Chicago, M., St. P. & P. R. Co. v. Gillis, 10050

• Decision Date: 07 December 1962
• Docket Number: No. 10050,10050
• Citation: 80 S.D. 50,118 N.W.2d 313
• Parties: CHICAGO, MILWAUKEE, ST. PAUL AND PACIFIC RAILROAD COMPANY, a Corporation, Petitioner, v. Bruce D. GILLIS as Commissioner of Revenue of the State of South Dakota et al., Respondents.
• Court: South Dakota Supreme Court

Page 313

118 N.W.2d 313

80 S.D. 50

CHICAGO, MILWAUKEE, ST. PAUL AND PACIFIC RAILROAD COMPANY, a Corporation, Petitioner, v. Bruce D. GILLIS as Commissioner of Revenue of the State of

South Dakota et al., Respondents.

No. 10050.

Supreme Court of South Dakota.

Dec. 7, 1962.

Dwight Campbell, Aberdeen, for petitioner.

A. C. Miller, Atty. Gen., John P. Dewell, Asst. Atty. Gen., Joseph H. Bottum, III, Asst. Atty. Gen., Pierre, for respondents.

MANSON, Circuit Judge.

This is an original proceeding in this court.

Petitioner is a Wisconsin railroad corporation. It is a common carrier of persons and property in many midwestern states, including South Dakota, where its trackage and appurtenant operating properties are distributed in and over some 744 taxing districts in 44 counties.

This proceeding is concerned with the valuation and assessment of these operating properties for ad valorem tax by the Commissioner of Revenue of the State of South Dakota and in no manner involves railroad property of the nonoperating classification, which is valued by local assessors. The principal point here at issue is the applicability of SDC 1960 Supp. 57.0334 to such operating property. This section as it now stands, was amended by Ch. 459, Laws of 1957, so as to establish a statewide assessment factor of 60% of true and full value of all property, and the sole legal question presented by the pleadings is whether this factor relates to railway operating property.

Petitioner contends that it does, that those of the respondents whose duty it is to establish assessed valuations upon such operating property have unlawfully and unjustly discriminated against petitioner in that they have refused to apply this factor to the true and full value of such property, and that this refusal has caused such property to be valued for taxation higher than other property of the same class owned by individual taxpayers within the state.

To the foregoing, respondents by answer allege, first, that the statutory factor of 60% aforesaid does not relate to railroad operating property and, secondly, that if the court determines otherwise, respondents would demonstrate that the imposition of the factor had, notwithstanding their view, been substantially accomplished, and that the writ would not lie.

The petition asks this court to issue its mandate to the respondents, requiring them to apply the factor of 60% provided by SDC 1960 Supp. 57.0334 to the valuation of petitioner's property and thus to assure an equality of taxation.

The 1962 valuation of petitioner's operating property by the respondent, Gillis, Commissioner of Revenue (legal successor to Director of Taxation) appears to have been initiated in conformity with SDC 57.1305. This section, headed 'Assessment: when and how made' under Ch. 57.13 'RAILROAD COMPANIES', reads as follows:

'The Director of Taxation shall assess the operating property of railroads on the seventh day of July and if the seventh day of July falls on Sunday or on a legal holiday, then the following day, each year. The ownership and valuation of the assessment shall be as of the first day of May each year, and shall be made upon the main line or lines and branches thereof and all side tracks outside the limits of cities and incorporated towns within the state, separately.

'The Director of Taxation shall, in determining the true and full value of the property assessed by him, value all the property of any railroad company as a unit, but shall make due allowance for any nonoperating property.

'For the purpose of determining the true and full value of the property of any railroad company the Director of Taxation shall take into consideration the actual or market value of the shares of stock outstanding, the actual or market value of all bonds outstanding and all other indebtedness as shall be applicable, for operating the road. In determining the market value of any such stock or indebtedness the Director of Taxation shall consider quotations for the next preceding five years; the net railway operating income of the company during the five calendar years preceding the assessment date; and the Director of Taxation may take into consideration any other information or data of any kind or nature which he may deem material in arriving at the true and full value of the property. The Director of Taxation, as an aid to this determination of value as aforesaid, may, if he sees fit, call upon the Public Utilities Commission of the state of South Dakota for any information and facts which said Commission may have concerning the property of any railroad company in this state, and it is hereby made the duty of said Public Utilities Commission to furnish such information upon request. The assessment by the Director of Taxation shall include capital stock and all other property of railroad companies, except such property as is found by the Director of Taxation to be nonoperating property as hereinbefore defined.

'If any railroad company owns or uses operating property partly within and partly without this state, the Director of Taxation shall determine the value of the entire operating property of such railroad and shall allocate or assign a part of said value to this state by the use of such factors or methods as are reasonable and equitable.'

Commissioner Gillis, according to the stipulation filed herein, took some steps prior to June 18, 1962, to establish a valuation of petitioner's property, and a letter was sent to petitioner on this latter date, advising it that a 'tentative valuation' of $31,100,806 had...