214 F. 180 (8th Cir. 1914), 4039, Wells Fargo & Co. v. Johnson

Docket Nº:4039, 4040.
Citation:214 F. 180
Party Name:WELLS FARGO & CO. v. JOHNSON, Treasurer of State of South Dakota. FARGO v. SAME.
Case Date:April 24, 1914
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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Page 180

214 F. 180 (8th Cir. 1914)

WELLS FARGO & CO.

v.

JOHNSON, Treasurer of State of South Dakota.

FARGO

v.

SAME.

Nos. 4039, 4040.

United States Court of Appeals, Eighth Circuit.

April 24, 1914

Syllabus by the Court.

In 1910 the Constitution of South Dakota provided that 'all taxation shall be equal and uniform,' that 'all taxes to be raised in this state shall be uniform on all real and personal property according to its value in money to be ascertained by such rules of appraisement and assessment as may be prescribed by the Legislature by general law, so that every person and corporation shall pay a tax in proportion to the value of his, her or its property. And the Legislature shall provide by general law for the assessing and levying of taxes on all corporation property, as near as may be, by the same methods as are provided for assessing and levying taxes on individual property. ' While the property of individuals and of the great majority of the taxpayers in the state was assessed according to its actual value in money, without considering the earnings of its respective owners, and taxes were levied at a uniform rate on all assessments, the Legislature required the State Board of Assessment and Equalization, in making the assessments upon the property of each express company doing business in that state, to 'take into consideration the gross earnings of said company within the state for the year ending on the 30th day of April preceding' (Laws of South Dakota 1907, c. 64, Sec. 17), and the board did so and measured the assessments of the property of such companies by the companies' earnings far more than by other matters considered.

Held, the provision of section 17 quoted violated the provisions of the Constitution quoted, and the assessments of the property of the express companies were void.

'General expressions in every opinion are to be taken in connection with the case in which those expressions are used. If they go beyond the case they may be respected, but ought not to control the judgment in a subsequent suit, when the very point is presented for decision.'

Systematic, repeated, continuing violations of the Constitution or the law in the making of assessments and the levying of taxes, like continuing trespasses, justify an injunction against the continuance of such a course and the collection of taxes so levied.

Page 181

C. O. Bailey, of Sioux Falls, S.D. (Bailey & Voorhees, of Sioux Falls, S.D., and Joseph W. Welsh and Charles W. Stockton, both of New York City, on the briefs), for appellants.

Royal C. Johnson, Atty. Gen., of South Dakota, and L. T. Boucher, of Aberdeen, S.D., for appellee.

Before SANBORN and CARLAND, Circuit Judges, and RINER, District Judge.

SANBORN, Circuit Judge.

These are appeals from decrees which dismissed complaints to enjoin the treasurer of South Dakota from collecting taxes levied against the plaintiffs by the state board of assessment and equalization of the state of South Dakota in the year 1910. The plaintiffs are express companies, and they claim that the assessments of their property made by the board in 1909 and 1910, on which it levied the taxes in those years, were made in violation of the Constitution of the state of South Dakota, in that in making them it took into consideration their earnings in the state while the earnings of the great majority of the taxpayers of the state were not considered in assessing their property for taxation, that these assessments were made in violation of the statutes of that state, in that the board based them on a certain percentage of the respective amounts the plaintiffs paid to the railroad companies for transportation services in South Dakota, instead of founding them on the values of their personal and real properties, and for other reasons. They brought suits on these grounds to enjoin the collection of the taxes in 1909 against them. Those suits were heard and decided in their favor by Judge Willard, and decrees for injunctions were rendered, from which no appeals were ever taken. Before the decision of those cases was made the board had made the

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assessments of 1910, which the court below has sustained in these cases, and that ruling is assigned as error. These cases were heard together, and whatever is said concerning one of them in this opinion which is not clearly applicable to that one alone is equally applicable to the other.

The Constitution of South Dakota in force in 1909 and 1910 provides in article 6, Sec. 17, that 'all taxation shall be equal and uniform,' and in article 2, Sec. 2, that:

'All taxes to be raised in this state shall be uniform on all real and personal property, according to its value in money, to be ascertained by such rules of appraisement and assessment as may be prescribed by the Legislature by general law, so that every person and corporation shall pay a tax in proportion to the value of his, her or its property and the Legislature shall provide by general law for the assessing and levying of taxes on all corporation property, as near as may be, by the same methods as are provided for assessing and levying of taxes on individual property.'

Section 17 of chapter 64 of the Laws of South Dakota 1907, which was in force in 1909 and 1910, provides that the board shall:

'On the first Monday in July each year assess all the property of every express and sleeping car company doing business in this state and used in the operation and maintenance of its business, and in doing so shall take into consideration the gross earnings of said company within the state for the year ending on the thirtieth day of April preceding the statements made by said companies and by the board of railway commissioners and any and all other matters necessary to enable them to make a just and equitable assessment of said property in the same ratio as the property of individuals.'

And that:

'Said board shall levy a tax upon said property, which tax shall be equal to the average amount of state, county, school, municipal, road, bridge and other local taxes levied upon other property for the preceding year.'

Section 16 of the act provided that every express company doing business within the state must transmit to the state auditor, on or before July in each year, a statement of the gross earnings of the total business of the company transacted in the state for the year ending April 30th preceding, and of the value of its office furniture, fixtures, and real estate within the state. Wells Fargo & Co. made a statement to the auditor in June, 1910, that its gross earnings within the state for the year ending April 30, 1910, were $131,096.28, and that the value of its office furniture, fixtures, and real estate was $18,473.98. The board assessed the value of its property $289,877, and assessed a tax of 28 mills on the dollar upon it, which made its tax $8,116.65. The American Express Company made a similar report, and received a similar assessment. It is admitted in the answer, and the testimony for the defendant was, that in making these...

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