Western Union Telegraph Co. v. Howe

• Decision Date: 27 April 1910
• Docket Number: 3,109.
• Citation: 180 F. 44
• Parties: WESTERN UNION TELEGRAPH CO. v. HOWE et al.
• Court: U.S. Court of Appeals — Eighth Circuit

180 F. 44

WESTERN UNION TELEGRAPH CO. v. HOWE et al.

No. 3,109.

United States Court of Appeals, Eighth Circuit.

April 27, 1910

The following is the opinion of Pollock, District Judge, in the Circuit Court:

Complainant the Western Union Telegraph Company, brought this suit originally against Samuel T. Howe, S. C. Crummer, and W. S Glass, members of the State Tax Commission of this state Clarence Smith, secretary of said commission, and J. M nation, Auditor of the state, to enjoin what is averred to be an illegal tax and assessment on its property for the year 1908.

The suit was originally instituted July 3, 1908. A restraining order was issued at the date of the commencement of the suit. By what is styled an amended and supplemental bill filed herein December 31, 1908, complainant brings in the county treasurers of the several counties of the state and makes them parties to the bill. The tax commissioners were appointed, qualified, and assumed to act in the matter complained of in the bill in pursuance of chapter 408, Laws 1907, of the state, as amended by the legislative assembly in the year 1908. The specific wrongs complained of by complainant in its bill are these: That the Tax Commission of the state caused complainant to return on blanks furnished for that purpose by it a statement and valuation of all its taxable property in the state for the year 1908 under the oath of its appropriate officer. In this statement the valuation fixed by the complainant on its property was the sum of $838,100.30. Thereafter, and on the 20th day of May, 1908, the State Tax Commission, as shown by the records of said commission, required by law to be kept, made an order assessing the property of complainant in the state at the sum of $3,159,322, and apportioned the same among the several taxing districts of the state as shown by said order, which reads as follows: 'Now, on this 20th day of May, the Tax Commission being in session as a board of appraisers, pursuant to chapter 81, Laws of 1908, does hereby assess the property of the Western Union Telegraph Company, in the state of Kansas, in the sum of $3,159,322.00. For the purpose of distributing said amount among the taxing districts of the state through which the lines of said company run, there is assigned a value of $226.26 to each mile of pole line, including cross arms and one wire; and further the sum of $27.71 for each mile of additional wire on any mile of pole line, and the secretary of the commission is hereby instructed to prepare certificates to be signed by the State Auditor certifying to the county clerks of the several counties the value so assigned in order that the same may be placed upon the tax rolls of the respective counties.'

It is the contention of the complainant, as averred in its bill, that the amount returned by it was the true and just market value of all its taxable property within the state subject to taxation for the year 1908; that the Tax Commission without instituting any inquiry into the actual value of complainant's property to determine the correctness or falsity of the return made by it, or the true and actual cash market value of its property, but, on the contrary, arbitrarily, and with a set purpose and without inquiry, therefore fraudulently, increased said assessment to the amount stated, as appears in the record of the commission. It is further contended by complainant as section 16, c. 408, Laws 1907, makes provision for the return of all persons, companies, and corporations under oath of the property of such persons, company, or corporation, for the purpose of taxation, and as certain interrogatories may therein be submitted to be answered under oath, as was done in this case, and as said section further provides the making of any known false answer to any such interrogatories submitted shall be deemed perjury, and as the section further provides any person, company, or corporation which refuses to answer any such interrogatories submitted shall be guilty of misdemeanor and punished, that the Tax Commission could not arbitrarily disregard any such return of property so made for the purpose of taxation. Wherefore an injunction is prayed against the assessment made by the commission as void.

At the time of filing and presenting the original bill, although complainant thereby confessed its liability to taxation on property owned by it in the state of the value of $838,100.30, it neither tendered nor offered to pay its just proportion of taxes in the state based on such amount as a condition to the order prayed. By the amended and supplemental bill filed complainant tenders and pays into court the sum of $10,000, which it avers to be more than its just proportion of the taxes due the state on the actual cash market value of its property, and asks the injunction prayed by it in its original bill. To this amended bill, defendants, the Tax Commission, its secretary, and the Auditor of State, have demurred. This demurrer has been presented in oral argument and on briefs of solicitors. While the question of the jurisdiction of this court is presented by complainant in support of its bill, the demurrer does not raise this question. I am satisfied, both under the statute law of the state and the general jurisdiction and power of the court, this court has jurisdiction to inquire into the questions presented by the bill. The ground of the demurrer is want of equity.

One of the objects and purposes of the Legislature as expressed in section 12, c. 408, Laws 1907, was that all assessments of property, real, personal, and mixed, should be made relatively just and uniform and at its true and full cash market value. Theretofore the taxable property of this state had been assessed in most instances from one-sixth to one-third of its actual market value. By the act in question the Tax Commission was created for the purpose of making the actual assessment of certain classes of property in this state and for the purpose of supervising the assessment of other classes of property made by local assessors. This commission is, also, by the terms of the act, made a State Board of Equalization; section 17 of the act providing as follows: 'The Tax Commission as hereby created shall constitute a State Board of Equalization, and shall equalize the valuation and assessment of property throughout the state; and shall have power to equalize the assessment of all property in this state between persons, firms or corporations of the same assessment district, between cities and townships of the same county and between the different counties of the state and the property assessed by the said Tax Commission in the first instance. And any person feeling aggrieved by the action of the county board of equalization may, within thirty days after the decision of said board, appeal to the State Board of Equalization for a determination of such grievances.'

By the terms of section 1, c. 79, Laws 1908 of the state, which took effect January 29, 1908, the foregoing section was amended as follows: 'That section 17 of chapter 408 of the Session Laws of 1907 be and the same is hereby amended to read as follows: Sec. 17. The Tax Commission as hereby created shall constitute a State Board of Equalization, and shall equalize the valuation and assessment of property throughout the state; and shall have power to equalize the assessment of all property in this state between persons, firms or corporations of the same assessment district, between cities and townships of the same county, and between the different counties of the state, and the property assessed by the said Tax Commission in the first instance. And any person feeling aggrieved by the action of the county board of equalization may, within thirty days after the decision of said board, appeal to the State Board of Equalization for a termination of such grievance. It shall be the duty of the Tax Commission to meet in its office on the second Wednesday in July in the year A.D. 1908, and of each year thereafter, to perform the work of equalization as hereinbefore provided. Said Tax Commission shall apportion the amount of tax for state purposes as required by law to be raised in the state among the several counties therein, in proportion to the valuation of the taxable property therein for the year as equalized by said Tax Commission. Whenever the valuation of any taxing district, whether it be a county, township, city, school district or otherwise, is changed by the State Board of Equalization, the officers of such taxing district who have authority to levy taxes are required to use the valuation so fixed by the state board as a basis for making their levies for all purposes.'

As shown by the record of the proceedings of the Tax Commission above quoted in making the assessment complained of in this case, the commission assumed to act under the provisions of chapter 81, Laws 1908, which, in so far as material to this inquiry, concerns only section 2 of that act, which reads as follows: 'That section 4 of chapter 502 of the Session Laws of 1905 be and the same is hereby amended to read as follows: 7533. Meeting. 15d. Said Tax Commission shall meet at its office annually, on the second Monday in April, for the purpose of assessing the property of telegraph, telephone and pipe-line companies in Kansas, except as hereinafter provided. The Tax Commission shall proceed to ascertain and assess the value of the property of said telegraph, telephone and pipe-line companies in Kansas, and in determining the value of the property of said companies in this state, to be taxed within the state and assessed as herein provided, said board shall be guided by the value of other personal property within the state.'

However it is contended by complainan...