Board of Directors of Miller Levee Dist. No. 2 v. Prairie Pipe Line Co.

• Decision Date: 09 August 1923
• Docket Number: 6159.
• Citation: 292 F. 474
• Parties: BOARD OF DIRECTORS OF MILLER LEVEE DIST. NO. 2 v. PRAIRIE PIPE LINE CO.
• Court: U.S. Court of Appeals — Eighth Circuit

292 F. 474

BOARD OF DIRECTORS OF MILLER LEVEE DIST. NO. 2 v. PRAIRIE PIPE LINE CO.

No. 6159.

United States Court of Appeals, Eighth Circuit.

August 9, 1923

Rehearing Denied September 21, 1923.

Henry Moore, Jr., of Texarkana, Ark., for appellant.

David C. Arnold, of Texarkana, Ark., and H. C. Black, of Independence, Kan. (W. H. Arnold and W. H. Arnold, Jr., both of Texarkana, Ark., and T. J. Flannelly and Paul B. Mason both of Independence, Kan., on the brief), for appellee.

Before LEWIS, Circuit Judge, and BOOTH and JOHNSON, District Judges.

BOOTH District Judge.

This is a suit by appellant, plaintiff below, brought in the Sixth chancery district of Arkansas, against various defendants to collect unpaid levee taxes. Appellee, one of the defendants removed its controversy to the federal court, where it was tried. From the decree entered in favor of defendant this appeal was taken.

The material allegations of the bill are that the Miller levee district No. 2 had been created by Act No. 69 of the General Assembly of Arkansas of the year 1911, as amended by Act No 71 of the year 1913; that plaintiff by virtue of the powers granted to it by said acts, and in accordance with the requirements thereof, had levied a tax of 6 per cent. ad valorem upon the assessed valuation of the real estate within said district for the year 1919; that lying within said levee district, among other lands assessed, were six miles of oil pipe lines belonging to defendant, assessed at $42,690; that the amount of the levee taxes for 1919 against defendant was $2,561.40, which became delinquent April 10, 1920, and, with a penalty of $640.35, making a total of $3,201.75, was still due and unpaid.

The defenses set up by the defendant in its answer, may be summarized as follows: (1) No levy or assessment was ever made against any of the property of the defendant; (2) no property of the defendant located within the confines of Miller levee district No. 2 ever appeared upon the real estate assessment book of Miller county, which was designated by the Legislature as the basis for the alleged levy and assessment; (3) all property of the defendant in the district is personal property, and therefore not subject to assessment for local improvements under the Constitution of Arkansas; (4) the pipe line of the defendant is in no manner benefited by the improvements of plaintiff; (5) the alleged assessment against the pipe line of the defendant is wholly arbitrary, illogical, injurious, discriminatory, and void, being in violation of section 5, article 16, of the Arkansas Constitution, and the Fourteenth Amendment to the Constitution of the United States. The decree of the court below was based on the fourth ground of defense.

We take up the last contention first, namely, that the assessment violated the Fourteenth Amendment. Sections 1 and 4 of the act, as amended, creating the levee district, provide:

'Section 1. That all that part of the territory lying in Miller county, Arkansas, Little river county, Arkansas, and Hempstead county, Arkansas, within the following boundaries, to wit:

'Commencing at the point in Miller county, Arkansas, where the state line between the states of Arkansas and Texas intersects the south bank of Red river at or near Index, in the county of Miller, state of Arkansas; thence down Red river in a general easterly direction until the line of the railway tracks of the St. Louis, Iron Mountain & Southern Railroad is reached at a point opposite Fulton, Arkansas; thence in a southerly direction to a point where the section line between sections seventeen (17) and twenty (20), township sixteen (16) south, range twenty-five (25) west, intersects the west bank of Red river at a point south of Garland, Arkansas, the said line from Index to the intersection of the section line between sections seventeen (17) and twenty (20), township sixteen (16) south, range twenty-five (25) west, to follow the meanderings of Red river; thence west along the section line between sections seventeen (17) and twenty (20) and eighteen (18) and nineteen (19), in township sixteen (16) south, range twenty-five (25) west, sections thirteen (13) and twenty-four (24), fourteen (14) and twenty-three (23), and fifteen (15) and twenty-two (22), township sixteen (16) south, range twenty-six (26) west, to the point where said line strikes the high ground, or 'hills'; thence in a northerly direction following the meanderings of the line at the foot of the 'hills' where the high land and overflow lands, or 'bottoms,' join, to the point where the said line between the high land and overflow land intersects the state line between the states of Arkansas and Texas; thence north along said state line to the point of beginning-- be and the same is hereby formed into a levee district to be known as 'Miller levee district No. 2,' the territory added being that part of Little River county and of Hempstead county, Arkansas, lying within and protected from overflow by said levee. * * *

'Sec. 4. That, for the purpose of building, repairing and maintaining the levee aforesaid, and for the purpose of paying such sums as may be necessary for the condemnation of property, and for carrying into effect the objects and purposes of this act, the board of directors of Miller levee district No. 2 shall have power, and it is hereby made their duty, to assess and levy annually a tax upon the valuation as it shall appear each year upon the real estate assessment book for Miller county, Arkansas, Little River county, Arkansas, and Hempstead county, Arkansas, upon all lands and tramroads in said district, and all natural gas or oil pipe lines within said district, and all telegraph lines and all telephone lines within said district, and upon the railroad track of all railroad companies within said district as appraised by the Board of Railway Commissioners under section 6947 of Kirby's Digest, or their successors, and it shall be the duty of the secretary of state to certify to the board of directors of Miller levee district No. 2, the value of such railroad track and telegraph or telephone lines, and natural gas or oil pipe lines, as are located in said district, and the board of directors shall list and assess the same as provided for in section 6945 of Kirby's Digest; but such tax on said lands, natural gas or oil pipe lines, telegraph or telephone lines, tramroads and railroad tracks shall, in no year exceed six per cent. (6%) of the valuation as assessed.'

Two matters must be inquired about: (1) The actual valuation adopted as a basis for the assessment; (2) the method by which the valuation was reached.

1. It is to be noted that the law adopts the 'valuation as it shall appear each year upon the real estate assessment book for the county. ' The valuation in fact used by the board in fixing the tax against defendant was not the valuation of lands owned by the defendant appearing upon the real estate assessment book of the county, although there was on said assessment book a valuation of lands which were owned by the company. These lands, however, did not include right of way for the pipe lines. But the valuation used by the board was that which appeared upon the 'personal assessment and personal tax book,' and covered, as stated by the Arkansas tax commission--

'value of machinery and equipment, telephone lines and phones, conduits, poles, cables, billets, insulators, and all other material used in construction; pipe lines, cars, barges, boats and barrels; all oil and gas on hand; all gas and oil wells owned or leased; all meters, regulators and services belonging to or operated by the Prairie Pipe Line Company on the first Monday in June, 1919, located in the county of Miller, state of Arkansas, and in the cities and incorporated towns in said county, as fixed by the Arkansas Tax Commission for the year 1919. (Everything is assessed as personal property.)'

The total assessed valuation of defendant's property under this heading was, in Miller county, $575,671, of which $42,692 was allocated to school district No. 32, and this latter amount was adopted by plaintiff as the assessed valuation within the levee district, inasmuch as the pipe line of the defendant within the levee district was, with the exception of a very small portion, within school district No. 32. In the present discussion we shall assume, but without so deciding, that for the purpose of this levee assessment, the pipe line-- i.e., the right of way and the pipe-- in the levee district was properly considered as real estate, although the pipe line did not appear on the real estate assessment book.

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