100 S.W. 138 | Tex. | 1907
This suit was brought by the Missouri, Kansas Texas Railway Company of Texas against O.K. Shannon, Secretary of the State of Texas; John W. Stephens, Comptroller, and W.R. Davie, Tax Commissioner of the State, constituting the State Tax Board, to enjoin them from taking any action under the Act of the Twenty-ninth Legislature approved April 17, 1905, commonly known as the "Intangible Assets Act." A temporary restraining order was applied for and was refused. Upon the hearing an exception to the jurisdiction of the court was overruled but a demurrer and exceptions to the merits of the petition were sustained and the plaintiff having declined to amend the suit was dismissed. Upon appeal to the Court of Civil Appeals the decree was affirmed. The complainant has applied to this court for a writ of error and it has been granted.
In the Court of Civil Appeals the defendants filed a cross assignment of error alleging that the court erred in overruling their exception to the jurisdiction of the court to hear and determine the case. This question confronts us at the threshold of the case, and logically is the first to be decided. The proposition of defendants in error in support of their cross assignment is: "That this is a suit against the State of Texas." So far as the question thus presented is affected, we are unable to distinguish this case from that of Fargo v. Hart (
It is also urged in behalf of the defendants in error, that the suit should proceed no further, because the acts which were sought to be enjoined have already been performed. If the suit were merely to restrain action as to the assessment for the year 1906, a serious question would be here presented; but as we understand the prayer of the petition, it is to enjoin action generally under the statute. Unless enjoined the Taxing Board will doubtless proceed to value the property referred to in the statute for the present and all subsequent years. Therefore we think that it is proper to maintain the suit to forbid future acts under the Act, provided. of course, the Act be invalid for the reasons alleged.
This brings us to the meritorious question in the case. Is the Act in question invalid, either under the Constitution of the State or that of the United States? The alleged grounds upon which the invalidity of the statute is claimed are presented in the able and exhaustive argument for the plaintiff in error; and we will treat them insofar as they require separate discussion as nearly as may conveniently be done in the order in which they are there presented.
The first proposition is that, "The State Tax Board as constituted and organized by the Intangible Assets Act is an illegal body, in that said Act attempts to confer upon the Secretary of State and the Comptroller of Public Accounts, each of whom is an executive officer, powers that are not executive and compels the exercise by them of powers which are not executive but are legislative and judicial in their nature, in violation of section 1, article 2, of the Constitution of the State of Texas." Section 21 of article 4 of our Constitution defines some of the duties of the Secretary of State, but also provides that he shall "perform such other duties as may be required by law." A like provision is found in section 23 of the same article which prescribes the duties of the Comptroller of Public Accounts. But it is insisted as we understand the argument, that no duties can be imposed upon these officers, except such as pertain to the executive department of the government and that the duties imposed by the Act in question are *389
judicial in their character. The first is probably correct. Since it is declared in section 1 of article 2 of the Constitution, that the powers of the government shall be divided into three distinct departments. namely, the legislative, the judicial and the executive, we are not prepared to hold that the Legislature has the power to devolve upon the Secretary of State and the Comptroller either judicial or legislative functions. It is very clear to our minds that the Act in question does not attempt to confer upon the Tax Board any legislative powers, nor do we understand that such a construction is claimed for it. But it is urged that their powers are judicial in their nature, and that therefore the Act is void. We think the argument is based upon a confusion as to the meaning of the word "judicial." Article 5 of our Constitution provides for the organization of the judicial department of the government. It prescribes what courts shall be established and defines their jurisdiction; names the officers of courts and prescribes their powers; and in every instance save one the province of the courts so provided for is to hear and determine causes between parties affecting the rights of persons as to their life, liberty and property. The exception is the Commissioners' Courts, which are not properly a part of the judicial department. But the whole scope of the article shows clearly what is meant by the judicial department of the government. The word "judicial" is, however, used, not with strict accuracy in another sense. It is applied to the act of an executive officer who in the exercise of his functions is required to pass upon facts and to determine his action by the facts found. This is sometimes called a quasijudicial function. This question came up in the case of Arnold v. The State (
The next proposition submitted in argument by counsel for plaintiff in error is that "The Act violates those provisions of article 8 of the Constitution of the State of Texas which require that all property of railroad companies shall be assessed and the taxes collected in the several counties in which said property is situated, including so much of the roadbed and fixtures as shall be in each county; that all property, whether owned by persons or corporations, shall be assessed and the taxes paid in the county where situated, and that there shall be elected in each county an assessor of taxes who shall assess such property, the valuation of which shall be equalized by the County Commissioners' Court sitting as a Board of Equalization for purpose of taxation." We understand the provisions referred to to be those found in sections 8, 11 and 14 of the article named. Section 8 is as follows: "All property of railroad companies shall be assessed, and the taxes collected *390 in the several counties in which said property is situated, including so much of the roadbed and fixtures as shall be in each county. The rolling stock may be assessed in gross in the county where the principal office of the company is located, and the county tax paid upon it shall be apportioned by the Comptroller, in proportion to the distance such road may run through any such county, among the several counties through which the road passes, as a part of their tax assets." Section 11 provides that "All property, whether owned by persons or corporations, shall be assessed for taxation and the taxes paid in the county where situated," etc. Section 14 reads as follows: "There shall be elected by the qualified electors of each county, at the same time and under the same law regulating the election of state and county officers, an assessor of taxes, who shall hold his office for two years and until his successor is elected and qualified."
In the case of the State v. Austin Northwestern Railroad Co. (
It is argued that section 14, properly construed, means not only that there shall be an assessor of taxes elected for each county, but that he and no other officer shall be entrusted with any part of the duty of making the assessment. We think the claim is too broad. The section contains no language which expressly prohibits the appointment of a board to assess taxes in a particular case. Unlike other provisions of the Constitution which create offices, it does not define the duties of the officers, from which we think it is to be inferrred that the scope of his duties was left to the determination of the Legislature. While we think, that the Legislature could not strip the assessor of all authority, and probably that it was intended by the framers of the Constitution that all ordinary assessments of property for taxation should be made by him, still we think it was not intended to deprive the Legislature of the power of devolving the duty upon another officer, or board to assess property in some special cases, where as in the present instance, the county assessors were clearly unable from the means at their disposal to ascertain with any reasonable degree of approximation the value of the intangible assets of the railroad company, and still less capable of making intelligently the apportionment due to their respective counties. But it seems to us, that this immediate question is settled by that part of section 1 of article 8 of *392 the Constitution of this State which reads as follows: "Taxation shall be equal and uniform. All property in this State whether owned by natural persons or corporations other than municipal shall be taxed in proportion to its value, which shall be ascertained as provided by law." Now if it be conceded that it was the intention of the makers of the Constitution to confer upon the county assessors the exclusive power to list and set down the value of all property in their respective counties, subject to an ad valorem tax, it can not be denied that the Legislature is empowered to provide the mode of ascertaining their value.
But it is insisted that the Act in question is repugnant to that provision of the section just quoted which prescribes uniformity and equality of taxation. The Act provides for no change in the rate of taxation as to the property subject to its provisions. Its sole purpose is to ascertain the values of such property. When ascertained the owners of the property pay tax at precisely the same rate as other ad valorem tax payers. All property as appears from numerous provisions on that subject in the Revised Statutes and in subsequent Acts amendatory thereto is to be assessed at its value — meaning by this as appears by some of them, its full and true value. It follows that if the law be properly enforced, the Act imposes upon the intangible assets of the owners of railroads the precise burden that is imposed by other laws upon other property.
The question of the uniformity of the tax is more difficult. In treating of the meaning of the word "uniform" as found in the Constitution of the United States, Mr. Justice Miller in the "Head Money Cases" says: "Perfect uniformity and perfect equality of taxation, in all the aspects in which the human mind can view it, is a baseless dream, as this court has said more than once. State R.R. Tax Cases,
The Constitution of Ohio requires property to be taxed "by a uniform rule." A statute of that State commonly known as the "Nichols Law" provided a board composed of the Treasurer, the Attorney-General *393
and the Auditor of the State, whose duty should be to ascertain the values of express, telephone and telegraph companies doing business in the State and to apportion them to the several counties through which the respective lines of such company operated and to report such values to the auditors of the several counties for assessment. The auditor of Lucas County deeming the Act to be repugnant to the Constitution of the State and that of the United States, refused to apportion the values so certified among the cities, villages, townships and districts of his county; and the members of the board brought a suit in the Supreme Court of the State for a mandamus to compel him to do so. (State v. Jones,
This proposition is also submitted in argument: "The Intangible Assets Act, in authorizing the State Tax Board to adopt the aggregate market or true value of the stock and bonds of a corporation as the standard or test of the true cash value of the entire property of such corporation and in authorizing the State Tax Board to deduct the assessed value of the physical property from the value of the entire property to arrive at the value of the intangible assets, prescribes artificial and arbitrary rules of value, in violation of the due process provisions of our State Constitution and of the fourteenth amendment to the Federal Constitution and in violation of the equality and uniformity in taxation required by our State Constitution." That the rules prescribed are in a certain sense artificial is not to be denied; for all statutes in that sense are artificial, though many are criticised as being inartificially drawn. We lay that aside. Are the rules arbitrary? We think not. On the contrary we think they are reasonable and well calculated to effect the purpose of the Act. It is true the Taxing Board are required to take certain data furnished them by the companies as a starting point from which to ascertain the true value of the intangible assets of the companies. They are to take the bonded indebtedness of the corporation and to it add the market value of its stock and from it deduct the value of its tangible property as assessed under law and to take the remainder as the value of the intangible properties, unless they conclude that in the particular case this will not result in giving the true value. Is this a reasonable method of accomplishing the object? How would a business man proceed to ascertain the value of a certain piece of real estate which is subject to a mortgage — that is to say, the value of the property as a whole and not the value of the equity of redemption? He would certainly consider that the property is worth the amount of the incumbrance and what it will sell for, subject to that incumbrance. So if a railroad is bonded for $1,000,000 and its shares at their market value are worth $500,000, it is reasonable to suppose, prima facie, that the property is worth $1,500,000. But for the reason that the shares in a corporation may have a value above what they would have as a profit paying property and its bonds may exceed its entire value, it would be arbitrary and unreasonable to require the Taxing *395
Board to fix the sum of the bonds and market value of its shares absolutely as the value. But without entering into a discussion of the provisions of the Act in detail, it is sufficient to say that it makes no such requirement. On the contrary, the rights of the companies are carefully guarded by providing, in effect, that the board may hear evidence and adopt such other method of determining the value of the intangible assets as they may deem just. Similar methods were provided by statute in Ohio for ascertaining the value of the intangible assets of telegraph, telephone and express companies; and in the case of the Adams Express Co. v. Ohio (
Nor do we think the Act by expressly excepting from its operation sleeping car companies, dining car companies and palace car companies or by failing to include other companies not mentioned, unlawfully discriminates against these that are included. It is to be borne in mind that the Act does not exempt any company from paying tax upon the value of its intangible assets, if any; nor does it prescribe a levy of any tax. It merely provides a mode by which the intangible assets of certain companies may be ascertained. When the Legislature concluded that there were corporations in the State who were escaping a part of the just burdens of the state government by not rendering their property for taxation at its true value, as they doubtless did conclude, and when they determined to correct the evil and to prescribe a method by which the whole property of such corporations should be assessed at its true value, then it became appropriate for them to select the classes to which the law should be made applicable. In order properly to perform that duty it became necessary to investigate the facts and to designate such classes. The difference in the character of the property of railroad companies and of sleeping car and dining car companies is so distinct that it is easy to discern a just reason for a discrimination as to them. But we confess our inability to see from the face of the statute any good reason why chair car companies should be included in the Act and sleeping car and dining car companies excluded. But so far as we can see, facts within the knowledge of the Legislature may have existed to justify a discrimination. Unless a corporation have a bonded indebtedness and marketable shares the provisions of the Act are hardly applicable. So that it seems to us that in the absence of facts alleged in the pleadings which attack the validity of the statute and of facts known to us judicially which show a discrimination, we can not assume there were none existing to justify one rule to the companies which were included and another to those which were excluded.
If the companies not included have intangible values, such values are not relieved from taxation. They may have no real estate to which *396 such values may be attached. But on the same day this Act was approved there was approved an Act which amended article 5076 of our Revised Statutes. This is the article which provides for the rendition of property for taxation. It contains forty-three specifications of different kinds of property subject to be assessed. The thirty-ninth specification is: "The value of all property of companies and corporations other than property hereinbefore enumerated;" and the forty-third and last is: "The value of all property not enumerated above." It follows that if a company, although it have no real estate, have intangible assets, they may be assessed and valued as provided in the article cited.
That the matter was very carefully considered by the Legislature is shown by the fact that in the Act which was also approved on the same day on which the statute in question was acted on by the Governor, which is commonly known as "the Kennedy Bill" and which provides for the levying and collecting taxes on the gross receipts of certain corporations, companies and individuals, the gross receipts of sleeping car, palace car and dining car companies are taxed together in one section, but separately from all others made subject to the Act and at a higher rate than any other corporation, company or individual. (Laws 1905, p. 359.)
It is also insisted that, by reason of the fact as alleged in the petition, that the county assessors of the respective counties through which the plaintiff's lines are operated habitually assess the properties situate in such county at less than its true value — namely, from one-fourth to two-thirds thereof — the operation of the Act in question will result in unequal taxation. But we must presume that these officers will do their duty and will obey the law. If the laws for taxing property be followed, no inequality can result. If the county assessors persist in assessing the properties in their respective counties at less than their value, it seems the plaintiff company is not without remedy. (Cummings v. Merchant's Nat. Bank,
The last proposition in the argument of the plaintiff in error is: "Section 12 of the Intangible Assets Act, taken in connection with section 7 of the Act imposing a tax of one percent on the gross incomes of railways, passed at the same session of the Legislature, delegates to the individual taxpayer the right to suspend the operation of a law of the State of Texas producing gross inequality in taxation, and renders the Act under consideration void for lack of certainty." Section 12 of the Act in question reads as follows: "That upon the taking effect of this Act, and upon compliance with its provisions by the individuals, companies, corporations and associations hereby affected, and upon the payment of the taxes imposed hereunder, if any are imposed, all laws and parts of laws laying taxes upon the gross receipts of said individuals, companies, corporations and associations, shall be and the same are hereby repealed." (Laws 1905, p. 356.) The following is the section of the other Act referred to in the proposition: "The tax imposed by this Act shall not be levied upon or collected from any person, firm, association, corporation, or receiver owning, operating, managing or controlling any line of railroad in this State after such person, firm, association, corporation or receiver shall have paid the *397 tax upon its intangible assets as provided for in Act of the Twenty-ninth Legislature entitled `An Act for the taxation of the intangible assets of certain corporations, and to provide for the creation of a State Tax Board for the valuation of such intangible assets and for the distribution of said valuations for local taxation, and for the assessment of said assets, and the levy and collection of taxes thereon,' while the same may be in force and effect." (Laws 1905, p. 338.) It is insisted that for the reason that these statutes place it in the power of a railroad company to suspend the operation of the occupation tax law, commonly called "the Love Bill" it is prohibited by that provision of our Bill of Rights which declares that "no power of suspending laws in this State shall be exercised except by the Legislature." (Art. 1, sec. 28.) We are of opinion, that the provision does not apply to the matter here in question. The purpose of the Legislature seems to be that the provision of "the Love Bill" which levies an occupation tax upon railroad companies should cease to operate as soon as the requirements of the Intangible Assets Act, commonly known as "the Williams Bill," should be fully performed. To suspend merely means according to Bouvier, "a temporary stop for a time." The suspension of a statute is different from a provision which declares that its operation shall cease at a special time, or upon the happening of a contingency. (Brown v. Barry, 3 Dall., 365.) The purpose of section 28 of article 1 of our State Constitution (quoted above) was to prohibit the Legislature from delegating to its officers the power of suspending the laws, and not to prohibit it from providing that a law may cease wholly to operate upon the happening of an event. A serious question may hereafter arise upon the effect of "the Love Bill," but in our opinion it does not now arise under the Act in question in this case. It is apparent that the Legislature did not intend that the statute, action under which is sought to be enjoined in this case, should cease to have effect at any time.
We are of the opinion that the judgment of the trial court and that of the Court of Civil Appeals should be affirmed, and it is, accordingly, so ordered.
Affirmed.