N. Pac. R. Co. v. Barnes

• Citation: 51 N.W. 386,2 N.D. 310
• Parties: Northern Pac. R. Co. v. Barnes, County Treasurer.
• Decision Date: 21 January 1892
• Court: United States State Supreme Court of North Dakota

2 N.D. 310

51 N.W. 386

Northern Pac. R. Co.

v.Barnes, County Treasurer.

Supreme Court of North Dakota.

Jan. 21, 1892.

Syllabus by the Court.

1. The taxing power is a legislative power, and such power passed to the territorial legislature of Dakota by virtue of the general grant of legislative power made by congress in the organic act. The power resided in the legislature without any limitations or restrictions whatsoever upon its exercise, except such limitations as were imposed by the organic act itself and the federal constitution.

2. There is nothing in the provisions of section 6 of the organic act under which the territory of Dakota was organized, or the fourteenth amendment of the federal constitution, which prohibited the legislature of said territory from enacting chapter 99 of the Laws of 1883.

Appeal from district court, Burleigh county; Roderick Rose, Judge.

Action by the Northern Pacific Railroad Company against Jerry A. Barnes, county treasurer of McLean county, to restrain the sale of certain land for taxes. Judgment dismissing the action on demurrer. Plaintiff appeals. Reversed.

Corliss, C. J., dissenting.James McNaught, John C. Bullitt, and Hollembaek & Long, for appellant. N. F. Boucher, Louis Hanitch, and R. H. Copeland, for respondent.

Winchester, J.

This action was brought by the appellant in September, 1888, to restrain the respondent, as county treasurer of McLean county, from selling certain lands in said county, and described in the amended complaint, for taxes levied and assessed thereon in the year 1887, amounting to $4,803. The respondent demurred to the appellant's bill, upon the ground that said bill did not state facts sufficient to constitute a cause of action. The demurrer was sustained by the lower court, and the action was dismissed. Judgment was duly entered by respondent against appellant, and from this judgment the present appeal was taken by appellant.

The sole question we have to consider is whether the complaint states facts sufficient to constitute a cause of action. The complaint avers that the appellant is a corporation organized under the act of congress approved July 2, 1864, entitled “An act granting lands to aid in the construction of a railroad and telegraph line from Lake Superior to Puget's sound on the Pacific coast, by the northern route,” and under certain subsequent acts and joint resolutions of congress relating to the same subject-matter; that, in pursuance of said act of July 2, 1864, and the subsequent acts and joint resolutions of congress, appellant has constructed a line of railroad and telegraph in all respects as required by said acts and joint resolutions, and is now engaged in operating the same; that said railroad and telegraph line has been duly accepted by the United States, as provided for in said acts and joint resolutions, and is in all respects of the material and character specified and required therein; that the line of said road was definitely fixed, and a plat thereof filed in the office of the commissioner of the general land-office at Washington, D. C., on May 26, 1873; that at all times prior to this date the lands described in the complaint were free from pre-emption or other claims or rights, and had not been sold, granted, reserved, or otherwise appropriated by the United States, and were a part of the public domain of the United States; that said lands were and are situated within either the “place” or “indemnity” limits of appellant's grant; and that, by reason of the facts above stated, appellant has acquired all the interest in said lands conferred and intended to be conferred by the acts of congress aforesaid. The complaint further alleges that in 1887 the taxing officers of McLean county levied certain taxes on said lands for that year for territorial, county, and other purposes, amounting in the aggregate to the sum of $4,803; that said taxes were and are illegal and void by virtue of the act of March 9, 1883, which provides that, in lieu of all other taxation upon the property of railroad companies, there should thereafter be paid a certain percentage of the gross earnings of such railroad companies; that said act of March 9, 1883, has in all respects been complied with by appellant; and that, notwithstanding these facts, the respondent threatens to sell the said lands to satisfy said taxes, and will do so unless enjoined by the court. The complaint prays for a permanent injunction enjoining such threatened sale.

A court of equity will not interfere, except upon the strongest and most cogent reasons, with the collection of the public revenue. The taxing power of the government has very wisely been delegated to the legislative department, and must necessarily be exercised by that body without interference by any other governmental department. It is true that the legislative, executive, and judicial departments of government are co-ordinate and equal; but it is also true that none of these departments will interfere with any of the other departments unless the person asking for such interference can show that the governmental department whose action is questioned has clearly exceeded its powers, and usurped an authority or power not properly belonging to it. In the case at bar this court is asked to interfere with the usual and ordinary method of procedure of collecting the revenues of the territory of Dakota by enjoining the respondent from selling appellant's lands to satisfy taxes assessed thereon by the proper governmental officers, and which said taxes have, it is conceded, not been paid. This method of procedure has been prescribed by the legislature of Dakota territory in pursuance of a power vested in it by the organic act creating the territory. By that act the legislature of the territory was given by congress full and complete power and authority over all rightful subjects of legislation, subject only to the limitation that the exercise of such power should not conflict either with the federal constitution or the laws of congress passed in pursuance thereof, or the provisions of the organicact itself. 12 U. S. St. at Large, p. 241; Rev. St. U. S. § 1925. By virtue of this grant of power to the territory the taxing power became vested in the territorial legislature, and could be exercised by that body in any manner that it saw fit, subject only to the limitations and restrictions above indicated. The power to tax is a legislative power, which acknowledges no other limitations than those prescribed in the paramount law of the land, and this vast power undoubtedly passed to and was vested in the legislature of Dakota territory by virtue of the provisions of the organic act under which that territory was formed, and which extended the power and authority of that body to “all rightful subjects of legislation.” McCulloch v. Maryland, 4 Wheat. 415;Bank v. Billings, 4 Pet. 514;State v. Lancaster Co., 4 Neb. 540; Cooley, Tax'n, (2d Ed.) c. 2, passim. And, as the actions which are complained of in this case, and against which relief is sought, resulted directly from and flow out of the exercise by the territorial legislature of a power that was unquestionably reposed in it by the organic act, the judicial department of the government cannot and will not interfere unless it clearly appears that either the legislative department has exceeded its power, or that the regularly constituted officers of the territorial government have usurped powers or functions not properly belonging to them, and in carrying out such usurpation will inflict irreparable injury and damage to the appellant.

It appears from the complaint that appellant's lands have been assessed for taxation for the year 1887, and that, as the appellant has refused to pay the taxes so assessed, the respondent threatens to and will sell said lands to satisfy said taxes, unless enjoined by this court. It is admitted that, if the gross earnings law of 1883, hereinafter referred to, (Sess. Laws 1883, c. 99,) is a valid and constitutional law, and exempts the property in question from taxation, the threatened action of respondent is unlawful. But this conceded fact would not, of itself, entitle appellant to invoke the aid of a court of equity. It is necessary that some additional facts be shown, so as to bring the case under some acknowledged head of equity jurisprudence. Cooley, Tax'n, 760. The case at bar shows such additional facts by reason of the provisions of section 67 of chapter 28 of the Political Code of Dakota territory, which enacts, in substance, that the purchaser of any tract of land sold for taxes shall be entitled to a certificate of sale, describing the land so sold, the sum paid, and the time when the purchaser will be entitled to a deed, and which shall be assignable, “and shall be presumptive evidence of the regularity of all prior proceedings.” It is unquestionably true that the issuance of this certificate creates a cloud upon the title to the land described therein, as said certificate is prima facie evidence, by the express terms of the statute, of the regularity of all prior proceedings, including the taxability of the lands. It follows that the case at bar presents sufficient ground to warrant the interference of a court of equity by the extraordinary writ of injunction, if it can be shown that the lands in question were not subject to taxation. The doctrine is well settled that a court of equity will grant proper relief in tax proceedings, in order to prevent the casting of a cloud upon the title of the complainant's land. Cooley, Tax'n, 779; Railroad Co. v. Cheyenne, 113 U. S. 516, 5 Sup. Ct. Rep. 601;Hannewinkle v. Georgetown, 15 Wall. 547;Dows v. Chicago, 11 Wall. 108;State Railroad Tax Cases, 92 U. S. 575;Oil Co. v. Palmer, 20 Minn. 468, (Gil. 424;)Dean v. Madison, 9 Wis. 402;Crooke v. Andrews, 40 N. Y. 547. In the case at bar the court will grant appropriate relief, by injunction or otherwise, if it appear that the...