State v. North Am. Car Corp.
| Decision Date | 11 December 1945 |
| Docket Number | 8541. |
| Parties | STATE v. NORTH AMERICAN CAR CORPORATION. |
| Court | Montana Supreme Court |
Appeal from District Court, First District, Lewis and Clark County A. J. Horsky, Judge.
Action by the State of Montana against the North American Car Corporation to recover taxes. Judgment for plaintiff, and defendant appeals.
Reversed and remanded with instructions.
Leon S. Hirsh, of Chicago, Ill., and Edmond G Toomey, Edgar M. Hall, and Toomey, McFarland & Hall, all of Helena, for appellant.
R. V Bottomly, Atty. Gen., and I. W. Choate and H. O. Vralsted Tax Counsel for State Board of Equalization, both of Helena, for respondent.
This is an appeal from a judgment of the district court in and for the First Judicial District sustaining the State Board of Equalization in assessing and levying taxes against defendant's fleet of freight line cars employed in transportation by various common-carrier lessees engaged in interstate commerce, such cars being used to transport freight into, out of and through the state of Montana. The power to impose the tax is predicated upon Chapter 190 of the Political Code.
The State Board of Equalization, hereinafter referred to as the State Board, filed its complaint March 21, 1940, setting up five separate causes of action. The first cause is grounded upon the allegation of taxes being due for the years 1930 to 1935 inclusive. The other four causes of action are for the four subsequent years, each cause of action relating to the taxes alleged to be due for the particular year. A demurrer to the complaint was overruled. The answer was in the nature of a general denial supported by certain affirmative defenses.
The case was tried on an agreed statement of facts which the trial court adopted in too, and which was made the basis of its findings. Judgment was given for the state for the full amount demanded and the defendant appealed.
The several specifications of error assigned were grouped by appellant for argument under the following heads:
We recite here such of the agreed statements of fact, in substance or in full, as we deem essential to our determination of the controversy, giving to those mentioned the same Roman numerals under which they appear in the transcript, as follows:
IV. The defendant is the owner of certain railroad cars consisting of refrigerator, poultry, and tank cars leased to and used by common carriers in the transportation of commodities. The defendant is not engaged in the transportation of commodities in the state of Montana or elsewhere. Defendant's cars are moved into, over and through the state of Montana but none of the cars are permanently located in this state or in any taxing district thereof. The cars are chiefly used in interstate commerce and only a small percentage of such use is intrastate.
V. The several common-carrier railroad companies operating in Montana own and operate freight cars of the same kind and nature as the freight cars owned by the defendant and there is no difference in the nature, kind, basic classificatioin and utilization of the cars owned by the defendant and those owned by such common-carrier railroad companies.
VI. Defendant has never paid any tax upon its cars to the state of Montana but admits that the provisions of section 2103.2, Revised Codes, directs the State Board to assess the cars of said corporation and to levy a tax thereon.
VII. In September 1936 the State Board, pursuant to sections 2097 to 2110, Revised Codes, determined the full and true value of defendant's freight line cars which were habitually employed within the state of Montana for the years 1930 to 1935 inclusive and did assess such cars to the defendant.
VIII. In determining the value of defendant's cars, the State Board followed the method provided by the sections of the statute mentioned in the preceding paragraph. The defendant not having reported to the State Board the use of its cars in Montana for the period mentioned, as required by section 2009, the State Board, in fixing such valuation for assessment purposes, had informed itself as best it could on matters necessary to determine the true and full value of defendant's cars.
VIII-A. This agreed statement of fact, being of particular importance in this controversy, is set out in full:
[This statement of fact being based upon section 2103, Revised Codes, that section, for convenient comparison, is recited here: 'It shall be the duty of the state board of equalization and it is authorized each year, to determine the rate of tax levy against the property of such companies which shall be equal, as nearly as may be, to the average rate of all general taxes, state, county, municipal, school and local, levied throughout the several taxing districts of the state for the preceding year and the average rate as so determined is hereby levied against the property of such companies.
'The state board of equalization shall, on or before the first day of June in each year, mail to each freight line company a statement showing the total assessed value and the taxable value of the property of such company for such year, as ascertained and determined by the state board of equalization, together with the amount of the tax determined by the state board of equalization, and such freight line company may, at any time before the third Monday in June, file with said state board of equalization a protest, in writing, against such determination or assessment, or both, and the state board of equalization may, on the filing of such protest, or on its own motion, review and correct its findings in such manner as it may deem to be just and proper; provided, however, that no action of any kind shall be instituted or maintained by any freight line company to enjoin the sale of any property seized by the state treasurer on account of the non-payment of any such tax, or to recover any tax, or any portion thereof, paid under protest, unless such freight line company shall have filed with said board a protest, in writing, in the manner and form and within the time provided in this section.]'
IX. On the first of June, 1936, pursuant to the provisions of section 2103 as construed by the State Board, an order was made determining the tax rate against defendant's cars for the years 1930 to 1933, inclusive, to be 64.188 mills, for the year 1934 to be 70.5 mills, for the year 1935 to be 71.347 mills, the amounts fixed being determined pursuant to paragraph VIII-A, supra.
X. In September 1936, the State Board computed the tax against defendant's freight line cars for the years 1930 to 1935, inclusive, according to the orders theretofore given fixing the tax levy and determined that the amount due was $2,704.96.
XI. The defendant was duly advised of the assessment, the levy and the amount due and was further advised that such amount, if not paid, would become delinquent November 30, 1936.
XII. The orders referred to above were given and made after hearing on a protest filed by the defendant with the State Board and its due consideration. The Board thereupon certified to the state treasurer the necessary information including the amount of said tax.
XIV. This agreed statement of fact is also of particular importance in this controversy and is here set out in full:
'That during all the years involved in this action, the taxing authorities of the State of Montana did not assess any taxable value upon nor levy any tax rate against the railroad freight cars owned by common-carrier railroads not operating within the State of Montana but which were furnished by such carriers, for compensation, to common-carrier railroads operating within the State, although such cars were of similar nature, kind, classification, and utilizatioin as those owned by the defendant herein.'
XV. At all times involved in this action the State Board assessed all railroads operating in more than one county of the state of Montana, including in such assessment the franchise, roadway, roadbed, rails and rolling stock of such railroad companies, and including also their freight cars of the nature, kind, basic classification and use identical with those owned by the defendant, and apportioned such assessment to the several counties, school districts, cities, towns and other taxing subdivisions in which such railroads were located in a manner provided by sections 2131 to 2137, Revised Codes, and Chapter 13 of the 1939 Session Laws amendatory thereof, and the amount apportioned to each taxing subdivision thereof.
XVI. Such proportional assessment of the property of the railroads mentioned in the preceding section was taken as a basis for the tax rates fixed and taxes...
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Kottel v. State
... ... In State v. North Am. Car Corp. (1945), 118 Mont. 183, 164 P.2d 161, for example, we considered a tax that treated railroad cars differently based on ownership. We ... ...