Source: https://www.chanrobles.com/usa/us_supremecourt/244/499/case.php
Timestamp: 2020-04-02 10:04:34
Document Index: 657148047

Matched Legal Cases: ['§ 4077', '§ 4079', '§ 174', '§ 4077', '§ 24', '§ 238', '§ 5219', '§ 172', '§ 723', '§ 4077', '§ 4079']

US Supreme Court Decisions On-Line> Volume 244 > GREENE V. LOUISVILLE & INTERURBAN R. CO., 244 U. S. 499 (1917)
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Under the so-called franchise tax provisions of Kentucky (Ky.Stats., §§ 4077-4079) relating to railroad and other corporations exercising special or exclusive privileges or franchises, what is termed the "capital stock of the corporation" (§ 4079) includes its entire property, chanrobles.com-red
Sections 171 and 174 of the Constitution of Kentucky require uniform taxation according to value, and an identical rate as between corporate and individual property, and the provision of § 174 that " all corporate property shall pay the same rate of taxation paid by individual property" means that not only the percentage of the rate, but the basis of the valuation, shall be the same. chanrobles.com-red
These are companion cases, involving similar questions, were argued together, and may be disposed of in a single chanrobles.com-red
opinion. Appellees are corporations organized under the laws of the State of Kentucky, one of which (the Louisville & Interurban Railroad Company) operates, as a common carrier, passenger and freight lines of railroad in three of the counties of that state and in various municipalities and taxing districts in those counties, while the other (the Louisville Railway Company) operates, as a common carrier, passenger and freight lines of street railway in the City of Louisville and in Jefferson County, outside of that city. They filed their several bills of complaint in the district court against Henry M. Bosworth and others, then constituting the Board of Valuation and Assessment of the Kentucky (Bosworth being also auditor of public accounts), and against the attorney general of the state and his assistants, suing them all, both individually and in their official capacities, for an injunction to restrain steps looking to the certification and enforcement of what are called "franchise taxes" attempted to be assessed upon the respective complainants for the year 1915 under § 4077 and succeeding sections of the Kentucky Statutes, upon the ground of discrimination in the valuation of the franchises, they having been assessed, as alleged, on the basis of 75 percent of actual values, while taxable property in general was assessed systematically and intentionally at not more than 52 percent of actual values. There being no diversity of citizenship, the jurisdiction of the district court was invoked, under the first paragraph of § 24, Judicial Code, upon the ground that the suits arose under the "due process" and "equal protection" clauses of the Fourteenth Amendment of the Constitution of the United States, and that the matter in dispute in each case was in excess of the jurisdictional amount. Plaintiffs also relied upon certain provisions of the constitution of the state that require uniform taxation of property according to value and at the same rate for corporate as for individual property. By supplemental bills, chanrobles.com-red
the successors in office of the original defendants were made parties in both their individual and official capacities. In each case, there was a motion to dismiss, equivalent to a general demurrer to the bill, upon the following grounds: (1) that there was no federal question involved, and therefore the court was without jurisdiction; (2) that the bills stated no cause of action under the laws of the state or of the United States; (3) that the plaintiffs had an adequate remedy at law; (4) that the bills showed no equity on their face, and (5) that the suits were suits against the State of Kentucky. After a hearing, the court overruled these motions, defendants declined to plead further and made no objection to the submission of the cases for final decrees, the allegations of the bills, not being denied, were taken as true, and final decrees were made granting relief against the enforcement of the disputed assessments and restraining the imposition of franchise taxes upon plaintiffs for the year 1915, based on assessments to their franchises at greater values than those conceded in the respective bills of complaint, which were 60 percent of actual values. The court, in reaching this conclusion, followed its own previous decisions in Louisville & N. R. Co. v. Bosworth, 209 F.3d 0, 230 Fed.191. Defendants appealed directly to this Court under § 238, Judicial Code.
The bills are substantially identical in form, and an outline of the one filed by the Louisville & Interurban Railroad Company (No. 617) will suffice. Following a prefatory statement of jurisdictional matters and a description chanrobles.com-red
It is chanrobles.com-red
It does not appear, from any express averment in the chanrobles.com-red
(1) It is convenient to state at this point what, indeed, is not controverted -- that, if the suits be otherwise maintainable, the last-mentioned averments of the bills show sufficient special grounds for invoking the equity jurisdiction under the rule established by repeated decisions of this Court. 78 U. S. 110-112; 82 U. S. 525-526; Ohio Tax Cases, 232 U. S. 576, 232 U. S. 587.
In Raymond v. Chicago Union Traction Co., 207 U. S. 20, 207 U. S. 38, the Court upheld the right of action in a federal court to restrain the collection of taxes that had been assessed at a different rate and by a different method from that employed with respect to other taxpayers of the same class, in defiance of the provisions of a constitutional statute that required equalization, and also in denial of the equal protection of the laws within the meaning of the Fourteenth Amendment. chanrobles.com-red
To recapitulate: real estate and personal property of individuals and of non-franchise corporations are assessed by the county assessors, both for state and county purposes; tangible railroad property by the Railroad Commission; bank shares, distilled spirits, and corporate franchises by the Board of Valuation and Assessment. It is important to be observed that the latter board has no authority or control over the actions of the county assessors, the county boards of supervisors, or the State Board of Equalization, and, on the other hand, these officials have no authority or control over the actions of the Board of Valuation and Assessment. Nor is there any statutory chanrobles.com-red
The fact should be emphasized that the Kentucky court of last resort, far from holding that discrimination such as is here complained of is in accord with the constitution and laws of the state, has recognized distinctly that it is not, but has felt constrained to hold that, under circumstances similar to those of the present cases, there is no redress in the courts of the state, and that the constitutional chanrobles.com-red
In Cummings v. Merchants' National Bank, 101 U. S. 153, the bank brought its bill in equity in a circuit court of the United States to enjoin the collection of a tax assessed against the shares of its stockholders, not because of inconsistency with the act of Congress relating to the taxation of such shares (§ 5219, Rev.Stats.), but upon the ground of a violation of the Constitution and laws of the State of Ohio, which required the taxation of all moneys, credits, and investments, and also all real and personal property, to be by a uniform rule and according to its true value in money. The supreme court of the state (Exchange Bank v. Hines, 3 Ohio St. 1, 15) had held that they required uniformity not only in the rate of taxation, but also in the mode of the assessment upon the taxable valuation. But the legislature had adopted a system of valuation under which there were different bodies acting independently of one another in regard to different classes of property in the process of estimating values for taxation, with one board of equalization having charge of the valuation of the real estate of the whole state once in every ten years, another having charge of the valuation of railroad property every year, a third of the valuation of shares of incorporated banks every year, but with no common superior to secure equalization as between the different classes of property. The evidence showed that, in the county where complainant's bank was situate, the assessors of real property, the assessors of personal property, and the county auditor (who was the assessing officer for bank shares) concurred in establishing a rule of valuation by which real and personal property, except money, were chanrobles.com-red
Appellants' contention that there is no remedy by injunction against the assessments imposed by the Board of Valuation and Assessment places undue emphasis upon the requirement contained in § 172 of the constitution that all property shall be assessed for taxation at its fair chanrobles.com-red
It is equally plain that it makes no difference what basis chanrobles.com-red
A substantially identical question was presented to the Circuit Court of Appeals for the Sixth Circuit in Taylor v. Louisville & Nashville R. Co.,88 F.3d 0, where the Constitution of Tennessee declared that all property should be taxed according to its value, to be ascertained as the legislature should direct, "so that taxes shall be equal and uniform throughout the state," and the statutes required that the real value of the property be adopted, and where, as here, railroad property and chanrobles.com-red
The justice of this view has been recognized by the state courts of last resort in many cases. Bureau County v. Chicago &c. R. Co., 44 Ill. 229, 239; Cocheco Mfg. Co. v. Strafford, 51 N.H. 455, 482; Manchester Mills v. Manchester, 58 N.H. 38; Randell v. Bridgeport, 63 Conn. 321, 324; C., B. & Q. R. Co. v. Atchison C., 54 Kan. 781, 792; Ex Parte Fort Smith &c. Bridge Co., 62 Ark. 461, 468; Burnham v. Barber, 70 Ia. 87, 90; Barz v. Board of Equalization, 133 Ia. 563, 565; Iowa Cent. Ry. Co. v. Board of Review (Iowa, chanrobles.com-red
(7) It is objected that appellees had an adequate remedy at law, and Singer Sewing Mach. Co. v. Benedict, 229 U. S. 481, is cited as a controlling authority. There, the suit was brought to enjoin the collection of taxes levied by the City and County of Denver, in the State of Colorado, and because of the act of Congress (Rev.Stats. § 723) and familiar decisions applying and enforcing it, since it appeared that a local statute required the board of county commissioners to refund taxes paid and thereafter found to be erroneous or illegal, "whether the same be owing to erroneous assessment, to improper or irregular levying of the tax, to clerical or other errors of omission," with a correlative right on the part of the taxpayer to enforce that duty by action at law, and the decisions of the supreme court of the state interpreted the statute so as to give an adequate remedy at law, this Court affirmed a decree dismissing the bill. chanrobles.com-red
(8) It is contended that appellees, if aggrieved, had chanrobles.com-red
The particular method of fixing the value of "capital stock" and of "corporate franchise" is not in issue in the present cases. The district court, in Louisville & N. R. Co. v. Bosworth, 209 F.3d 0, 409-411, reading §§ 4077-4079 together, seems to have considered that the method prescribed by the proviso in § 4079 was applicable to all public service corporations organized in Kentucky, including those which operate and conduct their business and have their property wholly in that state. And this appears to have been the view of the Kentucky Court of Appeals in Louisville Railway Co. v. Commonwealth, 105 Ky. 710, 714.