Case Name: CENTRAL PACIFIC RAILROAD COMPANY v. CALIFORNIA
Court: Supreme Court of the United States
Jurisdiction: United States
Decision Date: 1896-03-16
Citations: 162 U.S. 91
Docket Number: No. 559
Parties: CENTRAL PACIFIC RAILROAD COMPANY v. CALIFORNIA.
Judges: Me. Justice White concurred in the result.
Reporter: United States Reports
Volume: 162
Pages: 91–166

Head Matter:
CENTRAL PACIFIC RAILROAD COMPANY v. CALIFORNIA.
ERROR TO THE SUPREME COURT OF THE STATE OF CALIFORNIA.
No. 559.
Argued January 15, 16, 1896.
Decided March 16, 1896.
The Central Pacific Railroad Company, being required by the laws of California to make returns of its property to the Board of Equalization for purposes of taxation, made a verified statement in which, among other things, it was said: “The value of the franchise and-entire roadway, roadbed, and rails within this State is $12,273,785.” The Board of Equalization determined that the actual value of the franchises, roadway, roadbed, rails, and rolling stock of the company within the State at that time was $18,000,000. The company not having paid the taxes assessed on this valuation, this action was brought by the State to recover them. Held,
'(1) That the presumption was that the franchise included by the company in its return was a franchise which was not exempt under the laws of the United States, and that the board had acted upon, property within its jurisdiction;
(2) That if the Board of Equalization had included what it had no authority to assess, the company might seek the remedies given under the law, to correct the assessment so far as such property was concerned, or recover back the tax thereon, or, if those remedies were not held exclusive, might defend against the attempt to enforce it;
(3) Where the property mentioned in the description could be assessed, and the assessment followed the return, the company ought to be held estopped from saying that the description was ambiguous, and this notwithstanding the fact that the statement was made on printed blanks, prepared by the board.
The decision of the Supreme Court of the State that the findings of the trial court on the question of whether the franchises taxed covered • franchises derived from the United States was conclusive, and is binding on this court.
The fact that a court, after giving its decision upon an issue, gives its opinion upon the manner in which it would have decided the issue under other circumstances, does not constitute an error to be reviewed in this court.
The Central Pacific company is a corporation of California, recognized as such by the acts of Congress granting it aid and conferring upon it Federal franchises, and it was not the object of those acts to sever its allegiance to the State or transfer the powers and privileges derived from it; nor did those consequences result from.the acceptance of the grant by the corporation.
The property of a corporation of the United States may be taxed by a State, but not through its franchise.
Although a corporation may be-an agent of the United States a State may tax its property, subject to the limitation pointed out in Rcdlmad Co. v. Peniston, 18 Wall. 5.
It is immaterial in this case whether the railroad company operates its road under the franchise derived from the United States, or under that derived from the State.
When it is considered that the Central Pacific company returned its franchise for assessment, declined to resort to the remedy afforded by the state laws for- the correction of the assessment as made if dissatisfied therewith, or to pay its tax and bring suit to recover back the whole or any part of the tax which it claimed to be illegal, its position is not one entitled to favorable consideration; but, without regard to that, the court holds, for reasons given, that the state courts rightly decided that the company had no valid defence to the causes of action proceeded -on.
This was an action brought in the name of the People of the State of California against the Central Pacific Eailroad Company in the Superior Court of the city and county of San Francisco, under section 3670 of the Political Code of that State, to. recover a certain sum of money alleged to be due the State and various other sums of money alleged to be due eighteen counties of the State, for taxes for the fiscal year 1887 upon the assessment of the state Board of Equalization, judgment being demanded for the several sums of state and county taxes delinquent and unpaid as stated in the complaint, with five per cent thereon added for delinquency and non-payment, and interest from the time of such delinquency ; and also for costs of suit and attorneys’ fees, as allowed by law.
The provisions of the state constitution on the subject of revenue are found in article XIII; and sections 1, 4, and 10 of that article and sections 3664, 3665, 3666, 3667, 3668, 3669, 3670, and 3671 of the Political Code of Ca'liforiiia are given in the margin.
The complaint contained nineteen counts on nineteen alleged causes of action, and each count averred that the defendant was, at all times therein mentioned, a corporation organized and existing under the laws of the State of California, and engaged in operating a. railroad in more than one county of' that State; and that on August 13, 1887, the state Board of Equalization, for the purposes, of state and county taxation for the fiscal year ending June 30,1888, assessed to defendant, then the owner-arid operator thereof in more than one county in said State, the franchise, roadway, roadbed, rails and rolling stock of defendant’s railroad, then situated and being within said State, at the sum of eighteen millions of dollars. The first count then averred that within ten days after the third Monday in August, 1887, the state Board of Equalization apportioned the total assessment of the franchise, road way, roadbed, rails and rolling stock of defendant to the counties in the State in which the railway was located, in proportion to the number of miles of railway laid in such counties; and the amounts of the total assessment so apportioned by the board to those counties, and the number of miles of defendant’s railway laid in said counties, were specifically set forth.
The count then proceeded as follows :■
“V. That within ten days sifter the third Monday in August, 1887, said state. Board of Equalization did transmit to each of the county auditors of said counties a statement showing the length of the main track of defendant’s railway within the counties of said auditors respectively, with a description of the whole of defendant’s railway track within the counties of said auditors respectively, including the right of way sufficient for identification, the assessed value per mile of the same, as fixed by saidyww rata distribution per mile of the said assessed value of the whole franchise, roadway, roadbed, rails and rolling stock of defendant’s railway in said State, and the amount apportioned to the counties of said .auditors respectively. ... . • .
“VI. That thereafter, and prior to the first Monday in October, 1887, the county auditor of each of said counties did enter said statement so transmitted to him upon- the assessment roll of his county, and did enter upon said assessment roll of his county the said amount of said assessment apportioned by said state Board of Equalization to his county in the column of the assessment roll of his county which showed the total value of all property of his county for taxation. ...
“ VII. That thereafter, and on the first Monday of October, 1887, the board of supervisors of each of said counties did levy the state tax of said State of California according to the rate theretofore fixed for such .state tax for the fiscal year ending June 30, 1888, by said state Board of Equalization, upon the taxable property in its county,, including the property of defendant assessed and apportioned to its county as aforesaid, and the taxes so levied in all of said counties for the purposes of state taxation upon said property of defendant assessed, and apportioned to said counties as aforesaid was the sum of $109,440.
“ VIII. That upon the seventeenth day of September, 1887, said state Board of Equalization did fix the rate of state taxation for the fiscal year ending June 30, 1888, at the rate of $0,608 on each one hundred dollars.
“ IX. That defendant has never at any time paid said state tax, amounting to said sum of $109,440, nor any part thereof. That said state tax became and was delinquent on the last Monday in December; 1887, at six o’clock p.m., and upon and at the time of and by reason of such delinquency five per cent of said state tax, to wit, the sum of $5472, was, by the comptroller of said State, added to said state tax, and no part of said $5472, so added for delinquency has ever been paid by defendant.
• “ X. Tha,t prior to the third Monday of October, .1887, the said state Board of Equalization did prepare and transmit to the comptroller of said State a duplicate record of assessment of, railways, and a duplicate record of apportionment of railway assessments for the fiscal year ending June 30,1888, both certified by the chairman and clerk of said state Board of Equalization, and which said duplicate records included the said assessment of defendant’s said property, and the said apportionment of the assessment of defendant’s property to the said counties.
“Before the fourth Monday of October, 1887, said comptroller did compute at the rates of taxation fixed and levied as aforesaid, and enter in separate money columns in the said duplicate record of apportionment of railway assessments, the respective sums, in dollars and cents, to be paid by the defendant as the state tax upon the total amount of said assessment, and as the county tax upon the apportionment of said assessment to each county,- and city and county, of the property assessed to defendant named in said duplicate record. That within -ten days after the fourth Monday in October, 1887, said comptroller did- publish for two weeks in one daily newspaper of general circulation published at the state capital of said State, and in two daily newspapers of general circulation published in the city and county of San Erancisco in said State, a notice that he had received from said state Board of Equalization said duplicate record of assessments of railways, and said duplicate record of apportionment of railway assessments, and that the said taxes were then due and payable and would become delinquent on the last Monday in December, 1887, at 6 o’clock p.m., and that unless paid to the state treasurer at the capital prior thereto, five per cent would be added to the amount thereof.
“That a reasonable compensation for legal services by Langhorne & Miller, attorneys for plaintiff, in the institution and prosecution of this cause of action, is a sum equal to ten per cent of the tax in this- cause of action alleged to be delinquent.”
Then followed eighteen counts for the county taxes in the several counties, all averring in detail compliance with the law in relation thereto.
Defendant demurred to the complaint, the demurrer was overruled, and defendant answered, setting up various defences, one of which was that the franchise assessed to defendant by the state Board of Equalization was derived by defendant from the government of the United States through certain acts of Congress, and that the same were used by defendant as one of the instrumentalities of the Federal government, and, hence, was not taxable by the State; that the assessment of this franchise was so blended with the whole assessment as not to be separable therefrom; and that the whole assessment was therefore void.
The plaintiff ppt in evidence the “Duplicate Kecord of Assessments of Railways by the state Board of Equalization for 1887,” and the “ Duplicate Record of Apportionment of Railway Assessments for 1887,” filed in the office of the comptroller of the State of California on the 11th of October, 1887. These were admitted subject to defendant’s objection. The duplicate record of the assessments of railways stated that “ the state Board of Equalization being in session on this, the thirteenth day of August, 1887, all the members being present, and having under consideration the assessment of the franchise, roadway, roadbed, rails and rolling stock of the Central Pacific Railroad Company, within the State, for the year 1887, and it appearing to this board that said company, on the first Monday in March, in the year 1887, at 12 o’clock, meridian, of- that day, owned, and still owns, 719.50 miles of railroad within this State, which at said time and day in March was,' and still is, operated in more than one county; being the entire railway of said' company within this State, and which, with the right of way for the same, is described as follows:” [Here follows description of line of roadway, roadbed, rails- and right of way.] “And it appearing that the actual value of the franchise,'roadway, roadbed, rails and •rolling stock of said company, within this State, at the said date and time in March, was, and still is, the sum of eighteen millions of dollars: Therefore, it is hereby ordered that the said franchise, roadway, roadbed, rails and rolling stock, for the year 1887, be and the same are hereby assessed to the said Central Pacific Railroad Company at the sum of eighteen million- dollars.”
The ■ duplicate l’ecord of apportionment of mil way assessments, under date of August 22, 1887, stated: “The state Board of Equalization met this day. All the members present. The board this day apportioned the total assessment of the franchise, roadway, roadbed, rails and rolling stock of each railroad assessed by it on the 13th day of August, 1887, for the year 1887, to the counties and the city and county of San Francisco in proportion to the number of miles of railway laid in each county, and in the city and county of San Francisco, which apportionment is set out in the following table. The apportionment is based upon the proportion the number of miles in each county of a railway bears to the total number of miles of such railway laid in the State.”
The annexed table gave the name of the corporation to which each railway was assessed and the name of each railway assessed, in this instance as the “ Central Pacific Railroad Company ; ” the names of the counties and city and county, to which the assessment was apportioned; the- total number of miles of road in the State; the number of miles in each county and city and county ; the value per mile; the total assessment of the franchise, roadway, roadbed, rails and rolling stock of each railway assessed ; the amount apportioned to each county, and city and county, for purposes of county and city and county taxation; rate of taxation' for each county, and city and county, levied by the board of supervisors; amount of state taxes at the state rate; and amount due of county, and city and county, taxes upon the assessment as apportioned.
It was admitted that the apportionment was made as the Political Code required it to be made, and that the mileage for each county was correctly stated.
Plaintiff then proved, under objection, that the taxes sued for had not been paid, or any portion thereof. Evidence was also introduced in regard to the value of services of counsel.
Defendant called as a witness C. M. Cogían, clerk of the Board of Equalization, and identified the original minutes of the proceedings of the board relating to the assessment of the property of the Central Pacific Railroad Company for the year 1888, under date of August 17, 1888. It appeared therefrom that the attorney general recommended to the board that the franchises of the Central Pacific and .Southern Pacific companies,- derived from the State, be assessed, and that the valuation thereof be stated, separately in the record of assessments; that the board assess the moles,.bridges and culverts of each road separately, and in respect of certain railroad companies declare that the steamers used in operating those roads were not assessed; whereupon the board proceeded to make such assessment, and ordered that the franchise of the Central Pacific Railroad Company, derived from the State of California, be assessed at $1,250,000, and that the franchise of the Southern Pacific Railroad Company, derived from- the State of California, be assessed at $1,000,000; that the moles, culverts, bridges and wharves upon which the tracks of the Central Pacific are laid be assessed at $1,000,000; that the moles, culverts, bridges and wharves upon which the trades of the Southern Pacific are laid be assessed at $400,000. The original record of the assessment of the Central Pacific Railroad Company, made by the board for the year 1888 was offered in evidence, and was to the effect that the board assessed the franchise derived from the State of California, the roadway, roadbed and rolling stock of said company within said State, at the total sum of $15,000,000.
On the cross-examination of Mr. Cogían, plaintiff offered and the court admitted, in evidence, under defendant’s objec tion, the verified statements furnished by defendant to the state-Board of Equalization during the years 1887 and 1888, which were marked plaintiff’s Exhibits 4 and 6. Exhibit four was the return made by the Central Pacific Railroad Company for 1888, which read thus:
“ The Central Pacific Railroad Company answers the questions propounded by the board as follows: And makes the following statement in relation to its property subject to taxation in the State of California, owned .by it for the year ending on the first Monday in March, 1888, and of all property used in operating its railway during such year:
“ The length of railway owned and operated as a system in and out of the State.is 1344.14 miles.
“Length of track, sidings and double track reduced to single track js-; out of the State, 597 miles-; in the State, 747.14 miles.
“ The value of the franchise derived from the State within this State. $25 00
“ The value of the entire roadway, roadbed, rolling stock and rails within this State is 9,376,607 00
$9,376,632 00”
This was followed by a list of the mileage of the road in California in each of the counties through which it ran, and schedules of the rolling stock; the earnings and expenses of the road as a system in and out of the State; of the operating expenses; and of the earnings and expenses within the State. The return was duly sworn to.
Exhibit six was the return of the company for the year 1887. This opened with the same statement as the other, and after giving the length of the railway owned and operated as a system and the length of track, single and double, out of and in the-State, continued: “The value of the franchise and entire roadway, roadbed and rails within this State is $12,273,785.00.” ■ The usual lists and schedules were attached.
Defendant then called as a witness one Morehouse, a merh-ber of the state Board of Equalization, whose evidence tended to show that the assessment for 1887 was intended by him to and did include defendant’s Federal franchise, but that he could not say that the value of the Federal franchise operated on the minds of the other members of the board in making up the items of the valuation. Defendant offered to prove by Morehouse that at every session from 1883 and prior to 1888, the board, in making its assessment of the valuation of the property of the Central Pacific Kailroad Company, included in its total estimate the value of the Federal franchise held by that company, by virtue of the acts of Congress referred to, and that the valuation of the Federal franchise was blended into the general assessment of that company in such a manner as to be indistinguishable from it and not .capable of separation. This was objected to as incompetent, irrelevant and immaterial, the objection sustained by the court, and exception saved.
E. W. Maslin, secretary of the state Board of Equalization from April, 1880, to March, 1891, who was present at the board meetings and kept the record of its proceedings, was called as a witness by defendant, and testified that from his acquaintance with the history of the assessment of the road since 1880, his relation to it with respect of the franchise and personal property, his conversation with many members through those years, the knowledge he had of how two members arrived at their conclusions and the knowledge that he thought he had as to how three members arrived at their conclusions, he thought he could state what elements of value were considered by the board in making their estimate for the total values for 1887. Thereupon defendant asked witness the following questions:
“Q. From the various sources of knowledge which you have enumerated, please state to the court what elements were taken into consideration by the state Board, of Equalization in making the assessment of this company for the year 1887.
“ Q. Did you hear any conversation between the members of the state Board of Equalization during the meeting when the assessment of this company was made for the year 1887, with reference to the elements that they proposed to and did include in the assessment ?
“ Q. At the time that the assessment of 1887 was made by the state Board of Equalization upon the property of the Central Pacific Railroad Company, what was said and done at the. meeting of the state Board of Equalization on that day in your presence ? ”
To each of these questions plaintiff interposed objections, which were sustained by the court, and defendant excepted.
Defendant then made the following offer:
“ ISTow, in view of the ruling of the court on this subject, we now offer to prove by this witness that from the time of the organization of the state Board of Equalization in 1880 down to and including the year 1887, that board had every year considered the value of the Federal franchise — that is, the franchise derived from the United States by the acts of Congress of the government of the United States, belonging to and owned by the Central Pacific Railroad Company, as an element of value in assessing the total value of the property of ■that railroad company; and that in 1888, in consequence of the decision of the Supreme Court of the United States upon the subject, the state Board of Equalization for the first time ceased to consider this Federal franchise as an element of value, and hence reduced their valuation by the sum of three million dollars on the Central Pacific Railroad Company’s property.”
This offer was disallowed by the court, and defendant excepted. ,
Plaintiff in rebuttal called C. E. Wilcoxen and J. P. Dunn, who were members of the board and participated in .making the assessment of 1887, and they testified that the Federal franchise was not included in the assessment for. that year. On the cross-examination of Mr. Wilcoxen an effort was made to introduce testimony that he had given before a committee of the general assembly of California in 1889, which the court excluded, except so far as it related to the year 1887.
The statement on motion for new trial then continued:
“In its' written opinion, upon which the findings were based, the .court after determining as .a fact, from a preponderance of the. evidence before it, that the Federal franchise of defendant was not assessed or included in the assessment- of the property of defendant by the state Board of Equalization, for the year 1887, uses the following language :
“ ‘ But if the parol evidence offered did not weigh in plaintiff’s favor, and if by a preponderance of such evidence defendants could have shown that the State intended to and did include a Federal franchise in the assessment, I think the court would have to disregard it as incompetent. The effect of such parol evidence would be to contradict the record, which cannot be done.
“ ‘ The best and only evidence of the acts and intentions of deliberative bodies must be drawn from the record of its intentions. . . . From both standpoints of fact and of law, the findings- must be that a Federal franchise was not included in these assessments.’ ”
On February 3 the Superior Court made and filed its written findings of fact and conclusions of law. The findings of fact included the following:
“XXX. That on the 13th day of August, 1887, the state Board of Equalization, of the State of California, did, for the purposes of taxation for the fiscal year 1887 assess as a unit, and not separately, the franchise, roadway, roadbed, rails and rolling stock of defendant’s railroad, then being and situate within the State, at the sum and value mentioned in the amended complaint, and did then and there enter said assessment upon its minutes, and in its record of assessments. That such assessment is the one upon which the several taxes mentioned in the complaint .herein are based, and no other assessment than the one aforesaid was ever made by said Board of Equalization or other assessor of said property of the defendant for said fiscal year. That said state Board of Equalization did at the time and in the manner alleged in the amended complaint apportion said assessment and transmit such assessment and the apportionment to the county and city and county auditors, and said assessment and the apportionment thereof were entered upon the assessment rolls of said counties and said cities and counties as alleged in said amended complaint, as hereinbefore found.
“ XXXI. That the said Board of Equalization, in making said assessment, did assess the franchise, roadway, roadbed, rails, and rolling stock of defendant’s railroad, at their full cash value, without deducting therefrom the value of the mortgage, or any part thereof, or the value of said bonds issued under said acts of Congress, given and existing thereon, as aforesaid, to secure the'indebtedness of said company 'to the holders of said bonds, and, in making said assessment, said board did not deem nor treat said mortgage or bonds as an interest in said property, but it' assessed the whole value of said property as assessed to defendant in the same manner it would have done had there been no mortgage thereon. At the time said assessment and apportionment were made as aforesaid by said state Board of Equalization the assessment books or rolls for the said fiscal year had been completed and were in existence, and the assessment and valuation of defendant’s property for the purposes of taxation for said fiscal year had been ascertained and fixed as provided by law, and' said board, in making said valuation and apportionment, did exercise all necessary powers relative to the equalization of values for the purposes of taxation.”
“ XXXIII. Said state Board of Equalization, in making said assessment of defendant’s roadway, did not include in the valuation of said roadway the value of any fences erected upon the land of coterminous proprietors, and did not value said roadway at a greater value than the value of other property similarly situated and greater than its actual cash value, and did not blend in said assessment the value of any fences. That said board, in making its said assessment and valuation therefor, did not adopt a system of valuation which operated •unequally, or which was intended to or which did in any manner violate the rule prescribed in section 10 of article 13 of the state constitution, and said board, in making its said asséssment and valuation therefor, did not value the rolling stock of defendant at sixty (60) or any other per cent above its actual value, and did not value nor assess defendant’s franchise in excess of its actual value.
“ XXXIV. That in making said assessment and valuation therefor said state Board of Equalization did not include the value of or assess any steamboats or boats, nor blend the value or assessment of any steamboats or boats, with the value of or assessment of defendant’s roadway, rails-, roadbed and rolling stock.
“XXXY. That in making its assessment and valuation therefor of defendant’s franchise said state Board of Equalization did not include, assess or value any franchise or corporate power held or exercised by defendant under the acts of Congress hereinbefore mentioned, or under any act of Congress whatever. And said board, in making said assessment and valuation therefor, upon defendant’s franchise, roadbed, roadway, rails and rolling stock, for purposes of taxation for the fiscal year 1887, did not include in its said assessment and valuation therefor any Federal franchise, then possesséd by defendant, nor any franchise or thing -whatsoever, which said board could not legally include in such assessment of valuation. That the franchise, roadway, roadbed, rails and rolling stock of defendant’s railroad were valued and assessed by said state Board of Equalization, for purposes of taxation for the fiscal year 1887, at their actual value, and in proportion to their values respectively.”
The conclusions of law were that plaintiff was entitled to recover the sums claimed, with five per cent penalty, interest and counsel fees, the amounts being stated, and costs.
Judgment was rendered in- plaintiff’s favor accordingly:
On the 19th of June following, the statement, on motion for new trial, was approved and filed as part of the record, including an assignment and specification of errors. The defendant’s motion for a new trial was overruled, and defendant appealed to the Supreme Court of the State from the judgment and from the order denying the motion for new trial. January 6,1895, the Supreme Court rendered judgment, directing the court below to modify its judgment by striking therefrom the amount allowed for interest prior to the entry thereof, and also certain counsel fees, and that, as so modified, the judgment and order denying a new trial should stand affirmed. The opinion is reported in People v. Central Pacific Railroad, 105 California, 576.
Mr. J. Hubley Ashton (with whom was Mr. Charles H. Tweed on the brief,) for plaintiff in error.
Mr. J. P. Langhorne and Mr. J. H. Miller, (with whom-was Mr. W. F. Fitzgerald, attorney general of the State of California, on the brief,) for defendant in error.
Section 1. All property in the State, not exempt under the laws of the United States, shall be taxed in proportion to its value, to be ascertained as provided by law. The word “ property,” as used in this article and section, is hereby declared to include moneys, credits, bonds, stocks, dues, franchises, and all other matters and things, real, personal, and mixed, capable of private ownership: Provided, That growing crops, property used exclusively for public schools, and such as may belong to the United States, this State, or to any county or municipal corporation within this State, shall be exempt from taxation. The legislature may provide, except in the case of credits secured by mortgage or trust deed, for a reduction from credits or debts due to bona fide residents of this State.
Section i. A mortgage, deed of trust, contract, or other obligation by which a debt is secured, shall, for the purposes of assessment and taxation, be deemed and treated as an interest in the property affected thereby. Except as to railroad and other quasi public corporations, in case of debts so secured, the value.of the property affected by such mortgage, deed of trust, contract, or obligation, less the value of such security, shall be assessed and taxed to the owner of the property, and the value of such security shall be assessed and taxed to the owner thereof, in the county, city, or district in which the property affected thereby is situate. The taxes so levied shall be a lien upon the property and security, and may be paid by either party to such security; if paid by the owner of the security, the tax so levied upon the property affected thereby shall become a part of the debt so secured; if the owner of the property shall pay the tax so levied on such security, it shall constitute a payment thereon, and to the extent of such payment a full discharge thereof: Provided, That if any such security or indebtedness shall b.e paid by any such debtor or debtors, after assessment and before the tax levy, the amount of such levy may likewise be retained by such debtor or debtors, and shall be computed according to the tax levy for the preceding year. .
Section 10. All. property, except as hereinafter in this section provided, shall be assessed in the county, city, city and county, town, township, or district in which it is situated, in the manner prescribed by law. The franchise, roadway, roadbed, rails, and rolling stock of all railroads operated in more'than one county in this State shall be assessed by the state Board of Equalization, at their actual value, and the same shall be apportioned to the counties, cities and counties, cities, towns, townships, and districts in which such railroads are located, in proportion to the number of miles of railway-laid in such counties, cities and counties, cities, towns, townships, and districts.
Provisions of Political Code.
Section 3664. The president, secretary, or managing agent, or such other officer as the state Board of Equalization may designate of any corporation, and each person, or association of persons, owning or operating any railroad in more than one county in this State, shall, on or before the first Monday in April of each year, furnish the said board a statement, signed and sworn to by one of such officers, or by the person or one of the persons forming such association, showing in detail for the year ending on the first Monday in March in each year —
1. The- whole number of miles of railway in the State, and where the line is partly out of the State, the whole number of miles without the State and the whole number within the State, owned or operated by such corporation, person, or association:
2. The value of the roadway, roadbed, and rails of the whole railway, and the value of the same within the State :
3. The width of the right of way':
4. The number of each kind of all rolling stock used by such corporation, person, or association in operating the entire railway, including the part without the State:
5. Number, kind, and value of rolling stock owned and operated in the State:
6. Number, kind, and value of rolling stock used in the State, but owned by the party making the returns: -
7. Number, kind, and value of rolling stock owned, but used out of the State either upon - divisions of road operated by the party making the returns, or by and upon other railways.
Also showing in detail for the year preceding the first of January —
1. The -gross earnings of the entire road:
2. The gross earnings of thq road in the State, and where the railway is let to other operators, how much was derived by the lessor as rental:
3. The cost of operating the entire (road), exclusive of sinking fund, expenses of land department, and money paid to the United States:
4. Net income for such year and amount of dividend declared:
5. Capital stock authorized:
■ 6. Capital stock paid in:
7. Funded debt:
8. Number of shares authorized ;
9. Number of shares of stock issued:
10. Any other facts the state Board of Equalization may require :
11. A description of the road, giving the point of entrance into and the point of exit from each county, with a statement of the number of miles in each county. When a description of the road shall once have been given no other annual description thereafter is necessary, unless the road shall have been changed. Whenever the road, or any portion of the road, is advertised to be sold, or is sold for taxes, either state or county, no other description is necessary than that given by, and the same is conclusive upon, the corporation, person, or association giving the description. No assessment is invalid on account of a misdescription of the railway or the right of way for the same.
If such statement is not furnished as above provided, the assessment made by the state Board of Equalization.upon the property of the corporation,- person, or association failing tó furnish the statement is conclusive and final.
Section 3665. The state Board of Equalization must meet at the state capitol on the first Monday in August, and continue in open session from day .to day, Sundays excepted, until the third Monday in August. At such meeting the board must assess the franchise, roadway, roadbed, rails, and rolling stock of all railroads operated in more than one county. Assessment must be made to the corporation, person, or association of persons owning the same, and must be made upon the entire railway within the State, and must include the right of way, bridges, culverts, wharves, and moles upon which the track is laid, and all steamers which are engaged in transporting passengers, freights, and passenger and freight cars across waters which divide the road. The depots, stations, shops, and buildings erected upon the space covered by the right of way, are assessed by the assessors of the county wherein they are situate. Within ten days after the third Monday of August, the board must apportion the total assessment of the franchise, roadway, roadbed, rails, and rolling stock of each railway to the ’counties, or cities and counties in which such railway is located, in proportion to the number of miles of railway laid in such counties, and cities.-and counties. The hoard must also,-within said time, transmit by mail to the county auditor of each county, or city and county, to which such apportionment shall have been made, a statement showing the length of the main track of such railway within the county, or- city and county,, with a description-of the whole of the said track within the county, or city and county, including the right of way, by metes and bounds, or other description sufficient for identification, the assessed value per mile of the same as fixed by a pro rata distribution per mile of the assessed value of the whole franchise, roadway, roadbed, rails, and rolling stock of such railway within the State, and the amount apportioned to the county, or city and county. The auditor must enter the statement on the assessment roll or book of the county, or city and county, and where the county is divided into assessorial townships or districts, then on the. roll or book of any township or district he may select, and enter the amount of the assessment apportioned to the county, or city and county, in the column of the assessment book or roll as aforesaid, which shows the total value of all property for taxation, either of the county, city and county, or such township or district. On the first .Monday in October, the board of supervisors must make, and cause to be entered in the proper record book, an order stating and declaring the length of main track of the railway assesséd by the state Board of Equalization within the county; the assessed value per mile of such railway, the number of miles of track, and the assessed value of such railway lying in each-city, town, township, school and road district, or lesser taxing district in the county, or city and county, through which such railway runs, as fixed by the state Board of Equalization, which shall constitute the assessment value of said.property for taxable purposes 'in such city, town, township, school, road, or other district; and the clerk of the board of supervisors must transmit a copy of each order or equalization to the city council, or trustees, or other legislative, body of incorporated cities or towns, the trustees of each school district, and the authorized authorities of other taxation districts through which such railway runs. All such railway property shall be taxable upon said assessment, at the same rates, by the same officers, and for the same purposes,.as the property of individuals within such city, town, township, school, road, and lesser taxation districts, respectively. If the owner of a railway assessed by the state Board of Equalization is dissatisfied with the assessment made by the board, such owner may', at the meeting of the board, under the provision of section thirty-six hundred and ninety-two of the Political Code, between the third Monday in August and the third Monday in September, apply to the board to have the same corrected in any particular, and the board may correct and increase or lower the assessment made by it, so as to equalize the same with the assessment of other property in the State. If the board shall increase or lower any assessment previously made by it, it must make a statement to the county auditor of the county affected by the change in the assessment; of the change made, and the auditor must note such change upon the assessment book or roll of the county as directed by the board. [In effect March 9, 1883.]
Section 3666. The state Board of Equalization must prepare each year a book, to be called “ Record of Assessment of Railways,” in which must be entered each assessment made by the board; either in writing, or by both writing and printing. Each assessment so entered must be signed by the Chairman and clerk. The.record of the apportionment of the assessments made by the board to the counties, and cities and counties, must be made in a separate book, to be called “ Record of Apportionment of Railway Assessments.” In such last described book must be entered the names of the railways assessed by the board, the names of the corporation to which, or the name of the person or association to whom, each railway was assessed, the whole number of miles of the railway in the State, the number of miles thereof in each county, or city and county, the total assessment of the franchise, roadway, roadbed, rails, and rolling stock for purposes of State taxation, and the amount of the apportionment of such total assessment to each' county, and city and county, for county, and city and county taxation. Before the third Monday of October of each year the clerk of the state Board of Equalization must prepare and transmit to the comptroller of the State, duplicates of the “Record of Assessment of Railways,” and “ Record of Apportionment of Railway Assessments,” each certified by the chairman and clerk of the board, and to be known respectively as “ Duplicate Record of Assessment of Railways,” and “Duplicate Record of Apportionment of Railway Assessments.” In the last named duplicate' two columns must be added, in one of which the comptroller must enter the state taxes due the State upon the whole assessment by each corporation, person, or association, and in the other the county, or city and county taxes, due upon the assessment apportioned to each county, or city and county, by each corporation, person, or- association. The two duplicates constitute the warrant for the comptroller to collect the state and county, and city and county, taxes levied upon such property assessed by the board, and the amount of the apportionment of the assessment to each county, and city and county, respectively. [In effect March 9, 1883.}
Section 3667. When the board of supervisors of each county, and city and county, to which the state Board of Equalization has apportioned the assessment of railways shall have fixed the rate of county, or city and county, taxation, the clerk of the board of supervisors must forthwith by mail, postage paid, transmit to the comptroller a statement of the rate of taxation levied by the board of supervisors for. county, or city and county, taxation. If the clerk fails to transmit such statement, the comptroller must obtain the information as to such rate of taxation from other sources. On or before the fourth Monday of October the comptroller must compute and enter in separate money columns in the “ Duplicate Record of Apportionment of Railway Assessments” the respective sums, in dollars and cents, rejecting fractions of a cent, to be paid by the corporation, person, or association liable therefor as the state tax upon the total amount of the assessment, and the county, or city and county, tax upon the apportionment of the assessment to each county, and city and county, of the property assessed to such corporation, person, or association named in said duplicate record. [In effect March 9, 1883.]
Section 3668. Within ten days after the fourth Monday in October, the comptroller must publish a notice for two weeks in one daily newspaper of general circulation at the state capital, and in two daily newpapers of general circulation published in the city of San Francisco, specifying:
1. That he has received from the state Board of Equalization the “ Duplicate Record'of Assessments of Railways ” and the “ Duplicate Record of Apportionment of Railway Assessments; ”
2. That the taxes are now payable and will be delinquent on the last Monday in December next, at six o’clock p.m., and that unless paid to the state treasurer at the capítol prior thereto, five per cent will be added to the' amount .thereof. On the last Monday in December of .each year, at six o’clock p.m. , all of unpaid taxes are delinquent, and thereafter there must be collected by the state treasurer or other proper officer an addition of five per centum, which sum when collected must be set aside by the treasurer, as a fund with which to pay the contingent expenses of actions against any delinquents, the said expenses to be audited by the board of examiners. When any taxes are paid to the state treasurer by order of the comptroller, upon assessments made and apportioned by the state Board of Equalization, the comptroller must forthwith notify the auditor and treasurer respectively of each county, and city and county, that such taxes have been paid, and of the amount thereof to which each county and city and county interested is entitled. The State’s portion of the taxes must be distributed by the treasurer to each fund entitled thereto, and the portion belonging to the counties, and cities and counties, must be placed in a fund, to be called “Railway Tax Fund,” to the credit of each county, and city, and county entitled thereto. When any taxes are placed in the “ Railway Tax Fund ” to the credit of a county, or city and county, the comptroller, at the next settlement with the comptroller by the treasurer of such county, or city and county, must draw and deliver to such treasurer, his warrant upon the state treasurer for the amount in the fund to the credit of such county, or city and county. .[In effect March 9, 1883.]
Section 3669. Each corporation, person, or association assessed by the state Board of Equalization must pay to the state treasurer, upon the order of the comptroller, as other moneys are required to be paid into the treasury, the state and county, and city and county, taxes each year levied upon the property so assessed to it or hiiri by said board- Any corporation, person, or association, dissatisfied with the assessment made by the board, upon the payment of the taxes due upon the assessment complained of, and the five per cent added, if to. be added, on or before the first Monday in February, and the filing of notice with the comptroller of an intention to begin an action, may, not later than the first Monday of February, bring an action against the state treasurer for the recovery of the amount of taxes and percentage so paid to the treasurer, or any part thereof, and in the complaint may allege any fact tending to show the illegality of the tax, or of the assessment upon which the taxes are levied, in whole or in part. A copy of the complaint and of the summons must be served upon the treasurer within ten days after the complaint has been filed, and the treasurer has thirty days within which to demur or answer. At the time the treasurer demurs or answers he may demand that the action be tried in the Superior Court of the county of Sacramento. The attorney general must defend the action. The provisions of the Code of Civil Procedure relating to pleadings, proofs, trials, and appeals are applicable to the proceedings herein provided for. If the final judgment be against the treasurer, upon presentation of a certified copy of such judgment to the comptroller, he shall draw his warrant upon the state treasurer, who must pay to the plaintiff the amount of the taxes so declared to have been illegally collected, and the cost of such action, audited by the board of examiners, must be paid out of any money in the general fund of the treasury, which is hereby appropriated, and the comptroller may demand and receive from the county, or city and county, interested the proportion of such costs, or may deduct such proportion from any money then or to become due to said county, or city and county. Such action must be begun on or before the first Monday in February of the year succeeding the year in which the taxes were levied, and a failure to begin such action is deemed a waiver of the rights of action. £In effect March 9, 1883.]
Section 3670. After the first Monday of February of each year, the comptroller must begin an action in the proper court, in the name of the people of the State of California, to collect the délinquent taxes upon the property assessed by the state Board of Equalization; such suit must be for the taxes due the State, and all the counties, and cities and counties, upon property assessed by the Board of Equalization, and appearing delinquent upon the “Duplicate Record of Apportionment of Railway Assessments.”
The demands for state and county, and city and county taxes, may be united in one action. In such action a complaint in the following form is sufficient:
[ Title of Court.]
The People of the State of California
vs.
(Naming the Defendant).
Plaintiff avers that on the day of , in the year (naming the year), the state Board of Equalization assessed the franchise, roadway, roadbed, rails, and rolling stock of the defendant at the sum of (naming it) dollars. That the board apportioned the said assessment as follows: To the county of (naming it) the sum of (naming it) dollars (and so on naming each county).
That the defendant is indebted to plaintiff for state and county taxes for the year eighteen , in the following sums: For state taxes, in the-sum of (naming it) dollars; for county taxes of the county of (naming it), in the sum of (naming it) dollars, etc., with five per cent added for non- - payment of taxes. Plaintiff demands payment for said several sums and -prays that an attachment may issue in form as prescribed in section 540 of the Code of Civil Procedure.
(Signed by the comptroller or his attorney.)
On the filing of such complaint, the clerk must issue the writ of attachment prayed tor, and such proceedings shall be had as under writs of attachment issued in civil actions; no bond nor affidavit previous to the issuing of the attachment is required. If in such action the plaintiff recover judgment, there shall be included in the judgment as counsel fees, and in case of judgment of taxes after suit brought but before judgment, the defendant must pay as counsel fees, such sum as the court may determine to be reasonable and just. Payment of the taxes or the amount of the judgment in the case must be made to the state treasurer. In such actions the duplicate record of assessments of railways and the duplicate record of apportionment of railway assessments, or a copy of them, certified by the comptroller, showing unpaid taxes against any corporation, person, or association for property assessed by the state Board of Equalization, is prima facie evidence of the assessment, the property assessed, the delinquency, the amount of'the taxes due and unpaid-to the State and counties, or cities and counties therein named, and that the corporation, pe.rson, or association is indebted to the people of -the State of ■ California, in the amount of taxes, state and county, and city and county, therein appearing unpaid, and that all the forms of law in relation to the assessment and levy of such taxes have been complied with. [In effect March 9, 1883.]
Section 3671. The assessment made by the county assessor, and that of the state Board of Equalization, as apportioned by the -board of supervisors to each city, town, township, school, road, or other district in their respective counties, or cities and counties, shall be the only basis of taxation for the county, or any subdivision thereof, except incorporated cities and towns, and may also be taken as such basis in incorporated cities and towns when the proper authorities may so elect. All taxes upon townships, road, school, or other local districts shall be collected in the same manner as county taxes. [In effect March 9, 1883.]

Opinion:
Me. Chief Justice Fullee,
after stating the case, delivered the opinion of the court.
The assessment of the state Board of Equalization is not attacked on the ground of fraud, but it is contended that the value of the Federal franchise or franchises possessed by plaintiff in error was included therein, and that as the assessment embraced all the' property assessed as a unit, it was thereby wholly invalidated. Santa Clara County v. Southern Pacific Railroad, 118 U. S. 394; California v. Central Pacific Railroad, 127 U. S. 1.
By section 1 of article XIII of the constitution of California, it is provided that "all property in the State, not exempt-under the laws of the United States, shall be taxed in proportion to its value, to be ascertained as provided by law. The word ' property ' as used in this article and section is hereby declared to include moneys, credits, bonds, stocks, dues, franchises and all other matters and things real, personal and mixed, capable of private ownership; " and by section 10 that " the franchise, roadway, roadbed, rails and rolling stock of .all railroads operated in more than one county in this State shall be assessed by the state Board of Equalization, at their actual value;" and the Political Code provided that this must be, and the mode in which it should be, done.
Railway corporations were required to furnish the Board of Equalization, before it acted, and as of the first Monday of March in each year, a statement signed and sworn to by one of their officers, showing in detail the whole number of miles of railway in the State, and,, when the line was partly, out of the State, the' whole number of miles within and without, owned or operated by each corporation, and the .value thereof; the value of the roadway, roadbed and rails of the whole, and the value of the same within the State ; the width of the right of way; the rolling stock and value; the gross earnings of the entire road and of the road within the State; the net income ; the capital stock authorized and paid in; the number of shares authorized and issued, etc.
This verified statement for 1887 was made by plaintiff in error in due time, and purported to be a " statement in relation to its property subject to taxation in the State of California owned by it for the year ending on the first Monday in March, 1887, and of all property used in operating its railway during such year." And it was therein set forth, among other things: " The value of the franchise and entire roadway, roadbed and rails within this State is $12,273,785.00." The Board of Equalization determined " that the actual value of the franchise, roadway, roadbed, rails and rolling stock of said company, within this State, at the said date and time in March, was and still is the sum of eighteen million dollars," and thereupon assessed " the said franchise, roadway, roadbed, rails and rolling stock for the year 1887 " at that sum.'
By section 3670 of the Political Code, the duplicate record of assessments of railways, and the duplicate record of apportionment of railway assessments, or copies thereof, were made prima facie evidence of the assessment, and that the forms of law in relation to the assessment and levy of such taxes had been complied with, and these were put in evidence.
Under this state of facts, the presumption was that the franchise thus included by plaintiff in error in its return and by the board in its assessment was a franchise which was not exempt under the laws of the United States, and that the board had acted upon property within its jurisdiction rather than upon property which it' had no power to include in the assessment. Indeed, as the Supreme Court points out, when plaintiff in .error included the franchise in its statement, if there were two franchises, one of which could be assessed and the other could not, plaintiff in error ought not to be permitted to say. that the one which was not capable of assessment was intended by it to be or was included therein. People v. Central Pacifc Railroad, 105 California, 576, 592. And the court cited San Francisco v. Flood, 64 California, 504; Lake County v. Sulphur Bank Quicksilver Mining Co., 68 California, 14, and Dear v. Varnum, 80 California, 86, which rule that.a party who furnishes a list of property for taxation is estopped from questioning the sufficiency of the description so furnished in an action to collect the taxes. Undoubtedly if the Board of Equalization had included what it had no authority to assess, the company might seek the remedies given under the law to correct the assessment so far as such property was concerned, or recover back the tax thereon, or, if those remedies were not held exclusive, might defend against the attempt to enforce it. But where the property mentioned in the description could be assessed and the assessment followed the return, as it-, did here, the company ought, at least, to be held estopped from saying that the description was ambiguous.
It is said that plaintiff in error should not be bound by this statement because it was on printed blanks prepared by the board; but when plaintiff in error filled out and swore to the statement of its property " as being subject to taxation," and the blank form called on plaintiff in error to give a statement of the value of its franchise within the State for the purpose, of assessment and taxation, if it had intended to claim that its state and Federal franchises were so merged as to render the former not subject to taxation, or that it had'no franchise subject to taxation, it was its duty to so indicate in making the return. Nothing in the law and nothing in the blank form could have compelled it to make a statement contrary to the facts.
Plaintiff in error attempted to rebut the case made by introducing evidence which it claimed tended to show that the franchise assessed covered franchises derived from the United States as well as from the State, but the findings of fact of the trial court were to the contrary, and there being a Conflict of evidence on the point, the Supreme Court treated the findings as conclusive in accordance with the well-settled rule on the subject in that jurisdiction. In Reay v. Butler, 95 California, 206, 214, it was said: "It has been held here in more than a hundred eases, commencing with Payne v. Jacobs, 1 California, 39, in the first published book of reports of this court, and ending with Dobinson v. McDonald, 92 California, 33, in the last volume of said reports, that the finding of a jury or.court as to a fact decided upon the weight of evidence will, not be reviewed by this court."
That rule is equally binding on us. Republican River Bridge Co. v. Kansas Pacific Railway, 92 U. S. 315; Dower v. Richards, 151 U. S. 658.
It was argued in the Supreme Court of California, as it has been here, that because the trial judge, after having determined as a fact from the preponderance of the evidence before him that the Federal -franchise was not assessed, stated that he thought that if the parol evidence offered had not weighed in plaintiff's favor, and that if by a preponderance of such evidence defendants could have shown that the board intended to and did include a Federal franchise in the assessment, the court would have to disregard it as incompetent, because the effect would be to contradict the record, therefore the evidence had been disregarded by the court in making its decision, and that the rule in respect of the conclusivene'ss of a determination of facts on a conflict of evidence did not apply. Ve entirely concur with the disposition of this suggestion by the Supreme Court, which said: ".It clearly appears, however, that the court did not disregard the evidence, but that, after determining as a fact from the preponderance-of evidence before it that the Federal franchise had not been assessed, it stated that if the preponderance of evidence had been otherwise, it would have held as a matter of law that the assessment must be tested by its own language. The fact that a court, after giving its decision upon an issue, gives its opinion upon the manner in which it would have decided the issue under other circumstances, does not constitute an error to. be reviewed in this court."
Counsel for plaintiff in error also urge that inasmuch as it appeared in the proceedings to assess for 1888 that the board placed " the franchise of the Central Pacific company derived from the State of California " at $1,250,000, and then assessed " the franchise derived from the State of California, the roadway, roadbed and rolling stock of' said company within- said State at the total sum of $15,000,000," it should be inferred from the difference in the language used in the assessment of 1887, and the difference in the total amount, that the franchise then assessed included the Federal franchise. But it also appeared that the return of the company for 1888 in respect of this matter was as follows:
"The value of the franchise derived from the State within this State. $25 00
"The value of' the entire roadway, roadbed, rolling stock and rails within this State is.. 9,376,607 00
$9,376,632 00"
And we think that neither the difference in valuation nor the difference in the mode of statement has a material bearing on the assessment of 1887. The proceedings in 1888 showed greater care on the part of the company in making the return and on the part of the board in making the assessment, and possibly if plaintiff in error had been equally careful in relation to the assessment in 1887, it might have resulted that the valuation would have been less, although it does not follow that the reduction in 1888 might not be attributed to a change of financial conditions.
After all, these are considerations which were presented to the trial judge, in connection with all the evidence, and they have been disposed of adversely to the company.
Exceptions were saved to the action of the trial court in respect of the exclusion of certain evidence, but we are unable to find in these rulings or in the decision of the Supreme Court thereon the denial of any title, right, privilege or immunity specially set up or claimed under the Constitution or laws of the United States.
The rulings passed on by the Supreme Court, and which we must assume were all that were called to its attention, relate to the-cross-examination of the witness Wilcoxen, as to statements previously made by him, which the Superior Court confined to the assessment for 1887, in respect of which he had .been examined in chief. The Supreme Court held that, under the circumstances disclosed by the record, tbe Superior Court did not err in this particular.
And also to the exclusion of the evidence of Maslin as to the conversations of members of the board, in making the assessment, in relation thereto. The Supreme Court held as to this that "the intention pf the board or of any of its members, or the signification to be given to the term ' franchise,' as used in the assessment, could not be shown in this manner, and the evidence could not be used for impeaching purposes, unless the members of the board had been previously questioned thereon."
The correctness of these rulings commends itself to us, but ' it is enough to say that it is impossible to predicate error raising a Federal question as to these or any of the rulings on evidence referred to by counsel.
Clearly no such error- was committed in the rejection of the general offers of proof if we should treat them as open to consideration notwithstanding the apparent abandonment of the exceptions in that regard in the Supreme Court. The issue was upon the assessment for the year 1887. The decision in California v. Pacific Railroad Company, 127 U. S. 1, was announced April 30, 1888, but the last of the judgments of the Circuit Court therein considered and affirmed was rendered July 15, 1886. And the action of the board in years prior to 1887, as sought to be shown, was not necessarily relevant or material. Offers of proof must be offers of relevant proof, specific, not so broad as to embrace irrelevant and immaterial matter, and made in good faith. The exercise of the discretion of the trial court in rejecting these offers cannot properly be reviewed by .us.
The errors assigned as to the non-deduction of outstanding mortgages from the valuation of the property are expressly waived, though it is assigned for error in the brief that the court erred in not holding that, as the state franchise Was subject to the lien of a mortgage to the United States, the assessment was invalid because in effect taxing the interest of the United States in that franchise created by the mortgage. As to this, no such question was raised or passed on in the state. court; and, moreover, the objection is without merit, on principle and authority, on grounds hereafter stated.
¥e are thus brought to the consideration of the real question in the case, presented in various aspects and argued with much ability by counsel for plaintiff in error, namely, that the company's franchises are one and inseparable, constituting an indivisible unit, which cannot be subjected to taxation by the State of California because that would be necessarily to subject the Federal franchise to taxation.
The argument is that the franchise of railroads authorized by the state constitution and the provisions of the Political Code to be assessed is nothing but the right to operate the railroad and charge and take tolls thereon; that the right of the Central Pacific Eailroad Company to construct, maintain and operate its railroad in California was conferred upon that company by, and derived by it from,, the United States; and that the right is a single right, though granted also by the State.
The company is a corporation- of California, made up of two California corporations consolidated by articles of association entered into under the laws of California, and recognized as a California corporation by the acts of Congress through which it obtained Federal assistance and -Federal franchises, subsequently to its incorporation in 1861, act of July 1, 1862, c. 12Ó, 12 Stat. 489; act of July 2, 1864, c. 216, 13 Stat. 356; act of March 3, 1865, c. .88, 13 Stat. 504; act. of May 7, 1878, c. 96,-20 Stat. 56; and never otherwise regarded in the legislation of the State, Indeed, by the act of April 4, 1864, Stat. Cal. 1863-1864, c. 417, passed to " enable the said company more fully and completely to comply with and perform the provisions and conditions of said act of Congress," of July 1, 1862, California authorized the company to construct, maintain and operate the road and telegraph in the territory lying east of the' State, with the usual incidental rights, privileges and powers, also vesting in the company the rights, franchises and powers granted by Congress, with the express reservation that the company should be "subject to all the laws of this State concerning railroad and telegraph lines, except that messages and property of the United States, of this State, and of the said company, shall have priority of transportation and transmission over said line pf railroad and telegraph." Sinking Fund cases, 99 U. S. 700, 754. Severance of the allegiance of the corporation to the State that created it, and deprivation or transfer of the powers and privileges conferred by the State, were not the object of the grant "by the United States, nor the consequence of the acceptance of that grant by the corporation as thereto authorized by the State. Pennsylvania Railroad v. St. Louis, Alton &c. Railroad, 118 U. S. 290, 296. But it was not contended at the bar that the company ever became a corporation of the United States, or that it is other than a state corporation.
Even in respect 'of railway corporations created by act of Congress the claim of an exemption of their property from state taxation has been repeatedly denied. This was so ruled in Railroad Company v. Peniston, 18 Wall. 5, 30, 36, and Mr. Justice Strong said,:
" It cannot be that a state tax which remotely affects the efficient exercise of a Federal power is for that reason alone inhibited by the Constitution. To hold that would be to deny to the States all power to tax persons or property. Every tax levied by a State withdraws from the reach of Federal taxation a portion of the property from which it is taken, and to that extent diminishes the subject upon which Federal taxes may be laid. The States are, and they must ever be, coexistent with the National Government. Neither may destroy the other. Hence the Federal Constitution must receive a practical • construction. Its limitations and its implied prohibitions must not be extended so far as to destroy the necessary powers of the States, or prevent their efficient exercise. . . .
" It is, therefore, manifest that exemption of Federal agencies from state taxation is dependent, not upon the nature of the agents, or upon the mode of their constitution, or upon the fact that they are agents, but upon the effect of the tax; that is, upon the question whether the tax does in truth deprive them of power to serve the government as they were intended to serve it,' or does hinder the efficient exercise of their power. A tax upon their property has no such- necessary effect. It leaves them free to discharge the duties they have undertaken to perform. A tax upon their operations is a direct obstruction to the exercise of Federal powers.
" In this case the tax is laid upon the property of the railroad' company precisely as was the tax complained of in Thomson v. Union Pacific. It is not imposed upon the fran-. chises or the right of the company to exist and perform the functions for which it was brought into being. Ifo.r is it laid upon any act which the company has been authorized to do. It is not the transmission of dispatches, nor .the transportation of United States mails, or troops, or munitions of war that is taxed, but it is exclusively the real and personal property of this agent, taxed, in common with all other property of the State of a similiar character. It ,is impossible to maintain that this is an interference with the exercise of any power belonging to the General Government,- and if it is not, it is prohibited by no constitutional implication."
In Thomson v. Pacific Rai;lroad, 9 Wall. 579, 590, the Union Pacific Railway Company, Eastern Division, a corporation created by the legislature of Kansas, received government aid in bonds and land, and, thus aided, constructed its road to. become one link in the transcontinental line known as the-Union Pacific system, in accordance with the same acts- of Congress relating to plaintiff in error, and conferring the same functions and privileges. The State of Kansas having subsequently taxed the roadbed, rolling stock and certain personal property of the corporation, its stockholders sought to enjoin the collection of the tax on the ground that the property was mortgaged to the United States and that it was bound under the Congressional grant to perform certain duties and ultimately pay five per cent of its. net earnings to the United States, and that state taxation would retard and burden it in the discharge of its obligations to the general government. Rut the contention was overruled, and Mr. Chief Justice Chase said :
" But we are not aware of any case.in which the real estate or other property of a corporation not organized under an act of Congress, has been held to be exempt, in the absence of express legislation to that effect, to just contribution, in common with other property, to the general expenditure for the common benefit, because of the employment of the corporation in the service of the government.
" It is true that some of the reasoning in the case of McCulloch v. Maryland seems to favor the. broader doctrine. But the decision itself is limited to the case of the bank, as a corporation created by a law of the United States, and responsible, in the use of its franchises, to the government of the United States..
" And even in respect to corporations organized under the legislation of Congress, we have already held, at this term, that the implied limitation upon state taxation, derived from the express permission to tax shares in the national banking associations, is to be so construed as not to embarrass the imposition or collection of state taxes to the extent of the permission fairly and liberally interpreted. National Bank v. Commonwealth, 8 Wall. 353.
"We do not think ourselves warranted, therefore, in' extending the exemption established by the case of McCulloch v. Maryland, beyond its terms. We cannot apply it to the case of a corporation deriving its existence from state law, exercising its franchise under state law, and holding its property within state jurisdiction and under state protection.
". . . No one questions that the power to tax all property, business and persons, within their respective limits, is original in the States and has never been surrendered. It cannot be so used, indeed, as to defeat or hinder the operations of the national government; but it will be safe to conclude, in general, in reference to persons and state corporations employed in government service, that when Congress has not interposed to protect their property from state taxation, such taxation is not obnoxious to that objection. Lane County v. Oregon, 7 Wall. 71, 77; National Bank v. Commonwealth, 8 Wall. 353. We perceive no limits to the principle of exemp tion which the complainants seek to establish. It would remove from the reach of state taxation all the property of every agent of the government. .
"The nature of the claims to exemption which would be set up, is well illustrated by that which is advanced in behalf of the complainants in the case before us. The very ground of claim is in the bounties of the general government. The. allegation is, that the government has advanced large sums to aid in the construction of the road; has- contented itself with the security of a second mortgage; hák made large grants of land upon no condition of benefit to itself, except that the company will perform certain services for full compensation, independently of those grants; and will admit the government to a very limited and wholly contingent interest in remote net income. And because of these advances and these-grants, and this fully compensated employment, it is claimed that this state corporation, owing its being to state law, and indebted for these benefits to the consent and active interposition of the state legislature, has a constitutional right to hold its property exempt from state taxation; and this without any legislation on the part of Congress which indicates that such exemption is deemed essential to the full performance of its: obligations to the government."
In his dissenting opinion in Railroad Co. v. Peniston, 18 Wall. 5, 48, Mr. Justice Bradley distinguishes Thomson v. Pacific Railroad from that case thus: " That was a state corporation, deriving its origin from state laws, and subject testate regulations and responsibilities. It would be subversive of all our ideas of the necessary independence of the national and state governments, acting in their respective spheres, for-the general government to take the management, control, and regulation of state corporations out of the hands of the State to which they owe their existence, without its consent, or attempt to exonerate them from the performance of any duties, or the payment of any taxes or contributions, to which, their position, as creatures of state legislation, renders them, liable."
Both these cases were referred to with approval by Mr.. Justice Miller in Western Union Telegraph Co. v. Massachusetts, 125 U. S. 530, and by Mr. Justice Brewer in Reagan v. Co., 154 U. S. 413, 416. In the latter case it was contended that, as the Texas and Pacific Pailway was a corporation organized under the laws of the United States, it was not subject to the control of the State even as to rates of transportation wholly within the State. The argument was that the company received all its franchises from Congress-; that among those franchises was the right to charge and collect tolls, and that the State had not the power, therefore, in any manner to limit or qualify such franchise. But that position'was not sustained, and Mr. Justice Brewer, delivering the opinion, said "that, conceding to Congress the power to remove the corporation in all its operations from the control of the State, there is in the act creating the company nothing which indicates an intent on the part of Congress to so remove it, and there is nothing in the enforcement by the State of reasonable rates for transportation wholly within the State which will disable the corporation from discharging all the duties and exercising all the powers conferred by Congress."
Although the Central Pacific company is not a Federal corporation, it is nevertheless true that important franchises were conferred upon the company by Congress, including that of constructing a railroad from the Pacific Ocean to Ogden in the Territory of Utah. But as remarked in California v. Central Pacific Railroad, 127 U. S. 1, 38, 40, " this important grant, though in part collateral to, was independent of, that made to the company by the State of California, and has ever since been possessed and enjoyed." That case came up from the Circuit Court of the United States for the Northern District of California, and the Circuit Court found that the assessment made by the state Board of Equalization "included the full value of all franchises and corporate powers, held and exercised by the defendant; " and as it could not be denied that that embraced franchises conferred by the United States, it was held that the assessment was invalid, but it was not held nor intimated that if the Board of Equali zation had only included the state franchise, the same result would have followed.
Mr. Justice Bradley, delivering the opinion of the court, said:
"Assuming, then, that the Central Pacific Railroad Company has received the important franchises referred to by grant of the United States, the question arises whether they are legitimate subjects of taxation by the State. They were granted to the compunja for national purposes and to subserve national ends. It seems very clear that the State of California can neither take them away, nor destroy nor abridge them, nor cripple them by onerous burdens. Can it tax them ? It may undoubtedly tax outside visible property of the company, situated within the State. That is a different thing.
"But may it tax franchises which are the grant of the United States? In our judgment, it cannot. What is a franchise? Under the English law Blackstone defines it as 'a royal privilege, or branch of the King's prerogative, subsisting in the hands of a subject.' 2 Bl. Com. 37. Generalized, and divested of the special form which it assumes under a monarchical government based on feudal traditions, a franchise is a right, privilege or power of public concern, which ought not to be exercised by private individuals at their mere will and pleasure, but should be reserved for public control and administration, either by the government directly, or by public agents, acting under such conditions and regulations as the government may impose in. the public interest, and for the public security. Such rights and power must exist under every form of society. They a.re always educed by the laws and customs of the community. Under our system, their existence and disposal are under the control of the legislative department of the government, and they cannot be assumed or exercised without legislative authority. No private person can establish a public highway, or a public ferry, or railroad, or charge tolls for the use of the same, without authority from the legislature, direct or derived. These are franchises. No private person can take another's property, even for a public use, without such authority; which is the same as to say, that the right of eminent domain can only be exercised by virtue of a legislative .grant. This is a franchise. No.persons can make themselves a body corporate and politic without legislative authority. Corporate capacity is a franchise. The list might be continued indefinitely."
Mr. Justice Bradley then referred to McCulloch v. Maryland, Osborn v. Bank of the United States, and Brown v. Maryland to the proposition that a power given to a person or corporation by the United States'cannot be subjected to taxation by a State, and added " that these views are not in conflict with the decisions of this court in Thomson v. Pacific Railroad, 9 Wall. 579, and Railroad Company v. Peniston, 18 Wall. 5. As explained in the opinion of the court in the latter case, the tax there was upon the property of the company and not upon its franchises or operations. 18 Wall. 35, 37."
Thus it was reaffirmed that the property of a corporation of the United States might be taxed, though its franchises, as for instance its corporate capacity and its power to transact its appropriate business and charge therefor, could not be. It may be regarded as- firmly settled that although corporations may be agents of the United States, their property is not the property of the United States, but the property of the agents, and that a State may tax the property of the agents, subject to the limitations pointed out in Railroad Co. v. Peniston. Van Brocklin v. Tennessee, 117 U. S. 151, 177.
Of course, if Congress should think it necessary for. the protection of the United States to declare such property exempted, that would present a different question. Congress did not see fit to do so here, and unless we are prepared to overrule a long line of well considered decisions the case comes within the rule therein laid down. Although in Thom.son's case it- was tangible property that was taxed, that can make no difference in principle, and the reasoning of the opinion applies.
Under the laws of California plaintiff in error obtained from the State the right' and privilege of corporate capacity; to construct, maintain and operate; to charge and collect fares and freights; to exercise the power of eminent domain; to acquire and maintain right of way.; to enter upon lands or waters of any person to survey route; to construct road across, along or upon any stream, watercourse, roadstead, bay, navigable stream, street, avenue, highway or across any railway, canal, ditch or flume; to cross, intersect, join or unite its railroad with any' other railroad at any point on its route; to acquire right of way, roadbed and material for construction ;• -to take material from the lands of. the State, etc., etc. Stat. Cal. 1861, c. 532, 607; 2 Deering's Annotated Codes and Stat. Cal. 114.
It is not to be denied that such rights and privileges have value and constitute taxable property.
• The general rule, as stated by Mr. Justice Miller, in State Railroad Tax cases, 92 U. S. 575, 603, is " that the franchise, capital stock, business and profits of all corporations, are liable to taxation in the place where they do business and by the State which creates them, admits of no. dispute at this day." And the constitution of California expressly declares that the word " property " as used in section 1 of article 13, providing that " all property in the State, not exempt under the laws of the United States, shall be taxed in proportion to its value," includes franchises as well as all other matters and things capable of private ownership.
The question here is not a question of the value of the state franchise, but whether that franchise existed, for if in 1887 plaintiff in error possessed any subsisting rights or privileges, otherwise called franchises, derived from the State, then they were taxable, and the extent of their value was to be determined by the Board of Equalization.
So far as the ability of the company to' discharge its duties and obligations to the general government is concerned it is difficult to see that taxation of the state franchise would tend to impair that ability any more than taxation of the roadway, roadbed, rails and rolling stock. If the necessary effect of a tax on such tangible property is not to unconstitutionally hinder the efficient exercise of the power to serve the government, neither can it be so in respect of the state franchise. Indeed the taxation by the State of the franchise granted by it does not, and could not, prevent plaintiff in error from acting under its Federal franchise.
This was an action to recover judgment against the company under the statute, and the franchise was only an element in arriving at the valuation in making the assessment, but if the power to tax the state franchise involved the power to dispose of it at delinquent tax sale or on execution, such sale would be subject to the superior and independent rights of the United States, and the fact that this would affect the value is of no consequence. If the state franchise, should be voluntarily surrendered by the company to the State, or forfeited by the State, yet the United States through the Federal franchise could still operate the road in California. And, on the other hand, should plaintiff in error in any manner be deprived of its Federal franchise, it would not thereby be prevented from operating in California under its state franchise. The right and privilege, or franchise, of being a corporation, is of value to its members and is considered as property separate and distinct from the property which the corporation may acquire; but, apart from that, if the state franchise to be assessed were confined to the right to operate the road and take tolls, such a franchise was originally granted by the State to this company, and as such was taxable property. If the subsequent acts of Congress had the effect of creating a Federal franchise to operate the road, that merely rendered the state right subordinate to.the Federal right,, and did not destroy the state right nor merge it into the Federal right, and no authority is cited to sustain any such proposition. No act of Congress in terms attempted to bring about this result, and no such result can be deduced therefrom by necessary implication. Whether plaintiff in error now operates its road under the franchise derived from the United States or from the State is immaterial, as the Supreme Court well said. The right to operate the road is valuable, whether it is' being exercised or not, and the question, we repeat, relates to the existence of the franchise, and not to the extent of its value.
When we consider that plaintiff in error returned its fran- oliise for assessment, declined to resort to the remedy afforded by the state laws for the correction of the assessment as made if dissatisfied therewith, or to pay its tax and bring suit to recover back the whole or any part of the tax which it claimed to be illegal, we think its position is not one entitled to the favorable consideration of the court; but, without regard to that, we hold, for the reasons given, that the state courts rightly decided that the company had no valid defence to the causes of action proceeded on.
Judgment affirmed,.
Me. Justice White concurred in the result.