Fargo v. Powers
| Decision Date | 23 September 1914 |
| Docket Number | 3844. |
| Citation | 220 F. 697 |
| Parties | FARGO v. POWERS et al. |
| Court | U.S. District Court — Eastern District of Michigan |
Campbell Bulkley & Ledyard, of Detroit, Mich., for complainant.
Roger I. Wykes, of Grand Rapids, Mich., for defendants.
This case involves the authority of the State Board of Assessors and the method of its exercise, in assessing the property of express companies in Michigan.
The American Express Company, in 1903 and previously, did business and operated routes and possessed property in Michigan, which was in 1903 subject to taxation in this state; the State Board of Assessors imposed a tax for 1903 upon its Michigan property.
The statute under which taxation of the express company's property took place was Act 173 of 1901, as amended by Act 45 of 1903.
The bill is filed by James C. Fargo, on behalf of the said express company, to question the validity of the statute and tax and to restrain the collection of this tax.
These acts were based upon, and purposed to carry into effect, the constitutional amendments of 1900 embraced in sections 10 and 11 of article 14 of the Constitution, which reads as follows:
This system of taxation required detailed reports from all express companies, owning property and doing business in Michigan. The required report was made by the American Express Company for 1903.
After the coming in of the report, the board assessed the property of the company in Michigan, and extended the taxes against the assessment at the average rate as fixed by law.
Under the statute (section 8, Act 45 of 1903) the method of fixing the value of the Michigan property of express companies was as follows:
In its report for the year 1903, the express company stated, as the value of its several items of property and its mileage, the following:
Number of shares, 180,000; par value $100; actual value $153; personal property, not used in the express business, $20,939,694.22; real estate in Michigan $43,945.74; real estate outside of Michigan, $4,897,922; mileage, railroad, stage and water in the United States and Canada $42,807.50; Michigan mileage, $5,144.38; ocean and European mileage, $125,673.
With this report before it, the board proceeded in the following manner in making its assessment:
Taking the June average of the stock sales would make the value of the single shares $193,456, and the value of 180,000 shares . . . $34,822,080.00
From this to be deducted: Personal property not used in the business . . .
Real estate in Michigan . . .
43,945.74
Real estate outside of Michigan . . .
4,897,922.00
Total deductions . . .
25,881,561.96
Leaving a balance of . . .
$8,940,518.04
This to be apportioned under mileage as follows:
Railroad and stage in the United States . . .
Water (inland). . .
2,549.00
Railroad in Canada . . .
1,430.19
Total . . .
$42,807.50
And taking the Michigan mileage as follows:
Railroad . . .
$4,899.38
Water (inland). . .
245.00
Total . . .
The proportion of the property to be attributed to Michigan is found by dividing 5,144.38 by 42,807.50-- .1201747.
And this, applied to the value above found of $8,940,518.04 would equal . . . $1,074,424.07
Adding the real estate in Michigan . . . 43,945.74
Brings a total value of . . . $1,118,369.81
While the assessment was . . . $1,120,000.00
The American Express Company is not, strictly speaking, a corporation, but is a joint-stock association, organized under voluntary agreement of the parties pursuant to the common law of the state of New York. The Legislatures of that state have, from time to time, passed laws which confer upon joint-stock associations powers of a more or less corporate nature, but not destroying their real character of voluntary joint-stock associations.
While the bill raised numerous objections to the validity of the statute, Act 173 of 1901, and to the method of assessment followed and the tax imposed, but three of those objections were presented and insisted upon by the complainant's solicitor in argument:
While only the more important facts are stated in this opinion, all of the facts and proof in the case have been given due and full consideration.
Upon those facts the court is constrained to, and does, hold both the taxing statute and the action of the State Board there under, in assessing and taxing the property of the American Express Company, to be valid and constitutional.
The first objection to the tax and statute made by the complainants involves the construction to be placed upon the constitutional amendment of 1900, and the determination of whether the term 'corporations' as used in that amendment extends to, and includes, the property of joint-stock associations, such as the American Express Company, in such a manner as to permit the Legislature to apply to the property of those institutions the rule of assessment and taxation provided for in Act 173 of the Public Acts of 1901.
Upon its face the constitutional amendment is limited to corporations. If the amendment is to be construed literally and to include nothing but those institutions possessing every attribute of, and which are strictly, corporations, possibly the property of the complainant could not be included in the plan of taxation enacted there under, as it is a joint-stock association organized under the New York laws, and is not, strictly speaking, a corporation.
The representative of the state claims that the intent of the framers of this constitutional amendment and of the people in adopting it was to include and to permit the taxation through a State Board of Assessors of the property of joint-stock associations, and particularly the property of those which, like the American Express Company, had theretofore been specifically taxed.
One of the primary rules in the construction of both constitutional and statutory provisions is that the intent, when ascertained, must govern. However, that rule does not permit the courts to make investigations for the purpose of applying constructions which will do violence to the language which has been used. If the term of language used be clear, there is, of course, no room for construction; but where the question is whether a particular word, such as the word 'corporations' in this instance, shall be construed to extend...
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Opinion of the Justices
...has by statute adopted one, its action in this respect is well-nigh, if not completely, controlling. As stated in Fargo v. Powers (D.C.), 220 F. 697, 709, it is If the constitutional provisions in question are susceptible of two constructions one being that contended for by complainants, th......
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