Chicago, Burlington & Quincy Railroad Company v. Richardson County

• Decision Date: 05 October 1904
• Docket Number: 13,045
• Citation: 100 N.W. 950,72 Neb. 482
• Parties: CHICAGO, BURLINGTON & QUINCY RAILROAD COMPANY ET AL., APPELLEES, v. RICHARDSON COUNTY ET AL., APPELLANTS
• Court: Nebraska Supreme Court

100 N.W. 950

72 Neb. 482

CHICAGO, BURLINGTON & QUINCY RAILROAD COMPANY ET AL., APPELLEES, v. RICHARDSON COUNTY ET AL., APPELLANTS

No. 13,045

Supreme Court of Nebraska

October 5, 1904

APPEAL from the district court for Richardson county: JOHN S. STULL JUDGE. Affirmed.

AFFIRMED.

Smyth & Smith and John Gagnon, for appellants.

Charles F. Manderson, J. W. Deweese, Francis Martin and Frank E Bishop, contra.

H. H Baldrige, C. C. Wright, J. P. Breen and W. H. Herdman, amici curiae.

POUND, C. DUFFIE and KIRKPATRICK, CC., concur.

OPINION

POUND, C.

The facts in this case are the same as those involved in Chicago, B. & Q. R. Co. v. Richardson County, 61 Neb. 519, 85 N.W. 532, except that assessments for different years are in question. A further point is made on behalf of the county, however, not raised in the former case, namely, that sections 39 and 40, article I, chapter 77, Compiled Statutes, 1901, are unconstitutional. This point has been argued with no little ability and ingenuity, on the part of appellants, and is of such importance as to require our careful consideration.

Four objections are made to the plan for assessment of railroad properties prescribed by said sections. The first is that "sections 39 and 40, in legal effect, exempt the franchises of the railroad corporations from taxation and thereby violate section 1, article 9 of the constitution." This contention is disposed of sufficiently, in our opinion, by State v. Savage, 65 Neb. 714, 91 N.W. 716, in which this court held, construing the sections in question, that "the state board of equalization, in the assessment of railroad and telegraph properties, should include in its assessment the value of the franchise with the tangible property assessed." HOLCOMB, J., delivering the opinion of the court, at page 750, says:

"It seems reasonably clear that in assessing railroad and telegraph property as contemplated by sections 39 and 40, the whole property belonging to any one corporation, and subject to assessment in this state, should be valued for tax purposes in its entirety, and that in such valuation should be included all elements going to make up the entire property, whether consisting of franchises or other intangible property, or physical property, be it real, personal or mixed."

Next, it is asserted, to quote from the brief of counsel, that "the statute, sections 39 and 40 of the revenue law, for the assessment of railroad property provides a different mode of assessment for that property from that which is provided for the property of the citizen, and is, therefore, void, as violating the uniformity required by the constitution." Section 1, article 9 of the constitution, reads, in part: "The legislature shall provide such revenue as may be needful, by levying a tax by valuation, so that every person and corporation shall pay a tax in proportion to the value of his, her or its property and franchises, the value to be ascertained in such manner as the legislature shall direct." Construing this section, the court said in State v. Savage, supra:

"The paramount object of the constitution, and the laws relative to taxation, as we conceive the rule to be, is to raise all needful revenues by valuation of the taxable property so that each owner of property taxed will contribute his or its just proportion of the public revenues."

If properties are so essentially distinct in their nature that to assess each in one particular way would not result in requiring the respective owners to pay taxes in proportion to the value of their respective properties, it is evident that an attempt to provide a uniform method of assessment would involve contravention of the "paramount object" of the constitution. Hence, it is the result, not the method employed in reaching it, which must be considered. Counsel point out that section 52 of said chapter directs the assessor, when valuing real property generally, to fix "the value of each tract or lot improved, the value of each tract or lot not improved, and the total value," while the state board of equalization, in valuing a railroad, is directed, as counsel put it, to "lump the whole thing, whether it be buildings, lots, tracts of land or personal property, and put a price upon the heap." But the two species of property are in no wise comparable. What sort of result should we get if a local assessor, assessing 10 miles of road, was required to value the right of way unimproved, the right of way with ties and rails laid upon it, and the total value? What gives the 10 miles of track their real value is the franchise of the corporation operating them, the connections in and out of the state, and the fact that they are part of a great system of railway, operated as a whole. An attempt to assess the track of a railway in any one county by the statutory method of assessing houses and lots, would produce gross inequality, and enable the most valuable features of railroad properties to escape taxation. It is said that the scheme of dividing the total value by the number of miles in any county is arbitrary. But the real question is whether it provides a reasonable mode of ascertaining the value of that portion of a railroad lying in a given country, so as to insure that the corporation contribute its just proportion of the public revenues. The track in any one county is not an entity. It is merely part of a whole, spreading over many counties, or even many states. The value of each such part is obviously the proportion which it bears to the whole. Viewed by itself, apart from its place in the whole, it is merely a ditch and grade, bearing ties and old iron.

The third objection is that the system provided by the sections in question "exempts railroad property assessed by the state board of equalization from the payment of its proportion of the taxes levied for the support of the county school district and city, appellants in this action, and thereby violates the rule of uniformity prescribed by section 1, article 9 of the constitution." As the municipality in question is not a city of the metropolitan class nor of the first class, in which different standards of assessment prevail from those employed in the state at large, this case does not involve the question expressly left open by the opinion of HOLCOMB, J., in State v. Savage, supra. Here the same assessment serves for county and municipal purposes alike as to all property. Of course the presumption is that both the board of equalization and the local assessors act fairly and impartially, and fix a just and true valuation. State v. Savage, supra. Hence the question is whether, assuming that they do so, a proper proportion of the burdens of municipal taxation is thrown upon the railroad companies. This question depends upon the view taken as to the nature of railroad property. If the railroad is an entity, we have one piece of property, spreading over several counties; if that portion within each county is a separate...