*1 692 Bill returning Senate No.
stitutional provision, pre- after it had days, Sundays excepted, ten within not become law. and that it did to him, sented of Claims is of the Court judgment
Affirmed. v. ARKANSAS LUMBER RIVER COMPANY WHITE APPLEGATE, ATTORNEY GENERAL. ex rel. January May 27, 1929. Decided 1929. Argued No. Buzbee, B. George whom with Messrs. Thomas S. Mr. Harrison, brief, T. and A. Buzbee were on the Pugh, H. S. error. plaintiff Vaughan, M. with whom George Messrs. John Rose Applegate, Attorney and H. W. Messrs. R. E. L. Johnson brief, General on the defendant error. delivered the opinion
Mr. Justice Sanford Court. *2 constitutional
This a as to the question involves case 1 of Section law of Arkansas. validity of the set Acts of 1913—which is Act 169 of the Arkansas No. of where, in that because margin1 provides forth the — or assessment, or insufficient valuation or any inadequate any of which undervaluation, any belonged property at the time should have .taxes thereon corporation are overdue and paid, unpaid assessed and there properly or owing taxes thereon to the State a subdivision political in- thereof the shall by any corporation, Attorney General in stitute in the name of for chancery suit the State the collection thereof. 1 This section 1 Act so amended of No. 354 of Acts of the §
as Attorney to read: “Whére the General'is satisfied from his own tp investigations appear or it is in made to him the statement any writing reputable taxpayer State, consequence of any levy of taxes, the failure from because of cause to assess or any pretended levy upon any of assessment and basis of valua money any property than tion other the true value in hereinafter any inadequate'or mentioned or because of insufficient or valuation thereof, assessment of such any or undervaluation or from cause, owing there unpaid are overdue and State, county any or municipal corporation, district, or or road or district, by any corporation upon any school property now in this any belonged corporation which State at the such taxes should time properly have been paid; duty that it shall become his to at-once institute a suit or chancery suits in in the name of Arkansas, State for the collection same, any county which the owing may such taxes- found, be or in county part which of such property may found, as be inor any county any part in which of such may as escaped have in whole in part payment of the taxes as may aforesaid situated ...” & Digest, M. C. provided Tt § was also an earlier act that the political State and its subdivisions should have a lien-on payment for the taxes, of such overdue suit, be enforced this & M. Digest, C. 10207 § under July, proceeding State brought on the rela chancery court, suit in a section, General, against
tion of the
River
Attorney
White
business
foreign corporation doing
Company,
Lumber
for
The com
State,
back taxes.
recovery
alleged that
owned
amended,
plaint,
Company
in four
of valuable timber lands
tracts
counties
large
$30
$50
worth from
an acre but
State,2
and underassessed
taxation for
undervalued
had been
of about
1926, inclusive, at a valuation
1915 to
the years
and un
judgment
overdue
prayed
$4
acre;
per
years
per
cent
their true
for those
paid
had been fixed by
valuation
value —the basis
Tax
Commission —less the
order of
State
assessments
*3
answering,
made. The
denied that
actually
Company,
undervaluation;
claimed that
the
any
there had been
on the same
as like timber
lands had been valued
basis
and
corporations;
other individuals
lands owned
and
1 of
law as
to be en
attempted
that section
the
alleged
due
it,
repugnant
process
forced
thé
clauses
Fourteenth Amendment.
the
finding
years
that for the
chancery
ques
court —
tion the
Island
“
constituting
Big
value of the lands
the
remaining
$50
an
the
group,”3
acre,
^hat
$33.33
lands
an
and that the
aVerage assessments
acre,
had
at
other lands
these counties
approximately
Big
30
cent of their value —back assessed the
Island
per
acre,
other lands at
per acre,
$15
$10
and the
group
per
less
and sold
credits
timber stolen
and the valuations
and,
at which
declared
they
originally assessed;
had been
lien on
the
tracts for the amount of the back
several
due
as thus reassessed.
them, respectively,
Upon
appeals the
Court held that
Supreme
cross
authorizing
that
suits for
fact
back taxes
41,500
These contained
acres.
3 These
7,964
contained
acres.
repugnant
did not render it
applied
to corporations,
State
Amendment;
the Fourteenth
that under it the
maintain
additional
taxes on the
might
suit to recover
ground
inadequate
or insufficient
that
there had been
valuation or assessment of the
that
corporate property;
in such case
reassessment
should be on the same
original
basis
that
which the
as
inadequate
sessment
have been
and that as it
made;
appeared
should
all
that
assessed at an
of 30
average
property-was
cent
per
value,
lands, under
Company’s
uniformity clause of
State
should
Constitution,
cent,
assessed at
despite
that
fact that
the State
per
higher
Commission had
basis.
fixed
these
Applying
rules of law the court found from the testimony that
was not shown that there
had been
or in
inadequate
sufficient valuation of
the lands
except
Big
Island group,
group
but
was a
of lands
body
that were
well
had
unusually
timbered,
a value
pos
sessed
the other
timbered
which were assessed at
$4
$5
per acre,
average
and were of an
value,.
during
entire time covered
ques
the-assessments
tion,
$40
acre,
into
per
taking
timber
account .the
stolen and the timber sold.” And holding
they
should be assessed at a valuation of 30
cent of that
per
amount,
is, $12
acre,
less
valuation on which
per
the taxes had been paid,
decree of
court
chancery
*4
was modified
recovery
so as to
a
of
taxes on
permit
the Big Island group only,
and on those lands
to thé
extent
indicated.
1. It urged is here that of back tax act in providing for the reassessment of corpo- rations judicial by proceedings and the of addi- invposition tional taxes the payment thereon of the as- after taxes sessed by the duly assessing authorities, and constituted' in not providing such reassessment of property belong- ing natural denies to persons, Company and the laws violation
corporations equal protection of the Fourteenth Amendment. unquestioned
We sustain this contention. is cannot as- originar statutes for the the Arkansas providing make distinction be- for taxation no sessment of natural per- tween the and those corporations officers to assess assessing sons duty it is their And the manner, according them in like value. au- question now is whether a statute presented merely have of back lands which thorizing collection their invalid because taxation, is escaped just burden it is on the lands limited recovery additional inadequate at an which have been assessed corporations re- extend to the does not valuation, insufficient of natural on the lands of such additional covery been at an may have persons, likewise The decision or insufficient valuation. inadequate Quaker on which City Penna., S. Cab Co. v. U. a Company chiefly relies, merely question involved invalidity to the the discrimination made statute levying original an tax on the derived gross receipts operation from their of taxicabs. As there question was no whatever as to back taxes and no back involved, decision not act controlling is case. present California, 274 U. S. Whitney 357, 370, we said— “A statute various cases—that: not
citing does violate merely clause because it is not all-embrac A direct may properly legislation State ing ... evil deems without existing covering what it field of abuses . . . The must possible the whole aimed at an evil presumed to be where shows experience legislature, it and to be deemed felt, to be most practical need; coextensive with to be over merely because other bemay suggested thrown instances might being also applied; to which have *5 matter to unless the case for determine legislature And unless the very open objection clear . . . it is not to in or reasonable classification is 'lacking any adequate so was made preclude basis as to that it assumption exercise of the and discretion.” legislative judgment Court These and like have been principles applied made in four cases with classifications- dealing directly back statutes similar legislation. tax
In
Minnesota, 159 U.
S.
Winona & St. Peter Land
v. Co.
provid-
it
statute
which was held that
state
with-
ing for the
of back taxes on real
collection
out
taxes on
a like
including
collecting
provision
personal
Court said:
sustained,
should
The case is
law
different from that of
ordinary
which there
claim that the
may be some foundation
legislature is
to
no discrimination
. .
expected
make
Eor this
generally
statute rests
the assumption that,
all
speaking,
has
reached
property subject
taxation
and aims only
may
for those
provide
accidents
happen
system
under
any
taxation,
consequence
which here and
item of
there some
has
escaped
its proper
may
legislature
and it
well be that the
burden;
in view of the
probabilities
changes in the
or situs
title
of personal
deem it
property might
unwise to
attempt
charge
taxes,
it with back
while
same time, by rea-
real
stationary
estate,
son
character of
it might elect
rate,
that. At
proceed against
if it did
so would
violate
provision
no
the Federal Constitution.
. .
Barker,
York
New
State
But case another an undervaluation mistakenly assessed at difference to reach the between afforded án opportunity by making value an assessment the assessed and actual including of corporate capital, the actual the upon value “ in claim was that this oppor- the real estate. upon assessment real a mistaken tunity to correct its when assessed its corporation upon in case of a estate the in the case of an individual, not exist which does capital, of the denied the equal protection laws.” the “ The contention the court said: mere overruling In in the assessors the case of gives corpo- fact that the law to a correct their arrive at two chances valuation rations have but one the case of indi- when estate, they real a denial to the viduals, be held to be cannot long of the so as laws, the real in, is, of the individual generally estate its fact, fuil valué.” Central,
In &c. R. Reynolds, Co. U. S. Florida 471 held in so far the it was as Federal Con 480, which legislature had the power stitution concerned delinquent from collection compel the railroad years, even made though certain no companies delinquent for the collection “taxes for provision those Court, years quoting on other with approval case, Land Co. said: “If Winona the State, from the as the first seen, power, instance, has been has to clas it has the taxation, right same of classi sify property years past fication as has es must assume that the legislature taxation. We caped judgment for the interests according acts best A intent cannot be to it. wrong imputed Staté. delinquent railroad tax may have found was large, on other small delinquent If special not worth trouble therefor. provision are to then regarded mere debts, effort State to from collect one debtor is prejudiced its failure to make like effort collect another. ifAnd in the truer as a contribution regarded light then it support does not lie the mouth government, one called to make his contribution to upon complain has that some not been coerced into a like person contribution.” Lumber S. 532, 534, Ft. Co. v. 251 U. Smith statute, under the here State, proceeding had involved,
brought a corporation suit to recover back alleged proper to be due valuation of its capital *7 stock in by reason of the fact that its value there assessing of omitted the stock had value owned the corpo in ration two other each of which corporations, paid had “ The corporation ground full taxes. defended on the that are taxed for such subject individuals stock or to suit taxes, back the is for that double, setting up taxation Fourteenth Amendment.” This Court, overruling the defense with regard of confining recovery taxes to those due from corporations,” back said: “It is to be until the presumed, contrary appears, there were reasons for more strenuous efforts to collect admitted dues than other and we cannot cases, it an policy unlawful on the of the pronounce part State. Barker, New York 179 U. See v. S. 283.” no ground We see for Ft. Smith distinguishing case from now under Lumber Co. consideration, authority on and for the reasons stated therein and in the earlier' cases which we have hold that cited, although statute of to the confined deny them equal does not corporations, protection laws in violation of the Fourteenth the. Amendment.
2. It is in behalf urged also of the that even Company, if back tax be valid on its face, it was so in the present Court of the State
applied by Supreme constituting case, thirty-four land, by selecting tracts of on the the same Big reassessing Island group, an average their twelve on years value for average basis assessing them accordance basis of instead assessment actual value according with to the the Arkansas statutes separate on the actual year each tract each separate denial year, for that constitute basis assessment does not equal protection appear, of the laws. constitutional however, ques- from the record that this by the Supreme in or passed tion was presented this sought it was raise State'; ques- and as Court assignments of error tion for the first time from our consideration. necessarily it is' excluded Court, 316; and cases therein cited. Whitney California, supra, by the question presented is record 3. No federal is our The decree consideration. Affirmed. dissenting. Justice Butler, Mr. Arkansas of an provision attacks Plaintiff error repugnant that it statute,* ground Fourteenth Amendment. clause * 1887, p. original passed in 1887.- Laws There Act was *8 1911, is not material here. Laws 1911, in which an amendment (The again 1913, p. in 1913. Laws It was amended p. 324. italicized, are omitted by amendment' and those the last words added brackets.) by in are included it “ Attorney investiga- from General is satisfied his own Where appear writing to him made to statement in tion or it is State, consequence taxpayer of any reputable in any any levy taxes, from cause to assess and or because of failure levy upon any of taxes basis of pretended assessment valuation money any property in than the true value men- other hereinafter inadequate any or or tioned or because valuation assess- insufficient thereof, any or undervaluation such or from ment of unpaid owing cause, State, there are overdue to the
701 that, It directs where because of undervaluation there unpaid upon any are overdue and property which to a belonged corporation at time such taxes should have assessed and paid, Attorney been General shall them unless a suit to collect the title bring to an in- passes suit. No dividual before law the State create? or per- mits the like any enforcement or similar liability against The individuals. fact that the property property is owned is the sole corporation basis of the classifica- The claim here is additional tion. upon land, liable. The and the land alone is owner cannot be held for either the or back taxes. original See decision below, 973. Like Ark. individuals are shown to have been if grossly underassessed. And such lands owned corporations, they Would be liable for taxes.
The discrimination is deliberate. The statute, ipassed “An 1887, is entitled Act to for the provide collection of overdue taxes business in doing It was amended in 1913. In State ex rel. Attor- State.” v. K. ney Ry. General C. & and Bridge Co., 117 Ark. M- 613): (p. the court said object the amenda- of 1913 tory give act complete remedy county municipal any corporation, or or or district, road school or corporation, any district, by any property now in [or] this State any belonged corporation at the time such'taxes should have shall properly paid, duty become his to at once chancery or suits in in the institute a suit name'of the State of same, any of-the county for the collection in which the may found, be owing any such taxes or in corporation county in which may escaped as. of such have part payment may as aforesaid part of the taxes situated, whole or in which corporation owing taxes, such any, or suit suits claiming an interest such person] may as have [or aforesaid, be made shall escaped taxation a party defendant. ” Digest, Moses’ & Crawford § *9 of back taxes due a recovery corporation upon then in property State, belonged any corpo time have been ration at the such taxes should properly paid. away right assessed and It takes conferred where act to original proceed title although had to an it had been owned passed individual, a was and the when the assessment made see concurring taxes were e And payabl opinion, Co., v. Attorney State ex rel. General Bodcaw Lumber Ark. 505, 523. 1925; its brought original
This suit purpose to recover error additional for each plaintiff taxes, years ending of the 10 with on the value stock The capital intangible company’s property.’’ error, plaintiff that had complaint stated paid alleged real Tt personal property. its that tangible property “upon value of its which de- ” had actually paid provided by fendant market was much less than the value of capital stock, was demanded in error for judgment against plaintiff intangibles. back on such 'in But found that the had no company it was estate, real and about the Arkansas other than same time Oil court, State supreme Lyon Refining state [1926] 171 Co., Ark. held stock of capital which is neither located nor used foreign corporation be taxed therein. within cannot the State allege Then the was amended to complaint owned timber lands Arkansas which company had been 12 years ending in each of the underassessed with 1926. with court the lands chancery charged taxes. held there had court underval- The supreme company’s pdrt uation of and that the by the imposed of back taxes decree should amount accordingly. reduced
703 upon ground Such taxes are sole imposed original assessments were too low. through mistake the on is The for the enforcement lands not procedure owner; the State looks affected the character only likely to the are as to land. Lands of individuals n be to belonging undervalued as are those cor- erroneously Attorney General to porations. But the law directs collect not in where the taxes origi- back taxes all cases nally undervaluation, on paid levied and were based but the time belongs where to corporations of the assessment also at time suit. He not is per- to suit make bring mitted to such collections lands if they owned individuals even owned by corpora- tions when undertaxed. As here the Act applied, singles out the of a leaving lands those natural corporation, free persons individual, from such claims. Transfer to an made, prevents operation whenever of the Act. Quaker This case cannot City Cab distinguished Pennsylvania, Co. v. U. 277 S. 389. There the in con- tax gross re- troversy imposed upon corporation’s ceipts derived from -operation taxicabs. But gross of individuals in same receipts line of business were not taxed. And that reason the law was held repugnant The protection clause. Court said (p. 402): Here the tax is one can be upon laid re- ceipts a natural belonging person quite as conveniently as those of a upon corporation. It is not peculiarly ap- as plicable are taxes on their capital stock or franchises! The character the owner is the sole .... fact on which the distinction and discrimination are made depend. merely because the imposed owner is a corporation. The discrimination is not justified difference in the ... situation or character of the It is not property employed.” pretended that such back taxes on lands of individuals may not be imposed as con-
704 veniently corporations. those of The Arkansas a tax imposes liability law a corporation are subjected. which lands of an individual That case rules this one. are there cited support. decision below
But Minnesota, & Land Co. 526; Winona St. Peter U. S. Barker, New York State v. 179 U. S. 285; Florida Central, R. S. Reynolds, 471, 480; &c. R. Co. v. U. Arkansas, 251 and Fort Smith Lumber Co. v. U. S. *11 Minnesota, & St. Peter Land Co. v. did supra, Winona under the any question not clause. present for the A law assessment provided generally state and personal property both real and which had taxation tax roll. Lands of the company omitted 528) the Act. insisted that were assessed under (p. violated the clause process the Act contract due clause. latter contention, company support on personal as to back taxes
argued that, it failed to for provide invalid because notice Act was against fixed them; charges owners before that legislature assumed that the would attempt could not be it alone, and that there- against to enforce back But the state fell. court declined to fore whole Act contention, 512, 521, 40 Minn. that and held pass upon personal taxes on property might event back that action. This ordinary an court personal be enforced . assump- us . 539): It seems to (p. said legislature be believed would tion that it cannot of back taxes on for collection provide never seek to including the same time therein without at real property on- collecting personal back taxes prop- for provision like The case different from that cannot be sustained. erty, there may in which be some tax law ordinary .is legislature expected claim that for the foundation to make no and would not discrimination, attempt pro- vide for the on one kind collection of property without also making provision of taxes on collection all subject taxation . . property equally and it may well be that the legislature view the prob- abilities of changes the title or situs of personal prop- erty might deem unwise to charge it with attempt it back taxes, while at the time, same reason of the sta- tionary real estate, it elect to might proceed character against that.” The court concluded that event was for the state to determine' whether the court Act severable.
Both in back taxes Minnesota on personal owner; against are enforceable taxes and back taxes on are enforced land make land. The did attempt Minnesota Act not n any classification. a discrimination between Moreover, different from personal essentially and land is attempted The equal pro- the Arkansas statute. taxa- tection clause require that, does purposes merchandise, tion, land must be the class with put .in *12 other moneys, credits, livestock and personal property. The in kind are to differences sufficient warrant classifica- tion. Barker,
In supra, controversy York State New corporation’s capital concerned an assessment of a stock. It itself. There was a proceeding was in the reassessing no case of question increasing, The real estate of collecting taxes on land. corporations directly assessed, and required and individuals was law at actual value. this to be there addition, assessment tax, on a stock to capital be imposed from total deducting value all its prop- determined its intangible, debts and the tangible and assessed erty, the remainder to estate, of real be taxed as value capital stock. “ ” real value actual found taxing officers making $965,000 to be and added
estate debts, $1,095,049; deducted they total gross assets, ” estate, $600,000, value real $329,050, and assessed The cor- be as stock. $165,999, to taxed leaving capital assets determining gross total insisted poration value of real estate should be substitútéd the assessed to taxed nothing would leave be actual value; its stock. capital real at taking-of Its contention was its estate value equal value instead denied to it actual 284) This court out pointed laws. (p. protection company’s failure real estate at its that the to assess value for taxation and the use of actual actual separate stock tax could work no capital value ascertain if the real estate of individuals denial full and value as required in fact assessed true . allegation And it “There no . that law. said: has of real either any estate, there undervaluation . regard with individuals or . . corporations. (p. . . in we are . asked . absence of 285). But habitual, or indeed of under- allegations or proof judicial existence, assume or take notice of its valuatipn, undervaluation .would notwithstanding such constitute a . of the law of the State. (p. 286). clear violation Whether, if proved, by counsel, the case as assumed such in fact amount discrimination would as to work denial to against corporations plaintiff laws, question is a not equal protection record, and, therefore, necessary raised no discussion to show that this case requires decided.” in point. is not Central, Reynolds, supra, &c. Railroad Co. v.
Florida providing Florida statute collection of considered The single question railroad properties. *13 backward collect whether to reach 474) (p. was from also making certain without pro- kinds property collecting vision for on other kinds trans- clause, was is gressed held, well that railroads differ from understood, so other kinds The they may separately classified. case has no here. bearing
In Fort Smith Lumber Co. v. supra, the suit obligation to enforce an of the was itself and a claim for taxes The merely against land. com- in that other pany case owned stock two cor- Arkansas shares, claimed it entitled to porations and omit such from the taxable value of its own It stock. defended on that individuals are not taxed on ground such stock for subject to suits “If back taxes. Court said: the State of discourage Arkansas wished to but not forbid the of stock holding one another corporation by and- sought, attain the result this tax or if it simply saw fit to make corporations pay there privilege, would be nothing Constitution to hinder. .. The same regard is true with confining recovery - corporations. those to be due. from contrary presumed, until there appears, .were for more reasons strenuous efforts collect admitted dues from than- in cases,, corporations we cannot pronounce it unlawful the part on policy State.” This the special court assumed that burden was imposed of a definite pursuit purpose part the State in of stock in respect incorporated owners Arkansas cor- That rests porations. ground decision that the to corporations. peculiarly applicable But a tax on land is not.
As the back taxes claimed are enforceable only there is no basis land, the suggestion that there here for more exists reason strenuous efforts to collect from natural persons. than *14 made like that assumption And there is no basis for classification, Fort Lumber Smith Co. case. The land, capricious. is fanciful least when applied Liggett Baldridge, 105, 114. Co. U. S. should be reversed. decree Justice Justice and Me. Van Devanter.
The Chief opinion. in this concur v ATLANTIC MU- COMPANY REFINING
GULF TUAL INSURANCE COMPANY. April Argued May 27, 1929. Decided No. 506. Campbell Ira A. petitioner. Mr. Lyeth Richardson respondent. M.
Mr. J.