Memphis Ry Co v. Pace

• Decision Date: 05 January 1931
• Docket Number: No. 8,8
• Citation: 72 A.L.R. 1096,75 L.Ed. 315,51 S.Ct. 108,282 U.S. 241
• Parties: MEMPHIS & C. RY. CO. v. PACE et al
• Court: U.S. Supreme Court

282 U.S. 241

51 S.Ct. 108

75 L.Ed. 315

MEMPHIS & C. RY. CO.

v PACE et al.

No. 8.

Argued Oct. 29, 1930.

Decided Jan. 5, 1931.

Messrs. John B. Hyde and S. R. Prince, both of Washington, D. C., for appellant.

Messrs. W. W. Magruder, of Starkville, Miss., B. H. Charles, of St. Louis, Mo., and J. E. Cunningham, of Booneville, Miss., for appellees.

Mr. Justice VAN DEVANTER delivered the opinion of the Court.

By a suit in equity brought in the chancery court of Tishomingo county, Miss., the appellat § ought an injunction forbidding the collection of a tax levied to make a partial payment upon bonds of the Oldham road district in that county. Among other grounds for such relief the bill assailed the state statutes underlying the existence of the district and the levy of the tax as being invalid under the due process and equal protection clauses of the Fourteenth Amendment to the Constitution of the United States. After answer and a hearing the chancery court entered a decree for the defendants, which the Supreme Court of the state affirmed. 154 Miss. 536, 121 So. 826. An appeal brings the case here.

The road district was created, and commissioners therefor were appointed, by the board of supervisors of the county in February, 1926, under chapter 277 of the State Laws of 1920. With an approving vote of the district's electors, and at the request of the commissioners, the board of supervisors then issued and sold bonds of the district in the sum of $6,500 to provide money for the construction and maintenance of public roads in the district-the particular roads to be determined later on as provided in section 5 of chapter 277.

At this stage of the proceedings the state Legislature, desiring to put at rest any question respecting the validity of the creation of the district and the issue of the bonds, passed two acts confirming both. One of these acts took effect on March 11, 1926, and the other four days later. The first, being chapter 1080 of the local laws of that year, applied to this district alone. The second, being chapter 278 of the general laws of that year, applied broadly to all districts in the situation of this one, and to others.

After the enactment of the confirmatory measures the commissioners, with the approval of the board of supervisors, designated two roads-one branching from the other-as the ones to be constructed and maintained out of the proceeds of the bonds; and in due course the work of construction was begun and carried to completion.

In November, 1926, the board of supervisors, at the request of the commissioners, levied on all taxable property, real and personal, within the district an ad valorem tax to meet the first instalment of interest and principal upon the bonds, that instalment being payable in the following February. The tax was four-tenths of 1 per cent. of the assessed value of the property as fixed for state and county taxes. The amount so charged on the appellant's property was about $450, and this is the tax against which the suit is directed.

The Supreme Court of the state in the decision under review holds that the creation of the road district, the issue of the bonds, and the levy of the tax were all valid under the state Constitution and the acts before cited; that the board of supervisors in creating the district acted in a legislative capacity, they being invested by the Constitution and statutes of the state with discretion to create the district, or refuse to create it, according to their judgment of the best interests of all concerned; and that the two confirmatory acts were valid under the state Constitution and operated to make the district a legislatively created district if it was not such before. These were all questions of state law, and their decision by that court is controlling here.

Counsel for the appellant so understand the situation, for in their last brief they say 'that it (appellant) and this Court are bound by the decision of the State's highest court relating to the state constitution and state statutes and that it is no longer possible here for appellant to contend that the district was invalidly organized or that the special validating act approved as constitutional under the constitution of Mississippi did not serve to place the Oldham road district in the class of legislatively created districts.' And also that 'the Supreme Court of Mississippi in the decision below expressly held that the board of supervisors of a Mississippi county was vested with authority to deny the petition to create he district. District thus created, within the discretion of the board of supervisors, are, therefore, under this decision, equivalent to legislatively created districts, and hence a taxpayer whose property is included therein is not entitled to notice and hearing within the doctrine aforesaid of Browning v. Hooper, (269 U. S. 396, 46 S. Ct. 141, 70 L. Ed. 330).'

The only question presented in the Supreme Court of the state which is open here is whether the act of 1920 and the confirmatory acts of 1926, as construed and applied in this case, are invalid as authorizing the imposition of a tax which is so palpably arbitrary and unreasonably discriminatory that it offends the due process and equal protection clauses of the Fourteenth Amendment.

On the part of the appellant the tax is said to be thus objectionable, because it is imposed to pay for local road improvements and is not apportioned according to benefits, but is laid upon all the property, real and personal, within the district on an ad valorem basis; because the property of the appellant, and particularly its personal property, receives no benefit from the improvements; and because, even if there be some benefit to the appellant's property, the tax laid thereon is disproportionate to the benefit and to the tax laid on other property.

The construction and maintenance of serviceable roads in any community is a matter in which the whole community have an interest and is a typical purpose for which property may be taxed by the state. Missouri Pacific R. R. Co. v. Western Crawford Road District, 266 U. S. 187, 190, 45 S. Ct. 31, 69 L. Ed. 237. Whether the tax shall be state wide or confined to the county or local district wherein the improvement is made, and whether it shall be laid generally on all property or all real property within the taxing unit, or shall be laid only on real property specially benefited, are matters which rest in the discretion of the state, and are not controlled by either the due process or the equal protection clause of the Fourteenth Amendment. County of Mobile v. Kimball, 102 U. S. 691, 703, 26 L. Ed. 238; Spencer v. Merchant, 125 U. S. 345, 355-356, 8 S. Ct. 921, 31 L. Ed. 763; Houck v. Little River District, 239 U. S. 254, 262, 265, 36 S. Ct. 58, 60 L. Ed. 266; Valley Farms Co. v. West chester 261 U. S. 155, 43 S. Ct. 261, 67 L. Ed....