Southern Ry Co v. Commonwealth of Kentucky Mellon v. Same 1931

Citation52 S.Ct. 160,284 U.S. 338,76 L.Ed. 327
Decision Date04 January 1932
Docket NumberNos. 300 and 301,s. 300 and 301
PartiesSOUTHERN RY. CO. v. COMMONWEALTH OF KENTUCKY. MELLON, Director General of Railroads, v. SAME. Argued Dec. 4-7, 1931
CourtUnited States Supreme Court

Messrs. Edward P. Humphrey and Charles W. Milner, both of Louisville, Ky., for appellants.

Mr. Charles N. Hobson, of Frankfort, Ky., for the Commonwealth of Kentucky.

Mr. Justice BUTLER delivered the opinion of the Court.

This case involves franchise taxes imposed by Kentucky in respect of railroad lines in that state that are a part of the system of appellant, the Southern Railway Company, a Virginia corporation, and here referred to as the Southern system. A judgment of the circuit court of Woodford county affirmed in the highest court of the state, 204 Ky. 388, 264 S. W. 850, determined that there remained unpaid franchise taxes to be assessed on values of intangible elements amounting to.$1,730.090.02 for 1918 and $3,028,592.62 for 1919. These additional values were attributed solely to 127.63 miles of railroad in that state belonging to a Kentucky corporation, the Southern Railway Company in Kentucky. The lines of the Cincinnati, New Orleans & Texas Pacific Railway Company had been held to form a part of the system, but that company paid taxes in Kentucky upon its tangible property and also franchise taxes calculated on the basis of its own net earnings. The commonwealth originally made no claim against appellants for any taxes in respect of that company's lines. This court, 274 U. S. 76, 47 S. Ct. 542, 71 L. Ed. 934, reversed the judgment of the state court on the ground that the additional values attributed to such 127.63 miles were so excessive and arbitrary as in reality to include property outside Kentucky and that the enforcement by that state of franchise taxes based thereon would violate the due process clause of the Fourteenth Amendment.

After receiving our opinion and mandate, the Court of Appeals of Kentucky remanded the case to the circuit court; and there the commonwealth amended its petition so as to claim, in addition to its earlier demands, franchise taxes in respect of the Kentucky mileage of the Cincinnati, New Orleans & Texas Pacific. The facts were stipulated. Appellant maintained below that the proceedings were in conflict with our mandate and that to enforce the taxes claimed would be to tax property outside the commonwealth. The court adjudged the commonwealth entitled to recover as to the Kentucky mileage of both companies on the basis of the same values that in the former judgment had been assigned to the line of the Southern Railway Company in Kentucky alone. The Court of Appeals affirmed. 238 Ky. 638, 38 S.W.(2d) 696. This appeal is under 28 U. S. C., § 344(a), 28 USCA § 344(a).

Our former decision merely held that the particular application of the state statute then under consideration was repugnant to the due process clause. The judgment now before us is based on a different claim. The remanding of the case by the Court of Appeals and the filing of an amended petition in the circuit court by the commonwealth and the trial thereon were not inconsistent with the mandate of this court. Mutual Life Insurance Co. v. Hill, 193 U. S. 551, 553, 24 S. Ct. 538, 48 L. Ed. 788; Wolff Packing Co. v. Industrial Relations Court, 267 U. S. 552, 562, 45 S. Ct. 441, 69 L. Ed. 785.

The additional values adjudged are based on average net earnings per mile of the system in the year preceding that for which the franchise taxes are imposed. As shown in our former opinion, net earnings of the 127.63 miles of the Southern Railway in Kentucky were very small for 1917 and there was a large deficit in 1918. But the net earnings per mile of the Cincinnati, New Orleans & Texas Pacific, having 197.5 miles in Kentucky, for both years were high when compared with the average of the system. The values on which the last-mentioned company separately paid franchise taxes were excluded.

The Kentucky mileage used in the calculations included certain trackage rights and also the Kentucky lines of the Mobile & Ohio, the Cumberland...

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5 cases
  • United States v. McGuire
    • United States
    • U.S. Court of Appeals — Second Circuit
    • April 10, 1933
    ...approval of the ruling. Mutual Life Ins. Co. v. Hill, 193 U. S. 551, 24 S. Ct. 538, 48 L. Ed. 788; Southern Ry. Co. v. Commonwealth of Kentucky, 284 U. S. 338, 52 S. Ct. 160, 76 L. Ed. 327. We accordingly feel free to decide the question as one still Little light can be shed upon the intent......
  • Taylor v. Nutting
    • United States
    • New Hampshire Supreme Court
    • July 27, 1990
    ...point determined in that appeal." Security State Bank, 230 Neb. at 845, 434 N.W.2d at 292; see Southern Ry. Co. v. Kentucky, 284 U.S. 338, 341, 52 S.Ct. 160, 161, 76 L.Ed. 327 (1932); Nally, 253 Cal.Rptr. at 111, 763 P.2d at 962; Sigurdson, 448 N.W.2d at 64. As one commentator "Only such is......
  • United States v. Wintner
    • United States
    • U.S. District Court — Northern District of Ohio
    • September 4, 1964
    ...41 S.Ct. p. 278.) See also United States v. Haley, 371 U.S. 18, 83 S.Ct. 11, 9 L.Ed.2d 1 (1962); Southern Ry. Co. v. Commonwealth of Kentucky, 284 U.S. 338, 52 S.Ct. 160, 76 L.Ed. 327 (1932); and Charles Wolff Packing Co. v. Court of Indus. Relations, 267 U.S. 552 (1925). In Meyer v. United......
  • Piedmont & N. Ry. Co. v. Query
    • United States
    • U.S. District Court — District of South Carolina
    • February 2, 1932
    ...47 S. Ct. 542, 71 L. Ed. 934; Great Northern Ry. Co. v. Minnesota, 278 U. S. 503, 49 S. Ct. 191, 73 L. Ed. 477. Cf. Southern Ry. Co. v. Kentucky, 52 S. Ct. 160, 76 L. Ed. ___, decided Jan. 4, The only fact stated in the bill to show that the mileage proportion rule really is not applicable ......
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