Baltimore & O.R. Co. v. Allen

• Decision Date: 15 May 1883
• Citation: 17 F. 171
• Parties: BALTIMORE & O.R. CO. v. ALLEN, Auditor, etc., and others.
• Court: U.S. Court of Appeals — Fourth Circuit

17 F. 171

BALTIMORE & O.R. CO. v. ALLEN, Auditor, etc., and others.

United States Circuit Court, W.D. Virginia.

May 15, 1883

The railroad which reaches from the border of Virginia beyond Winchester to Staunton is owned by four several companies but it is operated by the Baltimore & Ohio Railroad Company the complainant in this cause. The part between the state border and Winchester is owned by the Winchester & Potomac Company; that between Winchester and Strasburg is owned by the Winchester & Strasburg Company; and that between Strasburg and Harrisonburg, by the Virginia Midland Company. These three roads are under lease to the complainant. The road between Harrisonburg and Staunton is owned by the Valley Railroad Company, and is operated by the complainant. The four roads are operated practically as one line by the complainant; none but its own locomotives, cars, and trains being used upon them, and the complainant having the exclusive control of the running of the trains in all the business which is conducted. These roads are all leased by the complainant except the Valley Railroad, which seems to have a contract by which it has reserved the privilege of employing its own depot agents to collect freights, and its own conductors are employes of the complainant for performing the same duties over the entire line. All four of the roads have as a common treasurer, W. H. Ijams, who resides in Baltimore, and has his office in Baltimore.

These railroads were assessed for state taxes in December, 1882, by the board of public works of Virginia, in pursuance of section 20 of chapter 118 of the Acts of 1881-2, p. 506. That section, after requiring certain annual reports from railroad companies, provides as follows in regard to railroads:

'Upon the receipt of every such report, it shall be the duty of the auditor of public accounts to lay the same before the board of public words, who shall * * * proceed to ascertain and assess the value of the property so reported, upon the best and most reliable information that can be procured, and to this end shall be empowered,' etc. 'A certified copy of the assessment, when made, shall be immediately forwarded by the secretary of the board to the president or other proper officer of every railroad * * * company so assessed, whose duty it shall be to pay into the treasury of the state, within sixty days after the receipt thereof, the tax which may be imposed thereon by law. A company failing to * * * pay the tax assessed upon its property shall be immediately assessed, under the direction of the auditor of public accounts, by any person appointed by him for the purpose, rating the value of their real estate and rolling stock at $20,000 per mile, and a tax shall at once be levied on such value of the annual rate of forty cents on the hundred dollars.'

The amount of the assessment made under the first provision of this law was based on a valuation of $15,000 a mile, and was, for the three leased roads, $4,818.12, and for the Valley road $1,593.04, making a total of $6,411.16. Notice was given, during the first week in December, to W. H. Ijams, treasurer, in Baltimore, of this assessment. This notice was repeated during the week which commenced on the fifteenth of January, 1883. The taxes so notified to be due were not paid within 60 days after the notices were sent. On this failure of payment the auditor of public accounts again assessed these roads, in accordance with the second provision of the law above cited, 'rating their real estate and rolling stock at $20,000 per mile. ' This second assessment, of course, added 33 1/3 per cent. to the former one. In pursuance of the same provision of the law, John E. Hamilton, treasurer of the county of Augusta, 'appointed by the auditor for the purpose,' proceeded to make a levy for the several amounts of tax thus assessed by the auditor on the following property of the complainant, viz.: On 22 freight cars at Winchester; on 1 engine and 15 freight cars at Harrisonburg; and on 24 freight cars at Staunton. He also levied on an iron safe and some furniture of the Valley company at Staunton, which was all the personalty of that company which could be found. The levies at Staunton and Winchester were made on the twenty-third of March, and that at Harrisonburg on the twenty-fourth of March last.

On the sixteenth of March, 1883, agents of the complainant had appeared at Richmond and tendered tax-receivable coupons of interest, alleged to have been cut from bonds issued by the state of Virginia, in payment of the several amounts of taxes due under the first assessment that has been described. The tender was made first to the cashier of a bank having deposits of the state under a warrant of the treasurer authorizing the bank to receive the amounts of money due for taxes, and was refused. It was then made to the treasurer and the auditor of the state successively, who each refused the coupons. The agents did not tender the taxes in gold, silver, United States treasury notes, or national bank notes, which are required to be paid in the discharge of taxes by the act of January 26, 1882, (chapter 41, Sec. 1, p. 37, Acts 1881-2,) nor did they deliver, or offer to deliver, the coupons for verification, as required by the act of January 14, 1882, (chapter 7, p. 10, of the same volume.)

Complainant now brings this bill into this court, in which S. Brown Allen, as auditor of public accounts of Virginia; David R. Reveley, as treasurer of Virginia; and John E. Hamilton, as treasurer, residing at Staunton, who is treasurer of the county of Augusta, are made the parties defendant.

The bill recites certain acts of the general assembly of Virginia declaring that coupons of interest, such as those tendered by complainant, shall be receivable in discharge of all taxes and dues to the state; avers the tender of coupons made on the sixteenth day of March, which coupons are now brought into this court; and complains among other things of the seizure of its cars and an engine by Hamilton, the defendant; of irreparable injury sustained; of cloud upon title resulting from illegal levy; of threatened multiplicity of suits; of obstruction in the performance of its duties to the public as a common carrier; and of the penalty inflicted upon it by the second assessment. The bill prays that the said Hamilton may be forever enjoined from further proceeding under the levies he has made; that the court will decree that the taxes first assessed were, by the tender of the coupons and by the bringing them now into this court, paid off and discharged; and that the second assessment and the levies made under it were null and void. On the filing of the bill a motion was made by complainant for a preliminary order enjoining further proceedings under the second assessment, and enjoining the sale of the property levied upon. It is that motion which the court has now to deal with.

Hugh W. Sheffey, A. R. Pendleton, and W. B. Compton, for complainant.

Frank S. Blair, Atty. Gen., for defendants.

BOND J.

The facts in this case, as shown by the affidavits and proofs filed, are few. The complainant is the Baltimore & Ohio Railroad Company, a corporation of Maryland, which operates certain roads in Virginia. These roads were duly assessed for taxes by the state officers to the amount of $6,411, for which sum the complainant tendered in payment coupons of the bonds of the state of Virginia issued under the act of March 30, 1871, 'receivable at and after maturity for all taxes and debts, dues and demands, due the state. ' Not regarding the tender as a legal settlement of the debt, the defendants, as they were required to do by the state law providing for the taxation of railroads, after 60 days' default, assessed the companies 30 per cent. in addition to their real tax as a penalty for their default. The defendant Hamilton, as tax collector, has seized the property of the complainant, and threatens to sell it for the amount of the taxes and the penalty. The bill asks that he may be enjoined from so doing; that the tender of the coupons may be regarded as payment or extinguishment of the debt; and that the company may not be subjected to a penalty for doing what the act of March 30, 1871, contracted with the holder of such coupons he might do.

That the coupons must be received for public taxes, when tendered, the supreme court of the United States has, at its last term, emphatically decided. Antoni v. Greenhow, 2 Sup.Ct.Rep. 91. The language of the court is: 'The right of the coupon-holder is to have his coupon received for taxes when offered. ' The fact here is that the complainant tendered coupons, and that they were rejected and the tax increased because coupons, and not money, were so offered. It is clear, then, that a right of the coupon-holder has been denied, according to the interpretation of the act of March 30, 1871, by the supreme court. What remedy has he?

In the case of Antoni v. Greenhow mandamus was sought as the remedy, but the forms of proceeding in that in Virginia were not complied with, for the reason that the complainant alleged: they were unconstitutional because they impaired the obligation of the contract. But the supreme court decided that the writ of mandamus now existing in Virginia did not differ so much from the remedy existing when the coupons were issued as to impair the obligation of the contract. It expressly decided, as we have seen above, that the right of the coupon-holder was to have them received when offered; but it also decided that if he sought by mandamus to compel such receipt, he must follow Virginia practice in obtaining that remedy.

The allegation or claim of this complainant is that it owes no taxes; that the tender of the amount in coupons...