Clark v. Vandalia Railroad Co.
| Citation | 86 N.E. 851,172 Ind. 409 |
| Decision Date | 06 January 1909 |
| Docket Number | 20,998 |
| Parties | Clark, Auditor, et al. v. Vandalia Railroad Company et al |
| Court | Supreme Court of Indiana |
Rehearing Denied June 3, 1909.
From Superior Court of Marion County (69,197); Vinson Carter Judge.
Suit by the Vandalia Railroad Company against Cyrus J. Clark, as auditor of Marion county, and others. From a decree for plaintiff, defendants Clark and a part of the others appeal.
Affirmed.
Merrill Moores, Morton S. Hawkins, Walter Myers, John Ogden and Holtzman & Coleman, for appellants.
Samuel O. Pickens and John G. Williams, for appellee Vandalia Railroad Company.
James E. Truesdale and Holtzman & Coleman, for other appellees.
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 receivers, including special funds arising from leases or operating contracts with other railroad companies located in Indiana and Illinois, 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, one of the appellees herein, and by virtue of the consolidating contract said 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 suit to enjoin such collection of taxes, and claims that under the railroad taxing laws of Indiana money is not taxable as a distinct and specific article of property, but must be, under the statute, considered 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 (Art. 10, § 1) 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 multiplicity of uses to which it is put, and the diverse character of owners, our legislative body, for more than half a 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, in 1852 (Acts 1852, p. 44, 1 Gavin & Hord, 68), for the valuation and assessment of property for taxation, the legislative intent to differentiate the valuation and appraisement of railroad property for taxation from that of individuals is evident. Section ten makes it the duty of all persons of full age, of sound mind, and not married women, to list all their property, and specifically requires them to list all moneys in their possession, or on deposit, and all credits due and owing to them. Section thirty-two 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 situated, 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 money and credits belonging to railroad companies. A further significant fact is furnished by the amendatory act of 1858 (Acts 1858, p. 24), 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, 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 today and there to-morrow, in this State or out of it, as business need requires--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. From that early date in the history of railroads, the purpose then adopted, of devising a scheme for the taxation of railroads that would secure not only 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 act of 1891 (Acts 1891, p. 199), which governs in this case, except for the years 1889 and 1890, differs 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, with the rapid multiplication of railroads, through Acts of 1859, p. 3, Acts of 1865 (s. s.), p. 121, Acts of 1872 (s. s.), p. 57, §§ 6269-6521 R. S. 1881, and Acts 1891, supra. It was found necessary, in 1872, to place railroads in a class by themselves, and there was then adopted, and has since been maintained, a more perfect system for listing and assessing such property, complete within itself, and drawing 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 schedule 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 superstructures, main, side or second track and turnouts, turntable, telegraph poles, wires, instruments and other appliances, and the stations and improvements of the railroad company on such right of way (excepting 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." § 10238 Burns 1908, Acts 1891, pp. 199, 229, § 78.
"The value of 'railroad track' shall be listed and 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 and all station houses, depots, machine shops or other buildings belonging to the road, which shall be taxed in the county, township, city or town in which the same are located." § 10239 Burns 1908, Acts 1891, pp. 199, 229, § 79. "The movable property belonging to a railroad company shall be held to be personal property, and denominated, for the purpose of taxation, 'rolling stock.'" § 10240 Burns 1908, Acts 1891, pp. 199, 229, § 80. 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. § 8499 Burns 1901, Acts 1891, pp. 199, 230, § 81.
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 of Tax Commissioners, verified statements or lists, on forms prescribed by the board, showing, as to the property denominated "railroad track," the length of the...
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