18 F. Cas. 1223 | U.S. Circuit Court for the District of Eastern Missouri | 1874
Non-resident stockholders in the St. Louis, Iron Mountain <&
Special grounds of relief are set forth in several of the bills not common to all the cases; such, for example, as the alleged erroneous assessments to the Pacific Railroad Company, and to the Missouri, Kansas & Texas Railway Company, of cars exclusively belonging to the Pullman Company; and to the Chicago & Southwestern Railway Company, of rolling stock of several hundred thousand dollars in value owned by the Chicago, Rock Island & Pacific Railroad Company. And again, the Pacific Railroad Company and the Atlantic & Pacific Railroad Company claim exemption, total or partial, from the taxes of 1873, by virtue of an alleged contract to that effect with the state, contained in the twelfth section of the act of December 25, 1S52, relating to these lines of road.
There is, however, a common ground of complaint in all the bills in respect to the action of the state board of equalization in fixing the valuation of the property of the respective companies for taxation. It is to this feature of the cases that I will now advert, omitting in this place reference to the grounds of relief peculiar to several of the cases.
In 1873 the legislature of Missouri passed an act specially providing for the assessment* of railroad property, and the mode of collection of taxes thereon. Laws 1873, p. (53. The act was in some respects modified in 1S74. Laws 1874, p. 130. By this legislation each railroad company in the state is required to make a statement, on oath, of its length of road and all its taxable property within the state, “and the actual cash value thereof.” This statement is to be furnished to the state auditor, and a similar statement to the clerk of the county court of each county through which the road runs. The county court of each county is required to examine.this statement and determine the correctness of the same as to description of property and valuation thereof. If correct, they so certify it to the state auditor. If property is omitted, they add it. And then, as to all property, they are required to forward to the state auditor “an official statement of what they believe to be the actual cash value.” The auditor lays these statements received from the companies and from all the county courts before the state board of equalization, which meets in January of each year.
The state board of equalization is composed of “the members of the state senate and the lieutenant governor for the time being,” of which “the lieutenant governor is ex officio president,” a majority of whom shall constitute a quorum, “and each member is required to take an oath as a member of the board.” Laws 1S72, p. 86. As respects railroad .property, the board are required, when they meet;®nnually, “to proceed to adjust and equalize the aggregate valuation of the property of each railroad company;” It is also provided that “the board shall have the power to summon witnesses, and to compel their attendance; to inorease or reduce the aggregate valuation of the property of any railroad company included in the aforesaid statements or returns, and any other property belonging to the said railroad companies which may be otherwise known to them, as they shall see just and right.” The board is required to apportion lands and buildings to the counties and towns in which such property is situate, and all the other property is to be apportioned to each county, town, etc., according to the ratio which the number of miles of road therein bears to the whole length of the road. It is upon the value thus determined that taxes are levied, the state taxes to be charged to the companies by the auditor, the county and other local taxes to be levied locally upon the valuation thus settled by the state board of equalization. The state taxes, as well as county taxes, are collected by the county authorities; the municipal taxes by the municipality.
It thus appears that the valuation of railroad property upon which all taxes, state and local, are levied, is determined by the state board of equalization, and all the powers and duties of this board are substantially set forth above.
The bills charge misconduct and illegal action on the part of the board in many particulars. It will suffice to refer to the statement of the more material of them in the case relating to the Iron Mountain Company. The bill sets forth that the board assessed the property of that company “at a sum more than three fold its cash value,” and that in doing so they were not governed by any evidence adduced before them of values, nor by any knowledge they possessed of values, but were in fact moved and influenced by passion and prejudice against the company; that, though they were the same body substantially as fixed the value, of the same property for the year 1872 at the total sum of $2,111,-435, yet for 1873 (the year now in question) they raised it three fold, or to the sum of $G,-266,334; that in 1S72 they fixed the value of the road bed at $5,000 per mile, whilst in 1873 they fixed the same at $14,000 per mile; that the board, consisting of thirty-five members, referred the matter of the values of the company's property to a committee of five, which,
It is stated that the committee of the board valued the road bed at $7,875 per mile, which the plaintiff alleges was in excess of the actual cash value, “yet the board, without any evidence whatever, and without any knowledge Whatever m themselves of values, increased the committee’s estimate to the enormous sum of $14,900 per mile,” and this without any report from the committee of the testimony or the facts proved before them, and against the voice of the members of the committee, with one exception.
The bill also charges that the board, in violation of the constitutional provision requiring equal taxation in proportion to value, and intending to discriminate against railroad .property, “knowingly and intentionally required such property to pay one-third more taxes in proportion to its value than other property of equal value. It is also charged that the state board exceeded its lawful powers by undertaking to make, and making, a new and original assessment, instead of confining themselves to the duty of equalizing •assessments.
In the case of the Pacific Railroad, it is alleged that the board in like manner increased the aggregate value from $3,716,920, as returned by the company, to $9,654,423, and fixed the value of the road per mile at $26,000.
The board in like manner, it is charged, increased the taxable valuation of the Atlantic & Pacific Company’s property from $2,30S,-504 to $6,215,503, and fixed the value of its road per mile at $10,000; the property of the Missouri, Kansas & Texas Company was increased by the board from $1,801,688, as valued by the company, or $3,481,246, as valued by the county court, to $5,698,950, and fixed the value of the road per mile at $18,000; the valuation of the Chicago & Southwestern Railway Company was increased from $650,-000 to $1,849,339. Other complaints in the bill are made against the board of a minor character, such as the failure of an active member to take the oath of office; and intentionally assessing as the company’s, property which did not belong to them.
Such are the grievances complained of; and the question now is whether, if the allegations of the bills are substantially true, they give a right in equity to relief, and to what extent. The eases are now before me, after notice to the defendants, for an allowance of a temporary injunction. No answers have-been filed, and hence the material allegations of the bill, which are sworn to, are, on this hearing, and for the present purpose, to be considered as true, and the inquiry is, supposing the bilis to be true, can a court of equity interfere, either preliminarily, by an-injunction, or finally, by a decree?
The decisions as to what will-give an equity •to enjoin the collection of taxes are conflicting, and, to my mind, not very satisfactory. Since all regular governments subsist by-means of taxes, which are assessed, levied, and collected under laws necessarily stringent ■and summary, in order to insure prompt payment, it is obvious that the courts should not interfere, by . injunction, with the regular working of these laws, unless an injury to-the citizen will be thereby inflicted, for which he has no other adequate remedy. When this "is the case, however, the courts should not ■hesitate to interfere to protect the citizen against the action of the state; for the state, acting for all, is under the highest obligation to deal justly with each.
I confess to some doubts as to what will-warrant the judicial tribunals in interfering with the results of the action of such a body as the state board of equalization. It is clear that such interference cannot be justified for reasons merely formal or technical, or for acts which do no substantial injury, or where the wrong could have been avoided or prevented by measures or steps open to the party at the time. Mistakes of judgment on the part of such a body in honestly over-valuing property cannot ordinarily, if ever, be corrected by a bill in equity.
On the other hand, I am unwilling, without further reflection, to say that in no possible case will a court of equity interfere with the result of the action of an assessing or equalizing body. Suppose local assessors purposely value the property of non-residents two or three times as high as the property of residents, and that this action is confirmed by the local board of equalization, which refuses to interfere because in sympathy with the feelings which actuated the assessors, is there no remedy? Now, if the charges in the present bill be true, the state board, actuated by passion and prejudice, and with a design to discriminate against railroads, and without evidence, have assessed the property not only higher than it was valued by the companies, on oath, but higher than it was valued by the county courts, and much higher than it was valued upon evidence by committees of their own
In order to bring this matter before a full court, and to give the defendants an opportunity to answer the charges in the biHs, if they so desire, I have thought it best to allow temporary injunctions to issue, unless the defendants are willing to let the collection of the taxes rest until the views of - the court can be had. We will give every facility for bringing the question to a speedy hearing, and the comities, etc., can at any time, if this is deemed desirable by them, have the injunctions modified so as to allow them to collect taxes so far as the admitted value of the property shows a liability, or so far as we see it to be equitable; or we can refuse to continue the injunction, except on condition that such a portion of the taxes be paid into court for the use of the state, counties, and towns entitled thereto. At present, and until the views of the court are settled concerning the -right to maintain these bills, it is, perhaps, best not to complicate the cases by requiring payment of a proportion of the assessed taxes as a condition of the injunction. Inasmuch as there exist doubts as to the right to maintain these bills, and in view of the fact that the time is only a few weeks distant, it would seem best on all sides to let the matter rest until the court meets, without requiring injunctions to be formally issued, which will be attended with costs; but if the defendants are unwilling to allow this to be done, a temporary injunction may issue in each case, reserving the right of the defendants to move at the next term to dissolve it, with or without answer,' as they may be advised. If answers are to be filed to resist the injunctions, let this be done by the Septem-her rules, and any affidavits In support thereof by September 15th, and counter-affidavits by September 25th. Motions to dissolve or modify the injunctions may be set down for the second Tuesday of the term. Ordered accordingly.