
Concurrence Opinion
I concur fully in' the conclusions reached in the foregoing opinion, by Mr. Justice Lowe, but, in the view which I take of the case, it is not necessary to determine the question as to the constitutionality of the law of 1862. The idea that the burdens of taxation should be borne equally is so just that no court will suffer an infringement of it, when the power to enforce it is within reach; and while this applies with equal force to all natural persons, it seems to be especially and in high degree the duty ' of a court to see that artificial persons, deriving their vitality and existence from the government, should not be permitted to escape the burdens of taxation which are laid by that government upon natural persons. But the power of taxation rests with the legislative department of the government, and, until the Legislature authorizes the taxation, courts of law are powerless to enforce it.
The first inquiry, then, is, has the Legislature authorized the taxation of the property of the defendant, as shown in this case ? The only laws of this State authorizing the taxation of railroad property, at any time, may be found in the Code of 1851, section 462; Laws of 1858, chapter 152; and Laws of 1862, chapter 173. The two former provide that property of corporations constructing railways, &c., shall be taxed through the shares of the stockholders, while the latter provides that such property shall be taxed one per cent on the gross receipts of said corporations. There
In the case of The City of Davenport et al. v. The M. & M. R. R. Company, 12 Iowa, 539 (which was decided below by the judge of the seventh judicial district, who is now a member of this Court), Baldwin, G. J., delivering the opinion of the Court, says: “The Court below, in deciding this cause, properly remarked, that it is a familiar and fundamental principle in the laws of taxation, that no property can lawfully be taxed until the Legislature authorizes and requires it to be done, and when the act requires it to be done in a particular way, that way, alone, can be pursued.” Another rule, equally well settled, is that municipal corporations must, in the exercise of their powers, conform to the general laws of the State, and can
The remedy for the plaintiff is with the Legislature, and ■ until a law is passed authorizing the levy and collection of the taxes, it is useless to appeal to the court.
An opinion in this cause has been pronounced by Mr. Justice Lowe, and another by Mr. Justice Cole. The two remaining members of this court concur in the conclusions reached in those opinions so far- as they hold the rolling stock of the defendant not to be liable, under the agreed statement of facts, to the municipal tax sought to be collected, but do not accede to the correctness of all the reasons advanced and all the grounds taken in those opinions, nor to the correctness of the view holding that the city could not levy the proposed tax upon the road bed, depot-grounds and buildings, situate within the city.
Without reviewing the grounds assumed in those opinions, the writer is instructed to present simply the opinion which the two other members of the court entertain.
1st. As to the right to tax the rolling stock :
The city charter (art. 5, § 1), gives to the city of Daven
It is maintained by the city that it has the power to tax this property on the ground that the rolling stock is personal property, that the residence of the company is -in Davenport, because that is its chief place of business, and that personal property wherever situate, is taxable where the owner resides.
If it be granted that rolling stock i£ personal property, .within the meaning of the rule of law, that such property, for some purposes, follows the residence of its owner, yet it by no means follows that the residence of the company is “within the city” of Davenport, in such a sense as to give the rule application in the present instance. In legal contemplation, the corporation does not solely reside in Davenport, in consequence of that being its chief place of " business. It is rather to be considered as residing in the counties and places through which the road passes, and in which it transacts its business. Baldwin v. The Mississippi and Missouri River Railroad Company, 15 Iowa, 518; Richardson v. The Burlington and Missouri River Railroad Company, 8 Id., 260.
This view does not exempt this property from all taxa
II. As to the right to tax the real estate.
The city charter, as we have seen, gives to the city “power and authority to levy and collect taxes upon all taxable prop&rty, real, personal and mixed, within the city.”
The depot grounds, buildings and road bed of the defendant within the city are under the Revision (chapter 45), taxable property. The Revision, § 711, exempts certain property from taxation, not including the property of corporations for pecuniary profit, and the following section (§ 712) then declares that “all other property, real and personal, within the State, is subject to taxation'' The same section also subjects to taxation “property belonging to any incorporated company.” So the Constitution provides that the property of all such corporations shall be subject to taxation, the same as that of individuals. Art. 8, § 2.
The property of railroads then is taxable property. The charter of the city, giving the city the right to levy a tax upon “all the taxable property within the city," we refer, of course to the general laws to ascertain what property is taxable; and when we make this reference, we find as above, that the property of the defendant is taxable, that is, subject to taxation, or in other words, not exempt therefrom.
It follows that the city, under its charter, has a right to levy and collect a tax on the property in question, unless this right has been taken away by some subsequent act of the Legislature, applicable to the city and to the municipal
The act of 1862, above cited, provides for a tax of one per cent rfpon the gross receipts of every railroad company, which tax is declared to -be “ in lieu of all taxes, for any and all purposes, on the road bed, track, rolling stock and necessary buildings for operating the road.” Acts of ■ 1862, 227.
In our judgment, this act does not repeal or affect the right of the city (which, it has been shown, would otherwise exist) to levy and collect a tax from the property in question. In other words, the act has no application, and was not intended to have airy, to the levy and collection of municipal taxes; but the act applies, and was intended to apply only to the kind of taxes therein provided for, viz., State and county taxes. Chapter 45 of the Revision, as well as the amendatory act of 1862, has no reference to cities, or to municipal taxation, and these acts do not conflict with the right of the city to levy and collect taxes under and by virtue of its charter and the powers thereby conferred; both can stand. The general language in the 16th section of the act of 1862, above quoted, means the same as if it read “ in lieu of all taxes, for any and all purposes within the contemplation of this act,” that is county' and State taxes. It means to declare that the county or State, the earnings having been taxed, cannot, for any purpose, levy and collect a tax on the road bed, depot-grounds, track, or rolling stock of the company.
The reasoning, if not the decision, in the case of The Burlington and Missouri River Railroad Company v. Spearman, &c., 12 Iowa, 112, is pointedly in support of this view. Entertaining the opinion above expressed, that the
If we are right in holding that the act of 1862 neither has, or was intended to have, any application to cities, this is a complete answer to the argument that even if the city has the right to tax railroad property, yet it must execute this right in the manner provided by the act, viz.: it must tax not the property, eo nomine, but the gross earnings.
Briefly stated, our argument is this: By the charter, the city has power to tax all taxable property within its limits. The depot-grounds, &c., are taxable property, and hence the city may levy a tax upon them. The act of 1862, does not touch this power of the city. The power of the city is the same as if this act had never been passed, and as there is no law providing' that the city shall execute its power to tax, by taxing the gross earnings, it is not required to proceed in this way; and that, as the depot-grounds, &c., are taxable property, the city has the right to assess them as land, and levy a tax upon them, the same as it does upon the real estate of individuals.
It is proper to be added, that the cases before decided in this court, cited by Mr. Justice Cole, and those in other States, referred to by Mr. Justice Lowe, do not, in our Opinion, conflict with the views above presented.'
The counsel for the city has earnestly contended that the act of 1862 is unconstitutional, because it discriminates in favor of' the property of railroads, by providing for this species of property a special mode of taxation instead of taxing it as all other property is taxed, by an assessment upon its vakm. The question under the peculiar language of our Constitution, is a grave one.
If the tax upon the gross earnings should be made twenty per cent, instead of one per cent, the position of the defendant, with reference to the law, might change; and yet the legal question, which is one of power in the Legislature, would or might remain the same. As we hold that the act of 1862 has no application to the city of Davenport, it is not necessary, and it would be improper, to express an opinion upon its constitutional validity.
It is due to the counsel on both sides, whose arguments, so replete with research and learning, have been of great service to us in our investigations, to state that we are sensible that all the questions discussed have not been treated, but we have examined them so far as necessary, to arrive at what we deem the just decision of the question, presented by the agreed statement.
It is a matter of regret that the questions are so intricate and nicely balanced that we have not been able, after the most thorough discussion, to arrive at a conclusion in which all can unite.
These considerations, as well as those arising from the peculiar nature of railroad property, which makes it difficult. to apply to it laws, chiefly intended for and adapted to the taxation of ordinary property, demonstrate the necessity which exists that the General Assembly should, by wise, just, and well considered legislation, remove the subject, as to cities, from the perplexity and doubt by which it is now surrounded.
The result is, that all of the members of the Court concur (but on different grounds), in the opinion that the rolling stock is not, under the agreed facts, taxable by the city. The decision of the court below is, therefore, affirmed on this point.
As to the liability of the depot-grounds, buildings, &c.,