186 F. 114 | 8th Cir. | 1911
The parties are arranged in this court as they were in the court below, the appellant being the complainant in the court below, and the appellees the defendants in the court below, and will be hereafter referred to as complainant and defendants, respectively.
The amended bill challenges the assessment of complainant’s property for taxation in the state of Oklahoma for the year 1908, and the relief sought is an injunction enjoining the state board of assessors, composed of the Governor, State Auditor, State Treasurer, Secretary of State, Attorney General, State Inspector and Examiner, and President of the Board of Agriculture, and especially the State Auditor, from certifying the assessment made by the board to the various counties of the slate for extension on the tax roll.
It is averred in the bill that pursuant to the requirements of the laws of Oklahoma complainant filed with the state board of assessors a complete statement of all its properties in the state of Oklahoma, with a correct statement of the actual cash value of each item thereof, including the franchise rights in connection therewith; that the board increased the value of its property to three times the amount at which it had been returned; that the valuation as made was arbitrarily made without any justification or excuse; that the act of the board of assessors in so valuing the property of the complainant was fraudulent and wrongful and amounted to denying the complainant the equal protection of the laws and the taking of its property without due process of law; that the board of assessors in so valuing its property intentionally overvalued the same in order to impose upon complainant a greater part than its just share of the burden of taxation. It is further averred that the property of other citizens of the state was assessed at less than 75 per cent, of its actual cash value; -that the property of complainant of like character as that owned by other citizens of the state was assessed at three times its actual cash value;
After averring its willingness to pay the taxes justly due, the bill prays for an injunction enjoining the board and the auditor from acting and dealing with the assessment as a valid and lawful assessment of the property of the complainant, and from certifying the same to the county and other officers of the state. The averments of the amended bill were put in issue by answers by the several defendants, and replications filed to these answers. Testimony was taken, and the case was brought on for final hearing, resulting in a decree dismissing the bill.
The record shows that the complainant is a citizen of the state of New York, that the defendants were all citizens of the state of Oklahoma, and that the amount involved in the suit exceeds the sum of •32,000, exclusive of interest and costs. The Constitution and laws of the United States confer upon the Circuit Courts jurisdiction to hear and determine controversies at law and in equity between citizens of different states in which there is involved more than $2,000, exclusive of interest and costs. This cannot be said to be a suit against the state within the eleventh amendment to the federal Constitution, although the board consists wholly of state officers. It is a suit brought by a taxpayer in which it is charged that the defendants are about to execute a taxing law of the state against the complainant in such a manner that, in view of the mode in which other taxing laws are executed against a large part of the taxable property of the state, the defendants will impose upon the complainant more than its just share of the burden of taxation in violation of its right under the Constitution of the state to pay only an equal share of the taxes in proportion to the value of its property. In other words, it is a suit against individuals by which it is sought to enjoin them from doing certain acts which they assert to be bv the authority of the state, but which the complainant avers in its bill is without lawful authority; Huidekoper v. Hadley, 177 Fed. 1, 100 C. C. A. 395; Smyth v. Ames, 169 U. S. 518, 18 Sup. Ct. 418, 42 L. Ed. 819; Reagan v. Trust Co., 154 U. S. 362, 14 Sup. Ct. 1047, 38 L. Ed. 1014; Pennoyer v. McConnaughy, 140 U. S. 1, 11 Sup. Ct. 699, 35 L. Ed. 363; Poin-dexter v. Greenhow, 114 U. S. 270, 5 Sup. Ct. 903, 962, 29 L. Ed. 185; Cummings v. Bank, 101 U. S. 153, 25 L. Ed. 903.
“One who is entitled to sue in the federal Circuit Court may invoke its jurisdiction in equity whenever the established principles and rules of equity permit such a suit iu that court, and he cannot bo deprived of that right by reason of his being allowed to sue at law in a state court on the same cause of action.”
See, also, Payne v. Hook, 7 Wall. 425, 19 L. Ed. 260; In re Tyler, 149 U. S. 164, 13 Sup. Ct. 785, 37 L. Ed. 689; McConihay v. Wright, 121 U. S. 201, 7 Sup. Ct. 940, 30 L. Ed. 932. The conclusion reached is that the Circuit Court had jurisdiction.
“Sec. 21. There shall be a state board of equalization, consisting of the Governor, State Auditor, State Treasurer, Secretary of State, Attorney General, State Inspector and Examiner, and President of the Hoard of Agriculture. The duty of said hoard shall he to adjust and equalize the valuation of real and persona] property of the several counties in the state, and it shall perform such oilier duties as may be prescribed by law, and they shall assess all railroad and public service corporation property.”
Regulation was necessary to render this provision of the Constitution operative, for it provides that “the board shall perform such other duties as may be prescribed by law.” The Regislature by an act approved April 17, 1908, known as the revenue act, attempted to supply this legislation. Sections 6 and 10 are the only two sections of the act requiring consideration, and are as follows:
“Sec. 6. The Governor. State Auditor, State Tresaurer, Secretary of State, Attorney 'General, State Examiner and Inspector, and President of the Board of Agriculture, shall constitute the state board of equalization, and said board of equalization shall hold a session at the capítol of tho state, commencing on the first Monday in August of said year.
“It shall be the duty of said, board to examine the various county assessments, and to equalize, correct and adjust the same, as between the counties by increasing or decreasing the aggregate asséssed value of the property, or any class thereof, in any way or all of them, to conform to the fair cash value thereof as herein defined, and to order and direct the assessment rolls of any county in this state to be so corrected as to adjust and equalize the valuation of the real and personal property of the several counties in tho state.”
“See. 10. The Governor, State Auditor, State Treasurer, Secretary of State, Attorney General, State Examiner and Inspector, and. President of the Board of Agriculture, shall constitute the board of assessors for the purpose of assessing the property subject to taxation under the law of all public service corporations doing business in this state. Said board shall meet at the oapitol on the first Tuesday of March, 1908, or as soon thereafter as practicable, for the purpose of making the assessment on such properties, and shall assess said properties in the manner provided by the Constitution and laws of this state, taking into consideration all rights, privileges and*122 franchises connected therewith, and shall cause said assessment to he certified, by the State Auditor to the county clerks of the several counties of the state in a manner' provided by law. For the purpose of making said assesment, said board of assessors shall have power to require of any such corporations any' additional information concerning its business and affairs to that now provided by law as it may deem necessary, and shall havé the power of the District Court to compel the production of books and papers. Public service corporations as used in this section shall, in addition to those mentioned in the Constitution, be held to include pipe lines, waterworks, electric light and. power and gas companies. The information furnished by any officer, agent or employe or other representative of any corporation by affidavit or otherwise shall not be binding on the Board of Assessors ór Board of Equalization as to the property and values thereon owned by such corporation or used any place within this state; but such board of assessment and such board of equalization are authorized to add any additional property and to increase the valuation of any such property in order to obtain a full and complete list and schedule thereof at its actual cash value.”
It will be observed that section 6 fixes the time when the board shall meet as a board of equalization, and makes it the duty of the board to examine the values of the assessments, and to equalize, correct, and adjust the same between the counties upon the basis of a fair cash value, and that section 10 constitutes the same officers a board of assessors for the purpose of assessing the property of public service corporations doing business within the state, and fixes the time when the board shall meet as a board of assessors. It specifies what shall be included in such assessment; provides that the auditor shall certify to thp county clerks of the several counties of the state the assessment so made; confers upon the board the power to require any public service corporation to furnish information concerning its property; and authorizes the board of equalization to add any property not returned, and “to increase the valuation of any such property in order to obtain a full and complete list and schedule thereof at its actual cash value.” It is insisted by complainant that by this legislation two separate and distinct boards were created; that section 6 created a board of equalization, and that by section 10 another and independent board was created for the purpose of assessing public service corporations.
. If it he true that the assessment was made by a board other than the 'board authorized by the Constitution to make the assessment, its acts would be invalid. It becomes important, therefore, to determine whether this legislation created two separate boards, or merely provided the manner in which the same board should perform its duties as a board of equalization and as a board of assessors. This depends upon the proper construction of the statute. The statute must, of course, be so construed, if possible, as to avoid conflict with the Constitution. A clear statement of the rule is found in Lewis’ Sutherland’s Statutory Construction (2d Ed.) § 83, where it is said;
“Another universal principle applied in considering constitutional questions is that an act should be so construed, if possible, as to avoid conflict with the Constitution, although such a construction may not be the most obvious or natural one. Courts may resort to an implication to sustain a statute, but not to destroy it. But the courts cannot go beyond the province of legitimate construction in order to save a statute, and where the meaning is plain, words cannot be read into them or out of them for that purpose.”
“The evidence to show the facts on which this claim is based cannot be regarded, for there is no averment in the bill to which 'it can be applied. It is not pertinent to any issue in the case.”
The same suggestion applies to the objection that the assessment is void because the board in making the assessment included the value of complainant’s franchise acquired uncler the laws of the United States, and that the value of such franchise was not given separately and independently from other property, but was included in the total valuation in such a way that no separation could be made. There is no averment in the bill that complainant’s franchise, or any portion of it, was acquired under any law of the United States.
“That the returns made by your orator to the Auditor of the Nfate of the value of each item of its property were made giving due consideration*124 to the value of such franchise as it 'may have in the state not derived from the United States, which are of small value because your orator has not at any time been able, and. is not now permitted, to earn a sufficient amount to pay the cost of maintaining and operating its telegraph system within the state.”
This is not equivalent to an affirmative averment that any part of complainant’s franchise within the state of Oklahoma was derived from the United States; neither is it charged in the bill that the board considered, in arriving at its valuation of complainant’s property, any franchise derived from the United States, and the evidence that the complainant accepted the provisions of the act of Congress of July 24, 1866 (chapter 230, 14 Stat. 221), must therefore be disregarded.
“This, however, is merely a permissive statute, and there is no expression in it which implies that this permission to extend its lines along roads not built or owned by the United States, or over and under navigable streams, or over bridges not built or owned by the Federal government, carries with it any exemption from the ordinary burdens of taxation. * * * It never could have been intended by the Congress of the United States‘in conferring Upon a 'corporation of one state the authority to enter the territory of any other state and erect its poles and lines therein to establish the proposition that such a company owed no obedience to the laws of the state into which it thus entered, and was under no obligation to pay its fair proportion of the taxes necessary to its support,”
See, also, Western Union Telegraph Co. v. Taggart, 163 U. S. 1, 16 Sup. Ct. 1054, 41 L. Ed. 49; Western Telegraph Co. v. Gottlieb, 190 U. S. 412, 23 Sup. Ct. 730, 47 L. Ed. 1116; Telegraph Company v. Texas, 105 U. S. 460, 26 L. Ed. 1067.
“The judgment of a state board empowered to fix the valuation for taxation cannot be set 'aside by the testimony of witnesses that the valuation, was other than that fixed by the board, where there is no evidence of fraud and no gross error in the system on which the valuations were made.” Railway Co. v. Backus, 154 U. S. 421, 14 Sup. Ct. 1114, 38 L. Ed. 1031 ; Adams Express Co. v. Ohio, 165 U. S. 194, 17 Sup. Ct. 305, 41 L. Ed. 683; Coulter v. Louisville & Nashville Rd. Co., 190 U. S. 599. 25 Sup. Ct. 342, 49 L. Ed. 615; C., B. & Q. Ry. Co. v. Babcock, 204 U. S. 585, 27 Sup. Ct. 326, 51 L. Ed. 636.
The record shows that there was a reduction of the valuation on real estate and other property assessed by the township officers, and after local equalization by the county commissioners certified by the counties to the State Auditor. But this was not true of all the property. There was an increase of 4.3 per cent, on pleasure carriages, 7.9 per cent, on watches, 85.3 per cent, on plate and jewelry, 41.2 per cent, on pianos, a reduction of 21.3 per cent, on land, 16.9 per cent, on town lots, and an average reduction upon all property of about 17 per cent. This increase and decrease was based on the assessed valuation fixed by the various county boards of equalization. There is testimony in the record tending to show the actual cash value of propertjr iu the various comities, and this testimony, taken in connection with the original assessments as returned by the county assessors and the general changes made by the state board of equalization, is quite persuasive that tlie board did not reach exact cash values. But it falls far short of establishing that there was any actual fraud on the pari of the board, or that the individual members were actuated by any purpose of intentionally undervaluing the property returned by the several counties for the purpose of making the complainant bear more than its just share of tlie burden of taxation.
While we have not discussed the assignments of error separately, they have all been carefully considered in connection with the record, and we think the evidence fails to warrant the conclusion that the board intentionally undervalued these assessments returned to the Auditor by the several counties, and that, if the property returned by the counties was reduced below its actual cash value, it was an error of judgment rather than any purpose on tlie part of the hoard to under
• The decree of the Circuit Court is affirmed.