Grand Canyon Railway Co. v. Treat

• Decision Date: 27 March 1908
• Docket Number: Civil 1032
• Parties: GRAND CANYON RAILWAY COMPANY, a Corporation, Plaintiff and Appellant, v. J. R. TREAT, as Treasurer and Ex Officio Tax Collector of the County of Coconino, Territory of Arizona, and the COUNTY OF COCONINO, TERRITORY OF ARIZONA, Defendants and Appellees
• Court: Arizona Supreme Court

95 P. 187

12 Ariz. 69

GRAND CANYON RAILWAY COMPANY, a Corporation, Plaintiff and Appellant, v. J. R. TREAT, as Treasurer and Ex Officio Tax Collector of the County of Coconino, Territory of Arizona, and the COUNTY OF COCONINO, TERRITORY OF ARIZONA, Defendants and Appellees

Civil No. 1032

Supreme Court of Arizona

March 27, 1908

APPEAL from a judgment of the District Court of the Fourth Judicial District, in and for the County of Coconino. Richard E Sloan, Judge. Reversed and remanded.

STATEMENT OF FACTS BY THE COURT.

The Santa Fe and Grand Canyon Railroad Company, theretofore duly incorporated under the laws of Arizona for the purpose and with the power, among others, of constructing, maintaining and operating a railroad from the town of Williams in Coconino county to the rim of the grand canyon of the Colorado river in Arizona, distant therefrom about seventy miles, for the carriage of passengers and freight as a common carrier, filed with the secretary of the territory, on August 19, 1899, a written statement designating the general course and terminal points of the railroad which it proposed to construct. The entire line of said railroad was located upon the ground by a survey, and the location designated and fixed by the survey stakes were duly adopted as the definite line of location of said road by the board of directors of said company on October 7, 1899. Thereafter, and within six months after the written statement above mentioned was filed with the secretary of the territory, the work of constructing said road was in good faith commenced on October 30, 1899, and a written statement setting forth the date and place of such construction was filed with the secretary of the territory. Construction was diligently prosecuted thereafter, and before October 22, 1900, the company had completed fifty-six and thirty-four hundredths miles of the road, and on December 22 1900, filed with said secretary of the territory a plat of the road which it had thus constructed. All of these things except the incorporation of the company, were done in compliance with Act No. 68, page 79, of the Twentieth Legislative Assembly of the territory of Arizona, approved March 16, 1899, and entitled "An act to induce and encourage the construction of railroads within this territory." Thereafter, in a suit brought for the foreclosure of a mortgage securing the corporate indebtedness of the company, the district court of Coconino county, on June 8, 1901, issued a decree directing a special master to sell all of the property, rights, franchises and privileges of the said company, including all exemptions from taxation owned or possessed by it, or which it or its assigns may hereafter acquire, own, or possess through or under the charter of said railroad company. Under this decree the special master, on July 18, 1901, sold all of said property and other things above mentioned to E. D. Kenna, Byron L Smith, and James H. Eckels, which sale was, on July 20, 1901, confirmed, and the property and things sold were thereupon delivered into the possession of the purchasers. Said purchasers, thereafter associating with themselves C. L. Sterry and T. J. Norton, organized the appellant corporation, the articles of incorporation of which were filed with the secretary of the territory on August 10, 1901. Appellant was formed for the purpose and with the power, among others, to acquire, own, maintain and operate the railroad sold as aforesaid, and to complete the construction of the same upon the route and right of way of the Santa Fe and Grand Canyon Railroad Company theretofore surveyed, and to acquire, own, use and enjoy the franchises, rights, privileges, immunities and exemptions acquired, held, and enjoyed by that company. About August 16, 1901, a deed conveying all of the property, rights, privileges, franchises, and exemptions sold to and purchased by the said E. D. Kenna, Byron L. Smith, and James H. Eckels at the sale under foreclosure above mentioned to the appellant herein, theretofore executed and delivered by the said purchasers, was placed of record on page 508, in book 13 of Deeds, of the public records of Coconino county. Appellant thereafter continued the construction of said railroad upon the location thereof which had been made by its predecessor, and completed the work on September 12, 1901. Thereafter, on November 8, 1901, the appellant filed with the secretary of the territory a map showing the portion of said road constructed during the year ending October 22, 1901, amounting to ten and seven hundredths miles. During the month of September, 1901, appellant located at its northern terminus an area of twenty acres for station grounds, and filed a map thereof with the Secretary of the Interior, which was, on August 18, 1905, duly approved by said Secretary. Appellant thereafter, in order to care for its passengers, erected upon said station grounds hotels and appurtenances, and has at all times since maintained on said grounds hotels, with electric and power plant to supply light, heat and power for said hotels and its depot and other buildings as situated on said station grounds, and used by it in its business. In the year 1906 the assessor of Coconino county and the board of equalization of the territory levied and assessed upon the aforesaid property of the appellant county and territorial taxes in the sum of $11,975.63. Against this assessment the Grand Canyon Railway Company entered a formal protest before the territorial board of equalization, in which it claimed that it was organized and succeeded to the property of the Santa Fe and Grand Canyon Company under the provisions of, and by compliance with, the requirements of Act No. 3, page 5, of the Session Laws of 1897; that the property taxed was entitled to exemption from taxation by virtue of the terms of section 1, Act No. 68, page 79, of the Session Laws of 1899, whether in the ownership and possession of the Santa Fe and Grand Canyon Company, or of it (the Grand Canyon Railway Company), as the successor of the former corporation. Upon the refusal of the board of equalization to vacate or set aside the assessment and the listing of the tax for collection the Grand Canyon Railway Company brought this action in the district court to restrain the collection of such taxes, on the ground that such property was exempt from taxation, and set forth in its complaint the facts as above stated; and, by amendment to said complaint, in addition thereto pleaded in extenso the certificate of incorporation of the said company. To the amended complaint the trial court sustained a general demurrer, without leave to amend, and entered judgment for the defendant in accordance therewith, from which judgment and ruling an appeal has been taken to this court. The appellant has presented its assignment of errors wherein it asserts that the court erred in sustaining the demurrer to appellant's amended complaint, and that the court erred in awarding judgment upon such order in favor of appellees, for, upon the facts stated in the amended complaint and admitted by the general demurrer thereto, the property mentioned in the amended complaint was and is exempt from taxation.

T. J. Norton, Paul Burks, and U. T. Clotfelter, for Appellant.

By the act of March 16, 1899, of the legislature of Arizona, the appellant's predecessor acquired an exemption to which the appellant became entitled by reason of its purchase of the properties, rights, franchises, privileges and immunities of "The Santa Fe and Grand Canyon Railroad Company," the appellant's predecessor in interest. Humphry v. Pegues, 83 U.S. (16 Wall.) 244, 21 L.Ed. 326; Philadelphia etc. R. Co. v. Maryland, 51 U.S. (10 How.) 376, 393, 13 L.Ed. 461; Chesapeake etc. R. Co. v. Virginia, 94 U.S. 718, 24 L.Ed. 310; Southwestern R. Co. v. Georgia, 92 U.S. 676, 23 L.Ed. 762; Tennessee v. Whitworth, 117 U.S. 139, 6 S.Ct. 649, 29 L.Ed. 833; Buchanan v. Knoxville & O.R. Co., 71 F. 324, 18 C.C.A. 122; Bancroft v. Wicomico County Commrs., 121 F. 878.

A thorough examination of the decisions of the federal courts is authority for the statement that appellant holds its property exempt from taxation, unless there may be something to the contrary in Acts 3 and 28 of the Session Laws of 1897, or in Act 68 of the Session Laws of 1899.

The exemption of the property is an appurtenant of the property which follows it everywhere. New Jersey v. Wilson, 7 Cranch, 164, 3 L.Ed. 303.

Whenever a general statute and a later special statute exist relative to the same subject, the latter must be regarded as an exception to the former. In re City Trust Co., 121 F. 706, 708, 58 C.C.A. 126; State v. Routh, 61 Minn. 205, 63 N.W. 621; In re Murray Hill Bank, 153 N.Y. 199, 47 N.E. 298; Dewey v. Manufacturing Co., 42 Mich. 399, 4 N.W. 179.

Henry F. Ashurts, E. S. Clark, and Edward M. Doe, for Appellees.

The mere use of the word "immunities" in the provisions of the act mentioned does not show the intention of the legislature to include the exemption from taxation in the property conveyed to new corporations in view of the expressed exemption contained in this statute in section 8 of the act of February 8, 1897.

OPINION

DOAN, J.

-- This appeal is prosecuted upon the theory that section 1 of Act of March 16, 1899, page 79, No. 68, which provides "that for the purpose of inducing and encouraging the construction of railroads, other than street and electric railroads within this territory, the capital stock, franchise, right of way, superstructures, betterments, telegraph lines, and all other real, personal and mixed property used or necessary in the construction and operation of railroads to be conducted as common carriers of freight and passenger, other than street and electric railroads,...