Railroad & Telephone Companies v. Board of Equalizers of Tennessee

• Decision Date: 23 December 1897
• Citation: 85 F. 302
• Parties: RAILROAD AND TELEPHONE COS. v. BOARD OF Equalizers OF TENNESSEE.
• Court: U.S. District Court — Middle District of Tennessee

85 F. 302

RAILROAD AND TELEPHONE COS. v. BOARD OF Equalizers OF TENNESSEE.

United States Circuit Court, M.D. Tennessee.

December 23, 1897

Edward Colston, Shields & Mountcastle, Richmond, Chambers & Head William A. Henderson, Dickinson & Waller, and Vertrees &amp Vertrees, for complainants.

W. L Granbery, J. C. Bradford, and S.W. Pickle, Atty. Gen., for defendant.

CLARK District Judge.

The bills in these cases raise fundamental questions of far-reaching importance. The cases have had, in the discussion at the bar, and in the briefs filed, the study and attention which their importance demands. The cases must now be disposed of in the light of what some of the best legal talent in the state can say on both sides of the question. In the industry which has been bestowed upon the cases a great accumulation of authorities has been furnished in support, as is assumed, of each side of the controversy. The number of the cases cited is so great that counsel readily understand I cannot, in the limits which must be put to an opinion, and most of all, an opinion upon this application, undertake to review these cases, nor to point out wherein I think particular cases are applicable or inapplicable. At the same time I have carefully read the cases cited, except some cases referred to in the brief for plaintiffs to which I have had access. As I cannot discuss at length the cases referred to as bearing on the different points, I think it may be just as well to state, in a very general way, my impressions after studying the cases, and to cite but few authorities. The cases are of a kind which will, and should, go up for review, and this makes it less necessary that I should express my opinion more in detail upon the points of issue.

As is well understood, the bills involve an attack upon the validity of the assessment of railroad and telephone properties for the Biennial period including the years 1897 and 1898. The validity of the assessment is called in question mainly upon the grounds: (1) That the assessment is, in and of itself, excessive, and above the real value of the property. (2) That the assessment is relatively out of proportion to the taxable value at which other species of property in the state are assessed whereby the property of these companies is made to bear an undue proportion of the burden of the government, in violation of the constitution of the state, and that they are also deprived of the equal protection of the law, under the fourteenth amendment to the constitution of the United States. (3) That the railroad commission act is unconstitutional, and that the commissioners appointed thereunder are not de jure officers of the state, and are not authorized legally to discharge the duties of tax assessors; these duties being attached, as ex officio power, to the office of railroad commissioners. (4) That these properties were legally assessed in the year 1896 for the years 1896 and 1897, by a valid assessment, and that the new assessment made for 1897 is null and void.

Some minor questions are made, relative to the procedure by the board of equalizers, such as the lack of proper notice of taking depositions, the exclusion of competent evidence, and the admission of incompetent evidence. I shall take up and dispose of what may be regarded as the most fundamental objection made to this assessment. I refer to the objection that the properties of these companies have not been equalized in the taxable value fixed with the assessment of all other property in the state, and have been overvalued.

The particular provisions of the constitution of the state which affect the matter now under consideration are found in article 2, Sec. 28, and read as follows:

'All property shall be taxed according to its value, that value to be ascertained in such manner as the legislature shall direct, so that taxes shall be equal and uniform throughout the state. No one species of property from which a tax may be collected shall be taxed higher than any other species of property of the same value.'

It is conceded that railroad and telephone properties have been assessed at their full value, and this is not to be regarded as a disputed fact in the cases. The answer filed by the board of equalizers must be taken as admitting that they made no effort whatever to equalize the assessment on this class of property with the assessments made on other classes of property in the state. The answer clearly admits of no other interpretation. The act contains no provision directing the assessors or board of equalizers specifically to enter upon the duty of equalization for the purpose of avoiding a disproportion between the taxable values of different properties, and the assessors and board of equalizers did not regard it as a duty resting on them to make any effort at equalization, the statute not furnishing, specifically, any means of discharging such a function or duty in any Beyond what is thus admitted, the plaintiffs have been put strictly upon proof as to every other fact involved in the issues here raised. The answer of the defendants is extremely guarded and cautious throughout, and contains no intimation as to the exact method by which the results complained of were reached. The defendants, in their answer, content themselves with meeting the charges of the bills by saying, in the most general terms, that they have acted legally. This is, of course, the averment of a mere conclusion of law. In the answer as well as in the argument, the position taken, in general, is that the board of equalization has jurisdiction to proceed, that the board proceeded regularly, and that its action is final and conclusive until and unless set aside by certiorari proceedings in the state court, this proceeding being called a direct one. Stated in another form, the contention for the defendants is that this court cannot inquire into the facts in the absence of allegations of fraud or bad faith on the part of the board of equalization. It is said, further, that, if errors of law occurred, these must be corrected in the certiorari proceedings, and the jurisdiction of this court to interfere by injunction is denied.

It is conceded, and could not be controverted, that the bill contains no specific allegation of fraud on the part of the board of equalization. While I do not regard this as a controlling point at all in the case, it must be stated, to avoid misapprehension, that, although acting with perfect honesty, if the assessors or board of equalizers pursued methods calculated to bring about a substantial inequality in the taxable value of the properties here in question, as compared with other species of property in the state, the innocent intent in such a procedure would be no justification whatever, in law, for a wrong result. Full legal responsibility is recognized for the necessary, legitimate and natural result of acts, and a systematic course of procedure and an innocent mistake about the matter does not change the effect. For legal purposes, all persons are presumed conclusively to contemplate and intend the necessary and natural result of their acts. Agnew v. U.S., 165 U.S. 36, 17 Sup.Ct. 235. If the board of equalization was under a duty to equalize, a mistaken view that such was not its duty could not change the law, and could not render a result legal which would otherwise be illegal. Was the board of equalization under obligation, constitutional or legal, to equalize the assessment on railroad and telephone property with the assessment on other species of property subject to taxation? It is obvious enough that if the state adopts a system of taxation by which assessments are made through different officers, agencies, or board, the state is equally represented by every such board or agency, and, so far as substantial results are concerned, the case is just the same as if the state acted through one board only. This is plainly so, and is recognized as being so in Missouri v. Hannibal & St. J.R. Co., 135 Mo. 625, 37 S.W. 532. The provisions of the constitution referred to, it must be borne in mind, are mandatory and self-executing. Levee Dist. v. Dawson, 97 Tenn. 160, 36 S.W. 1041; Hyatt v. Allen, 54 Cal. 353; and Board v. Patten, 62 Mo. 444. This being so, no legislation was necessary to give effect to these provisions of the constitution. The constitution is the paramount law of the land, and its mandatory directions impose a duty upon the legislature in the exercise of the taxing power, and equally upon every administrative board or agency provided for the execution of the tax system. If there is a discrimination against this species of property, imposing an unconstitutional burden thereon, the result cannot be sustained; and this is equally so whether such a result is due to erroneous action by the board, or to defect in the legislation, in not requiring equalization, and furnishing the means whereby this might be made real and effective. If the legislature had, in terms, undertaken to exempt this board from the duty of equalization, no person of ordinary intelligence would make any question that such act would have been unconstitutional. Again, if this particular revenue act be construed as not requiring equalization of the assessment on property of this character with assessments on other kinds of property separately treated, and could be regarded as constitutional in respect to the equality guaranty, although not making such requirement of equalization, we would clearly have an instance of special, partial, and class legislation of the most obnoxious kind; for, it is well known that the state, in regard to every other considerable class of property, has provided a board of equalization, charged with the duty of equalizing, and no...