Wells, Fargo & Company's Express v. Crawford County

• Decision Date: 20 March 1897
• Citation: 40 S.W. 710,63 Ark. 576
• Parties: WELLS, FARGO & COMPANY'S EXPRESS v. CRAWFORD COUNTY
• Court: Arkansas Supreme Court

40 S.W. 710

63 Ark. 576

WELLS, FARGO & COMPANY'S EXPRESS v. CRAWFORD COUNTY

Supreme Court of Arkansas

March 20, 1897

Appeal from Crawford Circuit Court in Chancery, JEPHTHA H. EVANS Judge.

STATEMENT BY THE COURT.

Bill for injunction against the collection of tax alleged to be illegal. Wells, Fargo & Company's Express filed its complaint in the Crawford circuit court, alleging, in substance, that it is a corporation organized under the laws of the state of California for the purpose of doing a banking business and express business by land and water; that it is carrying on an express business in the state of California and in and between many of the states of the United States and also with foreign countries; that it owns certain specific articles of personal property in Crawford county not exceeding in value $ 218; that it owns a safe carried on each of the passenger trains which pass through the county, but that the aggregate value of all these safes is not greater than $ 120, and that it does not own the trains or cars, and has no interest therein; that it has owned no personal property in said county, other than that mentioned, within one year; that there is placed on the tax books of said county against plaintiff an alleged assessment of personal property amounting to $ 4,292, and a tax has been extended amounting to $ 67.25, and a warrant is attached to said books, authorizing the collector to collect such tax; that there has been no assessment of plaintiff's property other than by the state board of railroad commissioners, made under the act of April 8, 1893; that the capital stock of said corporation not only includes and represents the value of hundreds of miles of express business transacted upon navigable waters, but includes its banking capital and valuable real estate owned in other states, and that the capital stock affords no adequate means of arriving at the value of personal property within the state; that the assessment so made is higher than the assessment of other property of equal value, and that the assessment so made is not equal and uniform throughout the state; that the assessment amounts to taxing plaintiff for the privilege of doing business in the state; that the act is contrary to the constitution of the state and of the United States, and contrary to the interstate commerce law. It was further alleged that there was levied, as part of said tax, five mills for general county purposes and one half mill to pay a judgment against the county for indebtedness incurred since the adoption of the constitution of 1874; that, unless restrained and enjoined, the sheriff and collector will seize and sell the property of the company, to its great and irreparable injury, wherefore it prays for an injunction, etc.

To this complaint the appellee Stewart, sheriff and collector, filed a demurrer on the ground that it "does not state facts sufficient to constitute a cause of action against the defendant, either in law or equity." The circuit court sustained the demurrer, and dismissed the complaint, and adjudged costs against the appellant company.

Judgment affirmed.

L. F. Parker and B. R. Davidson for appellant.

1. A court of equity has jurisdiction to enjoin the collection of an illegal tax. Sand. & H. Dig., sec. 3778; 27 Ark. 625; 30 id. 278-281; ib. 101; ib. 609; 34 id. 603; 28 id. 271; 30 id 129.

2. The law is unconstitutional, and contrary to state constitution, the constitution of the United States, and the interstate commerce law. It is virtually a tax on the privilege of doing business in this state. Art. 16, sec. 2, Const., provides that property shall be taxed according to value, that the valuation shall be equal and uniform, and that no one species of property shall be taxed higher than another species of equal value. No privilege, except those named in the constitution, can be taxed by direct or indirect methods, and any law that seeks to tax property at more than its true value is void. 2 Ark. 291; 13 id. 752; 44 id. 134. Any mode of taxation that causes one to pay more taxes on property than another on property of like value renders the assessment void. 101 U.S. 143; 127 U.S. 193. All property must be taxed according to its true value. 5 Ark. 204; 46 id. 327. The legislature cannot discriminate between different classes of property. There must be uniformity in the rate and mode of assessment, so that there will be equality of burden. 25 Ark. 289; 27 id. 202-210; 49 id. 337; 101 U.S. 143-158; 48 id. 370-378, 382. Sand. & H. Dig., secs. 6455, 6457, the commissioners to arbitrarily fix the value of the personal property of express companies by reference to the railroad mileage over which the company does business. But to apply this rule to an express company which carries on business over water ways, and does a banking business, and owns real property in other states, upon all of which its capital stock is based, makes its assessment higher than the assessment of other property, and hence not equal and uniform, and violates the constituton.

3. The constitution limits the county levy to five mills, and an excessive levy renders the whole tax void. 32 Ark. 496.

Chew & Fitzhugh for appellees.

1. The fact that appellant's property was assessed by the board of railroad commissioners, while that of private persons was assessed by the assessor, does not render the act invalid. 52 Ark. 535; 49 id. 518; 46 id. 312; 120 U.S. 97; 92 U.S. 578; 101 id. 153; 115 id. 321.

2. All property within a state, whether engaged in interstate commerce or not, may be taxed by the state. 18 Wall. 206; 105 U.S. 460; 7 Wall. 71.

3. It was clearly the intention of the act to tax the property within this state, and the method provided has been upheld by the courts. 125 U.S. 530; 141 id. 18.

4. No offer was made by the company to pay the five mill tax, which was conceded to be legal. Cooley, Taxation, 763; 92 U.S. 575; 3 Dillon, 25; 106 U.S. 196; 35 Ark. 505; 32 id. 496; 30 id. 278; Cooley, Taxation, 537.

E. B. Kinsworthy, Attorney General, for appellees.

The act is not unconstitutional. 141 U.S. 18-39; ib. 40. The mere allegation that the tax law is illegal or invalid is no reason for interference by injunction. 11 Wall. 108; 92 U.S. 575; 139 id. 591; ib. 658, 153 id. 252.

OPINION

RIDDICK, J., (after stating the facts.)

The main question that we are asked to determine in this case concerns the validity of an act of the general assembly of this state approved April 8, 1893, entitled "An act to assess and collect taxes from certain corporations."(Acts 1893, p. 232. ^[*])

This act requires that express companies and certain other corporations doing business in this state shall on the first Monday in July, 1893, and every second year thereafter, file with the board of railroad commissioners of this state a statement or certificate, verified by oath, showing in detail, among other things, the amount of capital stock subscribed, the par value thereof, and the market value of the same at the time the certificate is required to be filed. Such certificate must further show the number of miles of railway in this state over which such express company does business, and also show the total number of miles of railway within or without this state over which such business is carried on by the company. The act provides that, when such certificate shall have been filed, or the information obtained, the board shall proceed to ascertain the value of the entire capital stock of such company, and shall thereupon fix the sum at which the property of any such express company shall be assessed in this state for the purposes of taxation by taking the same proportion of the aggregate value of the capital stock of any such corporation as the number of miles of railway in this state over which it carries on business bears to the aggregate number of miles of railway within as well as without the state over which such company does business. The act further provides that the aggregate value of the property of such corporation thus ascertained to be taxable in this state shall be duly apportioned between the counties in this state through which such company carries on its business.

The complaint alleges and the demurrer admits that the business of appellant in this state is carried on over railroads exclusively, but that a large proportion of its business outside of the state is carried on over waterways, and not over railroads, and that the value of its capital stock is based in part upon this business over waterways. It is also alleged that appellant company owns no real property in this state, but owns real property in other states of great value, and that the value of its capital stock is based in part upon this real estate. Appellant therefore contends that, as applied to its property, the rule of assessment set out in the statute violates the provision of our constitution requiring that all property shall be taxed according to its value, and violates also the rule of equality and uniformity contained therein. The provision of the constitution referred to is as follows: "All property subject to taxation shall be taxed according to its value; that value to be ascertained in such manner as the general assembly shall direct, making the same equal and uniform throughout the state. No one species of property, from which a tax may be collected, shall be taxed higher than another species of property of equal value." Const. 1874, art. 16, sec. 5.

It may be conceded, without argument, that if the construction placed upon this act by appellant is correct,--if it arbitrarily compels the board of railroad commissioners to assess the property of this company by taking the same proportion of the value of its total capital stock as...