Clark v. Vandalia R. Co.

• Citation: 86 N.E. 851,172 Ind. 409
• Decision Date: 06 January 1909
• Docket Number: No. 20,998.,20,998.
• Parties: CLARK, Auditor, et al. v. VANDALIA R. CO. et al.
• Court: Supreme Court of Indiana

172 Ind. 409

86 N.E. 851

CLARK, Auditor, et al.

v.VANDALIA R. CO. et al.

No. 20,998.¹

Supreme Court of Indiana.

Jan. 6, 1909.

Appeal from Superior Court, Marion County; Vinson Carter, Judge.

Action by the Vandalia Railroad Company and others against Cyrus J. Clark, Auditor of Marion County, and others. From a judgment for plaintiffs, defendants appeal. Affirmed.Caleb S. Denney, Morton S. Hawkins, and Merrill Moores, for appellants. S. O. Pickens and Holtzman & Coleman, for appellees.

HADLEY, J.

In 1904, the taxing officers of Vigo and Marion counties made certain assessments for taxes against the Terre Haute & Indianapolis Railroad Company, and Volney T. Malott, receiver of said company; said assessments being made on moneys in the possession of said receiver, including special funds, or rentals, arising from leases, or operating contracts, with other railroad companies located in Indiana and Illinois, and the same being assessed, as omitted property, for the years 1889 to 1904, inclusive, and as belonging to the Terre Haute & Indianapolis Railroad Company. After the making of said assessments, the Terre Haute & Indianapolis Railroad Company consolidated with all of said leased and other companies, thereby forming the Vandalia Railroad Company, appellee, and by virtue of the consolidating contract the appellee company took over and became the owner of all the property of the Terre Haute & Indianapolis Railroad Company. The tax collection officers of Vigo and Marion counties are attempting to collect said omitted taxes by levy on the property formerly owned by the Terre Haute & Indianapolis Railroad Company. The appellee company brings this action to enjoin such collection of taxes, and claims that under the railroad taxing law of Indiana money is not taxable as a distinct and specific article of property, but must be, under the statute, considered and estimated, by the assessing officers, as but a constituent element of value of that part of railroad property which, from its very nature, should be taxed as a unit, and that the special assessments complained of are void, particularly those pertaining to moneys belonging to the Terre Haute & Indianapolis Railroad Company, or its lessor companies, located in the state of Indiana. The trial court adopted the view urged by appellee company, and we have not been convinced that the conclusion reached was erroneous.

Our Constitution directs that the General Assembly shall provide, by law, for a uniform and equal rate of assessment and taxation, and shall prescribe such regulations as will secure a just valuation of all property for taxation purposes. From the great variety of property which should bear the burden of taxation, the diverse character of owners, and multiplicity of uses to which it is put, our legislative body, for more than a half century, has recognized the necessity for different methods for the assessment of different classes of property, to secure a just and uniform valuation. In its first enactment under the new Constitution, to wit, in June, 1852 (1 Gav. & H. Rev. St. 1870, p. 68), for the valuation and assessment of property for taxation, it is plainly evident that it was the legislative intent to differentiate the valuation and appraisement of railroad property for taxation from that of individuals. Section 10 makes it the duty of all persons of full age, of sound mind, and not married women, to list all his property, and specifically requires him to list all moneys in his possession, or on deposit, and all credits due and owing him. Section 32 of the act classes railroads with other public service corporations, such as plank and turnpike roads, telegraph and bridge companies, and requires the proper accounting officers of the company to furnish, under oath, to the auditor of the county where its principal office is situate, a list of the capital stock of the company, its value, and a statement dividing all the capital stock among the several counties through which, or into which, the road runs. The details as to railroads are meager, but it is apparent that the effort was to provide a system by which all railroad property of every kind should be valued as a unit, and the valuation distributed equitably along the line for taxation.

It is also important to note that, while the act of 1852 is specific in more than one section that all moneys and credits belonging to private persons shall be given in and taxed, there is an entire absence of mention of moneys and credits belonging to railroad companies. A further significant fact is furnished by the amendatory act of 1858 (Acts 1858, p. 24, c. 4), which provides that railroad companies may omit from their lists all lands owned by the company that are not used in operating the road, and declaring that such lands should be assessed and taxed in the counties where situate, and in the same manner as lands belonging to private persons. This provision is equivalent to an affirmative declaration that all other property of railroads should be assessed and taxed in a manner different from private persons. It was not hard to see, even in 1852, that the transient, mobile character of locomotives and cars used in transacting the business of railroads, that the company's earnings, its capital stock, its franchise-in fact all the company's belongings, except its track and real estate, having a situs as much in one county occupied by the road as in another, here to-day and there to-morrow, in this state or out of it, as business need require-could not be assessed under the general taxing laws as located in any county, and could not have the principal values accredited to the county containing the home office, without great injustice to other counties traversed by the railroad. At that early date in the history of railroads, the purpose then adopted, of devising a scheme for the taxation of railroads that would not only secure a fair valuation of the whole property, but an equitable distribution of that value among the several counties affected, has threaded through every taxation statute passed from that day to this, and, accordingly, the statute of 1891 (Acts 1891, p. 199, c. 99; section 8408, Burns' Ann. St. 1901; section 10,140 et seq., Burns' Ann. St. 1908), which governs in this case, except for the years 1889 and 1890, differ from the old law only in giving fuller and more complete details in matters of classification and assessment. In these latter respects the evolution has proceeded along with the rapid multiplication of railroads through Acts 1859, p. 3, c. 1, Act 1865, p. 121, c. 27, Acts 1872, p. 57, c. 37, Rev. St. 1881, §§ 6269-6521, and Acts 1891, p. 199, c. 99 (section 8408, Burns' Ann. St. 1901, section 10,140, Burns' Ann. St. 1908), until it was found necessary, in 1872, to place railroads in a class of themselves, and there was then adopted, and has since been maintained, a more perfect system for listing and assessing such property, that is complete within itself, and draws support from no other statute.

The method best calculated to secure equality and uniformity in assessment and taxation is left to the judgment of the Legislature, and the decision of that body must be followed by all taxing officers. The Legislature, in the exercise of its power, has conferred upon the state board of tax commissioners jurisdiction to assess the unit property of railroads under two heads, namely, “railroad track” and “rolling stock,” and has given the board power, if not satisfied with the information contained in the reports and schedules submitted by the companies, touching the value of their property, to send for persons and papers, and make a thorough investigation of its own. The statute provides: “That the right of way, including the superstructions, main, side, or second track, and turnouts, turntables, telegraph poles, wires, instruments and other appliances, and the stations and improvements on such right of way (except machinery, stationary engines and other fixtures which shall be considered personal property) shall be held to be real estate for the purpose of taxation, and denominated ‘railroad track,’ and shall be so listed and valued.” Section 8496, Burns' Ann. St. 1901. “The value of ‘railroad track’ shall be taxed in the several counties, townships, cities, or towns, in the proportion that the length of the main track in such county, township, city or town, bears to the whole length of the road in this state, except the value of the side, or second track, and all the turnouts, stationhouses, depots, machine shops, or other buildings belonging to the road, which shall be taxed in the county townships, city or town in which the same is located.” Section 8497, Burns' Ann. St. 1901. “The movable property belonging to railroad company shall be held to be personal property, and denominated for the purpose of taxation, ‘rolling stock.’ The taxable value of the rolling stock as listed shall be distributed and taxed in the several counties, and in the same way as the property denominated ‘railroad track,’ except fixed personal property, not specifically taxed, including tools, raw material, machinery, etc., shall be listed and taxed where located.” Sections 8498 and 8499, Burns' Ann. St. 1901.

In order to furnish the state board a basis for ascertaining the value of this unit property, railroad companies are by the statute required to file with the auditor of state, who in turn is required to lay the same before the state board, verified statements, or lists, on forms prescribed by the board, showing, as to the property denominated “railroad track”: The length of the main and side tracks, and turnouts; the proportion in each county and township, and the total in the state; the “rolling stock,” whether owned or hired; the number of ties in track per mile; the weight of iron, or steel, per yard, in the main and side tracks; the joints used in the track; the ballasting of the road,...