Thomas v. Kansas City Southern Ry Co 12, 1923
| Decision Date | 09 April 1923 |
| Docket Number | No. 303,303 |
| Citation | 43 S.Ct. 440,67 L.Ed. 758,261 U.S. 481 |
| Parties | THOMAS, Sheriff, et al. v. KANSAS CITY SOUTHERN RY. CO. et al. Argued March 9-12, 1923 |
| Court | U.S. Supreme Court |
Messrs. James D. Head, of Texarkana, Ark., Otis Wing, of De Queen, Ark., and Henry Moore, Jr., of Texarkana, Ark., for appellants.
Messrs. S. W. Moore, of New York City, and James B. McDonough, of Ft. Smith, Ark., for appellees.
The Legislature of Arkansas created, by a special law, the Little River drainage and levee district of Sevier county, No. 1, a body corporate, and defined its boundaries. Act 186 of Acts of 1915, p. 747, amended by Act 79 of Acts of 1917, p. 348. This suit was brought in the federal court for the Western District of Arkansas, Texarkana Division, by two railroad companies to restrain enforcement of a tax levied in the year 1918 under that act. The defendants below were the district, its officers, and the sheriff and collector of Sevier county. The statute (section 4) named a board of directors, imposed upon it the duty of constructing drainage works, empowered it to raise the necessary money by construction notes and an issue of bonds to the amount of $100,000, and directed it——
'to assess and levy annually a tax upon the valuation as it shall appear each year on the assessment book of Sevier county, Arkansas, upon all lands and * * * upon the railroad tracks of companies in said district, as appraised by the Board of Railroad Commissioners; * * * not to exceed, however, in any one year, the sum of six per cent. of the assessed valuation of the said property within the district.'- The estimated cost of the improvement was about $75,000. For the purpose of defraying a part of this cost the directors levied in the year 1918, a tax of $7,346.12, being 6 per cent. of the assessed value of all real estate within the district. Of this amount it levied upon the railroads $4,194.60, being 6 per cent. of the assessed value of their property. Upon the 12,000 acres of land, being all the other real estate in the district, the directors laid, in the aggregate, taxes of $3,151.52, being 6 per cent. of its assessed value. Thus 57 per cent. of the burden was imposed upon the railroads, and 43 per cent. upon the owners of all the other real estate. Plaintiffs claimed that the tax was v id. After a hearing, at which much evidence was introduced, the District Court entered a decree for a permanent injunction. Its decree was affirmed by the Circuit Court of Appeals, on the ground that the facts reveal an instance of discrimination so palpable and arbitrary as to amount to a denial of equal protection of the laws. 277 Fed. 708. The case is here on appeal.
The applicable rules of law are settled. The Legislature of a state may, if consistent with its Constitution, establish a drainage district, may set the boundaries, and may apportion the burden by fixing the basis of assessment and of taxation. The Legislature's determination that lands will be benefited by a public improvement for which it authorizes a special tax is ordinarily conclusive. Its action in so doing cannot be assailed under the Fourteenth Amendment, unless it is palpably arbitrary or discriminatory. Houck v. Little River Drainage District, 239 U. S. 254, 262, 36 Sup. Ct. 58, 60 L. Ed. 266; Valley Farms Co. v. County of Westchester, No. 136, 261 U. S. 155, 43 Sup. Ct. 261, 67 L. Ed. ——, decided February 19, 1923. A proportion of the franchise of a railroad may, consistently with the federal Constitution, be included as real estate within the district. To justify an assessment upon property, the benefit from the improvement need not be a direct one. It may, in case of a railroad, consist of gains derived from increased traffic. Branson v. Bush, 251 U. S. 182, 40 Sup. Ct. 113, 64 L. Ed. 215. But vague speculation as to future...
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