Yazoo & Mississippi Valley Railroad Co. v. Adams

• Decision Date: 27 March 1899
• Citation: 25 So. 355,77 Miss. 764
• Parties: YAZOO & MISSISSIPPI VALLEY RAILROAD CO. v. WIRT ADAMS, STATE REVENUE AGENT
• Court: Mississippi Supreme Court

25 So. 355

77 Miss. 764

YAZOO & MISSISSIPPI VALLEY RAILROAD CO. v. WIRT ADAMS, STATE REVENUE AGENT

Supreme Court of Mississippi

March 27, 1899

March 1900

FROM the chancery court of Hinds county, first district, HON HENRY C. CONN, Chancellor.

This was a proceeding to enforce a lien for taxes for the years 1886-1891, inclusive, on what was formerly the property of the Louisville, New Orleans & Texas Railway Co., in the hands of the appellants, the Yazoo & Mississippi Valley and Illinois Central Railroad Companies. The appellee, the state revenue agent, had previously instituted before the state railroad commission a proceeding to have the railroad property which had been the property of the Louisville, New Orleans & Texas Railway Co. assessed for taxation, for the years above mentioned, as property which had escaped taxation for want of an assessment. In such proceeding notice was served upon the Yazoo & Mississippi Valley Railroad Co. as the successor of the Louisville, New Orleans & Texas Railway Co., and also upon the Illinois Central Railroad Co. This effort to secure an assessment was enjoined on the ground that the railroad commission had no authority to assess taxes for any year prior to the year 1892, when they were, for the first time, made assessors of railroad taxes, and the statute did not contemplate any assessments for years prior to that date by them. The injunction was dissolved, and the railroad commission proceeded and made the assessment in accordance with the demand of the revenue agent, and from the order making same the railroad companies took an appeal to the circuit court of Hinds county. Thereupon the revenue agent filed the bill in this cause setting forth the assessment made, and praying a decree for the amount of taxes, and the establishment of a lien, and a sale of the railroad property if the taxes were not paid accordingly. He set forth the consolidation of 1892, and showed how it was that the Yazoo &amp Mississippi Valley Railroad became the successor of the Louisville, New Orleans & Texas Railway, and alleged that the former company was then the holder of the property sought to be subjected. The bill made the Illinois Central Railroad Co. a party defendant, as well as the Yazoo & Mississippi Valley Railroad Co., averring their interest in the property, and also averring that the Illinois Central Railroad Co. had assumed to pay the taxes assessed. It alleged that the Illinois Central Railroad Co. was the owner of all the stock of the Yazoo & Mississippi Valley Railroad Co., and of a majority of the stocks and bonds of the Louisville, New Orleans & Texas Railroad Co., the latter stock being in the name of the Mississippi Valley Railroad Co., of which the Illinois Central Railroad Co. owned all the stock. To this bill the Yazoo & Mississippi Valley Railroad Co. interposed a plea, to the effect that the suit was prematurely brought inasmuch as there was an appeal still pending and undetermined in the circuit court from the order of assessment. The Illinois Central Railroad Co. demurred to the bill, on the ground that the same did not show any liability on that company, nor any reason for making the same a party defendant. At a later date the Yazoo & Mississippi Valley Railroad Co. filed a further plea, setting forth the fact that the circuit court had dismissed the said appeal on the ground that the same was not authorized by law, and that the said court had no jurisdiction thereof, and averring that the provisions of the code of 1892, from § 3875 to § 3886, and the act of 1894, in so far as the same authorized assessment for back taxes to be made against the railroads by said railroad commission, and authorized suits to be instituted thereon by the revenue agent, were unconstitutional and void. The Illinois Central Railroad Co. filed also an additional demurrer, raising the point that the act of 1894 was unconstitutional and void because the same violated sections 14 and 112 of the constitution of the state of Mississippi, and the fourteenth amendment to the constitution of the United States. The court below overruled these demurrers, and held these pleas insufficient, and ordered the defendants to answer; whereupon the defendants prosecuted separate appeals.

Affirmed.

Mayes & Harris, for appellants.

The bill shows no title in the property sought to be subjected, either legal or equitable, in the Illinois Central Railroad Co. The question comes to this: In a bill filed for the purpose of asserting a tax lien against the property of an incorporation, duly incorporated under the laws of the state, in possession of that property and operating the same, is it proper to make a party thereto a stockholder of the corporation and a holder of some of the bonds of the corporation? We contend that it is not. The corporation itself fully represents all the parties in interest. The court will observe that it has the title to the property, so far as this bill shows, both legal and equitable. The bill seeks to deal only with the property, and the Yazoo & Mississippi Valley Railroad Co., being properly summoned into court, represents all of its stockholders. If there is any reason why the Illinois Central Railroad Co., as a stockholder, should have been made a party to this bill, then, by parity of reasoning, every other stockholder should be made a party, and the record would be greatly incumbered.

So far as the holding of Louisville, New Orleans & Texas Railway bonds by the Illinois Central Railroad Co. is concerned it is not properly made a party on that account. The averment of the bill simply leaves the case in such attitude as that the Illinois Central Railroad Co. is alleged to be a creditor of the Louisville, New Orleans & Texas Railway Co. It does not aver that the bonds held by it are secured by any mortgage, or constitute any lien on the railroad which is sought to be subjected to these taxes, or any other railroad of the Louisville, New Orleans & Texas Railroad Co. And if such an averment had been incorporated into the bill, even then the proper party to have been brought in as defendant to represent the interest of mortgage bondholders would have been the trustee of the mortgage by which the bonds were secured.

In support of the foregoing proposition generally, we cite the following authorities: Story's Equity Pleading, secs. 226, 227; Foster v. Railroad Co., 36 F. 627; Shaw v. Railroad Co., 100 U.S. 605; 5 Monroe, 194; 2 Johnson's Ch., 197.

The so-called assessment made by the railroad commission, as stated in the original bill, was a nullity, for the reason that the statute appointing the said railroad commission to be assessors of railway property is void, being contrary to the provisions of § 112 of the constitution of the state. Sec. 112, so far as material, is as follows: "Taxation shall be uniform and equal throughout the state. Property shall be taxed in proportion to its value. . . . Property shall be assessed for taxes under general laws, and by uniform rules, according to its true value. But the legislature may provide for a special mode of valuation and assessment for railroads, and railroad and other corporate property, or for particular species of property belonging to persons, corporations or associations not situated wholly in one county, " etc.

The controlling provisions in this section are, first, that property shall be assessed under general laws, and by uniform rules, according to its true value, and, secondly, that the legislature may provide for a "special mode and valuation and assessment for railways, " etc.

We contend that the uniformity rule for assessment does not permit the important and critical and delicate function of assessing property for taxation to be so managed by the legislature as to commit the assessment of some sorts of property to one body, and the assessment of other sorts of property to a different body. Such a distribution and separation of the power of assessment is not assessment by uniform rule within the purview of the constitutional provisions, especially when it is remembered that the constitution, in § 135, expressly provides for an assessor, to be selected in a manner provided by law, for each county, and these assessors and the board of railroad commissioners are elected by a different constituency, the one being county officers, and the other being state officials. It must be remembered, also, that the constitution contemplates that assessments shall be made for taxation by the assessor provided for in the constitution. See French v. State, 52 Miss. 759; State v. Tonella, 70 Miss. 701.

Nor does the provision that "the legislature may provide for a special mode of valuation and assessment for railroads" authorize the commitment of such assessment and valuation to the railroad commission. The section, as a whole, provides that property shall be assessed by uniform rules, according to its true value, and the further provision that a "special mode of valuation and assessment may be provided for" does not authorize a valuation and assessment by a different body of assessors. The word "mode" means "manner of doing or being; method; form; fashion; custom; way; style." See Webster's Dictionary. It does not import that this function can be committed to a separate body of assessors, but only means that the constitutional assessors may make their assessment, if the law shall so provide, in a manner different from that in which they assess property lying wholly within the limits of a county, and may make their valuation in a different manner.

The subject of assessing property which lay partly in one comity and partly in another, and which was of such nature that it was not plainly and simply partable by county lines, had long been a subject...