Taylor v. Louisville & N.R. Co.

Decision Date05 July 1898
Docket Number599.
PartiesTAYLOR et al. v. LOUISVILLE & N.R. CO.
CourtU.S. Court of Appeals — Sixth Circuit

The Louisville & Nashville Railroad Company-- a c organized and existing under the laws of the state of Kentucky, and a citizen of that state--owns 519 miles of railroad in Tennessee. It filed its bill in equity in the circuit court of the United States for the Middle district of Tennessee against R. I. Taylor, W. S. Morgan, and E. B. Craig, citizens of Tennessee, who constitute a board of equalization of the state of Tennessee, to enjoin them from certifying, in accordance with the act of the legislature of Tennessee passed April 5, 1897, a tax valuation upon complainant's railroad in Tennessee, to be apportioned by the state comptroller to the 35 counties, cities, and towns in which the road lies. Under the act of 1897, railroad, telephone and telegraph property is assessed biennially by three members, known as 'State Tax Assessors,' whose assessment must be revised upon the record by another board called the 'Board of Equalization,' composed of the governor, secretary of state, and treasurer. The appellate board is given the power to examine each assessment, and increase or diminish the valuation upon any one or more of the properties assessed, so as to fix the proper value; and, until this board has acted upon the assessments, they are not deemed complete. The valuations fixed by the appellate board are certified to the comptroller, and he, in turn, certifies to the various counties and municipalities the valuation upon which taxes are to be collected by the respective counties and municipalities, the apportionment being graduated according to the mileage or value of the property assessed in each county and municipality. Under other laws of Tennessee, real and personal property of all persons, except railroad, telephone, and telegraph companies, is assessed by the taxing officers of each county. In counties having a population of 60,000 and over, one assessor for the county is elected, whose duty it is to assess all property in the county. In counties having a less population, each civil district has one assessor. Each assessor, before entering upon his duties, is required to enter into a bond in the sum of $5,000, conditioned that he shall faithfully and honestly discharge the duties of his office, and to take and subscribe an oath that he will assess property at its fair cash valuation, without fear or favor. A board of equalization is provided for each county, composed of the judge or chairman of the county court, and four freeholders, not members of the county court, and not holding any other office,-- state, county, or federal. These various boards meet in their respective counties, and compare and equalize the assessments of property made in and for the particular county. If the board desires to raise the value of any taxpayer's property, it can be done, upon notice to the taxpayer. Assessments of real estate made in 1896 were made for the biennial period of 1896 and 1897. Beginning with 1898, the assessments of realty are to be made every fourth year. Personal property is assessed annually. Until 1895 no attempt had ever been made to equalize the assessments of real estate of personalty, as between the different counties; but at its session in that year the general assembly created a state board of equalizers, for the purpose of equalizing the values of real estate in the various counties. The same board was given power to assess and apportion the value of railroads throughout the state. In 1896 the board of equalizers assessed the complainant's railroad for the taxes of 1896 and 1897 as follows: The main line, at the rate of $31,000 a mile; the Nashville & Decatur division, at the rate of $21,000 a mile; the Henderson division, at the rate of $20,000 a mile; the Memphis division, at $13,500 a mile; the Cumberland Valley division, at the rate of $15,000 a mile; the Clarksville & Princeton division at the rate of $4,000 a mile. By the act of April, 1897, the board of equalizers was abolished, and the duty of assessing railroads was imposed on a state board of tax assessors and a revisory board called the 'Board of Equalization,' but no power was given to the new board to equalize real estate. The board of state tax assessors made an assessment of railroads for 1897 and 1898, treating the assessment by the board of equalizers as annulled by the new law. Their valuation of complainant's main line was $65,000 per mile; of the Nashville & Decatur division was $47,000 per mile; of the Henderson division, $62,000 per mile; of the Memphis division, $27,000 per mile; of the Cumberland Valley division, $23,500 per mile; of the Clarkesville & Princeton division, $5,000 per mile; and of the Clarkesville & Mineral division, $7,000 per mile. The appellate board of equalization on appeal reduced the assessment on the main line from $65,000 to $60,000; on the Henderson division, from $62,000 to $55,000; on the Nashville & Decatur division, from $47,000 to $40,000 per mile,-- but in other respects affirmed the action of board of assessors.

Among other grounds set forth in the bill for equitable relief against this increase in the assessment is the following averment with reference to the evidence brought out before the state tax assessors: 'That the complainant also filed in its behalf before said assessors, a large number of affidavits (about 155 in number) made by tax assessors trustees, other officials, and real-estate owners, which showed that in the counties through which plaintiff's said roads ran, and in the counties through which other railroad properties assessed at the same time by said assessors ran, real estate, generally and systematically, was assessed for taxation at from fifty to seventy per cent. of its value. These affidavits varied in form, but the general tenor and result of them, and of depositions taken and filed as evidence by plaintiff, was to establish the fact that property generally in Tennessee, other than railroad property, by assessments generally and purposely made, does not bear a burden of taxation at a greater proportion than an average of sixty per cent. of its market value; and plaintiff alleges that such is the case, and that its said properties for said years, as finally fixed by said board of equalization, were assessed at more than their full value. Recognizing the fact that throughout the state of Tennessee property had been systematically assessed, from time immemorial, at a valuation for the purpose of taxation greatly less than its actual value, and at a valuation ranging from fifty to about sixty-five per cent. thereof, the state of Tennessee, through its board of assessors and equalizers, during the years 1895 and 1896 endeavored to systematize the county assessments, and bring them up to a common standard or basis of valuation. Accordingly the said board established as the basis of assessment for taxation in all of the counties of the state seventy-five per cent. of the actual or true value of the lands or property to be assessed, and raised the assessment in the various counties of the state for both said years, where they were less than seventy-five per cent., to seventy-five per cent. Plaintiff further shows that the said board of assessors and equalizers was the first state board of equalizers in the state of Tennessee, and was a legislative recognition of the systematic usage and custom of valuation prevailing, and the legislative purpose to render it uniform throughout the state. Plaintiff further states that said board of assessors and equalizers was not only intrusted with the power of equalizing assessments throughout the state, but also with the duty of assessing railroad, telegraph, and telephone properties for taxation; and it avers and charges that the assessment made by said board, and the valuation fixed upon said properties, were made by them at the rates fixed for the purpose of equalizing the assessments of such properties with those of the lands of Tennessee. If said assessments (i.e. those against which an injunction is prayed) stand, plaintiff will be bearing, in comparison with other property assessed in the state of Tennessee, at least twenty-five per cent. more than its just proportion; and the burden of taxation thus imposed upon it will be unequal, and in contravention of the constitution of the state of Tennessee, which provides that all property shall be taxed according to its value, and so that taxes shall be equal and uniform throughout the state, and so that no one species of property from which a tax may be collected shall be taxed higher than any other species of property of the same value, and also in contravention of the constitution of the United States, which guaranties to plaintiff and its property the equal protection of the laws. ' The bill further avers: 'In pursuance of said assessment act, said board of equalizers will, as they have informed plaintiff's counsel, unless prevented, certify at 12 m., November 30, 1897, to the comptroller, the valuations so fixed by them upon said property. The comptroller will proceed, after said assessment shall have been certified to him according to the course of law, the several towns, cities, and counties through which said roads pass, the said assessments; and the said towns, cities, and counties will proceed, under said act, to collect the same. Under said act, said taxes so assessed in behalf of the state, counties, and cities will become a first lien upon the property from the 10th of January of the year for which they are assessed. If the said taxes are not paid as assessed, distress warrants will issue against petitioner; and, if it shall not pay the same, then the comptroller will,...

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