Railway v. Williams

• Decision Date: 15 March 1890
• Citation: 13 S.W. 796,53 Ark. 58
• Parties: RAILWAY v. WILLIAMS
• Court: Arkansas Supreme Court

13 S.W. 796

53 Ark. 58

RAILWAY v. WILLIAMS

Supreme Court of Arkansas

March 15, 1890

APPEAL from Sebastian Circuit Court in Chancery, Fort Smith District, JOHN S. LITTLE, Judge.

The St Louis and San Francisco Railway Co., a corporation organized under the laws of Missouri and owning a continuous line of railroad from St. Louis, Mo. to Paris, Tex., running through the counties of Benton, Washington, Crawford and Sebastian in the State of Arkansas, and the Fort Smith and Van Buren Bridge Co., a corporation organized under the laws of Arkansas, brought suit against John F. Williams, collector of Sebastian county, to determine which of two assessments for taxation of the railroad bridge spanning the Arkansas river at Van Buren, Arkansas, was valid.

By the provisions of an act of Congress, approved July 3, 1882 plaintiff railway company was "authorized to construct or cause to be constructed, and maintain a bridge and approaches thereto over the Arkansas river at the town of Van Buren, Crawford county, Arkansas." The act provided (section 4) that "all railroad companies desiring the use of said bridge, shall have and be entitled to equal rights and privileges relative to the passage of railway trains over the same and over the approaches thereto."

For the purpose of constructing and maintaining such bridge plaintiff bridge company was organized on the 25th day of March, 1885, its corporators being officers and stockholders in plaintiff railway company. Thereafter the railway company executed to the bridge company a deed for the approaches of the bridge on both sides of the river, reciting that the grantee was authorized and empowered by virtue of its articles of association, of the laws of the State of Arkansas and of an act of Congress to construct, maintain, operate and own a highway and railroad bridge across the river.

On the 1st day of April, 1885, the bridge company, to raise money to construct the bridge, executed its bonds to the amount of $ 500,000, which were guaranteed by the railway company. To indemnify the latter against loss, the bridge company executed a mortgage upon the bridge and its approaches and transferred its entire capital stock as a pledge. At the same time the bridge company executed a written agreement styled a "contract or lease," which conveyed, granted demised and let to the railway company, its successors and assigns, the bridge to be constructed, with its approaches and other appurtenances, for the term of ninety-eight years from April 1, 1886, the railway company agreeing to pay a fixed toll or "rental" for passage of its trains. In the lease the bridge company expressly reserved to itself its corporate franchise and the right to contract with other parties for the use of the bridge, but only on condition that the written consent of the said railway company be first had and obtained.

On April 6, 1886, the bridge company entered into a written agreement with the Little Rock and Fort Smith Railway Co., whereby the latter company was to have the right to use the bridge and approaches for railway purposes for and during the term of thirty years. The contract was approved by plaintiff railway company.

The state board of railway commissioners, in assessing the railroads in the State for the year 1887, valued the bridge at $ 263,000.00 and assessed it as part of appellant's roadway, apportioning the total assessed value to the four counties, Benton, Washington, Crawford and Sebastian, according to the mileage of the road in the respective counties named.

The assessor of Sebastian county assessed the half of the bridge lying in Sebastian county, valuing it at $ 100,000.00. The other half of the bridge, lying in Crawford county, was assessed by the assessor of that county at the same valuation. The clerk of Sebastian county extended upon the tax-books both the assessment made by the county assessor and that apportioned to the county by the state board of railway commissioners.

Plaintiffs brought suit against the collector, offering to pay the taxes legally due on the bridge, alleging that the assessment by the county assessor was void and asking that defendant be restrained from collecting same. They filed a supplemental complaint alleging that the assessment by the state board was void and asking that the defendant be restrained from collecting it.

The circuit court decided that the bridge and its approaches were the property of the bridge company and assessable by the county assessor, under section 5645 of Mansfield's Digest; that the action of the state board in assessing said bridge property was without authority and void. The court, therefore, perpetually enjoined the sheriff from collecting any taxes from the railway company by reason of any assessment of the bridge by the state board. It denied the prayer of plaintiffs for an order enjoining the collector from collecting the taxes from the bridge company by reason of the assessment of the county assessor. Plaintiffs appealed.

Decree affirmed.

Clayton, Brizzolara & Forrester for appellants, with whom are McDaniel & McGill and E. B. Wall.

The bridge was constructed under a charter from Congress to the railway company. 22 U. S. St. at Large., 144. The railway has never conveyed its franchise to the bridge company; but the bridge company has conveyed all its proprietary rights, simply stipulating to be allowed to exist, and the railway company assumed the payment of all taxes.

Railroads, by the laws of this State, are required to be assessed as an entirety, and cannot be taxed by the separate counties through which they run. Sec. 5649, Mansf. Dig.; Acts 1887, secs. 21, 23, etc.; 1 Desty on Tax., 392, and note 8; 46 Ark. 312; 96 Am. Dec., 272; 75 Ill. 616, etc.

For the purpose of taxation the bridge belongs to the railroad company. Mansf. Dig., sec. 5649; Acts 1887, sec. 21, p. 155; Acts 1881, p. 79; secs. 5420, 5549, Mansf. Dig.; Cooley on Taxation (2d. ed.), 385, note 3; 86 Ill. 352; 2 Rorer on R. R., 1507, par. 23, note 2; 62 Ill. 395; 45 Ohio St. 577; 7 A. & E. R. R. Cas., 238; 8 Heisk., 812; 50 Md. 274-397.

The use, nature and character of the property and not the ownership determine whether the same should, under the laws of this State, be assessed and valued by the state board or by the local assessor. If the structure is a railroad bridge and used for that purpose, it does not matter by whom built or owned. 19 F. 177; 47 Iowa 196; 37 A. & E. R. R. Cas., 406; 25 A. & E. R. R. Cas., 522; 10 Peters U.S. 53.

The revenue laws prescribe the manner and mode of assessing railway property. Mansf. Dig., secs. 5648 to 5659, etc.; Acts 1887, pp. 154 to 160. It can be assessed in no other manner. The bridge is realty, and for purposes of taxation is denominated railroad track. Mansf. Dig., secs. 5648-50; Acts 1887, p. 155; 7 A. & E. R. R. Cas., 325; 56 Am. Dec., 526; 118 Ill. 134; 74 N.Y. 365.

If railroad property owned by a railroad company is only to be assessed by the state board, and similar classes of property used for railroad purposes exclusively, owned by private corporations other than a railroad company, are to be assessed in another way or manner than that provided by the general law for the assessment of railroad property as a class, then such a construction is in violation of art. 16, sec. 5 of the Constitution, and such laws would not be uniform as to the class upon which they operate. 92 U.S. 575; 13 F. 722 and note p. 786; 13 A. & E. R. R. Cas., 182; 101 U.S. 153; 118 U.S. 394.

Being a railroad bridge, used exclusively for railroad purposes, situated upon the right of way and appurtenant thereto, and adding to the value thereof, it could only be assessed by the state board. Cases supra.

The theory adopted by nearly every State in the Union for taxation of railroad property is to consider the entire road and everything upon its right of way as a unit.

In determining the classification of the property of railroads, the nature, character and use, and not the ownership, of it is the criterion.

But the railroad is the owner of the bridge. The bridge company conveyed to the railway company all its proprietary interests in the bridge and its approaches. The railway has possession and control for ninety-eight years. The interest of the railway being superior to that of the bridge company constitutes it the owner for purposes of taxation.

Clendening & Read and L. P. Sandels for appellee.

1. The bridge company is the owner of the bridge, and not the railroad company. Under the laws of Arkansas, the ownership, and not the use, is the criterion by which to determine how the bridge should be taxed, and as the bridge is owned by a corporation organized under the laws of Arkansas, it should be taxed as the property of other corporations are taxed, by the local officers of the counties where situate. Acts 1887, p. 153, secs. 17, 19, 21, 23; Const., art. 16, sec. 5.

Where it is declared by the legislature that the property of certain corporations shall be taxed in a particular manner, the court has no power to say it shall be taxed in a different manner. 47 Iowa 201; 92 U.S. 506; 18 Wall. 231; Desty, Taxation, 392.

The bridge and its approaches are not right of way or road-bed owned by any railroad company, and hence the state board has no authority to assess it. See 41 N.W. 246; 63 Cal. 467 ...