Louisville Trust Co. v. Stone

• Decision Date: 02 April 1901
• Docket Number: 733.
• Parties: LOUISVILLE TRUST CO. v. STONE, Auditor, et al.
• Court: U.S. Court of Appeals — Sixth Circuit

107 F. 305

LOUISVILLE TRUST CO. v. STONE, Auditor, et al.

No. 733.

United States Court of Appeals, Sixth Circuit.

April 2, 1901

James P. Helm, for appellant.

Lewis McQuown, for appellees.

Before LURTON, DAY, and SEVERENS, Circuit Judges.

DAY Circuit Judge.

This is a bill to enjoin the board of valuation and assessment of the state of Kentucky from assessing the property of the complainant at more than 70 per cent. of the face value thereof, and from taxing certain stock, the property of complainant, upon the ground that said stock is held in a Kentucky corporation, which, by the laws of the state, pays taxes on all of its property. It may be conceded that, if the allegations of the bill are made out, there exists in respect to the property of complainant, and others similarly situated, a systematic, intentional, and illegal undervaluation of other property by the taxing officers of the state, which necessarily affects an unjust discrimination against the property of which the plaintiff is the owner, and a bill in equity will lie to restrain such illegal discrimination, and that in such cases federal jurisdiction will arise because of the equal protection of the laws guarantied by the fourteenth amendment. Taylor v. Railroad Co., 31 C.C.A. 537, 88 F. 350; Railway C. v. Taylor (C.C.) 86 F. 168, in which the grounds of federal jurisdiction are carefully examined and fully stated by Judge Clark, who delivered the opinion. The questions principally argued, and upon which this case turns, are those of fact. It appears that there existed in the state of Kentucky a statute which authorized the state board of equalization to fix the percentage of value of real property for taxation at 70 per cent. of the cash value, to raise the valuation to that amount in counties whose list of real property was below that standard, and to lower it in those counties whose average lists are above the same; also personal property was to be equalized by adding to and subtracting from the list of personal property, as the case may be, the same per centum as was added to or subtracted from the list of farm lands for the same county, and for this purpose the average per centum of assessed value to the cash value of farm lands should be used. Sections 4274, 4275, Ky St. After the passage of these statutes, the new constitution of Kentucky went into effect, which provided:

'Sec 172. All property not exempt from taxation by the constitution shall be assessed for taxation at its fair cash value estimated at the price it will bring at a fair voluntary sale.'

This constitution went into effect in 1899. It established a rule for taxation inconsistent with the prior statutes, and must be taken as repealing those statutes which are in conflict with the constitutional provision. November 11, 1892, an act was passed (section 4020, Ky. St.), which provides:

'All real and personal estate within this state, and all personal estate of persons residing in this state, and of all corporations organized under the laws of this state, whether the property be in or out of this state, including intangible property which shall be considered and estimated in fixing the value of corporate franchises as hereinafter provided, shall be subject to taxation unless the same be exempt from taxation by the constitution, and shall be assessed at its fair cash value, estimated at the price it would bring ag a fair voluntary sale.'

Also section 4267:

'All acts and parts of acts in conflict with this act are hereby repealed, except an act entitled 'An act to provide additional funds for the ordinary expenses of the state government,' approved June 4, 1892, and also except an act amendatory thereof, approved July 6, 1892.'

The value of the complainant's property, as assessed by the board having authority over the property of such corporations, being the defendants in this case, may be said to be the full cash value of the property. The contention upon this branch of the case is that the state board of equalization, in equalizing the other property of the state systematically and uniformly, and particularly in the years 1897 and 1898, assessed and valued other property at only 70 per cent. of its fair cash value. If this is true, there is manifest discrimination against the complainant. It has procured affidavits of 8 members of local boards of supervisors, before whom the returns of the assessors go, 26 county court clerks and ex county court clerks, 31 sheriffs and ex-sheriffs, 24 county judges and ex county judges, 3 county attorneys, 1 mayor, 1 magistrate, and 1 county treasurer; also the affidavits of certain persons who claimed at certain times to have appeared before the state board of equalization; also the affidavit of one George M. Willis, a member of the state board of equalization for the year 1898. The tendency of this testimony is to show that in the years mentioned the other property of taxpayers of the state was assessed at not above 70 per cent. of its fair cash value. Complainant also presents the affidavit of Mr. Johnson, deputy auditor, who undertook to make a comparison between the assessed values and the cash sales as reported by the clerks of the various county courts in the state with a view of ascertaining what proportion the assessed value bore to the prices of lands reported in said sales for the period between September 15, 1895, and the same date in 1896. The result was that the assessed value of lands in 114 counties, as equalized by the board of equalization, is 71.89 per cent. of the total value of said lands as indicated by said sales. Mr. Johnson also stated that this was a year of very great depression in real estate values. He also produced a table showing the assessed value of farm lands of Kentucky for the years 1894 to 1898, inclusive, as equalized by the state board. This table indicates but little variation in the equalized value of the lands for the years given. To meet this testimony, the appellees offered the affidavits of 95 county assessors, who assessed the real and personal property in their counties for the years 1897 and 1898, each of whom swears that the real and personal property of his county was assessed for taxation at its fair cash value, estimated at the price it would bring at a voluntary sale. The affidavits of 52 county clerks who were in office in 1897, and were ex officio the clerks of the board of tax supervisors, and 62 county clerks for the year 1898, were filed by appellees. These affidavits are, in substance, that the property was valued in like manner at its fair cash value. The affidavits of four members of the state board of equalization for the years 1897 and 1898 were offered in evidence, and they make oath that the rule of the members was to fix the value of all real estate, personal property, and town lots in each and every county in the state that was subject to taxation at its fair cash value, and that no attempt was made to value the property at 70 per cent., or any other per centum less than 100 per cent., of its fair cash value. Mr. Scott, chief secretary of the state board of equalization in the years 1897 and 1898, says, in his affidavit, that property was valued at its fair cash value; that when below this the value of the property was raised, and when...