Source: https://supreme.justia.com/cases/federal/us/172/32/
Timestamp: 2019-04-24 08:19:45+00:00

Document:
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 within some recognized head of equity jurisdiction.
A railroad bridge across a navigable river forming the boundary line between two states is not, by reason of being an instrument of interstate commerce, exempt from taxation by either state upon the part within it. A railroad bridge is taxable under the Code of West Virginia of 1891, c. 29, § 67, and although the board of public works assesses separately the whole length of the railroad track within the state and that part of the bridge within the state, yet if the railroad company does not, as allowed by that section, apply to the auditor to correct any supposed mistake in the assessment, nor appeal, within thirty days after receiving notice of the decision of the board, to the circuit court of the county, and the officers of the state make no attempt to interfere with the company's possession and control of its real estate, nor, until after the expiration of the thirty days, either to impose a penalty for delay in paying the taxes or to levy on personal property for nonpayment of them, the company cannot maintain a bill in equity in a court of the United States to restrain the assessment and collection of any part of the taxes.
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 alleged that under and by virtue of that section of the Code, the plaintiff was required, through its principal officers, to make return in writing, under oath, to the auditor of the state on or before the 1st of April in each year and in the manner prescribed by that section, of its property subject to taxation in the state; the auditor was required to bring the return, as soon as practicable, before the board of public works; that board was authorized either to approve the return or to proceed to assess and fix the fair cash value of all the property of railroad companies which they were so required to return for taxation, and it was further provided that as soon as possible after the value of any railroad property was fixed for purposes of taxation by one of the several methods designated by that section, the auditor should assess and charge such property with the taxes properly chargeable thereon.
annexed to and made part of the bill, and is set out in the margin *), 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.
of $310,830, which included the plaintiff's railroad in the County of Hancock.
The bill further alleged that "on the ___ day of _____, 1895," the auditor added ten percent to the sum of $3,060, to pay the expense of collection, and certified that sum, with the ten percent added, to the Sheriff of Brooke County for collection, and that the sheriff "since said date" had demanded payment of the sum of $3,060 and the ten percent additional, and was threatening to collect them by legal process, and would thus inflict irreparable injury upon the plaintiff unless prevented by the interposition of a court of competent jurisdiction.
The plaintiff further alleged that the bridge constituted a part of its line of railway, and had no separate earning capacity, and no greater earning capacity than any other equal number of feet of its line of railway, and was used exclusively by it in transporting freight and passengers across the Ohio River to and from the States of West Virginia and Ohio, and that it was advised and believed that the bridge was an instrument of interstate commerce, and was not, as a separate structure from its line of railway, a proper subject for taxation by the State of West Virginia in the manner above set forth.
The bill then charged that the tax upon the bridge was illegal and unjust, and constituted a cloud upon the title to the bridge, and that, by reason of that clause of the Constitution of the United States which gives Congress control over interstate commerce, the Circuit Court of the United States for the District of West Virginia was clothed with authority and jurisdiction to restrain and to prevent the assessment and collection of this illegal and unjust tax, and prayed for an injunction against its assessment and collection, and for further relief.
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; Union Pacific Railway Co. v. Cheyenne, 113 U. S. 516; Milwaukee v. Koeffler, 116 U. S. 219; Shelton v. Platt, 139 U. S. 591.
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."
78 U. S. 11 Wall. 109, 78 U. S. 110.
"The party of whom an illegal tax is collected has ordinarily 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."
11 Wall. 78 U. S. 112.
"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."
"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. 92 U. S. 613-615.
In Union Pacific 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. 113 U.S. 526, 113 U. S. 527.
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."
"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. 139 U. S. 596-598.
In the light of these decisions, we proceed to an examination of the provisions of the Code of West Virginia of 1891, c. 29, § 67, under which the tax upon the plaintiff's bridge was assessed.
track and its branches, and side and second tracks, switches and turnouts therein, and the fair cash value per mile of such railroad in each county, including in such valuation such main track, branches, side and second tracks, switches and turnouts;"
"Its depots, stationhouses, freight houses, machine and repair shops and machinery therein, and all other buildings, structures and appendages connected thereto or used therewith, together with all other real estate, other than its railroad track, owned or used by it in connection with its railroad, and not otherwise taxed, including telegraph lines owned or used by it, and the fair cash value of all buildings and structures, and all machinery and appendages, and of each parcel of such real estate, including such telegraph line, and the cash value thereof in each county in this state in which it is located."
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.
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, 68 U. S. 147; Whitall v. Gloucester Freeholders, 11 Vroom (40 N.J.Law) 302, 305. And it had been declared by Congress to be "a lawful structure." Act of 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, 141 U. S. 679.
According to the facts alleged in the bill and admitted by the demurrer, the plaintiff has been assessed by the board of public works one sum upon the whole length of its railroad track within the state and another sum upon that part of the bridge within the state, as a separate structure.
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. Pittsburgh &c. Railway v. Backus, 154 U. S. 421, 154 U. S. 429; Robertson v. Anderson, 57 Ia. 165.
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, stationhouses, 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.
according to the facts proved, and certify such value to the auditor.
This provision for a review and correction by the circuit court of the county of the assessment made by the board of public works affords a convenient and adequate remedy for any error in the taxation, and has been held by the highest court of the state to be in accordance with its Constitution. Wheeling Bridge Railway v. Paull, 39 W.Va. 142.
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. Railway v. Board of Public Works, 28 W.Va. 264; Charleston & Southside Bridge Co. v. Kanawha County Court, 41 W.Va. 658; State v. South Penn Co., 42 W.Va. 80. See also Upshur County v. Rich, 135 U. S. 467.
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; Pittsburgh &c. Railway v. Backus, 154 U. S. 421.
Even if, therefore, no previous notice of the hearing before the board of public works was required by the statute or was in fact given to this plaintiff (which is by no means clear), yet the notice of its decision, with the right to appeal therefrom to the circuit court of the county, and there to be heard and to offer evidence before the valuation of its property for taxation was finally fixed afforded the plaintiff all the notice to which it was entitled.
circuit court of the county upon an appeal seasonably taken by the railroad company.
The section indeed also provides that, when the return made to the auditor is satisfactory to the board of public works or when an assessment is made by that board, the auditor shall immediately certify to the county court of each county through which the railroad runs the value of the property of the railroad company therein, as valued and assessed as aforesaid, that that court shall apportion that value among the districts, school districts, and municipal corporations through which the railroad runs, and that the clerk of that court, within 30 days after it has laid the county and district levies, shall certify to the auditor the apportionment so made, that the recording officer of each district or municipal corporation through which the road runs shall, within 30 days after a levy is laid therein, certify to the auditor the amount levied, and that, if any such officer fails to do so, the auditor may obtain the rate of taxation from the land books in his office or from any other source.
But the provision directing the auditor to immediately certify the assessment made by the board of public works to the county court of each county must be construed as subordinate to, and controlled by, the next preceding provision, giving the right of appeal from the board of public works to the circuit court of the county, as clearly appears from the next succeeding provision, by which it is, after the value of the property of the railroad company has been "fixed by the board of public works, or by the circuit court on appeal as aforesaid," that the auditor is directed to assess and charge the property of the company "with the taxes properly chargeable thereon" in a book to be kept by him for that purpose.
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.
The statute further makes it the duty of the auditor, "as soon as possible after he completes the said assessments," to make out and transmit to the railroad company "a statement of all taxes and levies so charged," and the duty of the railroad company "so assessed and charged" to pay "the whole amount of such taxes and levies upon its property" by the 20th of January "next after the assessment thereof," and if the company does not pay "such taxes and levies" by that day, the auditor is directed to add ten percent to the amount thereof to pay the expenses of collecting them, and to certify to the sheriff of each county "the amount of such taxes and levies assessed within his county."
In the present case, the bill does not allege that there was any fraud in the assessment, or that the defendant made any attempt to interfere with the plaintiff's ownership or control of its real estate, or that the plaintiff either made any application to the auditor to correct any supposed mistake in the assessment or took any appeal from the decision of the board of public works to the circuit court of the county, or that, within the thirty days allowed for such an appeal, any attempt was made by the defendants either to charge the plaintiff with the penalty of ten percent for delay in payment of the taxes or to levy upon its property for nonpayment of them.
before the bill was sworn to), the auditor added the ten percent 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.
The only reasonable inference from these vague allegations of the bill is that the auditor waited for more than thirty days after giving the plaintiff notice of the decision of the board of public works in order to afford full opportunity for an appeal from that decision, and that no penalty was imposed for delay in payment of the taxes, nor any active measure taken to enforce them, until it had become clear that the plaintiff did not intend to take such an appeal.
The plaintiff, upon its own showing, having made no attempt to avail itself of the adequate remedies provided by the statute of the state for the review of the assessment complained of, is not entitled to maintain this bill.
Second track . . . . . . . . . . . 7.11 "
Side track . . . . . . . . . . . . 13.57 "
Rolling stock. . . . . . . . . . . 7.11 "
Telegraph line . . . . . . . . . . 7.11 "

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