Board of Equalization of Campbell County v. Louisville & N.R. Co.

• Decision Date: 15 April 1908
• Citation: 139 Ky. 386,109 S.W. 303
• Parties: BOARD OF EQUALIZATION OF CAMPBELL COUNTY v. LOUISVILLE & N. R. CO.
• Court: Kentucky Court of Appeals

109 S.W. 303

139 Ky. 386

BOARD OF EQUALIZATION OF CAMPBELL COUNTY v. LOUISVILLE & N. R. CO.

Court of Appeals of Kentucky.

April 15, 1908

Appeal from Circuit Court, Campbell County.

"Not to be officially reported."

A bridge having been assessed as the property of the Louisville & Nashville Railroad Company by the board of equalization of Campbell county, an appeal was taken by the railroad company to the circuit court of that county, where the assessment was annulled, from which determination the board of equalization appeals. Affirmed.

John W Heuver and Brent Spence, for appellant.

H. L Stone, C. H. Moorman, and Benjamin D. Warfield, for appellee.

CLAY C.

The question involved on this appeal is whether or not the bridge formerly owned by the Newport & Cincinnati Bridge Company but now the property of appellee by virtue of a conveyance executed by the former to the latter on July 26, 1904, should be assessed for taxation by the Railroad Commission or by the local authorities in Campbell county. The property in question was assessed by the board of equalization of Campbell county at $1,500,000. From this action of the board an appeal was taken by the Louisville & Nashville Railroad Company to the county court. There it was adjudged that the assessment was invalid, and that the same be stricken from the assessment book. From that judgment an appeal was prosecuted to the circuit court of Campbell county. There it was adjudged that at the time of making the assessment there was no power in the board of equalization, or in the county assessor, to assess the property in question, and that at said time all such power was in the Railroad Commission, and not elsewhere. The judgment further directed that the assessment be stricken from the assessor's book, and that the sheriff of Campbell county collect no taxes thereon. From this judgment the board of equalization of Campbell county prosecutes this appeal.

For a number of years prior to the adoption of the present Constitution, it was the settled policy of this state that railroad property should be assessed as an entirety. By an act of 1864 the railroads were assessed at $20,000 per mile and were required to pay annually the same rate of tax on that assessment as was levied by law on real estate. In the case of Applegate v. Ernst, 3 Bush, 648, 96 Am.Dec. 272, the court held that fragmentary taxation of railroads would be unjust, injurious, and contrary to public policy, and that, under the above act, they were taxable for state revenue, and were not a fit subject for local taxation. By an amended act of March 17, 1876 (1 Acts 1875-76, p. 78, c. 785), local taxation of railroads was authorized, and the assessment thereof by local assessors was provided for. Evidently this method of assessment was soon found to be unsatisfactory for by an act of April 3, 1878 (1 Acts 1877-78, p. 82, c. 764), it was provided that the assessment of railroad property, whether for state, county, or other purposes, should be made by a board of equalization appointed by the Governor for that purpose. By an act of April 19, 1882 (1 Acts 1881-82, p. 66, c. 790), the power of assessment was vested in a railroad commission. In the case of C., N. O. & T. P. Ry. Co. v. Commonwealth, 81 Ky. 492, this court gives the reason why railroad property should not be assessed by the local officer of each county, but should be assessed by a central board, and in the opinion it is said: "The principal object of the Legislature in having this board of commissioners to assess and supervise the taxing of such corporations was that no injustice might be done the companies by subjecting their property to fragmentary assessments, subject to the revision of the supervising board of each county through which the road might run. Fragmentary taxation of the same line of road by a dozen or more different assessors would scarcely produce that uniformity in assessment so absolutely essential to produce equality in taxation, and the legislative purpose was to obviate such an objection and have a uniform assessment of this class of property, and no wiser suggestion could have been well made than to place the valuation in the hands of intelligent freeholders, to be selected by the executive of the state, thus removing the question of value from local influences and prejudices that often result in imposing upon such corporations oppressive burdens." Thus it will be seen that at the time of the adoption of the present Constitution in 1891 it was the settled policy of the state that local taxation of railroads should be based entirely upon the assessment made by the Railroad Commission. Section 182 of the Constitution, adopted in 1891, is as follows: "Nothing in this Constitution shall be construed to prevent the General Assembly from providing, by law, how railroads and railroad property shall be assessed and how taxes thereon shall be collected. And, until otherwise provided, the present law on said subject shall remain in force." Thus it will be seen that the framers of the Constitution recognized the propriety of providing that railroad property should be assessed in a manner different from the assessment of property generally. Prior to the adoption of the present Constitution, it was differently assessed, and by the section above referred to, the power was expressly given to the General Assembly to provide by law how railroads and railroad property should be assessed; and it was further provided that the law then in force should remain until it should be changed by the Legislature. Since that time the Legislature, instead of changing the system, has practically continued it in force, and such continuation has been repeatedly recognized and enforced by this court. Louisville & Nashville Railroad Co. v. City of Louisville, 29 S.W. 865, 16 Ky. Law Rep. 796; Commonwealth, by, etc., v. Union R. T. Co., 80 S.W. 490, 26 Ky. Law Rep. 23. By the act of March 16, 1906 (Acts 1906, p. 139, c. 22), it is provided that "the president or chief officer of each railroad company, or other corporation owning or operating a railroad line, in whole or in part, in this state, and all railroad bridge companies owning or operating the bridge spanning a river constituting the boundary of this state shall, on or before the first of August in each year, return to the Auditor of Public Accounts of the state, under oath, the total length of such railroad, including the length thereof beyond the limits of the state," etc. Counsel for appellant insist that this act does not place the power in the Railroad Commission to assess for taxation the bridge in question. It is unnecessary to determine whether or not the expression "all railroad bridge companies" includes the bridge of appellee. The record shows that the bridge in question was conveyed to appellee in the year 1904, and is now the property of appellee. By the acts in force prior to the act of 1906 all railroad property was subject to taxation by this state, and the assessment thereof was to be fixed by the Railroad Commission alone. It was not intended that any property belonging to a railroad company should be exempt from taxation. In our opinion, therefore, the bridge in question, being owned by appellee, was taxable even prior to the act of 1906; and, being taxable as railroad property, it was proper that the assessment thereof be made by the Railroad Commission.

It is contended by counsel for appellant that under section 181 of the Constitution the Legislature cannot vest in the Railroad Commission power to assess for taxation property not strictly "railroad property," as that section provides that "the General...