Court Opinion

ID: 9418593
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:33:09.727153+00
Date Added: 2024-06-11T17:22:06.616623
License: Public Domain

Me. Justice Brandéis,
dissenting.
I do not consider the merits of this case, because, in my opinion, it should be affirmed on a point of practice which was urged here by the Commonwealth. .On writ of error to a state court, even where, as here, this Court has jurisdiction, no objection is reviewable which was not made there. The question on which the judgment of the Court of Appeals of Kentucky is reversed was not raised or passed upon below.
The claim made below was that the Southern could not be taxed at all in Kentucky under the unit rule and that, therefore, the statute as applied was void. Dahnke Walker Milling Co. v. Bondurant, 257 U. S. 282, 288-290. The Commonwealth admitted that the Southern, a Virginia corporation, did not own the Kentucky lines di*87rectly. The Southern admitted that it controlled them by stock ownership. In support of the claim that the unit rule could not be applied, the Southern made two contentions. The first was dealt with by the Court of Appeals in its first opinion, 193 Ky. 474; the second, in its second opinion, 204 Ky. 388. The first contention was that the unit rule could have no .application, because the Southern was not doing business in Kentucky. That contention the Court of Appeals decided against the Southern for all the years; and this Court affirms the ruling. The second contention was that the unit rule did not apply, because there was not unity of use and operation of the Kentucky lines with its lines elsewhere. The question depended upon the amount of control exercised by the Southern Railway Company over the C., N. O. & T. P. Railway, which connected the Southern Railway in Kentucky with the rest of the Southern system. This contention the Court of Appeals decided in favor of the Southern for the years 1914, 1915 and 1916; but against it for the years 1917 and 1918. With this ruling also this Court agrees. The reversal by this Court is based on an entirely different claim. It is on the ground that the method of assessment used was such as to furnish, as a basis for the franchise tax, an amount so unreasonable and arbitrary ,as to involve taxation of property outside the State, in view (1) of the fact that the per mile earnings of the entire system were so much larger than the per mile earnings of the Southern in Kentucky, and (2) of the supposed use of too large a percentage intended to represent the proportion of the mileage in Kentucky to the total mileage of the system.
The Court of Appeals recognized clearly that it could not tax in Kentucky any property outside its limits. It upheld the tax as an increase of assessment upon property located confessedly in Kentucky, applying the rule of Pullman Co. v. Richardson, 261 U. S. 330, 338, that “ if *88the property be part of a system and have an augmented value by reason of a connected operation of the whole, it may be taxed according to its value as part of the system, although the other parts be outside the State; — in other words, the tax may be made to' cover the enhanced value which comes to the property in the State through its organic relation to the system.”
Applying the unit rule, however, there are two grounds on which a decision sustaining the claim that property 'outside the State has been taxed might have rested, if the appropriate claim had been made below. It might have been held that the statute, so far as it required the adoption of the mileage plan of valuation, was void as applied, because the different character: of the lines out-. side Kentucky precluded the application of the per mile method as a basis of valuation. Compare Fargo v. Hart, 193 U. S. 490; Wallace v. Hines, 253 U. S. 66, 69. Or it might have been held that the tax was void, because the additional assessment based on mileage without the State was so arbitrary and unreasonable in amount as to violate due process. Compare Union Tank Line Co. v. Wright, 249 U. S. 275; Wallace v. Hines, 253 U. S. 66, 69-70. But neither of these claims was made in the court below. The only contentions made there were those which this Court and the lower court agree in holding unfounded— namely, that the Southern was not doing business in Kentucky and that there was no such unity of use and operation of the lines within and those without the State as to permit of the application of the unit rule.1
*89The second opinion of the Kentucky Court of Appeals recites that “it is admitted that the assessments for 1917 and 1918 were made in accordance with and are concluded by our former opinion.” Hence it was necessary for the plaintiff in error to show that the objections insisted upon in this Court were raised upon the first trial or the appeal in the state court.2 A consideration *90of the entire answer and of the entire first opinion make it altogether clear that the contention, which was advanced by the answer and refuted by the opinion, consisted solely of the claim that any assessment against the Southern would be unconstitutional as taxing property outside the State because the Southern was not doing business within the State.. Neither the record nor the opinion of the Court of Appeals discloses that there was an objection to the assessment as such. Nowhere in the opinion is there any reference to the figures urged here as showing the arbitrariness of the statute as applied.
It cannot be said “ that the necessary effect in law of a judgment, which is silent upon the question, is the denial of a claim or right which might have been involved therein, but which in fact was never in any way set up or spoken of.” Dewey v. Des Moines, 173 U. S. 193, 200. The rule that a claim or right which was not asserted in the state court cannot be deemed to have been denied, and hence cannot be insisted upon in this Court has been long established.3 It is true also that the party defeated upon a federal question in a state court will not .be limited in this Court to the same argument upon that question, Dewey v. Des Moines, supra, at p. 198; and that, if the federal question is properly raised, it is immaterial that the state court may have refused to discuss the point. Erie R. R. Co. v. Purdy, 185 U. S. 148, 154. But *91if the contention made below differs from the contention made here to such a degree that the decision upon one would not necessarily conclude the other, the raising of-one below will not permit the raising of the other here, even if the same provision of the Constitution be the basis of both claims. Compare Dewey v. Des Moines, supra; Marvin v. Trout, 199 U. S. 212, 223-224, 227.
The importance of the rule of practice is illustrated by the case at bar.4 Because the reasonableness of the method of assessment was not questioned below, there is nothing in the record to show what figures and what method of calculation were used by the taxing officers. The figures adopted by this Court are presented only in the brief of the plaintiff in error. They are protested by counsel for the Commonwealth. Moreover, there is reason to believe that the inferences drawn from them are unsound.

 As showing that they were raised, this Court relies upon the allegation of the answer that “ the effort made herein is simply for the purpose of endeavoring to bring into the State of Kentucky for purposes of taxation, property not in Kentucky; . . . that to do this would be in violation of . . . the Fourteenth Amendment,” and upon a quotation from the first opinion of the Kentucky Court of Appeals to the effect that “ it is insisted that this would result in taxing in Kentucky property having no situs here. . . .” The reliance of this Court appears to rest upon a misapprehension. On the first trial, the lower courts dismissed the State’s petition. As no method of assessment was before the Court of Appeals, it could not, in its first opinion, have passed upon the arbitrariness of this or any other method of assessment. See 193 Ky. 474, 489.

 In 1836 Mr. Justice Story, because of the fact “that a different impression exists at the bar,” reviewed all the cases that had reached this Court from the state courts, finding that they exhibited “an uniformity of interpretation . . . which has never been broken in upon,” requiring that, in order to give the Court jurisdiction, the question sought to be reviewed had both to be raised in the court below and there decided. Crowell v. Randell, 10 Pet, 368, 392, 398. By 1894 Chief Justice Fuller regarded such principles as “ axiomatic.” California Powder Works v. Davis, 151 U. S. 389, 393. The rule is still inflexible. New York v. Kleinert, 268 U. S. 646.

 Compare Hamilton Co. v. Massachusetts, 6 Wall. 632, 636; National Bank v. Commonwealth, 9 Wall. 353, 363; Edwards v. Elliott, 21 Wall. 532, 557; Wilson v. McNamee, 102 U. S. 572; Keokuk & Hamilton Bridge Co. v. Illinois, 175 U. S. 626, 633; Bolln v. Nebraska, 176 U. S. 83, 90; Chapin v. Fye, 179 U. S. 127; Capital City Dairy Co. v. Ohio, 183 U. S. 238, 248; Cox v. Texas, 202 U. S. 446, 452; Montana v. Rice, 204 U. S. 291, 301; Hunter v. Pittsburgh, 207 U. S. 161, 180; Selover, Bates & Co. v. Walsh, 226 U. S. 112; Illinois Cen*92tral R. R. Co. v. Mulberry Coal Co., 238 U. S 275, 281; Bullen v. Wisconsin, 240 U. S. 625, 632; Hiawassee River P. Co. v. Power Co., 252 U. S. 341. Compare Virginian Ry. Co. v. Mullens, 271 U. S. 220.