2 N.D. 310 | N.D. | 1892
Lead Opinion
The opinion of the court was delivered by
This action was brought by the appellant' in September, 1888, to restrain the respondent, as county treasurer of McLean county, from selling certain lands in said county, and described in the amended complaint, for taxes, levied and assessed thereon in the year ■ 1887, amounting to: $1,803. The respondent demurs to the appellant’s bill, upon the ground that said bill did not state facts sufficient to constitute a cause of action. The demurrer was sustained by the lower court and the action was dismissed. Judgment was duly entered by respondent against appellant, and from this judgment the present appeal was taken by the appellant.
The sole question we have to consider is whether the complaint states facts sufficient to constitute a cause of action. The complaint avers that the appellant is a corporation organized under the act of congress approved July 2, 1861, entitled “An
It appears from the complaint that appellant’s lands have been assessed for taxation for the year 1887, and that, as the appellant has refused to pay the taxes so assessed, the respondent threatens to and will sell said lands to satisfy said taxes, unless enjoined by this court. It is admitted that, if the gross earnings law of 1883, hereinafter referred to (Sess. Laws 1883, c. 99), is a valid and constitutional law, and exempts the property in question from taxation, the threatened action of respondent is unlawful. But this conceded fact would not, of itself, entitle appellant to invoke the aid of a court of equity. It is necessary that some additional facts be shown, so as to bring the case under some acknowledged head of equity jurisprudence. Cooley, Tax’n, 760. The case at bar shows such additional facts by reason of the provisions of § 67 of chapter 28 of the Political Code of Dakota territory, which enacts, in substance, that the purchaser of any tract of land sold fcr ’taxes shall be entitled to a certificate of sale, describing the land so sold, the sum paid, and the time when the purchaser will be entitled to a deed, and which shall be assignable, “and shall be presumptive evidence of the regularity of all prior proceedings. ” It is unquestionably true that the issuance of this certificate creates a cloud upon the title to the land described therein, as said certificate is prima facie evidence, by the express terms of the statute, of the regularity of all prior proceedings, including the taxability of the lands. It follows that the ease at bar presents
The appellant has urged with great earnestness that the various defects in the levy and assessment of the .taxes upon its lands, specified in the complaint, rendered such taxes void in toto, and warranted a court of equity in interfering by injunction to stop the sale of said lands to satisfy such void taxes. In the view we take of the case, it is not necessary to consider this point.
The main argument of appellant is that the lands in question were exempt from taxation by virtue of the “gross earnings law” (so called) of 1883. The respondent contends — First, that this statute does not exempt the lands in question from taxation; and, secondly, that it is unconstitutional. The first point made by respondent must be disposed of before passing to the questions of constitutional law raised; and in order to properly dispose of this-point, it will be necessary to briefly review the legislation of Dakota territory in respect of the taxation of railroad companies. Prior to 1879, the property of railroad companies in the then territory of Dakota was taxed in the same manner as other taxable property. In that year the first gross earnings law was passed. Sess. Laws, 1879, c. 46, p. 122. This law specifically provided that the percentage of gross earnings to be paid by railroad companies in pursuance of its provisions should “ be in lieu of all other taxation * * * of the roadbed, right of way, station or depot grounds, tracks, rolling stock,
There is a radical difference between the acts of 1879 and 1883 in respect of the property exempted from taxation. The act of 1879, by its express terms, limited the exemption only to
The gross earnings law is also attacked by respondent upon constitutional grounds'. It is argued that the act contravenes § 6 of the organic act of the territory, which is as follows: “And be it further enacted, that the .legislative power of the territory shall extend to all rightful subjects of legislation consistent with the constitution of the United States and the provisions of this act; but no law shall be passed interfering with the primary disposal of the soil. No tax shall be imposed upon the property of the United States; nor shall the lands or other property of non-residents be taxed higher than the lands or other property of residents; nor shall any law be passed im
We do not think that § 6, which is the only provision of the organic act relied on by respondent, has any bearing on the
However-, the question whether the territorial legislature had power to exempt any property from taxation is not, in our opinion, before the court, and it is not necessary to pass on that point. If it were necessary to do so, we would unhesitatingly say that the power to exempt existed in the territorial legislature; following upon this point, the case of Ferris v. Vannier, 6 Dak. 186, 42 N. W. Rep. 31, where the supreme court of Dakota territory held that the legislature had full power to make exemptions from taxation. In what way then does § 6 limit the legislative power in respect to taxation? We are of opinion that it only prevents unjust discrimination in taxing property
The conclusion that we have reached upon this branch of the case is in accordance with the opinions of every court that has been called upon to pass upon a similar question. The supreme court of Wisconsin, in the case of Railroad Co. v. Taylor Co., 52 Wis. 37, 8 N. W. Rep. 833, was called upon to determine whether a law exempting the land grant of the Wisconsin Central Company from taxation in consideration of a percentage of the company’s gross earnings was constitutional or not. The constitutional provision relied upon by the defendant (Taylor county) was that “the rule of taxation shall be uniform, and taxes shall be levied upon such' property as the legislature shall prescribe;” and the defendant argued that this provision prohibited the legislature from exempting from taxation the lands granted to railroad companies to.aid in the construction of their lines. But the court held that the provision of the constitution was applicable only to such property as was declared to be taxable, and that, as the property of the company was expressly declared to be exempt, the provision was inoperative. We quote at considerable length from the opinion, as the case is, perhaps, the leading one upon this point. Cassoday, J., in delivering the opinion of the court, said: “Since the legislature are to ‘prescribe’ the ‘property’ which must bear the burden of taxation, it follows as a logical sequence that the balance of the property in the state, and which is not so ‘prescribed,’ must necessarily be exempt from taxation. It is only upon the property so prescribed or designated by the legislature that the rule of uniformity can have any application. It clearly cannot apply to property not prescribed, and which would therefore be exempt. But the right of the legislature to prescribe what property shall be taxed includes the right to prescribe what property shall not be taxed. The right of choosing some from the multiplicity of kinds, classes, species, use, and ownership of property in the state, and the rejection of others, includes the absolute power to discriminate between what shall be chosen and what rejected, except in so far as it may be limited by the re
The constitution of Arkansas by article 7, § 2, tit. “Revenue” provides that “ all property subject to taxation shall be taxed according to its. value.” This is quite similar to § 6 of the organic act of Dakota territory, and was construed in the case of State v. Crittenden Co., 19 Ark. 360. In this case, by act of congress of September 28, 1850, swamp and overflowed lands were granted to the state of Arkansas for certain specified purposes. Thereafter the legislature passed an act-to provide for the reclamation of these lands. The fourteenth section of this act provided that “to encourage by all just means the progress and completion of the reclamation, by offering inducements to purchasers and contractors to take up said lands, the swamp and overflowed lands shall be declared exempt from taxation for the term of ten years, or until said lands shall be reclaimed.” Subsequent to the passage of this statute, an additional act was passed, repealing it. Prior to the repeal, the lands had been sold to private purchasers, and after the repeal of the statute exempting them from taxation for ten years the assessor of Crit•tenden county assessed the lands for taxes. The purchasers refused to pay the tax, upon the grounds that the act creating the exemption constituted a contract between the state and the purchasers, and that this contract could not, under the federal constitution, be abrogated or impaired by subsequent legislation. On the part of the state it was contended that the act granting the exemption was unconstitutional and therefore created no contract between the state and the subsequent' purchasers, because it was incompetent for the legislature to exempt swamp and overflowed lands from taxation so long as it taxed, other lands. The contention of the purchasers of the lands was sustained, the court saying: “We declare the true rule of construction to be that the legislature has the power, under the constitution, to select the objects of taxation, and upon the exercise of this power there is no constitutional restriction. When the legislature has selected the objects, these restrictions attach as to the imposition of taxes upon them, and the end intended to be accomplished is equality and uniformity in the taxation of
In view of what we have before said it seems unnecessary to enter into any further discussion of the authorities bearing, either remotely or directly,-upon the point under discussion; Our opinion is that, so far as the provisions of § 6 of the organic act are concerned, the legislature had full power and authority to enact the gross earnings law of 1883. In addition to the cases heretofore cited, we refer, without comment, to Stratton v. Collins, 43 N. J. Law 562; Mississippi Mills v. Cook, 56 Miss. 40; New Orleans v. Davidson, 30 La. Ann. 554; New Orleans v. Tourchy, Id 910; Crow v. State, 14 Mo. 237; Hamilton v. County Court, 15 Mo. 3; State v. North, 27 Mo. 465; Railroad Co. v, McLean Co., 17 Ill. 291 — all of which cases fully support and sustain the views we have expressed.
There is nothing in the provisions of § 6 of the organic act which prohibited the legislature of Dakota territory from passing the law of 1883. As we have before said that section applied only to the second requisite of apportionment, and was intended to prescribe the rule by which the subjects, selected
We must now consider whether the gross earnings law of 1883 is contrary to the provisions of the fourteenth amendment to the federal constitution, which provides that no state shall deny to any person within its jurisdiction “ the equal protection of the laws.” The respondent contends that, in so far as, the lands granted by congress are concerned, the appellant, as; owner, occupies exactly the same position as the farmer, settler, homesteader, pre-emptioner, or speculator occupies; that in respect of the ownership of the lands, the appellant, and every other property owner in the territory, occupies the same position; and that a law prescribing a different method of taxation; for one of the constituent members of this general class from thatprescribedfor the taxation of another constituent member of the same class is void, under the fourteenth amendment to the federal constitution. In other words, it is denied that the territorial legislature had the power to place railroad companies in a class by themselves for the purpose of taxation. The law of 1883 unquestionably classifies these corporations by themselves, and seeks to tax them by a method and system far different from the method pursued in taxing the individual citizen or property owner. The question is, can this classification be sustained upon legal grounds ? The fourteenth amendment does not prohibit classification by the legislatures of the several states and territories in respect of those subjects properly coming under the exercise of the legislative power. It permits the legislature to create one class of persons or property, subject to and controlled by one law, another class controlled by another law, and so on; the only limitation upon the power being that all the constituent members of the same class must be treated exactly alike. Discrimination between different classes is permitted, but discrimination between members of the same class is not permissible. It has never been doubted that for purposes of taxation persons pursuing certain trades or occupations could be put into classes by themselves, and be re
This power of classification has been repeatedly recognized by the United States supreme court in cases arising after the adoption of the fourteenth amendment. We do not think it is necessary to enter into any extended consideration of these cases, as the principles announced in and established by them are now thoroughly familiar both to the bench and bar. But it may be of use to refer, briefly, to several of them, which seem to us to establish the principles that must govern our decision in this case. In Barbier v. Connolly, 113 U. S. 27, 5 Sup. Ct. Rep. 357, a municipal ordinance prohibiting washing and ironing in public laundries, within defined territorial limits, between 10 o’clock in the evening and 6 in the morning, was held to be valid. This ordinance was evidently intended to operate against the Chinese in the city of San Francisco, but the court declared that, as it operated alike on all persons engaged in the same business within the same territory, it was not within the amendment. In Missouri v. Lewis, 101 U. S. 22, a statute prohibiting appeals to the supreme court of the state from certain designated counties in the state was held to be not obnoxious to the fourteenth amendment. In Hayes v. Missouri, 120 U. S. 68, 7 Sup. Ct. Rep. 350, a statute providing that in all capital cases, except in cities having a population of over 100,000 inhabitants, the state should be allowed eight peremptory challenges to jurors, and in such cities should be allowed fifteen, was held to be constitutional. In Dow v. Beidelman,
■ The power to classify railroads, banks, and other corporations for purposes of taxation, and to accept from them, in lieu of the customary taxes, a specified percentage of their gross earnings, has over and over again been affirmed, and cannot now bé questioned. 1 Nasty, Tax’n, 145; Cooley, Tax’n, 69; Bank v. Knoop, 16 How. 369; Dodge v. Woolsey, 18 How. 331; Bank v. Skelley, 1 Black 436; Delaware Railroad Tax, 18 Wall. 206; Daughdrill v. Insurance Co., 31 Ala. 91; State v. Railroad Co., 45 Md. 361; Worth v. Railroad Co., 89 N. C. 291; Wright v. Sill, 2 Black 544; Gardner v. State, 21 N. J. Law 557; State v. Commissioner, 37 N. J. Law 240; State Lottery Co. v. New Orleans, 24 La. Ann. 86; LeRoy v. Railroad Co., 18 Mich. 233; St. Louis v. Bank, 49 Mo. 574;
Is the classification of railroad companies for purposes of taxation a purely arbitrary one, or is it justifiable upon the ground that these corporations, by virtue of their peculiar powers and liabilities, differ from the other persons in the community, and constitute a peculiar class by themselves? A railroad is a public highway, operated for the public benefit; and, although it may be owned by a private corporation, yet it is charged with a public use, and the owner, in operating it, has a public duty to perform. Sharpless v. Mayor, etc., 21 Pa. St. 169. He must carry for all alike, and cannot discriminate in favor of any person or individual. When goods are offered him for carriage, he cannot refuse to receive them, or to transport them to the designated place; and after he receives them he is responsible for their safe carriage and delivery, and cannot excuse himself at common law except by showing that the act of God or of the public enemy prevented him from performing his duty. In the carriage of passengers he must exercise extraordinary care to insure his passenger’s safety, and the burden is upon him to show that he exercised this degree of care. Such, briefly stated, are some few of the onerous duties and burdens cast by the law upon common carriers. In return for these, railroad companies are given the right to construct and operate their railroads, and are, for these purposes, vested with the power of eminent domain. But in all their operations they are public servants, subject to regulation by the public, and answerable to the public for any dereliction of duty. Indeed, they are public instrumentalities to such an extent that the public may not only be taxed to aid in the construction of their railroads, but, after such construction, may regulate the fares and tolls that are to be charged for the use of the railroads. A merchant may charge as much as he sees fit for his goods, a
But is appellant, as owner of its land grant, in exactly the same position as other owners of land? We think not. The individual who owns a city or town lot may erect a dwelling house thereon, and either live in it himself or rent it to another.He may erect a store thereon, or a manufactory, and carry on merchant’s or manufacturer’s business. He may mortgage the property to secure his debts. In fact, he may do what he sees fit with his land. And the same is true of the owner of country land, who may cultivate it as a garden or farm, or mortgage it, or permit it to lie vacant and untilled. And all individual property owners may at any time sell their lands, and dispose of the proceeds as they choose. But appellant does not have like or equal or similar powers in respect to its land grant. It possesses and holds its lairds for certain specified purposes, and cannot exercise the same freedom of action in respect thereof as may be exercised by every other property owner. The act of congress (chapter 217, 13 St. U. S. p. 365) whereby appellant was incorporated provided, by § 1, that appellant should have the power to “lay out, locate, construct, furnish, maintain, and enjoy a continuous railroad and telegraph line, with the appurtenances,” etc. By § 2 a right of way was granted to appellant for its railroad and telegraph line over the public lands of the United States, to the extent of 200 feet in width on each side' of said railroad, and this right of way was, by said § 2, declared to be exempt from taxation in the territories of the United
The only other constitutional question raised at the argument is whether the law is void because, being concededly invalid in so far as it attempted to tax the earnings derived from interstate traffic, the remaining portions, being inseparably connected with the void parts, must fall with them. The argument of respondent is that the gross earnings law of 1883 is void so far as interstate earnings of railroad companies are concerned; that the legislature would not have passed the law if it had known that interstate earnings could not be taxed; that, by the terms of the act, earnings upon local traffic cannot be separated from interstate earnings for purposes of taxation; that all the earnings of railroads must be taxed or none at all; and hence that, as the tax on interstate earnings cannot be sustained, the entire act falls to the ground. The earnings of railroads, derived from interstate traffic or business, cannot be taxed by the states. Fargo v. Michigan, 121 U. S. 230, 7 Sup. Ct. Rep. 857; Steamship Co. v. Pennsylvania, 122 U. S. 326, 7 Sup. Ct. Rep. 1118. The act of 1883 was expressly declared by the supreme court of Dakota territory to be unconstitutional, in so far as it related to interstate commerce, in the case of Railroad Co. v. Raymond, 5 Dak. 356 40 N. W. Rep. 538. That case, however, did not touch upon or decide the question now under consideration. It is our duty to construe the act so as to make it constitutional, unless it clearly appears that it cannot be sustained by any reasonable intendment or allowable presumption. People v. Supervisors, 17 N. Y. 241. It is to be presumed that the legislature did not intend to exceed its jurisdiction, and tax earnings of appellant derived from interstate commerce, and this presumption must prevail, unless it is clearly rebutted by the language of the act itself. If that language is susceptible of two constructions, one of which will invalidate the statute, and the other of which will sustain
What then is the true construction to be placed on the language? If the language is transposed, and placed in its proper order, it would read: “All the gross earnings arising from the operation of such railroad as shall be situated within this territory.” It is obvious that the intent of the legislature could not have been to tax all the gross earnings of any corporation--that might happen to operate a railroad situated within the territory. And yet a strict grammatical construction would war
The only remaining question is, therefore, does the complaint show such a title in the railroad company as will enable it to maintain this action? Of course,'if plaintiff has no interest in these lands, their taxation and sale cannot work any injury to it, and it cannot be heard to complain. The third section of the act of July 2, 1864, granting lands to the Northern Pacfic Railroad Company, is as follows: “ That there be, and hereby is, granted to the Northern Pacific Railroad Company, its successors and assigns, for the purpose of aiding in the construction of said railroad and telegraph line to the Pacific coast, and to secure the safe and speedy transportation of the mails, troops, munitions of war, and public stores over the route of said line of railroad, every alternate section of public land, not mineral, designated by odd numbers, to the extent of twenty alternate sections per mile on each side of said railroad line, as said company may adopt, through the territories of the United States, and ten alternate sections of land per mile on each side of said railroad whenever it passes through any state, and whenever on the line thereof the United States has full title, not reserved, sold, granted, or otherwise appropriated, and free from preemption or other claims or rights at the time the line of the road is definitely fixed, and a plat thereof filed in the office of the commissioner of the general land office; and whenever, prior to said time, any of said sections or parts of sections shall have been granted, sold, reserved, occupied by homestead settlers, or pre-empted, or otherwise disposed of, other .lands shall be selected by said company in lieu thereof, under the direction of the secretary of the interior, in alternate sections, and designated by odd numbers, and not more than ten miles beyond the limits of said alternate section; provided, that if said route shall be found upon the line of any other railroad route, to aid in the construction of which lands have heretofore been granted by the United States, as far as the routes are upon the same general line, the amount of land heretofore granted shall be deducted from, the amount granted by this act; provided, further, that the railroad company receiving the previous grant
These considerations justify the conclusion that the act of July 2, 1864, in effect, although not in terms, fixes a lateral limit of forty miles on each side of the line of the road within which every alternate section of non-mineral land, designated by odd numbers, and which was not reserved, sold, granted, or otherwise disposed of, and is free from pre-emption or other
By the joint resolution approved May 31,1870 (16 St. p. 378), congress, anticipating that plaintiff would find difficulty in securing the amount of land granted within the limits designated in the act of July 2, 1864, provided that, “in the event of there not being in any state or territory in which said main line or branch may be located, at the time of the final location thereof, the amounts of land per mile granted by 'congress to said company, within the limits prescribed by its charter, then said company shall be entitled, under the directions of the secretary of the interior, to receive so many sections of land belonging to the United States, and designated by odd numbers, in said territory or state, within ten miles on each side of said road, beyond the limits prescribed in said charter, as.will make up such deficiency on said line or branch, except mineral and other lands, as excepted in the charter of said company of 1864, to the amount of the lands that have been granted, sold, reserved, occupied by homestead settlers, pre-empted, or otherwise disposed of subsequent to the passage of the act of July 2, 1864.” The phrase in this resolution, “ the amount of lands per mile granted
As we have seen, when the line of the road is definitely located, and a plat thereof filed in the office of the commissioner of the general land office, the grant, previously a float, acquired precision. The sections within the forty-mile or place limits become susceptible of identification. The idemnity limits themselves are defined. The number of acres required to satisfy the grant, and which aré to be taken within the indemnity limits, is fixed; and the grant, previously a float, both as to exact quantity and location, becomes a specific quantity to be taken within a defined limit. As said by the supreme court: “When the line was fixed, which we have already said was by the filing of
In St. Paul & P. R. Co. v. Northern Pac. R. Co., 139 U. S. 1, 11 Sup. Ct. Rep. 389 — an action brought to determine the title to lands within the conflicting limits, both place and indemnity, of congressional grants made to aid in the construction of two roads — it was strenuously urged that there had been no selection shown on the part of the Northern Pacific Company to certain indemnity lands. It was established that there were not, at the time of the definite location of the Northern Pacific Eailroad, sufficient lands within the indemnity limits, subject to appropriation for the purpose, to make up for the deficiency within the place limits.' Says the court: “As to the objection that no evidence was produced of any selection by the secretary of the interior from the indemnity lands to make up for the deficiency found in the lands within the place limits, it is sufficient to observe that all the lands within the indemnity limits only made up in part for
The facts alleged in the complaint sufficiently show — First, a deficiency in the amount of lands within what we may call the “place limits” of the grant to which plaintiff was entitled; sec
The position that approval by the secretary is necessary to the vesting of the title in the grantee undoubtedly has its suggestion in the fact that all preceding railroad grants prescribe such a condition precedent. The indemnity provisions in the grants of Sept. 20, 1850 (9 St. p. 466;) June 10, 1852 (10 St. p. 9;) February 9,1853 (10 St. p. 156;) June 29,1854 (10 St. p. 302;) May 15, 1856 (11 St. p. 9;) May 17, 1856 (11 St. p. 15;) June 3, 1856 (11 St. pp. 17-19, 21;) August 11, 1856 (11 St. p.. 31;) March 3,1857 (11 St. p. 195;) May 5, 1864 (13 St. p. 66;} March 3,1865 (13 St. p. 520;) July 4,1866 (14 St. p. 83) — are substantially as follows: “But in case it shall appear that the United1. States have, when the line of said road shall be definitely fixed1, by the authority aforesaid, sold any section, or any part thereof, granted as aforesaid, or that the, right of pre-emption has not' attached to the same, then it shall be lawful for any agent or agents, to be appointed by the governor of said state, to select,, subject to the approval of the secretary of the interior, from the. lands of the United States nearest [or most contiguous] to the tier of sections above specified, so much land in alternate sections or parts of sections as shall be equal to such lands as the United States have sold,” etc. In the acts of March 3, 1863 (12 St. p. 772;) May 12,1864 (13 St. p. 73;) July 1, 1864 (13 St. p. 339;) July 4, 1866 (14 St. p. 87;) July 23, 1866 (14 St. pp. 210, 236;) July 26, 1866 (14 St. p. 87) — the language is: “It shall be the duty of the secretary of the interior to cause to be selected,” etc. In the act of March 3, 1865 (13 St. p. 526), it is: “And said lands granted shall .be in all cases indicated by the secretary of the interior.” In the act of May 5, 1864 (13 St. p. 64) it is: “ Then it shall be the duty of the secretary of the interior to select from the lands of the United States,” etc. The uniform use of language in these cognate acts plainly requiring the approval of the secretary of the interior before the selections become effective so as to pass the title to the lands, coupled with the failure to use similar appropriate language in the
By the act of July 2, 1864, the following things are prescribed as requisite to a selection: First, that lands within the forty (or twenty in the states) mile limits of the grant should have been granted, sold, reserved, occupied by homestead settlers, pre-empted, or otherwise disposed of prior to the time the line of the road is definitely fixed, and a plat thereof filed in the office of the commissioner of the general land office; second, that the selection must be within ten miles of the place limits of the grant; third, they must be of odd sections, or parts of odd sections; fourth, they must be non-mineral public lands, not reserved, sold, .granted, or otherwise appropriated, and free from pre-emption or other claims or rights; fifth, they must be made by the company; and, sixth, they must be made under the directions of the secretary of the interior. "When these conditions are complied with, the land is at once identified, and passes under the grant. This act does not require, and the court cannot import, among the conditions precedent to the acquisition of title to indemnity lands by selection, the further conditions, “subject to the approval of the secretary of the interior.” U. S. v. Railroad Co., 98 U. S. 339. The approval of these lists by the secretary would be of great importance to the company. The approved lists, like the patents, would be conclusive evidence that the government, by its authorized agent, had determined that there was a deficiency within the place limits, which the company was entitled to have filled from the indemnity
It is urged that our conclusions herein are in direct conflict with the conclusions reached by the court in Jackson v. La Moure Co., 1 N. D. 238, 46 N. W. Rep. 449. That decision, however, is not necessarily in conflict with the opinion here expressed. In that case the court says:. “ It is, however, averred in the complaint, and admitted by the demurrer, that the company has never made the selection of the land in question, or any part thereof, and that the United States still holds the legal title to the land.” Any discussion in that case as to what would be the law if the railroad company had selected the land in question is dictum, and is not binding upon the court. It was an opinion delivered upon an hypothetical state of facts not presented to. the court, and is not necessary to a decision. The judgment of the district court sustaining the demurrer to the complaint is reversed, this court being of the opinion that the facts alleged and set up in the complaint are sufficient to constitute a cause of action.
Dissenting Opinion
(dissenting.) I am unable to agree with the views expressed in the prevailing opinion. The plaintiff invokes the interposition of equity to stay the collection of taxes assessed against its land grant in the county of McLean. It rests its claim for equitable relief upon two grounds: It insists that the land grant was exempt from taxation; it asserts that the tax proceedings were illegal and void. We will discuss these propositions in their order. The contention that the land grant was exempt is based upon the provisions of chapter 99 of the Laws of 1883. This statute, in substance, declares that in lieu of any and all other taxes upon the property of any railroad company there shall be paid a percentage of all the gross earnings of such company “ arising from the operation of such railroad as shall be situated within this territory,” and that such payment shall be in full of all taxation and assessment upon such property. To plaintiff’s claim to exemption founded upon this
Is, then, the act of 1883 unconstitutional in part? And, if - so, is that part so important — is it of such magnitude — that it cannot be asserted that the legislature would have bargained away the right to tax plaintiff’s property in consideration of the ■ portion of the gross earnings tax, which would be constitutional if standing- by itself? It seems to be clear, and, indeed,' it is undisputed, that, if the act relates solely to gross earnings arising from purely local transportation, it would be constitu- ' tional. It would not in any sense interfere with interstate com- ' merce. The plaintiff insists that this is the true construction;
In the prevailing opinion, after some preliminary discussions, the conclusion is reached that the gross earnings subject to taxation under the law are “all the gross earnings arising from the operation within this territory of such railroad.” I am content to accept this construction for the purpose of the argument, but I am at a loss to understand by what process of reasoning the conclusion is reached on this view of the statute that only local earnings on local traffic are taxed. To demonstrate the unsoundness of this conclusion, let us assume that each of the four states of Washington, Montana, North Dakota, and Minnesota should enact a law taxing all the gross earnings arising from the operation within these states, respectively, of the Northern Pacific Railroad Company. On a shipment from
In Canal Co. v. Com., 17 Atl. Rep. 175, the supreme court adopted as its opinion the opinion of the trial court. Referring to the two later decisions of the federal supreme court, above cited, the trial court said: “If the cases thus referred to, with others therein quoted, and the language quoted, do not completely overthrow the authority of the State Tax on Railway Gross Receipts, we are at a loss to understand their meaning. Believing that they do, we think it our duty to disregard that decision, and to follow the later cases in holding that a statute which attempts to tax the gross receipts of transportation companies derived, in the language of the act before us, from “ tolls and transportation, telegraph business, or express,” is not valid, so far as such receipts are derived from commerce between points without the state.” There is no doubt that the supreme court of Pennsylvania always has considered, and still does consider, that the case of State Tax on Railway Gross Receipts, 15 Wall. 284, sustained the constitutionality of a tax on the gross earnings of interstate commerce. The Michigan supreme court
A construction placed upon a statute by those intrusted with the enforcement of it is strong evidence of its meaning, especially where*, as in this case, that construction has been adopted by parties interested, when the contrary interpretation
The next question is whether the portion of the act of 1883 exempting plaintiff’s land grant (assuming that it does in fact exempt such property) falls within the unconstitutional part of the statute. On such a question authorities are unnecessary. The case is so plain that no case should be followed which would sustain the exemption under such circumstances. It was given for a consideration, six-sevenths of which has failed. In the Raymond Case it appeared that the tax derived from the percentage on earnings of local commerce was about one-seventh that which would be received from a percentage on the earnings of both local and interstate transportation. Nor do we need to test this question by what transpired subsequently to the enactment of the law. The Raymond Case is only an illustration of what every one, including the members of the legislature, knew when the act of 1883 was passed. It was known that the internal commerce of the territory was insignificant, as compared with its interstate commerce. The people were chiefly
Are, then, the averments as to the defects in the tax proceedings such as to warrant the equitable relief sought? We will discuss the question first on the authorities, and then refer to our statute, which had wrought a change in the mode in which the taxpayer is required to do justice. The first irregularity set forth in the complaint is the ommission of the assessor to take and subscribe the statutory oath, and attach the same to the assessment roll. This defect is, however, conceded by the plaintiff and appellant to be insufficient to warrant the maintenance of this action without payment or tender of the tax, or an offer to pay it, set forth in the complaint, in the absence of statutory regulation. No such allegation is made, and therefore, under the authorities, this irregularity must be disregarded in determining whether the plaintiff has any right to be heard in equity, leaving our statute out of consideration for the present. Boeck v. Merriam, 10 Neb. 199, 4 N. W. Rep. 962; Hunt v. Esterday, 10 Neb. 165, 4 N. W. Rep. 952; Wood v. Helmer, 10 Reb. 65, 4 N. W. Rep. 968; Fifield v. Marinet Co., 62 Wis. 532, 22 N. W. Rep. 705; Railroad Co. v. Lincoln Co., 67 Wis. 478, 30 N. W. Rep. 619; Land Co. v. City of Crete, 11 Neb. 344, 7 N. W. Rep. 859; Stell v. Watson (Ark.) 11 S. W. Rep. 822.
The next irregularity pleaded as a ground for equitable relief without payment, tender, or offer to pay is the failure of the county clerk to “make out a tax list containing the description of the lands, * * * with a valuation of each or any of the tracts specified thereon, and the several species of taxes and the total taxes against the said tracts carried out in separate columns opposite each tract, and as nearly as practicable in the form set forth in § 37 and § 39 of chapter 28 of the Political Code of this territory.” There is also an allegation in the same language relating to the duplicate list required by law to be furnished the county treasurer by the county clerk. These two defects will be discussed together. These allegations might be strictly true, and yet the defect in the list and in the duplicate list might be in some trifling matter of form which could not possibly affect the tax either in law or in equity. The sufficiency
The other two allegations — that the county commissioners did not attach to the original and duplicate lists their warrants requiring the treasurer to collect the taxes, and that the county treasurer had not given the proper notice to acquire jurisdiction to sell the property for such taxes — are, under all the authorities, insufficient to warrant a restraint of the tax proceedings without payment or tender of the tax. A cloud on the title from illegal tax proceedings will ordinarily warrant a resort to equity to remove it. But a dominant principle of equity intervenes, and requires equity to be done by the taxpayer before he can secure the relief sought. He must, when the tax is valid in equity, pay or tender the tax as a condition precedent to his right of action. In all such cases our statute has substituted a judgment for such taxes in the action in place of tender or payment. It is thus equity is to be done by the taxpayer. The statute provides that the court shall in such cases render judgment for the tax. It treats the judgment for the tax as a substitute for the tax itself. The tax proceedings, being such as to cast or threaten' to cast a cloud on the title, must be set aside, but the tax itself, with its penalties and interest, must be émbodied in a judgment,' on which execution shall issue as soon as the tax is delinquent. The penalties and interest which must be embodied in the judgment when rendered after the tax has become delinquent are those prescribed by law in cases of delinquency. § 1643, Comp. Laws; Farrington v. Investment Co., 1 N. B. 102.
The argument that the county has estopped itself from claiming the tax upon these lands because of having received its
But it is said that by the payment of this tax, and by the receipt by the county of its share, the plaintiff has done equity. The position is untenable, for the reason that it does not appear from the complaint that the plaintiff has paid the tax in controversy, or that the county has received a sum equivalent to that tax by the receipt of its share of the gross earnings tax. Further, if the gross earnings law did not in terms exempt these lands, then the plaintiff has paid no part of the tax upon such lands. But we do not decide that question, for the reason already stated. The burden is on the plaintiff to show that it has done or offers to do not only partial, but full and unstinted equity. Until it avers the payment or tender of the tax in question, or of a sum equal to such tax, equity will lend it no aid, although it should be satisfied that a portion of such tax had, in effect, been, received by the county. This reasoning, of course, ignores the statute which has substituted the tax judgment for payment or tender. But the principle is important, for where equity required payment or tender the statute provides for a judgment. 1 N. D. 102. The dissent of Justice Wallin in that case was not upon this question.
The complaint avers the non-payment by the plaintiff of the cost of surveying, selecting and conveying the plaintiff’s land grant within the territory of Dakota. Under the decision in Railroad Co. v. Traill Co., 115 U. S. 600, 6 Sup. Ct. Rep. 201, the lands would not have been taxable because of the lien of the government thereon for such unpaid expenses had congress not taken from plaintiff and other like companies the power to interpose its own dereliction of duty as a barrier against taxation. That act was approved July 10, 1886 — a year before the