Bush v. Branson

• Decision Date: 16 February 1918
• Docket Number: 4958.
• Citation: 248 F. 377
• Parties: BUSH v. BRANSON, Sheriff and Collector, et al.
• Court: U.S. Court of Appeals — Eighth Circuit

248 F. 377

BUSH v. BRANSON, Sheriff and Collector, et al.

No. 4958.

United States Court of Appeals, Eighth Circuit.

February 16, 1918

W. L Curtis, of Sallisaw, Okl., and Thomas B. Pryor, of Ft. Smith Ark., for appellant.

C. A Starbird, of Alma, Ark., and George B. Rose, of Little Rock Ark. (W. E. Hemingway, D. H. Cantrell, J. F. Loughborough, and V. M. Miles, all of Little Rock, Ark., on the brief), for appellees.

Before SANBORN, Circuit Judge, and TRIEBER, District Judge.

TRIEBER District Judge.

The issue involved is the liability of the appellant, the receiver of the St. Louis, Iron Mountain & Southern Railway Company, duly appointed in a proceeding to foreclose a mortgage executed by the railway company, for assessments on the railroad property for the construction of a road by a road district, created by a special act of the General Assembly of the state of Arkansas, approved April 28, 1911. Act 228, Session Acts of Arkansas, page 642.

The legality of the assessment is attacked upon several grounds. (1) That under the provisions of the act (section 5) the railroad's property was assessed on its 3.6 miles within the district for a sum equal to 28 per cent. of the entire cost of the road. (2) That the assessment not only included the realty of the railroad, but also its rolling stock and materials, which under the Constitution and laws of the state of Arkansas are personalty, amounting to $6,770, the tax thereon being $44.59 annually for the term of 20 years; that the latter is in violation of section 11, art. 17, of the Constitution of the state and section 5 of this act, and also in violation of the equal protection clause of the Fourteenth Amendment, no other person's or corporation's personal property being so assessed. (3) That section 5 of the act provides that the county assessment is adopted, as conclusively determining the benefits from the construction of the road, and that under the laws of the state the property of the railroads is not assessed by county assessors, but by the state tax commission. (4) That the state tax commission is required by the laws of the state to include in the assessment of the railroad property the value of its franchise, in addition to its tangible property, and therefore places a greater burden on the railroad than on other property, in violation of the Constitution of the state and the Fourteenth Amendment. (5) That the act was enacted without notice or investigation, and arbitrarily fixed the charge, in violation of the due process clause of the Fourteenth Amendment to the Constitution of the United States. (6) That the assessment is void, because based on the mileage basis of defendant's property, whereas all other property is on the acreage basis. (7) It is also claimed that the tax is void, so far as it taxes the property of the railroad, because it is in no wise benefited by the building of the road. (8) That the act creating the district is in violation of the constitutional provision of the state of Arkansas (section 26, art. 5), this being a special act, and no notice thereof was published, as required by that constitutional provision.

So far as provisions of the state Constitution are affected, their construction by the Supreme Court of the state is conclusive on the national courts. This disposes of the assignment of error about local and special bills, notice of which had not been published, as it is the settled law of the state that the Legislature is the sole judge whether this provision has been complied with, and if it chose to disregard it, and passed a bill without notice having been published, no issue upon the subject can be raised in the courts. Davis v. Gaines, 48 Ark. 370, 385, 3 S.W. 184; Waterman v. Hawkins, 75 Ark. 120, 86 S.W. 844; Caton v. Drainage Dist., 87 Ark. 8, 112 S.W. 145. This also applies to the contention that the property of the railroad cannot be assessed for benefits derived from an improvement district under the Constitution of the state. That it may be was decided in St. Louis & San Francisco R.R. Co. v. Bridge District, 113 Ark. 493, 168 S.W. 1066.

Does the assessment of the property of the railroad tax it equally with other property in the district, as required by section 5, art. 16, of the Constitution of the state and the Fourteenth Amendment?

That this provision of the Constitution applies to improvement districts was determined in Davis v. Gaines, supra. The claim that section 5 of the act, which makes the county assessment of the property within the district, including railroads, the benefit to the property, is void, because the property of the railroad is assessed by the state taxing board, and not by the county assessor, is untenable, for the state tax commission, after making the assessment, certifies it to each county, and thereupon it is put upon the assessment books, and thereafter becomes the assessment of the county in the same manner as if made by the county assessor. The act does not say 'the assessment made by the county assessor,' but uses the words 'county assessment.'

But the assessment of the railroad property by the state tax commission differs materially from that made by the county assessors, as it includes, not only the value of all the tangible property of the railroad company, but also the intangible property, called the franchise, thereby imposing on it a higher rate of taxation than on all other property of the district, which is clearly in violation of section 5, art. 16, of the Constitution of the state (Ft. Smith, etc., Bridge Co., Ex parte, 62 Ark. 461, 36 S.W. 1060; Bank of Jonesboro v. Hampton, 92 Ark. 492, 123 S.W. 753; State ex rel. v. Meek, 127 Ark. 349, 192 S.W. 202), and the equal protection clause of the Fourteenth Amendment.

The power of the Legislature of a state to charge the cost of local improvements, either according to valuation, or superficial area, or frontage, cannot be questioned. Webster v. Fargo, 181 U.S. 394, 21 Sup.Ct. 623, 45 L.Ed. 912; St. Louis Southwestern R.R. v. Board of Directors, 81 Ark. 562, 99 S.W. 843; Board of Directors v. Crawford County Bank, 108 Ark. 421, 158 S.W. 149; Board of Improvement v. S.W. Gas & Electric Co., 121 Ark. 105, 180 S.W. 764.

The act of the General Assembly, which declared the benefits to the property by the building of the road to be more than the cost thereof, as shown by the county assessment of each piece of property within the district, it is claimed is not due process of law, and therefore void. It is charged in the complaint that the act was passed without any hearing or notice being given, giving the property owners an opportunity to be heard before the enactment of the law. This is not denied, nor is there any provision in the act giving the taxpayer an opportunity to be heard on the assessment of the benefits, or appeal to any court or other tribunal. That a state may by statute directly, or by appropriate legal proceeding, fix the basis of taxation or assessment, without violating the due process provision of the national Constitution, unless it is palpably arbitrary, and a plain abuse, is beyond question. The latest cases on this subject are Wagner v. Baltimore, 239 U.S. 215, 36 Sup.Ct. 66, 60 L.Ed. 230; Houck v. Little River Drainage Dist., 239 U.S. 254, 262, 36 Sup.Ct. 58, 60 L.Ed. 266; Myles Salt Co. v. Board of Commissioners, 239 U.S. 478, 36 Sup.Ct. 204, 60 L.Ed. 392. But such power, arbitrarily exercised, imposing a burden without a compensating advantage of any kind, amounts to confiscation, and violates the due process provision of the Fourteenth Amendment. Myles Salt Co. v. Board of Commissioners, supra. In Gast v. Schneider Granite Co., 240 U.S. 55, 36 Sup.Ct.

254, 60 L.Ed. 523, a law establishing a paving district, levying the cost of paving on property fronting on the street, based on area without out providing for equal depth of the assessment district, was held to be void, reversing the decision of the Supreme Court of the state of Missouri. In Myles Salt Co. Case, the court, in reversing the decision of the Supreme Court of Louisiana, said:

'It is to be remembered that a drainage district has the special purpose of the improvement of particular property, and when it is so formed to include property which is not and cannot be benefited directly or indirectly, including it only that it may pay for the benefit to other property, there is an abuse of power and an act of confiscation. Wagner v. Baltimore, ante (239 U.S. 207, 36 Sup.Ct. 66, 60 L.Ed. 230). We are not dealing with motives alone, but as well with their resultant action; we are not dealing with disputable grounds of discretion or disputable degrees of benefit, but with an exercise of power determined by considerations, not of the improvement of plaintiff's property, but solely of the improvement of the property of others-- power, therefore, arbitrarily exerted, imposing a burden without a compensating advantage of any kind.'

And when assessments are thus imposed without the opportunity of having them reviewed by some authority, a court of equity may unquestionably interpose its protective arm to prevent wrong and injustice.

The pleadings and evidence establish the following undisputed facts: That in the assessment of benefits of the complainant there was included rolling stock and material of the value of $6,370. As this is clearly personalty under the laws of the state (section 11, art. 17, of the Constitution of Arkansas), it was not subject to assessment under the act, which expressly limits the assessments to real property.

The contemplated road begins at the opposite end of the town of Alma from where the railroad tracks and station are one-quarter of a mile from them, and no portion of the road connects with the railroad's right of...