State v. St. Louis, Kansas City & Northern Ry. Co.

• Decision Date: 30 April 1883
• Citation: 77 Mo. 202
• Parties: THE STATE v. THE ST. LOUIS, KANSAS CITY & NORTHERN RAILWAY COMPANY et al., Appellants.
• Court: Missouri Supreme Court

77 Mo. 202

THE STATE

v.THE ST. LOUIS, KANSAS CITY & NORTHERN RAILWAY COMPANY et al., Appellants.

Supreme Court of Missouri.

April Term, 1883.

Appeal from St. Louis Court of Appeals.

REVERSED.

Wells H. Blodgett for appellants.

As against an innocent purchaser a tax is not a lien until after it is levied, and it is shown by the record in this case that said defendant acquired the property on February 6th, 1872, and that said taxes were not levied by the county court of St. Charles county until long after said date. Heine v. Levee Commrs., 19 Wall. 659; Cooley on Tax., (1 Ed.) 305; Hilliard on Tax., 463, § 63; Ream v. Stone, 102 Ill. 359. There is nothing in the statute under which the taxes in question were assessed from which it can be fairly said that the legislature intended to create a lien in favor of the State and county for such “back taxes” as are sued for in this action. Had that been the intention, appropriate words to that effect would have been employed. In the absence of a plain expression of such intention the statute will not be construed to have such retroactive effect. Sedgwick on Stat. and Con. Law, (1 Ed.) 190; Woart v. Winnick, 3 N. H. 477; Towle v. Eastern R. R. Co., 18 N. H. 547; Willard v. Harvey, 24 N. H. 344; Wade on Retroactive Laws, § 194. Prior to the act of March 10th, 1871, and during all the years in question, the revenue laws of the State required all taxes against corporations to be levied on the shares of their capital stock, and not on their property, and declared such taxes a lien on said shares and not a lien on their property, and hence if the act of March 10th, 1871, was intended by the legislature to authorize taxes to be levied from 1862 to 1871 on property which was not the subject of taxation during said years, then said act was to that extent retrospective and void under the constitution of the State. R. S. 1855, p. 1331, §§ 30, 31, 32; Ib., p. 1342, §§ 25, 26; Gen. St. 1865, p. 103, §§ 27, 28, 29; Ib., p. 113, §§ 28, 29; Const. Mo. 1865, art. 1, § 8; Sedgwick on Stat. and Con. Law, 190. Both methods of taxation cannot be enforced at the same time, as it would amount to double taxation. H. & St. Jo. R. R. Co. v. Shacklett, 30 Mo. 558; Tallman v. Butler County, 12 Iowa 531. By section 6 of the amended charter of the North Missouri Railroad Company all the property of said company was by statute made and declared to be personal estate, and as such was vested in the respective share-holders of said company, in proportion to the number of shares held by each, and it appearing from the record that all said property remained personal estate, and as such vested in said share-holders until the sale of said road to Jessup, on August 6th, 1871, it was not competent for the legislature (as against the St. Louis, Kansas City & Northern Railway Company, who purchased February 6th, 1872), to authorize said property to be afterwards assessed or taxed as real estate, for the same years said property had been by law declared to be personalty. If the shares were taxed, then no further assessment of the property for the same year could be made. To tax the shares was to exempt the property represented by the shares. H. & St. Jo. R. R. Co. v. Shacklett, 30 Mo. 558; Tallman v. Butler Co., 12 Iowa 531; Middlesex R. R. Co. v. Charlestown, 8 Allen 333; Wilmington R. R. Co. v. Reid, 13 Wall. 264; State ex rel. N. J. R. R. Co. v. Haight, 34 N. J. L. 319.Wm. A. Alexander and H. C. Lackland for respondent.

There can be no question about the constitutionality of the act of 1871. State v. Severance, 55 Mo. 378; Washington Co. v. R. R. Co., 58 Mo. 375; Pacific R. R. Co. v. Watson, 61 Mo. 57; State v. R. R. Co., 60 Mo. 143. The lien and liability for taxes had been a charge on the property ever since 1862. It could not be evaded by a transfer. The policy of the law will not permit taxes to be evaded in any manner whatever, as long as the property is in sight and can be followed. Wellshear v. Kelley, 69 Mo. 343; State v. Heman, 70 Mo. 441; s. c., 7 Mo. App. 420. The North Missouri Railroad Company is and has been since August, 1871, insolvent. The act of 1871 was notice to all the world (if notice was necessary) of the State's intention to enforce its lien for itself and all its municipalities. The lien for taxes is necessarily prior to all other liens, and the lien for the last year is prior to all other years. On no other principle could the government be maintained, and the burthen of taxation be made to bear equally and justly on all alike. Under all the laws from 1855 down, the taxes were treated as debts due from the corporation, and not from the share-holders. There is nowhere anything to exempt the property of the North Missouri Railroad Company from taxation or to require it to be assessed to the share-holders. On the contrary, the law required the stock and property to be assessed against the corporation; and it looked to the corporation for the payment of the taxes, and not to the stockholders. But the property was not assessed in any shape. If it be maintained that it ought to have been assessed in shares, then it is evident that the company was derelict in its duty in not delivering a list of the shares to the assessor; and the company cannot now be heard to complain that the property was not assessed in that way. According to the theory of the defendant, the shares represent the property, and the property represents the shares; and theoretically in law they are both equal in value; one is the equivalent of the other. The result ought to be the same in either case, whether we assess the property or the stock. It must be conceded that the State has power to tax one, or the other, or either, at its pleasure, interchangeably. Now even if it be conceded that the laws in force for the years in question, required the property to be assessed in shares; yet, if by the neglect of the officers of the company, it was not done, we are unable to see that there is any principle of law to prevent the legislature from afterwards assessing the property instead of the shares for the years omitted. State v. Dulle, 48 Mo. 282; St. Joseph v. R. R. Co., 39 Mo. 476; State v. R. R. Co., 60 Mo. 143; St. Louis M. L. Ins. Co. v. Charles, 47 Mo. 462, 466, 467; H. & St. Jo. R. R. Co. v. State Board, 64 Mo. 294, 307; Cooley on Tax., pp. 221, 222, 223, 228 to 230; State R. R. Tax cases, 92 U. S. 576. Bailey v. Maguire, 22 Wall. 229; Tucker v. Ferguson, 22 Wall. 527, 575; West Wis. R'y Co. v. Supervisors, 93 U. S. 595; Grim v. School District,57 Pa. St. 433.

HENRY, J.

This suit was instituted in the circuit court of St. Charles county against the defendants for the recovery of taxes levied upon the railroad and other real and personal property of the North Missouri Railroad Company in 1872, for ten years, from 1862 to 1871, inclusive. The property in question, prior to 1872, had not been assessed for either of those years, and the levy in 1872 was made under an act of the legislature, approved March 10th, 1871. After that act was passed, and before the levy of the taxes sued for, the North Missouri Railroad and all the other property of that corporation, were sold and conveyed to Morris K. Jessup, who subsequently sold and conveyed the same to the St. Louis, Kansas City & Northern Railway Company. Defendants had judgment in the circuit court, which, on appeal to the St. Louis court of appeals, was reversed, and they have appealed to this court.

Was the property, as contradistinguished from the capital stock of the company, subjected to taxation for any of the years from 1862 to 1871, inclusive? This is the controlling question in the case.

By an act of the legislature approved January 7th, 1853, amendatory of the act incorporating the North Missouri Railroad Company, it was provided that “the capital stock, together with all machines, wagons, cars, engines or carriages belonging to the company, together with all their works and other property, and all profits which shall arise from the same, shall be vested in the respective shareholders of the company forever in proportion to their respective shares, and the same shall be deemed personal estate and be exempt from any public charge or tax whatsoever, for the period of five years after the passage of this act.” Sess. Acts 1853, p. 323, § 6. By this act, the capital stock and all other property of that corporation were exempt from taxation until January 7th, 1858, and after that date as long as section 6 of the act of 1853, supra, remained unrepealed, the property of the company was subject to taxation only as personal property in a manner to be prescribed by the general assembly. Bangor & Pisc. R. R. Co. v. Harris, 21 Me. 233. By the express declaration of the statute, all its capital stock and other property was vested in the holders of the stock forever as personal property. By the revenue law in force when the period for which the property was exempt from taxation expired, it was provided that: “For the support of the government, etc., a tax shall be levied on the following objects, * * shares of stock in incorporated companies at their cash value, excepting manufacturing companies, the property of which alone shall be taxed, * * all property owned by incorporated companies, over and above their capital stock.”

It is clear that by that law the property of the corporation, except such as it owned over and above its capital stock, was not subjected to taxation. The State could have taxed either the capital stock, or the property of the corporation, and might have imposed the tax on the shareholders, or against the corporation, on the aggregate of its capital stock. It may be conceded, only for the purpose of the argument, what has never been held by any court, that it could have subjected to taxation the shares of individual stockholders, the capital stock, and the property, but the question is, had the legislature, up to 1871, seen proper to do so?

That property is...