Source: https://supreme.justia.com/cases/federal/us/218/551/
Timestamp: 2019-04-22 04:36:51+00:00

Document:
If the law of the state permits it, the fact that the making of an assessment is delayed does not detract from the authority or the duty of the assessing power to make it.
does not deprive those parties of any constitutional rights where no ground is shown for impugning the assessment so made.
The federal Constitution does not preclude a state from requiring a corporation actually controlling and exercising a franchise to pay the tax legally assessed thereon, although not the actual owner of the franchise.
When the record does not show that others similarly situated escaped the taxation imposed on the plaintiff in error, and the state court has declared that, if any escaped, they are still liable, this Court regards the contention of denial of equal protection of the law as without merit.
The facts, which involve the validity of an assessment, are stated in the opinion.
was based upon the fact that the Illinois Central Railroad Company was, at the time to which the tax related, in possession of the railroad, and was operating it under a power of attorney from the purchaser at a judicial sale, and had made the report which was required by the statute relating to the taxation of franchises. The judgment was affirmed by the Court of Appeals of Kentucky. 128 Ky. 268. The Illinois Central Company petitioned for a rehearing, and presented the federal questions now urged under the Fourteenth Amendment of the Constitution of the United States. The court entertained the petition and extended its opinion, holding that no right of the appellant under the Fourteenth Amendment had been violated by the decision. Thereupon this writ of error was brought, and, as the state court passed upon the federal questions, this Court has jurisdiction. Mallett v. North Carolina, 181 U. S. 589; Leigh v. Green, 193 U. S. 85.
The validity of the statutes of Kentucky providing for the taxation of franchises is not assailed, and nothing is shown which would open to dispute the taxable character of the particular franchise here involved. The plaintiff in error, the Illinois Central Railroad Company, contends that, by virtue of the judgment, it has been deprived of property without due process of law first in that there was no assessment upon which to base the recovery of the tax, and second in that it has been held personally liable to pay a tax upon a franchise of which it was not the owner. The plaintiff in error also contends that it has been denied the equal protection of the laws, as it insists that all other railroad corporations were assessed for the purpose of franchise taxation upon a different basis and by a different method, and that, as to other railroad corporations, the assessments similar to the one in question were abandoned.
assessment -- is that an assessment implies a record, and that there was no record, but only a memorandum; that an assessment must be a definite act, and that here it was only tentative.
"to take charge of the business, maintenance, and operation of the railroad, . . . together with all the land, real estate, leaseholds, easements, . . . and all other corporate property, real and personal, lately belonging to the said Chesapeake, Ohio & Southwestern Railroad Company, included in the said sale and conveyance, and all the rights, privileges, immunities, and franchises whatsoever"
which he had acquired. It was expressly authorized to receive "all the earnings of the said railroad," to apply the same to the expenses incurred in its "management, maintenance, and operation," and to take all proceedings necessary or expedient for these purposes.
insertion of the dates of the first and final notices to the corporation, of the notice to the county clerk, and of the payment of the tax. The form upon the jacket was filled out by the insertion of the name of the "Chesapeake, Ohio & Southwestern R. Co., Louisville, Ky.," and the date of the report. In the columns provided for the purpose, entries were made, setting forth the "Total Capital, $6,700,000," "Less Tangible Property, etc. $4,753,339," "Franchise, $1,946,661," and "Tax, $10,219.97." This is the amount of the tax sued for and recovered in this action.
These entries were made early in the year 1898. The fact that the making of the assessment for the year 1897 was delayed did not detract from the authority and duty to make it. Southern Railway in Kentucky &c. v. Coulter, 113 Ky. 657. That the Board of Valuation and Assessment was authorized to fix the value of the franchise, and to make the entries setting forth their determination, and that the entries upon the jacket were in fact made by the Board in the discharge of its duty, do not admit of question. The Commonwealth of Kentucky filed as a part of its petition in the suit a copy of the indorsement on the jacket as a correct copy of the assessment. This was introduced in evidence on the commonwealth's behalf. The testimony presented in defense did not in any way challenge the authenticity or official character of the jacket entries. On the contrary, the testimony of the former state auditor, who, as such, was chairman of the Board of Valuation and Assessment leaves no room for doubt on this point. It also sufficiently appears upon this record, and it is not open to dispute here, that due notice of the assessment was given.
cannot be regarded as a record, because it lacks permanency. But this, of course, depends upon the means of preservation and the nature of the filing system adopted. There is no inherent reason why such a record should not be suitably preserved. It is unnecessary to review the numerous authorities which the industry of counsel has collated, for it may be assumed that an assessment should be recorded. It is obvious, however, that the state cannot be denied the right to collect its taxes, and the assessment cannot be held to have been in violation of the Constitution of the United States because for convenience it was recorded -- in the form provided for the purpose -- upon the jacket enclosing the report of the railroad company, instead of in a separate book. If the Board did not proceed properly to make the assessment according to the statute, the corporation aggrieved had its remedy; if the assessment was otherwise properly made, it cannot be defeated because the determination was set forth in the manner described.
"Name of corporation -- Chesapeake, Ohio & Southwestern Railroad company."
"Name the principal place of business of the corporation, company, or association you represent -- Louisville, Kentucky."
"Give the name and official position of the officer making the report. "
"Name, J. C. Welling. Position, Vice President, I. C. R. Co. -- Agt."
"The kind of business in which the said corporation, company, or association is engaged."
"Operating railroad from Louisville, Kentucky, to Memphis, Tennessee."
The conclusion that the assessment entered in this manner was made in accordance with the law of the State of Kentucky was necessarily involved in the decision of the Court of Appeals. And the fact that, upon the report made by the plaintiff in error in the circumstances stated, the assessment was entered under the name of the company which had formerly owned the franchise furnishes no ground for the contention here that there has been an absence of due process of law. Castillo v. McConnico, 168 U. S. 674, 168 U. S. 682-684; Witherspoon v. Duncan, 4 Wall. 210.
the Board was to reconsider these assessments entirely, and take them back, in consideration of the fact that the road would pay the next two assessments on the basis agreed upon."
"The Board made the assessment in the way that all other assessments were made. It gave notice of the assessment to the railroad company, as required by statute, and at the end of thirty days it gave notice, as provided by the statute, that the assessment had become final. When this had been done, the matter passed beyond the control of the Board. A final assessment had been had, as provided by law, and if any injustice was done the taxpayer, it was due entirely to his failure to appear before the Board and ask a reduction of the assessment. No reliance could be placed in such proceedings if the validity of the record was made to depend upon the secret intentions of the assessing officer. The validity of their actions depends upon what they do, and not upon their undisclosed purposes. When the assessment had become final, and the railroad company owed the state the amount of taxes thus fixed, the assessing officers were without authority afterward to make any agreement with the railroad to the effect that, if the railroad would pay the taxes for 1899, they would forego collecting the taxes for the previous years."
and the legal effect of its action must depend on what they did, and not on the secret intentions of the auditor."
This construction of the powers of the state officers under the statutes of the state relating to franchise assessments -- this determination with regard to the finality of the assessment in question -- does not violate any constitutional right of the plaintiff in error. The assessment was made in accordance with the law of the state; it was, under that law, a final assessment, and no ground is shown here for impugning it.
It is insisted further that the enforcement of the tax by a judgment in personam against the plaintiff in error constitutes an unconstitutional deprivation of property -- that is, assuming that, under the statutes of the state, as construed by its highest court, the plaintiff in error was liable for the tax, nevertheless it could not properly be held, because it was not the owner of the franchise upon which the tax was laid. But, by virtue of the arrangement with the purchaser at the judicial sale, the plaintiff in error was operating the railroad, and was in possession and full control of the railroad property and its earnings. It cannot be doubted that, under the federal Constitution, the state is not precluded from fixing liability for the payment of the tax, to which the franchise is subject, upon the corporation actually exercising the franchise within the state, and in control of the railroad property and its earnings. There is no constitutional obligation requiring it to look further in order to secure payment of the tax which it is entitled to levy. Carstairs v. Cochran, 193 U. S. 10, 193 U. S. 16; National Bank v. Commonwealth, 9 Wall. 353.
"As shown by the opinions of this court, cited in the opinion herein, taxes have been imposed, based on the assessments in controversy. All other taxpayers than railroads were taxed, and if some railroads escaped, it is no reason that others should go free while all taxpayers of other classes paid their taxes. If any railroads escaped, they are still liable for their taxes unless barred by limitation."
No conclusion to the contrary is justified by the record, and the contention that the plaintiff in error has been denied the equal protection of the laws, as the case lies before us, is without merit.

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