N. Pac. R. Co. v. Carland

• Decision Date: 31 January 1884
• Citation: 5 Mont. 146
• Parties: NORTHERN PACIFIC R. Co. v. CARLAND, Treasurer, etc.
• Court: Montana Supreme Court

5 Mont. 146

NORTHERN PACIFIC R. Co.

v.CARLAND, Treasurer, etc.

Supreme Court of the Territory of Montana.

January Term, 1884.

Syllabus by the Court

1. An action or controversy which turns upon the existence, effect, and operation of an act of congress is an action arising under such act, and a suit brought to determine such controversy is properly commenced in the district court of the territory, sitting to hear and determine causes arising under the constitution and laws of the United States; and especially is this the case when the action is brought by or against a corporation chartered by an act of congress.

2. Plaintiff's right of way through the public lands blic lands is an easement therein, and such an interest in the land that personal articles attached to the soil and annexed to the easement, within the boundaries of the right of way, become a part of the land, and therefore partake of and are included in the exemption from taxation that belongs to the right of way, and hence a tax levied upon “twenty miles of railroad” constructed upon, over, or through plaintiff's right of way in the territories of the United States, is a tax levied upon property that is exempt from taxation, and therefore void.

3. The act of congress incorporating plaintiff is a contract between the government and the incorporators and their successors, and it is not within the constitutional power of congress, or of a territorial legislature, to impair the obligations of this contract, which would be done by the imposition of a tax upon plaintiff's right of way, by the authority of congress or the territorial legislature.

4. The fourteenth amendment to the constitution of the United States is a limitation upon the sovereignty of the states, and was adopted by the people of the United States to secure to the inhabitants of each state equal laws and equal protection of the laws, without regard to race, color, or previous condition.

5. This limitation applies to the subject of taxation, and forbids the states or territories from exempting property from taxation, except in those cases wherein the property is devoted to public uses in which all the people are equally benefited.

6. It is within the constitutional power of congress to exempt the property of the United States from taxation. The government may dispose of its own property upon such terms and conditions as it deems proper, and congress is the sole judge as to how this property shall be disposed of.

7. It was competent for congress to charter the Northern Pacific Railroad Company; to grant to it public lands; and exempt its right of way through such lands from taxation.

8. There is a consideration for the contract contained in the charter incorporating the Northern Pacific Railroad Company, which consideration is found in the public benefits to be derived to the whole people of the United States by reason of the construction of such road.

9. When rights have become vested under a valid contract, legislative authority cannot invalidate such contract or disturb such rights.

10. The fourteenth amendment to the constitution is not a limitation upon the power of congress in the disposal of the property of the United States.

11. In order that a county assessor may have jurisdiction to assess property for taxation he must follow the statute.

12. An assessment made in a manner not authorized by statute, and not in substantial compliance with its provisions, is void and equivalent to no assessment at all.

13. An assessment that values real and personal property in a mass is void.

14. An assessment should show a proper description of the property, and the real estate and personal property should be separately and distinctly assessed and valued.

15. An assessment that is in such a condition that it cannot be equalized by the board of commissioners, sitting as a board of equalization, is void.

16. In assessing railroads for taxation the assessor must follow the provisions of the statute.

17. A tax will not be restrained upon the ground that it is irregular or erroneous.

18. To entitle a party to relief in equity, against an illegal tax, he must bring his case under some acknowledged head of equity jurisdiction.

19. Courts of equity will enjoin the casting of a cloud upon a title, in cases wherein the cloud itself, when cast, would be removed.

20. If the record showing the valuation and levy of tax is complete on its face, such record creates a lien upon the real estate against which the tax is assessed, and is a cloud upon the title of the owner.

21. If a tax deed is made prima facie evidence of the purchaser's title, and may be introduced in evidence, without showing the regularity of the proceedings up to the delivery of the deed, such deed is a cloud upon the title of the owner, and equity would interfere, when by the averments of the bill, it appears that the property is exempt from taxation, or that the assessment was void.

22. If the illegality of the tax appears upon the face of the proceedings, no cloud is cast upon the title.

23. Equity will enjoin the collection of a tax levied upon property that is exempt from taxation, to prevent a multiplicity of suits, and to afford a complete remedy.

24. Equity will interpose to prevent the destruction of a franchise.

25. A franchise is property, and in the case of a continuing injury to the same, courts of equity will prevent a repetition of the injury, and protect the franchise.

26. Any encroachment upon the quiet enjoyment of an easement, whether created by grant or prescription, will be prevented by injunction.

27. Equity will interfere to protect rights, when it sufficiently appears that the evidence by which such rights can be established is liable to be lost.

Appeal from First district, Gallatin county.

Sanders & Cullen, and E. W. & J. K. Toole, for appellant.

J. A. Johnston, Atty. Gen., and Chumasero & Chadwick, for respondent.

WADE, C. J.

This is an action in the nature of a bill in equity to enjoin the collection of a tax assessed by the assessor of Custer county, which the treasurer thereof, the defendant herein, is attempting to collect, upon “twenty miles of railroad and rolling stock” of the plaintiff, situated in said county of Custer and territory of Montana. There was a demurrer to the complaint, which was sustained, and the plaintiff abiding its complaint, judgment was rendered for the defendant, from which plaintiff appeals.

The action was commenced in the district court of the First judicial district, at Bozeman, Gallatin county, sitting to hear and determine causes arising under the constitution and laws of the United States, and the complaint alleges the creation and corporate existence of the plaintiff under an act of congress of 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.” The complaint, in substance, further alleges:

That by the terms of said act plaintiff's right of way through the public lands is 200 feet in width on each side of said railroad, and in addition thereto includes all necessary ground for station buildings, work–shops, depots, machine shops, switches, side tracks, turntables, and water stations, which right of way and necessary ground is exempt from taxation in the territories of the United States; that notwithstanding said exemption the assessor aforesaid, on the fifth day of September, 1881, without notice to plaintiff or its authorized agent at Helena, in said territory, whose duty as to returning assessments of plaintiff's property for taxation in the territory were those of secretary or clerk, named and mentioned in the territorial laws, did then and there value and assess the personal property of the plaintiff, in said county, for taxation at $15,500, and did assess, value, and return as assessable valuation in said county “twenty miles of railroad and rolling stock,” at $200,000, to the commissioners of said county, who then and there, without the knowledge of plaintiff or its agents in that behalf, approved of said valuation, and levied a tax thereon, amounting to 25 mills on each dollar thereof, and thereby made it the duty of the treasurer of said county to collect said tax; that the plaintiff paid the tax upon said $15,500 of personal property, and applied to the board of county commissioners of said county at their December session, 1881, to remit the tax on 20 miles of railroad and rolling stock, so valued by said assessor at $200,000, which the board refused to do, and neglected to make any record of said application; that the plaintiff, before the commencement of this action, appraised at its true value the rolling stock on said 20 miles of road, and has tendered to the defendant the taxes thereon, amounting to the sum of $440, and brings the money into court; that the assessment and levy of said tax upon said 20 miles of said road, valued at $180,000, is evidenced by a record in the hands of the defendant, which tax he is proceeding to collect, and the same is a lien upon the real property of the plaintiff in said county, and a cloud upon its title; that, unless the defendant is enjoined, he will levy upon and sell the personal property and real estate of the plaintiff for said tax; and that for the wrong thus impending there is no plain, speedy, or adequate remedy at law, but that the injury so threatened is, and will be, and remain, irreparable.

That Custer county is largely indebted, to–wit, in the sum of more than $100,000, and has no money in its treasury applicable to pay any claim of plaintiff against the county, if it should pay said tax and sue the county, and recover a judgment for the same; that the taxes collected in said county are applicable by law to the payment of the necessary current expenses and interest upon warrants and the bonded indebtedness of the county, which warrants and bonds are payable in...