St. Louis, I.M. & S. Ry. Co. v. Davis

• Decision Date: 08 October 1904
• Docket Number: 1,399.,1,398,1,396
• Citation: 132 F. 629
• Parties: ST. LOUIS, I.M. & S. RY. CO. v. DAVIS et al., State Board of Railroad Assessors. LITTLE ROCK & FT. S. RY. CO. v. SAME. LITTLE ROCK & H.S.W.R.R. v. SAME.
• Court: U.S. District Court — Eastern District of Arkansas

132 F. 629

ST. LOUIS, I.M. & S. RY. CO. v. DAVIS et al., State Board of Railroad Assessors. LITTLE ROCK & FT. S. RY. CO. v. SAME.

LITTLE ROCK & H.S.W.R.R. v. SAME.

Nos. 1,396, 1,398, 1,399.

United States Circuit Court, E.D. Arkansas, Western Division.

October 8, 1904

S. B Johnson and Oscar L. Miles, for complainant.

George W. Murphy, Atty. Gen., and James P. Clarke, for defendants.

TRIEBER District Judge.

The complainant and several other railroads seek to enjoin the defendants from certifying the assessment made by them as a state board of the property of the railroads to the assessors of the various counties, for the purpose of having them placed upon the tax books. The bill is very ably drawn setting up the facts very fully, and at the same time as concisely as possible. The material allegations, so far as they are necessary to a correct understanding of the issues involved on this demurrer to the jurisdiction, may be briefly stated as follows:

The complainant is a railway corporation organized under the laws of the states of Missouri and Arkansas. It owns and operates a railroad from the city of St. Louis, in the state of Missouri, through the state of Missouri, and then through the state of Arkansas, to the boundary line between the states of Arkansas and Texas. It owns and operates numerous branches in Missouri and Arkansas, and also has railroad lines connected with it in the states of Illinois and Louisiana. The total length of main and branch railroads owned by it is 1846.31 miles, of which 987.06 miles are in the state of Arkansas. The bill then sets forth the statutes of Arkansas regulating the assessment of railroad property for the purposes of taxation, those statutes being sections 6464-6469, 6471-6473 of Sandels & Hill's Digest of Statutes of Arkansas, as amended by the act of May 4, 1899 (Acts 1899, p. 244). These statutes provide very fully how the railroad property shall be assessed. Section 6464 constitutes the Governor, Secretary of State, and Auditor of State as the board. Section 6465 provides that on the first Monday in June each year they shall proceed to ascertain the value of all property of railroad corporations. Section 6466 requires the railroads to return sworn lists or schedules of taxable property. Section 6467 requires the railroads to file those schedules on the first Monday in May of each year. Section 6468 requires them to state the fair and actual aggregate value of the whole railroad, taking into consideration the right of way, and estimating everything situated upon such right of way or pertaining to such right of way. Section 6469 requires these schedules to be verified. Sections 6471 and 6472 provide what part shall be deemed real estate and what personal. Section 6473 provides that the board shall meet on the first Monday in August every year, and, after being duly sworn to fearlessly, impartially, and honestly discharge their duties shall proceed to examine the lists or schedules of the description and value of the railroad track of the railroad companies, and shall make an assessment which is fair and reasonable, and thereupon the Secretary of State is to certify to the assessor of each county in which the railroad is located so much of the assessment list of such railroad as is located in said county or city or town, and the assessor shall list and assess the same as real estate.

There is no complaint made that the acts of Arkansas are in any way obnoxious to any constitutional provision, either state or national. But it is charged that, although section 5 of article 16 of the Constitution of the state of Arkansas provides that 'no one species of property from which a tax may be collected shall be taxed higher than another species of property of equal value,' the defendants as the state board have assessed the property of complainant practically at its full value, while all other property in the state of Arkansas is only assessed at about 30 per cent. of its actual value; that in arriving at the value of the complainant's road the board undertook to value the entire railroad system, within and without the state of Arkansas, and wherever located, as a unit, profit-producing plant, including in said valuation property of the value of many millions of dollars, consisting of terminal property located in the city of St. Louis, Mo., and also in the state of Illinois, owned by the complainant and used in connection with its business in Arkansas or elsewhere, and which property is taxed now in other states, and if permitted to be included in this assessment would amount to a double taxation. It is further charged that the board made no inspection or examination of any of the property of the complainant before assessing it, and therefore it is claimed that the acts of the board, in making the assessment as it did, are a violation of the constitutional provision of the state of Arkansas hereinbefore cited, and that it is also void under the fifth and fourteenth amendments to the Constitution of the United States, by depriving complainant of property without due process of law and denying to it the equal protection of the laws.

Another violation of the Constitution of the United States is claimed by reason of the fact that the action of the defendants in taking into consideration all of the property of the complainant, including that situated in states other than the state of Arkansas, for the purpose of arriving at a valuation, is in conflict with the commerce clause of the national Constitution (article 1, Sec. 8). The bill charges the acts of defendants to be in violation of the laws of the state in the following language:

'Wherefore your orator avers that said assessment, made on such basis, was grossly erroneous and a fraud upon your orator, and was not authorized or warranted, but was expressly forbidden by the laws of the state of Arkansas.'

The jurisdiction of this court is not invoked upon the ground that there is a diversity of citizenship, but solely upon the ground that the action of the defendants tends to deprive complainant of the rights guarantied to it by the amendments to the national Constitution as hereinbefore stated, and therefore raises a federal question. Complainant in its bill seeks to do equity by offering to pay the taxes upon what it claims to be a proper basis of valuation-- that adopted for the assessment of all other property in the state-- and submits that the assessment of its property in 1903 was fair and just, and a proper basis for the assessment to be made this year, and it offers to pay the taxes on that assessment.

In determining questions of jurisdiction of the national courts, there are several well-settled rules to govern the courts. Act March 3, 1887, c. 373, 24 Stat. 552, as corrected by Act Aug. 13,1888, c. 866, 25 Stat. 433 (U.S. Comp. St. 1901, p. 507), was intended to contract the jurisdiction of the national courts, and all doubts as to jurisdiction must be resolved against it. Tennessee v. Union & Planters' Bank, 152 U.S. 454, 14 Sup.Ct. 654, 38 L.Ed. 511; Chappell v. Waterworth, 155 U.S. 102, 15 Sup.Ct. 34, 39 L.Ed. 85; Walker v. Collins, 167 U.S. 57, 17 Sup.Ct. 738, 42 L.Ed. 76; Sawyer v. Kochersperger, 170 U.S. 303, 18 Sup.Ct. 946, 42 L.Ed. 1046; Railway Co. v. Bell, 176 U.S. 321, 20 Sup.Ct. 399, 44 L.Ed. 486; Arkansas v. Coal Company, 183 U.S. 185, 22 Sup.Ct. 47, 46 L.Ed. 144; Fergus Falls v. Water Company, 72 F. 873, 19 C.C.A. 212; Montana Company v. Boston, etc., Mining Company, 93 F. 274, 35 C.C.A. 1; Filhiol v. Torney (C.C.) 119 F. 874, affirmed in 194 U.S. 356, 24 Sup.Ct. 698, 48 L.Ed. 1014; Joy v. City of St. Louis (C.C.) 122 F. 524. At the same time it is also well settled that, if it appears from the bill that in any aspect which the case may assume the right to obtain relief may depend upon the construction of a provision of the Constitution or laws of the United States, and is not merely a colorable claim, but rests on a reasonable foundation, the national courts have jurisdiction to determine the case. Illinois Central R.R. Company v. Chicago, 176 U.S. 646, 20 Sup.Ct. 509, 44 L.Ed. 622 (where the court say: 'In determining the existence of a federal question, it is only necessary that it is set up in good faith and is not wholly destitute of merit'); St. Paul, etc., Railway Company v. St. Paul & N.P. Railroad Company, 68 F. 2, 15 C.C.A. 167. But the mere fact that the bill alleges constitutional questions is not sufficient, if it plainly appears that such averment is not real and substantial, but is without color or merit. Newburyport Water Co. v. Newburyport, 193 U.S. 561, 576, 24 Sup.Ct. 553, 48 L.Ed. 795.

The claim of complainant that the action of the defendants is in violation of the fifth amendment to the Constitution cannot be maintained, as that amendment is only intended as a limitation upon the powers of Congress, and does not apply to any actions of the state. Barron v. Baltimore, 7 Pet. 243, 8 L.Ed. 672; Fox v. Ohio, 5 How. 410, 12 L.Ed. 213; Pervear v. Massachusetts, 5 Wall. 480, 18 L.Ed. 608; Davidson v. New Orleans, 96 U.S. 97, 24 L.Ed. 616; Presser v. Illinois, 116 U.S. 265, 6 Sup.Ct. 580, 29 L.Ed. 615; Spies v. Illinois, 123 U.S. 166, 8 Sup.Ct. 21, 22, 31 L.Ed. 80; Talton v. Mayes, 163 U.S. 376, 16 Sup.Ct. 986, 41 L.Ed. 196; Lloyd v. Dollison, 194 U.S. 445, 24 Sup.Ct. 703, 48 L.Ed. 1062.

Nor is the action of the state authorities in the case at bar in any way affected by the commerce clause of the national Constitution. Learned counsel, neither in their oral argument nor in their elaborate and able brief filed in the case discuss that phase, and it may therefore be treated as abandoned; but if the fact that the defendants, as charged in the bill, value the entire property of the complainant,...