Chesapeake v. Miller

• Decision Date: 22 April 1882
• Citation: 19 W.Va. 408
• Court: West Virginia Supreme Court
• Parties: Chesapeake & Ohio R. Co. v. J. S. Miller, Auditor.

19 W.Va. 408

Chesapeake & Ohio R. Co.

v.J. S. Miller, Auditor.

Supreme Court of Appeals of West Virginia.

Submitted March 18, 1882.

Decided April 22, 1882.

1.A court of equity has jurisdiction to enjoin the collection ot an illegal tax, when such injunction will prevent a multiplicity of suits. (p. 416).

2.Although the State of West Virginia cannot be sued, yet an injunction will of a mere ministerial duty. (p. 416)

3. When the text of a constitutional provision is plain and unambiguous, courts in giving construction thereto are not at liberty to search for its meaning beyond the instrument itself. (p. 419).

4.The clear meaning of section one of article eight of the Constitution of 1863 is, that " all property both real and personal shall be taxed," except such as the Legislature may exempt under the exception contained in said section. (p. 437.)

5. By said section of the Constitution the Legislature was clearly inhibited from passing a law exempting the property of a railroad-corporation from taxation. (p. 436).

6.The last clause of section seven of the act of the Legislature passed March 1, 1866, which declares, that "no taxation upon the property of said company shall be imposed by the State, until the profits of said company shall amount to ten per cent. on the capital of said company," is unconstitutional and void. (p. 437).

Appeal from a decree of the circuit court of the county of Ohio, rendered on the 6th day of June, 1881, in a cause in said court then pending, wherein the Chesapeake & Ohio Railway Company was plaintiff, and Joseph S. Miller, Auditor of the State of West Virginia, was defendant, allowed upon the petition of said Miller.

Hon. Thayer Melvin, judge of the first judicial circuit, rendered the decree appealed from.

Johnson, President, furnishes the following statement of the case:

The plaintiff in February, 1880, filed its bill of injunction in the circuit court of Ohio county, "to restrain Joseph S. Miller. Auditor of the State of West Virginia, from adding to the amount of the taxes alleged to have been assessed upon the complainant's property ten per centum or any other sum, and from certifying said alleged taxes or any part thereof to the sheriffs of the counties mentioned in said auditor's statement, or of any or either of said counties, for collection, or from doing anything whatever looking or tending to the collection of said taxes" &c. The bill of injunction had been presented to the Hon. Joseph Smith, judge of the seventh judicial circuit, and the injunction had been by him granted, and the process had been issued thereon by the clerk of the circuit court of Ohio county, and bond as required having been given, the injunction was by the clerk endorsed upon the process. The bill set out the legislation of the State of Virginia and this Slate looking to the building of a railroad from tide-water to the Ohio river and the incorporation of the Chesapeake and Ohio Railroad Company, and set forth particularly the provisions of the act of the Legislature of West Virginia, dated March 1, 1866, entitled "An act to incorporate the Covington and Ohio Railroad Company," the seventh section of which provided among other things, that "no taxation upon the property of the said company shall be imposed by the State, until the profits of said company shall amount to ten per cent, on the capital of said company" also the act of February 26, 1867, entitled "An act to 'provide for the completion of a line or lines of railroad from the waters of the Chesapeake to the Ohio River" the second section of which act provided, that "the companies, which may consolidate under the provisions of this act, shall constitute one corporation, which shall be vested with 'all the rights, privileges, franchises and property, which may have been vested in either company prior to the act of consolidation, ' and shall be known as the Chesapeake and Ohio Railroad Company." The 14th section of the same act pro- vides, that the several companies therein mentioned or either of them might contract with the Covington and Ohio Railroad commissioners for the construction of the railroad from Covington to the Ohio river, and in the event such contract should be made, the company so contracting should be known as the "Chesapeake and Ohio Railroad Company" and "shall be entitled to all the benefits of the charter of the Covington and Ohio Railroad Company, and to all the rights, interests and privileges, which by this act are conferred upon the Chesapeake and Ohio Railroad Company, when organized."

The bill alleges, that such contract was made, and was formally adopted by the Legislature of West Virginia by an act passed January 26, 1870, entitled: "An act confirming and amending the charter of the Chesapeake & Ohio Railroad Company that the company was organized, and the road completed. The bill further alleges, that from time to time trust-deeds or mortgages were executed upon the property of the said company and recorded in the counties, through which the road passed. The mortgages or deeds of trust are specified. It is further alleged, that suits were instituted to foreclose these mortgages; that in said suits the said mortgages were foreclosed, and a sale of the railroad and of all the property of the company was ordered, and said property was sold, and at the sale A. S. Hatch, C. P. Huntington, A. A. Law, Isaac Davenport, Jr., and John Cartru, styling themselves a "committee of purchase and re-organization for themselves and others," became the purchasers thereof, which sale was confirmed, and a deed was ordered to be executed, by a commissioner appointed for the purpose, and was duly executed, a copy of which is filed with the bill, in which conveyance said Hatch and others, the purchasers," declared that the name, by which by virtue of such conveyance and the statutes in such cases made and provided they should and would become a corporation, is and shall be the Chesapeake and Ohio Railway Company."

The bill charges, that by virtue of the matters aforesaid it on the first day of July, 1878, (the date of said deed) became and was, and has since continued to be, and now is, a corporation by the name of " The Chesapeake and Ohio Railway Company, entitled to all the works, property, estate, rights, fran- chises and privileges theretofore owned, used and enjoyed by The Chesapeake and Ohio Railroad Company, including therein the exemption from taxation on the property of said company conferred by the contract, by which the company was formed and organized," etc. The bill alleges, that the profits of The Chesapeake and Ohio Railroad Company and The Chesapeake and Ohio Railway Company have never at any time amounted to ten per cent, a year on the capital and have never yet altogether amounted to ten per cent, on its capital. The bill charges, that Joseph S. Miller, auditor of the State of West Virginia, has made out and transmitted to the president of the complainant company a detailed statement of the amount of taxes claimed to be due for the year 1879 from the company for State, State-school, county and district purposes in the State, amounting in the aggregate to $27,927.40, and has accompanied the same with a letter signed in his official capacity, dated December 10, 1879, describing said statement as a statement of taxes assessed against the company for the year 1879, and stating in said letter, that if payment was made at the treasury of the State on or before the 20th day of January next thereafter, two and one half per centum would be deducted, and if not paid by that day, that it would be his duty to add ten per centum thereto, and certify to the proper officers for collection; that complainant is informed and believes, that the said auditor bases his action on an act of the Legislature of West Virginia, passed January 31, 1879, purporting to amend section 7 of the act of March 1, 1866, so as to repeal the exemption from taxation thereby granted. Complainant alleges, that said act has never been agreed to by it, and is advised, that in so far as it attempts to deprive the complainant of the exemption aforesaid, it is null and void; and that the said auditor is not justified by it nor by any law of the State imposing taxes in the action done and threatened to be done by him; that said act as well as all other acts, which were designed or can be construed to impose taxes upon the property of the complainant in derogation of the exemption granted by said act of March 1, 1866, is in violation of the provisions of the Constitution of the United States, which prohibits a State from passing any law impairing the obligation of a contract.

The bill charges, that unless the said auditor is restrained, he will certify said taxes to the officers in the counties, through which complainant's road passes, for collection, and to permit this would be unjust and oppressive, and would involve a multiplicity of suits to restrain the sheriffs from the collection of such taxes, &c, and would be in violation of complainant's chartered rights. The bill concludes with the prayer for the injunction, which was granted.

The defendant on the 11th day of May, 1880, demurred to the bill on three grounds: 1st, for want of equity; 2d, for want of proper parties; and 3d, for want of jurisdiction. The demurrer was overruled; and the defendant answered. In his answer he insists," that any act oj the Legislature of West Virginia passed since it became a State, which authorized or attempted to authorize or agree to the exemption of any property of a railroad company from taxation, was unconstitutional, null and void. The said defendant further insisted, that if any act exempting the property of the Chesapeake and Ohio Railroad Company was constitutional, it conferred an immunity personal to the said company, and that by the sale of the said company's property and the deed made to the purchaser said immunity did not pass to said purchaser, the Chesapeake...