Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1882-04-22
RAILROAD LANDS.
The Railroad Commissioner Arranges For
Test Cases to Determine the Question Of
TaYctinn

Test Cases to Deter mine the Question OF
Taxation.
The following communication upon the
subject head lined explains itself:
M. E. L. shanks. Esq, Auditor, Martin
county, Sir: There are. 80 many inquiries in
reference to the taxable condition of railroad
lands, that / take the occasion of your letter to
state the general facts for the information of
the public.
On the 4th OF March, 1881, in the last hours
OF the session, the house adopted "report OF
the special committee of railroad lands" This
report set forth some specific facts, as shown
by evidence, relating to railroad lands alleged
to be yetexempt from taxation, though Vir.
tually sold or contracted to be sold, and had
in fact become the property of private indivld-
uals. The concluding clause of
this report directed the attorney general
that he might, sin his discretion, stipulate
with the different railroad companies mep-
toned for the bringing of test suits to deter
mine the taxability of the lands in said report
mentioned; and in case said course is agreed
upon, the other lands not embraced in such
test suits, may in the discretion or on the
direction of the attorney general, not be placed
on the tax-roll until such test suits are deter
mined. This instruction was not binding
upon the attorney general, for the reason that
it was not a joint resolution. Nevertheless he
has taken action in accordance with the direc
ton.
By agreement of the. attorney general
test cases have been made to
be brought before the district
court of Hennepin county this summer in
time to reach the October term of the supreme
court, where they must go for final determi-
nation. The first of these cases is that of the
st. Paul & Chicago Railroad company vs. F.
s. Mcdonald, county auditor. and Frank Slo.
Gordon Il. cole being attorney for the road,
and the attorney general himself to appear in
behalf of the State. By direction of the State
auditor the above officers placed tract of this
land on the tax list and sought to collect tax
thereon. This case involves q class of rail-
road lands where the railroad company haG
made contract with construction company
to transfer to them a part of their lands in
payment for work in the construction of their
road, the construction company ito have the
absolute separate ownership of the lands"
The report of the house committee seems to
indicate that the lands were earned by the con.
struction company, but never transferred to
prevent taxation.
The second class to be made is that of a
tract of land belonging to the st. Paul &
Sioux City railroad company. In this case the
committee of the house alleged that certain
special land stock, or scrip, was issued TO pay
debt, and block of 100000 acres of land
was placed in the hands of the Hon. VIM. r.
Marshall, as q trustee, the proceeds Of the
sale of which land was to be devoted to the
payment of the special land stock This trus-
tee was to make an irrevocable power of
attorney to E. F. Drake, to sell and convey
these lands to satisfy this scrip. This scrip
carried the power to locate tnese lands. In
- ,<%
lands. Thus it was claimed that while the
naked legal title to the lands was not in the
owners of the land stock, they could title at
any moment, but did not do so to avoid taxa
ton. It was further set forth that the present
owners of the st. Paul & Sioux City railroad,
represented by Fl. Fl. Porter, president, had no
right or interest in any of these lands, and
that Mr.. Porter had so testified before the
committee. It was claimed that, as matter
private individuals. This case will be repre-
scented by Judge Palmer for the company, and
the attorney general for the state.
A third class OF these lands are those of the
Southern Mlnnesona railroad, designated as
the Clark W. Thompson special trust lands,
and the 233 Wykoff and Thompson land trust
certificates. These embraces two blocks of
Houston, Fillmore, Freeborn, Mower, Ohm
sted and Martin counties, These lands have
been held by recent decision of the attorney
general august 81, 1922 to be taxable His
opinion is based on decree of the United
States court in foreclosure proceedings of
July IA, 1874, which sets apart certain lands
for the benefit of the holders Of certificate S.,
so as to confer on them the right to the pro-
ceeds of the sales of such'lauds, or the lands
themselves if they choose to have them par
toned. The supreme court of the state, in re-
ferring to such contingency, holds ''that
under such circumstances the company had
sold and conveyed" the lands Estate VS.. trus-
tees of Southern Minnesota railroad company,
vol. 81, page 35l). The attorney general
holds that such a state of facts exists as to
the above mentioned facts. The state auditor
to the respective county auditors, so that they
may be placed on the duplicate for the ensu-
ing year.
fourth class of cases of the greatest
present importance, and on which the attor-
ney general has just this day reached decis-
ion, is this: The railroad lands contracted to
be sold have heretofore been assessed in fee,
and according to the value of the land. These
lands are henceforth to be assessed only TO the
merts) which, together with his improve
ments. are to be taxed as real estate, (see
Edgertons railroad laws, page 331, Sec
ton s.. AS all these lands have heretofore
been taxed in fee, according to value, the new
rule will work a radical change in the whole
system, The radical change is the manner of
the assessment. When county auditors sell
these lands for taxes, they can only sell to the
extent Of the purchasers interests and i'm
provements. The sale cannot reach the land,
for the fee of the railroad company lies in
trenched and buttressed in the ex-
emptlon contained in their charter, fran C hise
and grants.
Parties having heretofore paid taxes under
the assessment, hitherto prevailing, now find
ing the taxes do not follow the land when
they forfeit, might naturally ask for q return
of their taxes. But the attorney general holds
that the purchaser, having voluntarily paid
such taxes, the state will not refund. The
state auditor will now probably direct that all
these railroad lands, as assessed heretofore, be
swept from the duplicate. The railroad COM
panies will probably be required to furnish
detailed list of what purchasers have paid, so
the amount can be reached by the assessor.
The original wrong was in the sweeping ex-
emptions. If the exemption from taxation
has been for a series of years in every case,
say ten, it would have been better for the
roads and for the people also.
You are aware that the supreme court of
the state has decided that railroad land grants
are exempt from taxation till sold and con-
veyed, the exemptions being part of the
franchise; that such exemptions by the legis-
lative authority are not forbidden by the con-
stitution. Estate VS.. Winona & st. Peter Rail.
road comnanv vol 21 maze 315l The same