State ex rel. Gottlieb v. Western Union Telegraph Company

• Decision Date: 03 December 1901
• Parties: THE STATE ex rel. GOTTLIEB, Collector, Plaintiff and Appellant, v. WESTERN UNION TELEGRAPH COMPANY, Defendant and Appellant
• Court: Missouri Supreme Court

65 S.W. 775

165 Mo. 502

THE STATE ex rel. GOTTLIEB, Collector, Plaintiff and Appellant, v. WESTERN UNION TELEGRAPH COMPANY, Defendant and Appellant

Supreme Court of Missouri

December 3, 1901

Appeal from Jackson Circuit Court. -- Hon. Jno. W. Henry, Judge.

Reversed and judgment here.

Edward C. Crow, Attorney-General, and Sam B. Jeffries, Assistant Attorney-General, for the State, plaintiff-appellant.

(1) The point is made that by the acceptance of the foregoing act of the Federal Government the telegraph company "is constituted a government agency within the meaning of the law exempting such agencies from the burdens of taxation imposed by the States." In this counsel are in error for two reasons: First, because the privileges conferred upon companies of this character by the act of the Federal Government, carries with it no exemptions whatever from the ordinary burdens of taxation of a State in which they may own or operate lines of telegraph; second, the tax here imposed is the ordinary tax levied against the company in proportion to the value of its property in this State. It is the ordinary property-tax authorized by our State Constitution in the manner warranted by law. The mere fact that a corporation receives its charter and pecuniary or other aid from the United States does not fix its character as a Federal agency. Nor does the fact that the United States sometimes makes use of it for its purposes, as it might of a similar convenience brought into existence in some other way, constitute or make it a government agency. Cooley on Taxation, 85; Huntington v. Railroad, 2 Sawyer, 503; Railroad v. Peniston, 18 Wall. 5; Thompson v. Railroad, 9 Wall. 579; Wes. U. Tel. Co. v. Mass., 125 U.S 530; Wes. U. Tel. Co. v. Mass., 141 U.S. 40. The Western Union Telegraph Company owes its existence to the laws of the State of New York, and not to any act of the Federal Government. It was not created as a Government agency, nor, by accepting the terms of the act of Congress of July 14, 1866, did it become a Government agency, so as to exempt it from State taxation. The acceptance of the statute made no change in the corporate identity of the company nor did it in anywise change its relation to the State of its birth. The most that can be said is that it became a Government agency by virtue of a contract with the United States. For the use of the military and post roads it agreed to perform certain services for the Government. To exempt it from State taxation would, as suggested by the courts, open the way to a general exemption as to all who may be found performing services for the Federal Government. It would, as has been said, "remove from the reach of the State, for taxing purposes, all of the property of every agent of the Government. Every corporation engaged in the transportation of mails or of Government property, of every description by land or water, or in supplying materials for the use of the Government, or in performing any service whatever, might claim the benefit of the exemption. The effect of which would be to embarrass and injure the State to the benefit of the individual rather than the nation." Cooley on Taxation 85; Thompson v. Railroad, supra. The Supreme Court of the United States has on several occasions held that there is an intangible or franchise value belonging to the Western Union Telegraph Company in other States. West. U. Tel. Co. v Norman, 77 F. 18; West. U. Tel. Co. v. Mass., supra; West. U. Tel. Co. v. Taggart, 162 U.S. 1; Adams Express Co. v. Ohio, 166 U.S. 217; Bridge Co. v Kentucky, 177 U.S. 626; Henderson Bridge Co. v. Illinois, 166 U.S. 154; Adams Express Co. v. Ohio, 165 U.S. 194. (2) The State board is clothed with sufficient authority to assess the intangible property values of telegraph companies. Our Constitution and statutes provide, except such as is specifically exempted by the Constitution, that all "property" shall be assessed for taxation. Section 9123, Revised Statutes 1899, in defining the various property terms, concludes with a clear definition of the term "property." As heretofore stated, it is defined as follows: "The term 'property,' wherever used in this chapter shall be held to mean and include every tangible and intangible thing being the subject of ownership, whether animate or inanimate, real or personal." No form of property or value can escape the terms of this definition and by it the board was justified in listing the intangible property as "all other property." It is not essential that all the details shall be set out in the statutes authorizing the assessment. Where the power is confided, any reasonable means and details may be employed. Railroad v. Governor, 74 N.C. 712; Railroad v. Governor, 13 Wall. 134; Railroad v. Commissioners, 87 N.C. 134; Railroad v. Commissioners, 72 N.C. 10; Life Association v. Board of Assessors, 49 Mo. 522; People v. Adams, 125 N.Y. 471; Ins. Co. v. Yard, 17 Pa. St. 331; Laird v. Hiester, 24 Pa. St. 452. (3) It will not be disputed that equity will not relieve against a mistake in judgment as to the valuation to be placed upon any particular piece of property. The courts can not, in such cases, take upon themselves the function of a revising and equalizing board. Newman v. Supervisors, 45 N.Y. 676; National Bank v. Elmyra, 53 N.Y. 49; Bruecher v. Fortchester, 101 N.Y. 240; Hicks v. Westport, 130 Mass. 478. Absolute equality and uniformity in assessments for taxation are seldom, if ever, attainable. The fallibility of the human judgment and the uncertainty attending all human evidence, precludes the possibility of this attainment. Intelligent men differ as to the value of property; therefore, the most that can be expected from wise legislation is an approximation to the desired end. It is true that where overvaluation of property has arisen from the adoption of an arbitrary rule of appraisement, which conflicts with the constitutional and statutory direction, and operates unequally not alone on a single individual, but on a large class of individuals or corporations, the party aggrieved may resort to a court of equity to restrain the exaction of the excess upon payment or tender of what is admitted to be due. Cummings v. National Bank, 101 U.S. 153. There must be a systematic, intentional and unlawful undervaluation or over-valuation for taxation, which necessarily effects an unjust discrimination against a certain species of property. It was so held in the cases of Taylor v. Railroad, 60 U. S. App. 170, and Stanley v. Supervisor, 121 U.S. 535, both of which cases are referred to by counsel for the company in their brief. (4) The valuations fixed upon the property of the Western Union Telegraph Company can not now be questioned. If fraud exists, or if the officers have intentionally violated the law, which, of course, constitutes fraud, the assessments will be set aside, but under the evidence and the pleadings of this case, the valuation should stand as fixed by the board. Hamilton v. Rosenblat, 8 Mo.App. 237. Proof of fraud or misconduct, and not merely an error of judgment on the part of the assessing board, is necessary to warrant setting aside an assessment. Railroad v. Board of Public Works, 172 U.S. 32; Maish v. Arizona, 164 U.S. 600; Bank v. Perea, 147 U.S. 87; Weeks v. Milwaukee, 10 Wis. 242; Railroad v. City, 38 N.Y. 154; Smith v. Smith, 19 Wis. 615; Ledoux v. Lebree, 83 F. 761; McCloud v. Receiver, 71 F. 451.

H. M. Meriwether for Collector, plaintiff-appellant.

(1) The franchises, in the sense of intangible property, as well as the poles and wires of the defendant, are taxable by the several States, and such franchise taxes have been sustained in all recent cases by the Supreme Court of the United States against this defendant, and others similarly situated. West. U. Tel. Co. v. Massachusetts, 125 U.S. 530; Massachusetts v. West. U. Tel. Co., 141 U.S. 40; Railroad v. California, 162 U.S. 91; West. U. Tel Co. v. Norma, 77 F. 13; West. U. Tel. Co. v. Taggart, 162 U.S. 1; 25 Am. and Eng. Ency. of Law, 873; Adams Express Co. v. Ohio, 166 U.S. 220; Commonwealth v. West. U. Tel. Co., 2 Dauph. (Pa.) 40; Michigan Tel. Co. v. City of Charlotte, 93 F. 11; Keokuk & H. Bridge Co. v. Kentucky, 175 U.S. 626; Henderson Bridge Co. v. Kentucky, 166 U.S. 154; Louisville Tobacco Warehouse Co. v. Commonwealth, 49 S.W. 1069; Commonwealth v. Manor Gas Co., 188 Pa. St. 195; Wier v. Norman, 166 U.S. 171. (2) The assessment made by the State board was an assessment of the property of defendant, and did not include, or in any way affect, the right to exist and transact its business in Missouri or elsewhere. The tax is strictly a property-tax, and having been fairly and legally assessed upon a reasonable valuation of the property of defendant, should be sustained. National Bank v. Commonwealth, 9 Wall. 353; Railroad v. Pemiston, 18 Wall. 30; Electric Light Co. v. Judson (Wash.), 56 P. 829; Railroad v. Commonwealth, 49 S.W. 486; Railroad v. McCracken, 49 S.W. 178; National Bank v. City of Owensboro, 173 U.S. 664; Commonwealth v. Manor Gas Co., 2 Dauph. (Pa.) 128; People of New York v. Roberts, 19 S.Ct. 58. (3) There is a clear distinction between a license tax and a property-tax. The former involves a charge for permission or authority to transact certain business, while the latter is a contribution imposed upon, and measured by the property of an individual or corporation. This State can not impose a license, impost, or embargo on defendant, even though it be called a tax. But it can take from the property owned by defendant within the jurisdiction of the State, a sufficient amount to pay its just proportion of its governmental expenses. Nothing else having been attempted, the tax should be sustained. Cooley on Taxation (2 Ed.), p. 383, p. 576; Burroughs on Taxation,...