McLeod v. Receveur

• Decision Date: 06 January 1896
• Docket Number: 224.
• Parties: McLEOD et al. v. RECEVEUR, Treasurer.
• Court: U.S. Court of Appeals — Seventh Circuit

71 F. 455

McLEOD et al. v. RECEVEUR, Treasurer.

No. 224.

United States Court of Appeals, Seventh Circuit.

January 6, 1896

In a suit in the circuit court of the United States for the district of Indiana, wherein the Youngstown Bridge Company was complainant, and the Kentucky & Indiana Bridge Company and others were defendants, the appellants were appointed receivers of the property of the company defendant in that bill. The defendant corporation was the owner of a bridge spanning the Ohio river at or near Louisville, in the state of Kentucky, and New Albany, in the state of Indiana, with considerable property in both of such states adjacent to the termini of the bridge. The state board of equalization of Indiana assessed the property of the Kentucky & Indiana Bridge Company in the years 1891, 1892, and 1893 at something over $200,000. The taxes levied by the state of Indiana and by the county of Floyd for such years, respectively, upon the basis of that assessment, remaining unpaid, the treasurer of Floyd county, in which county the property in the state of Indiana belonging to the company was situated, and who, by law, is charged with the duty of collecting such taxes, on the 29th of May, 1894, filed his intervening petition setting forth that the taxes for those years were levied by the state of Indiana and by the county of Floyd upon the property of the company situated within the state of Indiana and in the county of Floyd and north of the low-water mark of the Ohio river; that such taxes, remaining due and unpaid constituted a first lien upon all the property of such bridge company; and asking for a decree that the receivers be adjudged to pay the same out of any funds in their hands. To that petition the receivers made answer, inter alia, as follows: 'Your respondents, for further answer, state that they are, as receivers, under the order of this court ready and willing and able to pay any taxes due the county of Floyd and state of Indiana, for either of the years named,-- 1891, 1892, 1893. They state that the assessments upon the property of said Kentucky and Indiana Bridge Company for the years above named were not legally, fairly, justly, and equitably assessed by the state board of equalization of the state of Indiana, and that the amount of property belonging to the said Kentucky and Indiana Bridge Company, in the state of Indiana, was unfairly and improperly represented to said state board of equalization of the state of Indiana, and that, by reason of said unfair, improper, and incorrect representations of the property of said Kentucky and Indiana Bridge Company, the valuation placed thereon was greatly in excess of the fair, just valuation of said property, due from any standpoint whatever. Respondents further say that the said board of equalization were led to believe, and did believe, against the statements and protest of said Kentucky and Indiana Bridge Company, that the property to be assessed and that was assessed, and was considered in the valuation of said property, was to be the channel of the Ohio river on the Kentucky side; that said board of equalization claim that the property of the Kentucky and Indiana Bridge Company, for the purpose of valuation aforesaid, should be held as extending to what is known as 'Sand Island,' in the Ohio river near the Kentucky shore; whereas the property of the Kentucky and Indiana Bridge Company, for purposes of valuation and taxation in the state of Indiana, does not extend further than the low-water mark on the Indiana side; that the members of the state board of equalization were misled by the statements and representations of a member thereof, who resided in the city of New Albany, and who assumed to know the circumstances and relations of the property, and said valuation was made through mistake and error as to the amount of property belonging to said company in the state of Indiana. Your respondents state, and charge the fact, and believe, that in the said valuation of the Kentucky and Indiana Bridge Company property, for the purpose of taxation, the property of said company was considered to be and held as extending to the channel of the river on the Kentucky side, which would be about eighteen hundred feet further into the channel of the Ohio river than by law it could extend for purposes of taxation. Your respondents further state that the cost of all the property of the Kentucky and Indiana Bridge Company in the state of Indiana could not exceed $45,000, and yet, by the inducements and representations, at the time said amount was first assessed against said property, the valuation was placed at the sum of $200,000, more than four times its original cost, and far greater than could be reasonably, fairly, and justly, under all the circumstances, placed upon the property of the Kentucky and Indiana Bridge Company for the purpose of taxation. Your respondents further allege, and they stand ready to prove, that, on account of said misrepresentations and statements and mistakes as to the amount of property of the Kentucky and Indiana Bridge Company in the jurisdiction of the state of Indiana, this erroneous and unjust and unlawful assessment was placed upon the property of said company. Your respondents further state that said facts were placed before said board of equalization, and that said Kentucky and Indiana Bridge Company protested against any part of its property south of the low-water mark on the north bank of the Ohio river being considered in the valuation of its property for taxable purposes, but that in defiance of the rights of the Kentucky and Indiana Bridge Company, and owing to the persuasions and representations of said member of said board of equalization, in the beginning of said valuation, as above set forth, was induced to place such excessive, erroneous, unjust, and unlawful valuation upon the property of the Kentucky and Indiana Bridge Company for the years 1891-2-3. Respondents further state that said property, either actually or relatively, was of no greater value than $45,000; that they have offered to pay, and do hereby again offer to pay, to the county and state aforesaid, taxes for 1891, 1892, and 1893, on said valuation of $45,000; and that taxes of said amount is all that should be placed by this court upon this property for the years above named. ' The intervening petitioner thereupon moved to strike out the paragraphs of the answer quoted, upon the ground that each of said paragraphs states matters, and only matters, impertinent and irrelevant, and in no way material to the defense of the petition. The court sustained the motion, and struck out the paragraphs referred to; and the receivers withdrawing all other defenses stated in their answer, and electing to stand upon and abide by their exception to the order and ruling of the court sustaining the intervening petitioner's exception to, and motion to...