McCord v. Nashville, C. & St. L. Ry.

• Decision Date: 03 May 1948
• Parties: McCORD et al. v. NASHVILLE, CHATTANOOGA & ST. L. RY.
• Court: Tennessee Supreme Court

213 S.W.2d 196

187 Tenn. 277

McCORD et al. v. NASHVILLE, CHATTANOOGA & ST. L. RY.

Supreme Court of Tennessee.

May 3, 1948

Error to Circuit Court, Davidson County; E. F. Langford, Judge.

Proceeding by the Nashville, Chattanooga & St. Louis Railway for certiorari to review an assessment of petitioner's properties in the state for ad valorem taxation by the State Board of Equalization. Judgment overruling a motion to dismiss the petition declaring the assessment illegal, null and void, and quashing it, and Jim McCord and others constituting the board, bring error.

Reversed motion to dismiss sustained, and petition dismissed.

Roy H. Beeler, Atty. Gen., William F. Barry, Sol. Gen., and E. J. Walsh, both of Nashville and Hamilton E Little, of Memphis, for plaintiffs in error.

William H. Swiggart, Edwin F. Hunt and Walker & Hooker, all of Nashville, for defendant in error.

GAILOR Justice.

This appeal presents for determination the validity of the assessment of properties in Tennessee, of the Nashville, Chattanooga & St. Louis Railway for ad valorem taxation for the biennium 1945-1946. The assessment was made under authority of sections 1508 through 1540 of the 1932 Code of Tennessee, as it was amended by certain Acts of the Legislature of 1945. Plaintiffs in Error will be referred to herein as 'The Board,' and the Nashville, Chattanooga & St. Louis Railway will be referred to as 'The Railway' or 'Taxpayer,' and the Railroad & Public Utilities Commission as the 'Commission.'

In considering the appeal a brief review of the somewhat unusual and complex steps taken in the litigation below is unavoidable. After the assessment of the Railway properties had been completed by the Commission, an appeal was taken by the Railway to the State Board of Equalization. After a hearing de novo before the Board, introduction of the evidence and record made before the Commission, new evidence and argument of counsel which lasted from day to day, from October 2, 1945, until October 15, 1945, the Commission's assessment was approved by the Board and certified back to the Commission as the final assessment (Code sec. 1535). The assessment is as follows:

Tennessee localized property $3,469,994

Tennessee distributable property 31,886,680

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Total assessment (less $1000 exemption) $35,355,674

The Railway then filed petition for certiorari in the Circuit Court of Davidson County, seeking judicial review, not only of the legality of the assessment, but of the valuation of the property upon which it was based.

Petition for certiorari was met by a written motion of the Board to dismiss on numerous grounds, among which were,--that the petition for certiorari showed on its face that the assessment had been regularly and legally made; that it failed to show that the Board had acted illegally, arbitrarily, fraudulently or in excess of its jurisdiction. The case was then heard by the Circuit Judge on the petition for certiorari, the full transcript and record of the proceedings had before the Railroad and Public Utilities Commission and the Board of Equalization, and upon the motion to dismiss. As a result of this hearing the Circuit Judge overruled the motion to dismiss and ordered the Board to make further defense.

The Board then filed motion for new trial seeking to have the Court set aside and vacate the order overruling its motion to strike the petition for certiorari. To this motion for a new trial the Railway replied with a motion to strike on the ground that there had been no final judgment. After argument of the motion for a new trial and motion to strike, the Court sustained the motion to strike and denied the Board the right to appeal on the ground that the orders theretofore entered in the cause were interlocutory and not final.

The Board then asked leave to file and time for filing a bill of exceptions or wayside bill of exceptions. This motion, too, was overruled, the Court denying the Board the right to have time to prepare and file a bill of exceptions or to appeal. Thereupon the Railway moved for judgment by default for failure of the Board to plead further, in accordance with the order of Court overruling motion to dismiss the petition for certiorari. Refusing the Board's application for time and to defer action on the motion for judgment by default until the presentation of questions already raised could be made in the Supreme Court, the Circuit Judge granted the motion for judgment by default and ordered that the petition for certiorari and the averments thereof be taken as confessed, and that the cause be set for hearing ex parte as to the Board. The Board then prepared and tendered its wayside bill of exceptions or bill of exceptions, and the Circuit Judge refused to grant the Board any bill of exceptions or wayside bill of exceptions.

Thereupon the Board presented to an Associate Justice of this Court separate petitions (1) for a writ of mandamus to require the Circuit Judge to allow a bill of exceptions or wayside bill of exceptions, (2) for writs of certiorari and supersedeas to review and set aside the aforesaid action of the Court in overruling its motion to dismiss, in sustaining petition for certiorari, and in striking the Board's motion for a new trial. By consent, petition for mandamus was disposed of by an order permitting the Board to file its wayside bill of exceptions, which was duly done. Petition for certiorari and supersedeas was considered by this Court and granted. As a result, the judgment by default rendered in the Circuit Court was set aside and the cause remanded for a hearing on the record of the proceedings before the Board as certified and filed by the Board in the Circuit Court, and for the entry by the Circuit Court of a final judgment.

Thereafter the cause was finally heard in the Circuit Court, the Judge rendered no opinion and stated no grounds for his action, but held (1) that the petition for certiorari should be sustained, and (2) that final judgment should be entered sustaining all averments of illegality made in the petition for certiorari, and adjudging that the assessment of the Railway properties for 1945 for ad valorem taxation was illegal, null and void; that the assessment should be quashed; that the assessment of the Railway properties for the biennium 1945-1946 be remanded to the Board for such further proceedings as are authorized by law. Motion by the Board for new trial was made and overruled, the wayside bill of exceptions and the bill of exceptions setting forth the proceedings had in Circuit Court after procedendo on certiorari and supersedeas, were filed and an appeal prayed and granted.

The case is now before us after elaborate and extensive argument, voluminous briefs and the entire record, including all proceedings before the Railroad and Public Utilities Commission, the Board of Equalization, and the Circuit Court.

We were forced to make this lengthy statement of the history of this litigation on account of this state of the record and the extent to which various legal and factual questions have been presented and argued in the briefs filed. However, the only real question for our determination is whether or not the petition for certiorari filed by the Railroad in the Circuit Court was on its face sufficient to warrant or justify judicial review of the assessment as finally made by the State Board of Equalization. To justify or warrant such review it must appear that the assessment as finally certified was action illegal, arbitrary, or fraudulent. Illegality includes the question of jurisdiction and authority.

In its brief the Railroad insists the assessment was illegal:

'(1) Because so grossly excessive as to be a constructive fraud and because made in an arbitrary, capricious and unfair manner;

'(2) Because in excess of any valuation established by the record, and hence constructively fraudulent;

'(3) Because made in violation of statute on the basis of personal inspection, investment cost and a former pretended assessment and by the inclusion of the value of non-taxable securities;

'(4) Because petitioner's constitutional right to equalization was denied;

'(5) Because, as to the year 1945, a prior assessment for such year had been made and certified in 1944 and had become a lien on petitioner's property as of January 10, 1945, prior to the making of the challenged assessment or the passage of the statute which allegedly authorized it and such prior assessment remained effective.'

From the broad scope of matters presented in briefs and arguments of this case under a proposed elaboration of the foregoing summary, it seems necessary to state against that this Court is not a Board of Tax Appeal and that so far as the Legislature is concerned, no duty has been imposed on this Court in relation to the assessment of property of public utilities; that the present appeal is before us on common law writ of certiorari under section 9008 et seq. of the Code, as those sections have been limited and defined in Anderson v. Memphis, 167 Tenn. 648, 72 S.W.2d 1059; W. J. Savage & Co. v. Knoxville, 167 Tenn. 642, 72 S.W.2d 1057. On this certiorari the Court's jurisdiction is 'supervisory' not 'appellate,' State ex rel. v. Hunt, 137 Tenn. 243, 250, 192 S.W. 931, and certiorari does not lie to have judicial review of the action of the State Board of Equalization 'on the merits.' State ex rel. v. Dixie Portland Cement Co., 151 Tenn. 53, 267 S.W. 595; The Press, Inc., v. Washington County, 179 Tenn. 435, 439, 167 S.W.2d 329.

The assessmet and collection of taxes is an administrative and not a judicial function. The Legislature has created the Railroad & Public Utilities Commission, whose three members are elected by all the people of the State to...