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U.S. Supreme Court

American Refrigerator Transit Co. v. Hall, 174 U.S. 70 (1899)

American Refrigerator Transit Company v. Hall

No. 226

Argued and submitted March 16, 1899

Decided April 24, 1899

174 U.S. 70


It having been settled by previous decisions of this Court that where a corporation of one state brings into another state, to use and employ, a portion of its movable property, it is legitimate for the latter state to impose upon such property thus used and employed its fair share of the burdens of taxation imposed upon similar property used in like way by its own citizens, it is now held that such a tax may be properly assessed and collected when the specific and individual items of property so used (railway cars) were not continuously the same, but were constantly changing according to the exigencies of the business, and that the tax may be fixed by an appraisement and valuation of the average amount of the property thus habitually used and employed, and that the fact that such cars were employed as vehicles of transportation in the interchange of interstate commerce would not render their taxation Invalid.

In March, 1896, the American Refrigerator Transit Company, a corporation organized under laws of the State of Illinois, filed in the District Court of Arapahoe County, State of Colorado, against Frank Hall, treasurer of said county, a bill of complaint, seeking to restrain the defendant from enforcing payment by the said transit company of certain taxes assessed upon refrigerator cars owned by the company and used for the transportation of perishable freight over various lines of railroad throughout the United States. The bill alleged that the business in which said cars were engaged was exclusively interstate commerce business, that the company has, and has had, no office of place of business within the State of Colorado, and that all the freight transported in plaintiff's cars was transported either from a point or points in a state outside of the State of Colorado to a point within that state or from a point in the State of Colorado to a point without said state, or between points wholly outside of said state; that said cars had no taxable situs within said state; that said assessment of taxes upon said cars was without authority of

Page 174 U. S. 71

law and void, and that complainant had no plain or adequate remedy a law.

A demurrer to the complaint was overruled, and answer was filed denying some, and admitting other, allegations of the bill. At the trial, the parties agreed to and filed the following stipulation:

"1st That plaintiff is, and was during the times mentioned in the petition, a corporation duly organized and existing by virtue of the laws of the State of Illinois, with its principal office in the City of East St. Louis, in said state; that it is engaged in the business of furnishing refrigerator cars for the transportation of perishable products over the various lines of railroads in the United States; that these cars are more expensive than the ordinary box or freight car; that the cars referred to are the sole and exclusive property of the plaintiff, and that the plaintiff furnishes the same to be run indiscriminately over any lines of railroad over which shippers or said railroads may desire to route them in shipping, and furnishes the same for transportation of perishable freight upon the direct request of shippers, or of railroad companies requesting the same on behalf of shippers, but on the responsibility of the carrier, and not of the shipper; that, as compensation for the use of its cars, plaintiff received a mileage of three-fourths of a cent per mile run from each railroad company over whose lines said cars are run, such rate of payment being the same as is paid by all railroad companies to each other for the use of the ordinary freight cars of each when used on the lines of others in the exchange of cars incident to through transportation of freight over connecting lines of railroads; that plaintiff has not, and never has had, any contract of any kind whatsoever by which its cars are leased or allotted to, or by which it agrees to furnish its cars to, any railroad company operating within the State of Colorado; that it has and has had during said times no office or place of business, nor other property than its cars, within the State of Colorado, and that all the freight transported in plaintiff's cars in or through the State of Colorado, including the cars assessed, was transported in such cars either from a point or points in a State of the United

Page 174 U. S. 72

States outside of the State of Colorado to a point in the State of Colorado, or from a point in the State of Colorado to a point outside of said state, or between points wholly outside of said State of Colorado, and said cars never were run in said state in fixed numbers, nor at regular times, nor as a regular part of particular trains, nor were any certain cars ever in the State of Colorado except as engaged in such business aforesaid, and then only transiently present in said state for such purposes."

"That owing to the varying and irregular demand for such cars, the various railroad companies within the State of Colorado have not deemed it a profitable investment to build or own cars of such character , and therefore relied upon securing such cars, when needed, from the plaintiff or corporations doing a like business."

"That it is necessary for the railroad companies operating within the State of Colorado, and which are required to carry over their lines perishable freight such as fruits, meats, and the like, to have such character of cars, wherein they can safely transport such character of freight."

"2d. That the average number of cars of the plaintiff used in the course of the business aforesaid within the State of Colorado during the year for which such assessment was made would equal forty, and that the cash value of plaintiff's cars exceeds the sum of $250 per car, and that, if such property of the plaintiff is assessable and taxable within such State of Colorado, then the amount for which such cars, the property of the plaintiff, is assessed by said state board of equalization is just and reasonable, and not in excess of the value placed upon other like property within said state for the purposes of taxation."

"3d. That said company is not doing business in this state except as shown in this stipulation and by the facts admitted in the pleadings."

"4th. That in case it be found by the court, under the undisputed facts set forth in the pleadings and the facts herein stipulated, that the authorities of the State of Colorado, under existing laws, have no power to assess or tax the said property of plaintiff, then judgment shall be entered herein for the

Page 174 U. S. 73

plaintiff for the relief prayed; otherwise, judgment shall be entered for the defendants."

"The following constitutional and statutory provisions are referred to in the opinion:"

" All corporations in this state, or doing business therein, shall be subject to taxation for state, county, school, municipal, and other purposes, on the real and personal property owned or used by them within the territorial limits of the authority levying the tax."

"(§ 10, art. 10, state const.)"

" SEC. 3765 (M.A.S.). All property, both real and personal, within the state, not expressly exempt by law, shall be subject to taxation. . . ."

" SEC. 3804. . . . It shall be the duty of said board [the board of equalization] to assess all the property in this state owned, used or controlled by railway companies, telegraph, telephone and sleeping or palace car companies."

" SEC. 3805. The president, vice-president, general superintendent, auditor, tax agent, or some other officer of such railway, sleeping or other palace car, or telegraph or telephone company, or corporation owning, operating, controlling, or having in its possession in this state any property shall furnish said board on or before the fifteenth day of March, in each year, a statement signed and sworn to by one of such officers, and showing in detail for the year ending on he thirty-first day of December preceding:"

"5th. A full list of rolling stock belonging to or operated by such railway company, setting forth the number, class and value of all locomotives, passenger cars, sleeping cars or other palace cars, express cars, baggage cars, mail cars, box cars, cattle cars, coal cars, platform cars, and all other kinds of cars owned or used by said company. The statement shall show the actual proportion of the rolling stock in use on the company's road, all of which is necessary for the transportation of freight and passengers, and the operation of the road within the state during the year for which the statement is made. The said statement shall also show the actual proportion of rolling stock of said company used upon leased lines and lines operated with others within the

Page 174 U. S. 74

state, the mileage so leased and operated and the location thereof. . . ."

"7th. . . . Whenever it shall be found that one corporation uses or controls any property belonging to or owned by another corporation, said board may assess such property either to the corporation using or controlling the same, or to the corporation by which it is owned or to which it belongs. But every such corporation shall, in the statement to said board, set forth what property belonging to or owned by any other corporation is used or controlled by the corporation making the statement."

The cause having come on to be heard, judgment was entered on behalf of the plaintiff, awarding a perpetual injunction as prayed for in the bill of complaint. Thereupon an appeal was taken to the supreme court of the state, from whose decision, reversing the judgment of the trial court and directing the dismissal of the bill, an appeal was taken to this Court.

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