Court Opinion

ID: 7092987
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:07:55.324752+00
Date Added: 2024-06-11T16:13:08.921327
License: Public Domain

Cole, J.
I concur fully in' the conclusions reached in the foregoing opinion, by Mr. Justice Lowe, but, in the view which I take of the case, it is not necessary to determine the question as to the constitutionality of the law of 1862. The idea that the burdens of taxation should be borne equally is so just that no court will suffer an infringement of it, when the power to enforce it is within reach; and while this applies with equal force to all natural persons, it seems to be especially and in high degree the duty ' of a court to see that artificial persons, deriving their vitality and existence from the government, should not be permitted to escape the burdens of taxation which are laid by that government upon natural persons. But the power of taxation rests with the legislative department of the government, and, until the Legislature authorizes the taxation, courts of law are powerless to enforce it.
The first inquiry, then, is, has the Legislature authorized the taxation of the property of the defendant, as shown in this case ? The only laws of this State authorizing the taxation of railroad property, at any time, may be found in the Code of 1851, section 462; Laws of 1858, chapter 152; and Laws of 1862, chapter 173. The two former provide that property of corporations constructing railways, &c., shall be taxed through the shares of the stockholders, while the latter provides that such property shall be taxed one per cent on the gross receipts of said corporations. There *362never has been any law in this State authorizing the taxation of the property of railroads, by an assessment of its value, or in any other manner than as above specified. The right to levy a tax must be based upon a law authorizing its levy. Upon this point the decisions of this court are uniform and consistent with both principle and authority. In Tallman v. The Treasurer of Butler County, 12 Iowa, 531, Wright, J., delivering the opinion of the Court, says: “ Taxation is an attribute of a sovereignty. The power to tax implies a corresponding power to apportion such tax as the Legislature shall deem proper. If it is unwisely (not unconstitutionally) exercised, the remedy is with the Legislature. No property can be taxed, however, until the law-making power authorizes and requires it to be done, .and if it be done in one or a particular way, that alone can be pursued, it cannot be done in another. These are plain and fundamental principles governing the taxing power. * * * * The Legislature has declared that the property of certain corporations shall be taxed in a particular manner. What right have we, then, to say that this power shall be exercised in a different method? We know of none.”
In the case of The City of Davenport et al. v. The M. & M. R. R. Company, 12 Iowa, 539 (which was decided below by the judge of the seventh judicial district, who is now a member of this Court), Baldwin, G. J., delivering the opinion of the Court, says: “The Court below, in deciding this cause, properly remarked, that it is a familiar and fundamental principle in the laws of taxation, that no property can lawfully be taxed until the Legislature authorizes and requires it to be done, and when the act requires it to be done in a particular way, that way, alone, can be pursued.” Another rule, equally well settled, is that municipal corporations must, in the exercise of their powers, conform to the general laws of the State, and can*363not act in conflict with them. It follows then, that, unless' the taxes in this case were assessed in accordance with some law of the State, the plaintiff has no legal rights to enforce their collection. That they were not assessed, according to the law of 1862, is conceded, but it is claimed that law is unconstitutional. Suppose it is; of what avail can the maintenance of that position be to plaintiff? If it be held unconstitutional, and by reason of it, that the law of 1858 is still in force, the plaintiff is in no better situation, for there has been no compliance with that law in the assessment of the taxes sought to be collected. If it is claimed that the law of 1858, and the Code of 1851, are. both repealed, then there is no law authorizing the levy of the tax; therefore, under the principles laid down in the cases cited, the plaintiff must fail.
The remedy for the plaintiff is with the Legislature, and ■ until a law is passed authorizing the levy and collection of the taxes, it is useless to appeal to the court.
Dillon, J.
An opinion in this cause has been pronounced by Mr. Justice Lowe, and another by Mr. Justice Cole. The two remaining members of this court concur in the conclusions reached in those opinions so far- as they hold the rolling stock of the defendant not to be liable, under the agreed statement of facts, to the municipal tax sought to be collected, but do not accede to the correctness of all the reasons advanced and all the grounds taken in those opinions, nor to the correctness of the view holding that the city could not levy the proposed tax upon the road bed, depot-grounds and buildings, situate within the city.
Without reviewing the grounds assumed in those opinions, the writer is instructed to present simply the opinion which the two other members of the court entertain.
1st. As to the right to tax the rolling stock :
The city charter (art. 5, § 1), gives to the city of Daven*364.port “ power and authority to levy and collect taxes upon all taxable property, real, personal and mixed within the city.” Under the charter, situation or location, actual or constructive, “ within the city,” is an essential requisite of the right to tax. While exemptions from taxation are strictly construed, the right to tax, must be clearly made out. By the agreed statement of facts, the rolling stock is, in fact, no more situate within the city of Davenport than it is in the city of Muscatine, Iowa City and other places along the route of the road. These places would seem to have the same right to tax the rolling stock that the city of Davenport has, unless the fact that the latter place is the chief place of business of the company gives it the right and the exclusive right, to tax this species of property.
It is maintained by the city that it has the power to tax this property on the ground that the rolling stock is personal property, that the residence of the company is -in Davenport, because that is its chief place of business, and that personal property wherever situate, is taxable where the owner resides.
If it be granted that rolling stock i£ personal property, .within the meaning of the rule of law, that such property, for some purposes, follows the residence of its owner, yet it by no means follows that the residence of the company is “within the city” of Davenport, in such a sense as to give the rule application in the present instance. In legal contemplation, the corporation does not solely reside in Davenport, in consequence of that being its chief place of " business. It is rather to be considered as residing in the counties and places through which the road passes, and in which it transacts its business. Baldwin v. The Mississippi and Missouri River Railroad Company, 15 Iowa, 518; Richardson v. The Burlington and Missouri River Railroad Company, 8 Id., 260.
This view does not exempt this property from all taxa*365tion. It only decides that one city, whose right to impose a tax is, under the agreed facts, no higher and no greater than the right of other cities on the road, cannot levy a local tax upon all of the rolling stock used to operate a road one hundred and seventy miles in length. If the city of Davenport should be allowed to levy such a tax, how upon the facts admitted in the record before us, could we deny the same right-to Muscatine, Iowa City and Washington, and thus subject the property to quadruple taxation?
II. As to the right to tax the real estate.
The city charter, as we have seen, gives to the city “power and authority to levy and collect taxes upon all taxable prop&rty, real, personal and mixed, within the city.”
The depot grounds, buildings and road bed of the defendant within the city are under the Revision (chapter 45), taxable property. The Revision, § 711, exempts certain property from taxation, not including the property of corporations for pecuniary profit, and the following section (§ 712) then declares that “all other property, real and personal, within the State, is subject to taxation'' The same section also subjects to taxation “property belonging to any incorporated company.” So the Constitution provides that the property of all such corporations shall be subject to taxation, the same as that of individuals. Art. 8, § 2.
The property of railroads then is taxable property. The charter of the city, giving the city the right to levy a tax upon “all the taxable property within the city," we refer, of course to the general laws to ascertain what property is taxable; and when we make this reference, we find as above, that the property of the defendant is taxable, that is, subject to taxation, or in other words, not exempt therefrom.
It follows that the city, under its charter, has a right to levy and collect a tax on the property in question, unless this right has been taken away by some subsequent act of the Legislature, applicable to the city and to the municipal *366tax sought to be levied. To establish the proposition that the power has been taken away, the learned counsel for the railroad company rely upon the 16th section of the act of April 16th, 1862, being “ An act to amend chapter 45 of the Revision of 1860, in relation to revenue.”
The act of 1862, above cited, provides for a tax of one per cent rfpon the gross receipts of every railroad company, which tax is declared to -be “ in lieu of all taxes, for any and all purposes, on the road bed, track, rolling stock and necessary buildings for operating the road.” Acts of ■ 1862, 227.
In our judgment, this act does not repeal or affect the right of the city (which, it has been shown, would otherwise exist) to levy and collect a tax from the property in question. In other words, the act has no application, and was not intended to have airy, to the levy and collection of municipal taxes; but the act applies, and was intended to apply only to the kind of taxes therein provided for, viz., State and county taxes. Chapter 45 of the Revision, as well as the amendatory act of 1862, has no reference to cities, or to municipal taxation, and these acts do not conflict with the right of the city to levy and collect taxes under and by virtue of its charter and the powers thereby conferred; both can stand. The general language in the 16th section of the act of 1862, above quoted, means the same as if it read “ in lieu of all taxes, for any and all purposes within the contemplation of this act,” that is county' and State taxes. It means to declare that the county or State, the earnings having been taxed, cannot, for any purpose, levy and collect a tax on the road bed, depot-grounds, track, or rolling stock of the company.
The reasoning, if not the decision, in the case of The Burlington and Missouri River Railroad Company v. Spearman, &c., 12 Iowa, 112, is pointedly in support of this view. Entertaining the opinion above expressed, that the *367act of 1862 was not intended to,- and' does not apply to cities, it is not necessary to determine whether, under the Constitution (Art. 8, §§ 29, 80) and the decisions there under (9 Iowa, 30; id., 104;' 10 id., 145), the rights of the city under its charter could be affected by the act of 1862, if such had been the intention of the Legislature.
If we are right in holding that the act of 1862 neither has, or was intended to have, any application to cities, this is a complete answer to the argument that even if the city has the right to tax railroad property, yet it must execute this right in the manner provided by the act, viz.: it must tax not the property, eo nomine, but the gross earnings.
Briefly stated, our argument is this: By the charter, the city has power to tax all taxable property within its limits. The depot-grounds, &c., are taxable property, and hence the city may levy a tax upon them. The act of 1862, does not touch this power of the city. The power of the city is the same as if this act had never been passed, and as there is no law providing' that the city shall execute its power to tax, by taxing the gross earnings, it is not required to proceed in this way; and that, as the depot-grounds, &c., are taxable property, the city has the right to assess them as land, and levy a tax upon them, the same as it does upon the real estate of individuals.
It is proper to be added, that the cases before decided in this court, cited by Mr. Justice Cole, and those in other States, referred to by Mr. Justice Lowe, do not, in our Opinion, conflict with the views above presented.'
The counsel for the city has earnestly contended that the act of 1862 is unconstitutional, because it discriminates in favor of' the property of railroads, by providing for this species of property a special mode of taxation instead of taxing it as all other property is taxed, by an assessment upon its vakm. The question under the peculiar language of our Constitution, is a grave one.
*368The counsel for the railroad company contends for the validity of the law.
If the tax upon the gross earnings should be made twenty per cent, instead of one per cent, the position of the defendant, with reference to the law, might change; and yet the legal question, which is one of power in the Legislature, would or might remain the same. As we hold that the act of 1862 has no application to the city of Davenport, it is not necessary, and it would be improper, to express an opinion upon its constitutional validity.
It is due to the counsel on both sides, whose arguments, so replete with research and learning, have been of great service to us in our investigations, to state that we are sensible that all the questions discussed have not been treated, but we have examined them so far as necessary, to arrive at what we deem the just decision of the question, presented by the agreed statement.
It is a matter of regret that the questions are so intricate and nicely balanced that we have not been able, after the most thorough discussion, to arrive at a conclusion in which all can unite.
These considerations, as well as those arising from the peculiar nature of railroad property, which makes it difficult. to apply to it laws, chiefly intended for and adapted to the taxation of ordinary property, demonstrate the necessity which exists that the General Assembly should, by wise, just, and well considered legislation, remove the subject, as to cities, from the perplexity and doubt by which it is now surrounded.
The result is, that all of the members of the Court concur (but on different grounds), in the opinion that the rolling stock is not, under the agreed facts, taxable by the city. The decision of the court below is, therefore, affirmed on this point.
As to the liability of the depot-grounds, buildings, &c., *369to the taxation of the city, the Court are equally divided, and hence, the judgment below, asserting such liability, stands affirmed by operation of law.
Wright, Ch. J. concurs in tbe foregoing opinion of Dillon, J.