Source: https://caselaw.findlaw.com/us-supreme-court/172/32.html
Timestamp: 2019-04-19 14:26:10+00:00

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The Pittsburgh, Cincinnati, Chicago & St. Louis Railway Company, a corporation of the state of Ohio, owning and operating a railway running through the states of West Virginia, Ohio, Pennsylvania, Indiana, and Illinois, under the laws of those states, and crossing the Ohio river, a navigable stream forming the boundary between the states of West Vir- [172 U.S. 32, 33] ginia and Ohio, by means of a bridge built, owned, and controlled by the plaintiff, filed in the circuit court of the United States for the district of West Virginia a bill in equity against the board of public works of the state of West Virginia, a public corporation, against its members individually (being the governor, the auditor, the treasurer, the superintendent of free schools, and the attorney general of the state), and against one Cowan, sheriff of Brooke county, all of them citizens of that state, to restrain the assessment and collection of taxes upon the bridge, under section 67 of chapter 29 of the Code of West Virginia of 1891.
The bill also alleged that the plaintiff's main line of railway ran through the state of West Virginia for a distance of 7.11 miles, of which 6.53 miles were in the county of Brooke, and 58 miles in the county of Hancock; that its bridge across the Ohio river was part of its railway; that the total length of the bridge, including its abutments, was 2,044 feet, of which 1,518 feet were in West Virginia and 526 feet in Ohio; and that the plaintiff, before April 1, 1894, as required by section 67 of chapter 29 of the Code, made to the auditor of the state of West Virginia a return of its property subject to taxation in the state for the year 1894 (a copy of which was [172 U.S. 32, 34] annexed to and made part of the bill, and is set out in the margin 1), and, in making that return, included, in the 7.11 miles of its main track, so much of the bridge as lay within the state, amounting to 1,518 feet.
The bill further alleged that neither the board of public works, nor any member thereof, nor the auditor, informed the plaintiff of the valuation which had been placed upon its property by the board for taxation, nor of the taxes which had been assessed thereon by the auditor; that on September 28, 1894, the plaintiff, not having been informed of the action of the board or of the auditor, addressed, through its chief engineer, a letter to the auditor, inquiring what action had been taken by the board of public works and the auditor with regard to the assessment of taxes on its property for 1894; that the letter was not answered, nor was any information in regard to the taxes given to the plaintiff until January 19, 1895, when it received from the auditor a statement showing that the board of public works had placed a separate and additional valuation of $200,000 upon the bridge for the purposes of taxation, and that the auditor had proceeded to assess and charge the plaintiff with the sum of $3,060 as a tax for 1894 upon that valuation; and that on January 19, 1895, the auditor demanded of the plaintiff payment of that sum, and the plaintiff refused to pay it, but paid to the auditor the rest of the taxes assessed, amounting to the sum of $4,187, upon a valua- [172 U.S. 32, 36] tion of $310,830, which included the plaintiff's railroad in the county of Hancock.
A general demurrer to the bill was afterwards filed and [172 U.S. 32, 37] sustained, the injunction dissolved, and the bill dismissed. The plaintiff appealed to this court, under the act of March 3, 1891, c. 517, 5 (26 Stat. 828).
The collection of taxes assessed under the authority of a state is not to be restrained by writ of injunction from a court of the United States, unless it clearly appears, not only that the tax is illegal, but that the owner of the property taxed has no adequate remedy by the ordinary processes of the law, and that there are special circumstances bringing the case under some recognized head of equity jurisdiction. Dows v. Chicago, 11 Wall. 108; Hannewinkle v. Georgetown, 15 Wall. 547; State Railroad Tax Cases, 92 U.S. 575 ; Railway Co. v. Cheyenne, 113 U.S. 516 , 5 Sup. Ct. 601; Milwaukee v. Koeffler, 116 U.S. 219 , 6 Sup. Ct. 372; Shelton v. Platt, 139 U.S. 591 , 11 Sup. Ct. 646.
In Dows v. Chicago, a citizen of the state of New York, owning shares in a national bank organized and doing business in the city of Chicago, filed a bill in equity, in the circuit court of the United States for the Northern district of Illinois, to restrain the collection of a tax assessed by the city of Chicago upon his shares in the bank, alleging, among other things, that the tax was illegal and void, because the tax was not uniform and equal with taxes on other property, as required by the constitution of the state, and because the shares were taxable only at the domicile of the owner, and therefore were not property within the jurisdiction of the state of Illinois. This court, speaking by Mr. Justice Field, without considering the validity of the objections to the tax, held that the bill could not be maintained, saying: 'Assuming the tax to [172 U.S. 32, 38] be illegal and void, we do not think any ground is presented by the bill justifying the interposition of a court of equity to enjoin its collection. The illegality of the tax, and the threatened sale of the shares for its payment, constitute of themselves alone no ground for such interposition. There must be some special circumstances attending a threatened injury of this kind distinguishing it from a common trespass, and bringing the case under some recognized head of equity jurisdiction, before the preventive remedy of injunction can be invoked. It is upon taxation that the several states chiefly rely to obtain the means to carry on their respective governments, and it is of the utmost importance to all of them that the modes adopted to enforce the taxes levied should be interfered with as little as possible. Any delay in the proceedings of the officers, upon whom the duty is devolved of collecting the taxes, may derange the operations of the government, and thereby cause serious detriment to the public. No court of equity will, therefore, allow its injunction to issue to restrain their action, except where it may be necessary to protect the rights of the citizen whose property is taxed, and he has no adequate remedy by the ordinary processes of the law.' 11 Wall. 109, 110. 'The party of whom an illegal tax is collected has ordinarity ample remedy, either by action against the officer making the collection or the body to whom the tax is paid. Here such remedy existed. If the tax was illegal, the plaintiff, protesting against its enforcement, might have had his action, after it was paid, against the officer or the city to recover back the money, or he might have prosecuted either for his damages. No irreparable injury would have followed to him from its collection. Nor would he have been compelled to resort to a multiplicity of suits to determine his rights. His entire claim might have been embraced in a single action.' Id. 112.
In State Railroad Tax Cases, this court, in a careful and thorough opinion delivered by Mr. Justice Miller, stated that 'it has been repeatedly decided that neither the mere illegality of the tax complained of, nor its injustice nor irregularity, of themselves, give the right to an injunction in a [172 U.S. 32, 39] court of equity'; referred to section 3224 of the Revised Statutes, which provides that 'no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court'; and said that, 'though this was intended to apply alone to taxes levied by the United States, it shows the sense of congress of the evils to be feared if courts of justice could, in any case, interfere with the process of collecting the taxes on which the government depends for its continued existence.' The court then quoted from Dows v. Chicago and Hannewinkle v. Georgetown, above cited, and proceeded as follows: 'We do not propose to lay down in these cases any absolute limitation of the powers of a court of equity in restraining the collection of illegal taxes. But we may say that, in addition to illegality, hardship, or irregularity, the case must be brought within some of the recognized foundations of equitable jurisdiction; and that mere errors or excess in valuation, or hardship or injustice of the law, or any grievance which can be remedied by a suit at law, either before or after payment of taxes, will not justify a court of equity to interpose by injunction to stay collection of a tax. One of the reasons why a court should not thus interfere, as it would in any transaction between individuals, is that it has no power to apportion the tax or to make a new assessment, or to direct another to be made by the proper officers of the state. These officers, and the manner in which they shall exercise their functions, are wholly beyond the power of the court when so acting. The levy of taxes is not a judicial function. Its exercise, by the constitutions of all the states, and by the theory of our English origin, is exclusively legislative. A court of equity is therefore hampered in the exercise of its jurisdiction by the necessity of enjoining the tax complained of, in whole or in part, without any power of doing complete justice by making, or causing to be made, a new assessment, on any principle it may decide to be the right one. In this manner, it may, by enjoining the levy, enable the complainant to escape wholly the tax for the period of time complained of, though it be obvious that he ought to pay a tax if imposed in the proper manner.' 92 U.S. 613 -615. [172 U.S. 32, 40] In Railway Co. v. Cheyenne, in which the Union Pacific Railway Company obtained an injunction against the levy of a tax by the city of Cheyenne, the facts were peculiar. The plaintiff, owning many lots of land in that city, had paid a tax assessed on all its property by a board of equalization, under a general statute of the territory of Wyoming, and had also been taxed by the city of Cheyenne under provisions of its charter which had been repealed by that statute; and the bill showed, as stated in the opinion, that the levy complained of 'would involve the plaintiff in a multiplicity of suits as to the title of lots laid out and being sold, would prevent their sale, and would cloud the title to all its real estate.' 113 U.S. 526, 527 , 5 S. Sup. Ct. 606.
In Shelton v. Platt, 139 U.S. 591 , 11 Sup. Ct. 646, the president, in behalf of himself and other members of an express company, a joint- stock company of the state of New York, filed a bill in equity in a circuit court of the United States in Tennessee to restrain the collection of a license tax upon the company under a statute of the state of Tennessee, alleged to be contrary to the constitution of the United States. The bill averred that the comptroller had issued a warrant of distress to a sheriff to collect such taxes for two years, the sheriff had levied or was about to levy the warrant on the property of the company, and the comptroller was about to issue a like warrant to collect the tax for a third year; that the property of the company in Tennessee was employed in interstate commerce in the express business, and was necessary to the conduct of it; and that the seizure by the sheriff would greatly embarrass the company in the conduct of that business, and subject it to heavy loss and damage, and the public served by it to great loss and inconvenience. This court held that, even if the statute was unconstitutional and the tax void, the bill could not be maintained, and, speaking by the chief justice, said: 'The trespass involved in the levy of the distress warrant was not shown to be continuous, destructive, inflictive of injury, incapable of being measured in money, or committed by irresponsible persons. So far as appeared, complete compensation for the resulting injury could have been had by recovery of dam- [172 U.S. 32, 41] ages in an action at law. There was no allegation of inability on the part of the express company to pay the amount of the taxes claimed, nor any averment showing that the seizure and sale of the particular property which might be levied on would subject it to loss, damage, and inconvenience which would be in their nature irremediable.' The court went on to say that another statute of the state (which had been adjudged by this court in Tennessee v. Sneed, 96 U.S. 69 , to afford a simple and effective remedy) provided that, where an officer charged by law with the collection of a tax took any steps to collect it, a party conceiving it to be unjust or illegal might pay it under protest, and sue the officer to recover it back, and should have no other remedy, by injunction or otherwise. The court observed that 'legislation of this character has been called for by the embarrassments resulting from the improvident employment of the writ of injunction in arresting the collection of the public revenue, and, even in its absence, the strong arm of the court of chancery ought not to be interposed in that direction, except where resort to that court is grounded upon the settled principles which govern its jurisdiction'; and that the jurisdiction exercised by the courts of the United States to restrain by injunction the collection of a tax wholly illegal and void had always been rested on other grounds than merely the unconstitutionality of the tax. 139 U.S. 596 -598, 11 Sup. Ct. 648.
In the light of these decisions, we proceed to an examination of the provisions of the Code of West Virginia of 1891 (chapter 29, 67) under which the tax upon the plaintiff's bridge was assessed.
The return made by the railroad company to the auditor is to be laid by him, as soon as practicable, before the board of public works. If the return is satisfactory to the board, the board shall approve it, and, by an order entered upon its records, direct the auditor to assess the property of the company with taxes, and he shall assess it as afterwards provided. But, if the return is not satisfactory, the board is authorized to proceed, in such manner as it may deem best, to obtain the information required to be furnished by the return; and may compel the attendance of witnesses and the production of papers; and is directed, as soon as possible after having procured the necessary information, to assess and fix the fair cash value of all the property required to be returned, in each county through which the railroad runs; and, in ascertaining such value, to consider the return, and all the evidence and information that it has been able to procure, and all such as may be offered by the railroad company. [172 U.S. 32, 43] The legislature evidently intended that the annual return should include all the real estate owned or used by the railroad company in connection with its railroad within the state. The plaintiff's bridge across the Ohio river between the states of West Virginia and Ohio was real estate. It was a 'building or structure,' within the proper meaning of the words. Bridge Proprietors v. Hoboken Co., 1 Wall. 116, 147; Whitall v. Gloucester Freeholders, 40 N. J. Law, 302, 305. And it had been declared by congress to be 'a lawful structure.' Act July 14, 1862, c. 167 ( 12 Stat. 569). The fact that the bridge was an instrument of interstate commerce did not exempt so much of it as was within West Virginia from taxation by the state. Henderson Bridge Co. v. Henderson City, 141 U.S. 679 , 12 Sup. Ct. 114.
The plaintiff alleged in the bill that its return included, in the number of miles of its main track, so much of the bridge as lay within the state; and contended that the bridge was included in 'its railroad track,' within the meaning of the third subdivision of the section of the Code above quoted, and therefore should have been assessed only as so many feet of the railroad. But the return does not mention the bridge; and, if it was included in the term 'railroad track' in that subdivision, the increased value of the track by reason of the bridge might properly be taken into consideration in estimating the value of the railroad track, and the assessment of the track and the bridge separately would seem to be a difference of form rather than of substance. Railway Co. v. Backus, 154 U.S. 421, 429 , 14 S. Sup. Ct. 1114; Robertson v. Anderson, 57 Iowa, 165, 10 N. W. 341.
If the bridge was not covered by the third subdivision, it was certainly included in the fifth. This subdivision begins by designating 'depots, station houses, freight houses, machine and repair shops and machinery therein, and all other build- [172 U.S. 32, 44] ings, structures and appendages connected thereto or used therewith.' It was argued that the words 'thereto' and 'therewith,' in this sentence, referred to the same antecedent as the previous word 'therein,' and that 'therein' referred to depots, station houses, freight houses machine and repair shops, and therefore 'thereto' and 'therewith' must be equally restricted. But, if a strictly grammatical construction should be adopted, it may well be doubted whether 'machinery therein' related to anything but machine and repair shops; and it can hardly have been the intention of the legislature to limit the words, 'buildings, structures and appendages connected thereto or used therewith,' to those connected or used with such shops only. If the bridge is not a 'building or structure,' within the meaning of those words, as here used, it certainly (if not part of the 'railroad track,' under the third subdivision) comes within the words next following, 'together with all other real estate, other than its railroad track, owned or used by it in connection with its railroad.' By a clause near the end of the same section, it is provided that 'all buildings and real estate owned by such company, and used or occupied for any purpose not immediately connected with its railroad,' are to be taxed like similar property of individuals.
The same section further provides that the decision made by the board of public works shall be final, unless the railroad company, within 30 days after such decision comes to its knowledge, appeals (which it is expressly authorized by the statute to do) from the decision, as to the assessment and valuation made in each county through which the railroad runs, to the circuit court of that county. The appeal is to have precedence over all other cases, and is to be tried as soon as possible after it is entered. That court, on such appeal, is to hear all legal evidence offered by the appellant, or by the state, county, district, or municipal corporation, and, if satisfied that the valuation as fixed by the board of public works is correct, to confirm the same; but, if satisfied that such valuation is too high or too low, to correct it, and to ascertain and fix the true value of the property [172 U.S. 32, 45] according to the facts proved, and certify such value to the auditor.
That court has often had occasion to inquire how far the action of the circuit court of the county, in this respect, is administrative only, and how far it may be considered as judicial in its nature. Pittsburgh, C . & St. L. Ry. Co. v. Board of Public Works, 28 W. Va. 264; Charleston & S. Bridge Co. v. Kanawha County Court, 41 W. Va. 658, 24 S. E. 1002; State v. South Penn Oil Co., 42 W. Va. 80, 24 S. E. 688. See, also, Upshur Co. v. Rich, 135 U.S. 467 , 10 Sup. Ct. 651.
But it is not important, in this case, to pursue that course of inquiry; since, in matters of taxation, it is sufficient that the party assessed should have an opportunity to be heard, either before a judicial tribunal, or before a board of assessment, at some stage of the proceedings. Kelly v. Pittsburgh, 104 U.S. 78 ; Railway Co. v. Backus, 154 U.S. 421 , 14 Sup. Ct. 1114.
The railroad bridge in question being liable to assessment under section 67, it is unnecessary, for the purposes of this case, to determine whether it should be treated as 'railroad track,' or as a 'building or structure,' or as 'other real estate, owned or used in connection with the railroad.' In any view, its assessment and valuation by the board of public works, of which the plaintiff complains, was subject to review by the [172 U.S. 32, 46] circuit court of the county upon an appeal seasonably taken by the railroad company.
The statute also contains a provision that 'no injunction shall be awarded by any court or judge to restrain the collection of the taxes, or any part of them, so assessed, except upon the ground that the assessment thereof was in violation of the constitution of the United States, or of this state, or that the same were fraudulently assessed, or that there was a mistake made by the auditor in the amount of taxes properly charge- [172 U.S. 32, 47] able on the property of said corporation or company; and in the latter case no such injunction shall be awarded unless application be first made to the auditor to correct the mistake claimed, and the auditor shall refuse to do so, which facts shall be stated in the bill.' While this provision cannot, of course, bind the courts of the United States, it is nearly in accord with the rule governing the exercise of the jurisdiction in equity of those courts, as established by the decisions cited at the beginning of this opinion.
On the contrary, the bill would appear to have been studiously framed to avoid making any such allegation. The bill, which was sworn to on March 18, 1895, alleged that on January 19, 1895 (60 days before), the plaintiff received notice from the auditor of the decision of the board of public works; that 'on the ___ day of 1895' (which might be any day [172 U.S. 32, 48] before the bill was sworn to) the auditor added the 10 per cent., and certified to the sheriff the amount of the tax assessed, with that addition; and that the sheriff 'since said date' had demanded payment of both sums from the plaintiff; and the affidavit filed with the bill on March 25, 1895, shows that the sheriff's levy on one of the plaintiff's engines was made after the bill was sworn to.
[ Footnote 1 ] Valuation of P., C., C. & St. L. R'y Main Line in the State of West Virginia as Returned for Taxation for the Year 1894.
Main track 7.11 miles Second track 7.11 " Side track 13.57 " Rolling stock 7.11 " Telegraph line 7.11 "

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