Sacramento daily record-union., 1883-09-20
RAILROAD TAX DECISION.
The Rule to be Followed Where the Mort
gage Excseds the Value Of the Property



The following is the concluding portion OF Justice
Fields opinion the railroad tax cases. the points
Of which were not embraced in the summary pub.
lished yesterday:
have thus gone over, as far as deem 1t neces-
sary important, the several positions Of counsel
for the plaintiffs, and find IN none of them any
sufficient answer to the objections Of the defend
ants. This opinion might, therefore, close with
simple order directing judgment for the defendants.
But owing TO the misapprehensions which have pre-
vailed In the community since the trial OF the San
Mateo case which involved similar questions, as to
the effect of decision against the State upon its
right to subject railroad property to Its just proper
ton of the public burdens, will venture to make
some suggestions to the manner in which all such
demands OF the State may be enforced without in
ftinging upon any principle OF constitutional
law | am profoundly sensible Of. Of the
escape from the just burdens Of Government natur-
ally creates. Tho more powerful, the more wealthy
the party, the more intense the feeling, and 1t finds
expression in words OF bitter complaint, not merely
against the party, but sometimes also against any
administration OF justice which toerates such sup
posed evasion. 1t is sometimes forgotten that the
Courts cannot supply the defects OF the law, nor al
ways correct the mistakes OF public officers nor the
errors OF even learned counsel Certainly no MEM
Der Of this Court would In any manner countenance
the escape OF anybody from his just obligations, but
1t cannot with ANY seeming justice declare that one
party shall discharge an obligation which the law,
properly administered, would impose upon another.
Its duty is to administer the law it finds H. never
forgetting that its administration must always be in
subordinaton to those great principles for the pro-
lection of private rights embodied in our national
Constitution, which are OF priceless value TO every
one in the State.
The railroad companies in California are taxed
yearly to an amount exceeding $500, 900. Their
property is heavily encountered with mortgages,
amounting to much more than its actual value.
Why should not they be allowed by law. il they pay
this sum, to credit it on their mortgages, as any
ha
should this unjust discrimination be made against
them? Why should they by law be denied credit
for this more than 5000 900 a year. Is there any
justice in this deniaif There is no difficulty in
assessing and taxing the mortgages, if the words
except as to railroad and other quasi public cor
porations be eliminated invalid from the Con-
stitution. The imaginary difficulty has arisen from
| the supposed necessity OF taxing the debts the
bonds secured As these are held in different parts
of the country, out of the State, it would be
| impossible, 1t is said, to reach them But the
answer Is that the taxes should be placed upon the
mortgages, which, for purposes OF assessment and
taxation TO be treated interests in the prop
erty morQaged, much so as il il had been actu-
ally conveyed to the mortgages The records of
the different counties give the mortgages. The AS
SCISSORS OF each can return TO the Board OF Equaza
ton the value of the property covered by the mort
Cages in their respective counties, under Section
| 367S of the Political Code. The Board would then
have the value Of the property Of the companies,
and the amount of ths mortgages before them The
mortgage of the Southern Pacific beiug greater than
the value of the entire mortgeged property it would
be assessed at such value 1t could never as amort-
gage be worth more than the property. If ueces-
sary convenient, the assessment of the mortgage
| on the roadway, roadbed, rails and rolling stock
could be stated separately from the value OF the
mortgage on other property Of the company and
apportioned to the different counties at
| present. The value OF the mortgage on other
property could also be apportioned requiled by
the Political Code. Why, then, should not this sys-
TEN be pursued The State would thus collect all
| a Ia itOY YIsYht IN a n
| upon the property, could be enforced by sale Of
the property, just though it was levied on the
property and not on the mortgage. II the compa
MES should then pay the tax they could by the law
claim credit for it their mortgage; and it would
be deducted in the payment of the interest or prin-
cipal OF the bonds. Thus Justice would be done to
| the corporations, as Is done to individuals. The
same proceeding could be pursued with the first
mortgage the property Of the Central Pacific
That also being greater than the value Of the prop
erty, the State would be able TO collect large
revenue as by taxation on the property Itself, and
the company would have the benefit Of the payment
by credit on its mortgage.