CINCINNATI, N.O. & T.P. R. CO. V. COMMONWEALTH, 115 U. S. 321 (1885)

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U.S. Supreme Court

Cincinnati, N.O. & T.P. R. Co. v. Commonwealth, 115 U.S. 321 (1885)

Cincinnati, New Orleans and Texas

Pacific Railroad Company v. Commonwealth

Argued October 16, 19, 1885

Decided November 16, 1885

115 U.S. 321


A state statute for raising public revenue by the assessment and collection of taxes which gives notice of the proposed assessment to an owner of property to be affected by requiring him at a time named to present a statement of his property, with his estimate of its value, to a designated official charged with the duty of receiving the statement, which fixes time and place for public sessions of other officials at which this statement and estimate are to be considered, where the official valuation is to be made and when and where the party interested has the right to be present and to be heard, and which affords him opportunity, in a suit at law for the collection of the tax, to judicially contest the validity of the proceeding does not necessarily deprive him of his property without "due process of law" within the meaning of the Fourteenth Amendment to the Constitution of the United States.

Page 115 U. S. 322

A state law for the valuation of property and the assessment of taxes thereon which provides for the classification of property subject to its provisions into different classes, which makes for one class one set of provisions as to modes and methods of ascertaining the value and as to right of appeal, and different provisions for another class as to those subjects, but which provides for the impartial application of the same means and methods to all constituents of each class, so that the law shall operate equally and uniformly on all persons in similar circumstances denies to no person affected by it "equal protection of the laws" within the meaning of the Fourteenth Amendment to the Constitution of the United States.

The Commonwealth of Kentucky brought its several actions against the railroad companies above named as plaintiffs in error respectively to recover the amounts of certain taxes levied against each of them under the provisions of "An act to prescribe the mode of ascertaining the value of the property of railroad companies for taxation and for taxing the same," approved April 3, 1878. Bullitt & Feland's General Statutes of Kentucky, 1881, 1019.

As the validity of this statute is drawn in question in these actions, it is here set out in full as follows:

"§ 1. Be it enacted by the General Assembly of the Commonwealth of Kentucky that the president or chief officer of each railroad company or other corporation owning a railroad lying in this state shall, in the month of July in each year, return to the Auditor of Public Accounts of the state, under oath, the total length of such railroad, including the length thereof beyond the limits of the state, and designating its length within this state, and in each county, city, and incorporate town therein, together with the average value per mile thereof, for the purpose of being operated as a carrier of freight and passengers, including engines and cars and a list of the depot grounds and improvements and other real estate of the said company, and the value thereof, and the respective counties, cities, and incorporated towns in which the same are located; that if any of said railroad companies owns or operates a railroad or railroads out of this state, but in connection with its road in this state, the president or chief officer of such company shall only be required to return such proportion of the entire value of all its rolling stock as the number of miles

Page 115 U. S. 323

of its railroad in this state bears to the whole number of miles operated by said company in and out of this state."

"§ 2. That should any railroad or part of a line of railroad in this state be in the hands or under the control of a receiver or other person by order or decree of any court in this or any other state, it shall be the duty of such receiver or other person to make, under his oath, the returns and valuations required by the first section of this act, and should such president or chief officer of any railroad company or such receiver fail to make said returns and valuations on or before the first day of August in each and every year, the said auditor shall proceed and ascertain the facts and values required by this act to be returned, and in such manner and by such means as he may deem best, and at the cost of the company failing to make the returns and values."

"§ 3. That the governor of the state, on or before the first day of August, 1878, shall appoint three disinterested freeholders, citizens of this state, who shall constitute a board of equalization, who shall meet annually at the office of the Auditor in Frankfort on the first day of September in each year, a majority present constituting a quorum, for the transaction of business, and at the said meetings the auditor shall lay before them the returns made to him under this act, and any schedules and valuations as he may have made under the second section hereof, and should the valuations, or any of them, in the judgment of said board, be either too high or too low, they shall correct and equalize the same by a proper increase or decrease thereof. Said board shall keep a record of their proceedings, to be signed by each member present at any meeting, and the said board is hereby authorized to examine the books and property of any railroad company to ascertain the value of its property, or to have them examined by any suitable disinterested person, to be appointed by them for that purpose. The members of said board shall hold their office for the term of four years, and shall receive for their services ten dollars per day, and all traveling and other necessary expenses while in actual service provided, that said service shall not be for a longer period of time than twenty days in any

Page 115 U. S. 324

one year, and before proceeding to act under their appointment, they shall take an oath before the governor of the state that they will faithfully and impartially perform their duties as members of said board of equalization, and in the case of the death, resignation of either, or failure to act, the governor shall fill the vacancy by another appointment."

"§ 4. The same rate of taxation for state purposes, which is or may be in any year levied on other real estate in this commonwealth shall be and is hereby levied upon the value so found by the said board, of the railroad, rolling stock, and real estate of each company, and the same rate of taxation for the purposes of each county, city, town, or precinct in which any portion or any railroad is located which is or may be in any year levied on other real estate therein shall be and is hereby levied on the value of the real estate of said company therein and of the number of miles of such road therein reckoned as of the value of the average value of each mile of such railroad with its rolling stock as ascertained as aforesaid. And immediately after the said board shall have completed its valuations each year, the Auditor of Public Accounts shall notify the clerk of each county court of the amount so assessed for taxation in his county, and each railroad company of the amount of its assessment for taxation for state purposes, and for the purposes of such county, city, town, or precinct. And all existing laws in this state authorizing the assessment and taxation of the property of railroad companies by counties, cities, or incorporated towns are hereby repealed, and no county, city, or incorporated town in this state shall hereafter assess, levy, or collect any taxes on the property of railroad companies of this state except as provided by this act."

"§ 5. All taxes levied under the provisions of this act shall be paid on or before the 10th day of October in each year, and for a failure to pay the same, the officers of the said companies shall be subject to the same penalties to which they are now subject for a failure to pay the taxes now levied by law. And the taxes in behalf of the commonwealth may be recovered by action in the Franklin Circuit Court, and those in behalf of

Page 115 U. S. 325

the counties by actions in the courts of civil common law jurisdiction in such counties respectively."

"§ 6. That all laws in conflict with this act are repealed."

"§ 7. This act shall take effect from its passage."

The powers and duties conferred by this act upon the board of equalization were by a subsequent act, approved April 19, 1882, devolved upon the board of railroad commissioners, appointed under an act approved April 6, 1882. These actions were brought in the Franklin Circuit Court in pursuance of the fifth section of the act. The cause of action against the Cincinnati, New Orleans and Texas Pacific Railroad Company was set out in the petition, according to the practice in Kentucky, as follows:

"The plaintiff states that the defendant is a railroad company and corporation, and is and was during the year 1882 the owner of, by lease, and operating, a line of rail way lying in the State of Kentucky known as the Cincinnati Southern Railway, and the same constructed under, and chartered and incorporated by, an act of the General Assembly of the commonwealth of Kentucky, entitled"

"An act to authorize the trustees of the Cincinnati Southern Railway to acquire the right of way and to extend a line of railway through certain counties in this commonwealth,"

"approved February 13, 1872."

"Plaintiff states that the defendant, for the purpose of assessment and taxation for the year 1882 as required by law, reported to the Auditor of Public Accounts of the State of Kentucky the total length of said road owned and operated by it as aforesaid and the value thereof per mile, and also reported its engines, cars, depot grounds, improvements, and other real estate and the value thereof. The total valuation of said roads, including sidings and other taxable property as reported, was ___ dollars."

"Plaintiff states that after said report and valuation was made to the Auditor of Public Accounts by the defendant, the board of railroad commissioners, who by law constitute a board of equalization to value and assess the railroad property of the state, after being sworn as required by law, met on the first day of September, 1882, at the office of the auditor in

Page 115 U. S. 326

Frankfort, and with a majority of said board present, constituting a quorum, the auditor placed before them the valuations, returns, and report made to him by defendant."

"Plaintiff states that said board of equalization continued its sittings from day to day, as provided by law, of which the defendant had due notice, and plaintiff avers that defendant did appear before said board by its officers, agents, and attorneys, and presented such facts, figures, and information, and argument in relation to the valuation and assessment for taxation of its said property as it saw proper to."

"Plaintiff states that said board, after a full hearing of defendant, by her officers, agents, and attorneys and a full consideration of said returns, reports, information, and arguments before them, valued and assessed for taxation for the year 1882 the defendant's line of railroad lying in this state, the same reported by defendant to the auditor, together with the rolling stock, engines, cars, depot grounds, improvements, and other real estate at the sum of $6,027,942.00, and on the ___ day of September, 1882, returned and filed with the Auditor of Public Accounts the record of said assessment and valuation, signed and attested, as provided by law, a certified copy of which, marked 'A,' is filed herewith as a part hereof."

"Plaintiff states that the Auditor of Public Accounts, before the 10th day of March, 1882, duly notified defendant of the amount of its assessment for taxation, and, as required by law, opened an account with defendant, charging it with the sum of $28,632.42, the amount of tax due the State of Kentucky upon said assessment and valuation of the defendant's property for the year 1882 at 47 1/2 cents on the one hundred dollars, which is the rate of taxation prescribed by law on such property, and all other real estate of the commonwealth. A certified copy of said account is filed herewith as a part hereof, marked 'B.'"

"Plaintiff states that the defendant is indebted to him in the sum of $28,632.42, taxes due as aforesaid for the year 1882, no part of which has been paid."

"Wherefore plaintiff prays judgment against the defendant

Page 115 U. S. 327

for said debt, and interest from October 10, 1882, and for her costs, and all proper relief."

In the case against the Louisville and Nashville Railroad Company, the petition is substantially the same, except the averment of the valuation of its lines of railroad, which, it is alleged, were valued and assessed at the sum of $15,521,406, on which the amount of tax at 47 1/2 cents to the $100, is $72,726.69, on which there is admitted a credit of $25,000, paid January 22, 1883.

The taxable property of the other plaintiff in error, the Chesapeake, Ohio and Southwestern Railroad Company, it is averred in the petition, otherwise substantially the same as in the other cases, was valued an assessed at $2,791,994, on which the tax levied was $13,261.98, which is credited with $6,798.32, paid January 5, 1883.

An answer was filed in each case, but, so far as they raised an issue of fact, they were withdrawn, and the causes were heard on demurrers, the questions of law being such as arose upon the face of the petitions.

Judgments were rendered in favor of the commonwealth in all the cases, and were affirmed by the Court of Appeals, and thereupon the present writs of error were allowed and have been prosecuted.

Page 115 U. S. 330

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