Canadian P. Ry. Co. v. King County

• Decision Date: 29 February 1916
• Docket Number: 13003.
• Citation: 90 Wash. 38,155 P. 416
• Parties: CANADIAN PAC. RY. CO. v. KING COUNTY et al.
• Court: Washington Supreme Court

155 P. 416

90 Wash. 38

CANADIAN PAC. RY. CO. v. KING COUNTY et al.

No. 13003.

Supreme Court of Washington

February 29, 1916

Department 2. Appeal from Superior Court, King County; John S. Jurey Judge.

Action by the Canadian Pacific Railway Company against King County Wash., a municipal corporation, and others. Judgment for defendants, and plaintiff appeals. Affirmed.

Bausman J., dissenting.

Bogle, Graves, Merritt & Bogle, of Seattle, for appellant.

W. V. Tanner, Atty. Gen., and Edward W. Allen, Asst. Atty. Gen., for respondents.

HOLCOMB J.

In this action appellant sought to cancel and annul the taxes against its property in King county, and make a test case as to taxes, not only in King county, but also in the counties of Snohomish, Skagit, and Whatcom. The case was tried upon an agreed statement of facts, and judgment rendered in favor of respondents. On March 1, 1913, the state board of tax commissioners undertook to find and determine the value of appellant's railroad property subject to taxation within the state at that time, found personal property which it determined to be of the value of $139,000, and thereafter prepared assessment rolls and entered that sum thereon as the value of appellant's property. Afterwards the state board of equalization equalized this value for taxation purposes at the sum of $52,905, and apportioned that value to the various counties above named into and through which passenger cars of appellant, assessed as stated, were hauled, according to the classification and value thereof, in such proportion to the entire value thereof as the length of the line in each of the counties bore to the entire length of the line between Seattle and Sumas. The sum of $10,847 was apportioned by the state board to King county as the equalized value of appellant's railroad property, equipment, and rolling stock assessable within King county.

Appellant is a corporation organized and existing under and by virtue of the laws of the Dominion of Canada, and during all the times herein mentioned has owned, maintained, and operated a line of railway within the Dominion of Canada. On or about June 1, 1912, appellant made and entered into a certain written contract with the Northern Pacific Railway Company, a copy of which is attached to and made a part of respondents' answer herein, and on March 1, 1913, when the purported assessment was made, this contract was in full force and effect. Under and by virtue of the contract, in the conduct of transcontinental passenger traffic appellant daily delivers to the Northern Pacific Company at Sumas, on the international boundary line, three cars of its regular transcontinental trains, consisting of a standard sleeping car, a tourist sleeping car, and a dining car. The Northern Pacific Company hauls these cars over its own track in its train from Sumas to Seattle daily, and returns them the next day from Seattle to Sumas, where they are delivered to the appellant and placed in one of its regular transcontinental trains. The object of this arrangement is obviously to obtain passenger traffic between Puget Sound points and the East by giving continuous passage in either direction without change of cars, sleepers, or diner. The Northern Pacific train crews handle the cars within the state of Washington.

It is undisputed that appellant is the actual owner of the three passenger cars involved in this controversy. It is undisputed that the amount of the tax, so far as the value of appellant's property is concerned, is not questioned in this proceeding, and that there is no inequality as to the ratio or amount between such assessment and the assessment of other property in King county.

The contentions of appellant are briefly these: That the tax assessed is a claim against appellant, collectible, if valid, out of any of its property, and not merely a tax on account of the value of these particular cars; that the tax, as a tax against appellant on account of these cars, is invalid for three reasons, viz.: (1) Because appellant's domicile is in Canada, and for taxation purposes all its personal property, including these cars, had a situs in Canada and was assessable against it only in Canada, unless by reason of permitting the Northern Pacific Company to haul these cars in this state under the contract in question it gave the cars a situs also in this state as its property; (2) that even if the Legislature had power to provide for the assessment of these cars as appellant's property and the collection of a tax thereon, nevertheless the law in this state authorized an assessment by the state board of railway cars only as operating railroad property of a railway company owning or operating a line of railway in this state, and that under the undisputed facts it was not such an operating railroad within this state; and (3) that, even if appellant were mistaken in both of the foregoing claims, still the state board, in making the assessment in question, clearly failed to comply with the mandatory requirements of the law relative to levying such assessment so as to make the one in question void. Appellant concedes that, if this property is operating property, the tax might be levied upon it against the Northern Pacific Company which it claims actually used and operated cars within the state, and which, under the express terms of the statute, was the owner of the cars for the purposes of taxation.

The contract between the Canadian Company and the Northern Pacific Company provides, in substance, that at least one daily passenger train shall be run each way between Sumas and Seattle to haul the Canadian Company's equipment from and to points in the East, such train to be timed to connect at the transfer point, Sumas, with the express train of the Canadian Company; that each company shall handle the trains on its own lines by its own employés and at its own expense; that berth or seat earnings in sleeping, parlor, or similar cars, shall belong to the company furnishing the cars; that no charge shall be made for transfer at the transfer point, but the receiving company shall perform the transfer free of charge to the other company. Other terms of the contract provide for divisions of traffic and interchange between points beyond the line of either of the contracting companies upon certain specified bases. Under these conditions appellant claims that it is not an operating railroad company within the state of Washington, and therefore does not come within the provisions of section 8 of the act of 1907, page 137, giving the state board of tax commissioners power to assess railroad-operating property; that if these cars are to be considered operating property, they must be considered as the property of the Northern Pacific Railway Company and assessed to it; that if considered as mere chattels or personal property, they have no situs within the state of Washington.

The case of Hays v. Pacific Mail Steamship Co., 17 How. (U. S.) 596, 15 L.Ed. 254, is cited as in point, where the question involved was the right of the state of California to assess an ocean steamer owned and registered in New York and regularly plying between Panama, San Francisco, and ports in Oregon, remaining in San Francisco no longer than was necessary to land and receive passengers and freight. The case of Bain v. Richmond & Danville R. Co., 105 N.C. 363, 11 S.E. 311, 8 L. R. A. 299, 18 Am. St. Rep. 912, is also cited, to the effect that cars used by a railway company in interstate commerce over a line of railway leased and operated by it in the state of North Carolina were not subject to taxation within that state. We do not regard these cases as strictly in point. In the first case cited, obviously ocean vessels having their situs fixed by act of Congress and their course over navigable waters, and touching land only incidentally and temporarily, have no such situs as would authorize local taxation; and cars or vehicles merely passing through one state, although regularly, would be similarly situated. Pullman's Palace Car Co. v. Pennsylvania, 141 U.S. 18, 11 S.Ct. 876, 35 L.Ed. 613.

We regard the general rule to be that tangible personal property is subject to taxation by the state in which it is, no matter where the domicile of the owner may be.

'It is equally well settled that there is nothing in the Constitution or laws of the United States which prevents a state from taxing personal property, employed in interestate or foreign commerce, like other personal property within its jurisdiction.' Pullman's Palace Car Co. v. Pennsylvania, supra; Old Dominion Steamship

...