Pittsburgh C & Srco v. Backus Indianapolis & C

This was an action by the Pittsburgh, Cincinnati, Chicago & St. Louis Railway Company against Victor M. Backus, as treasurer of Marion county, Ind., and others, brought in the superior court of that county, to restrain the collection of taxes on plaintiff's property. The court rendered judgment for defendants, which, on appeal, was affirmed by the supreme court of the state. 33 N. E. 432, 133 Ind. 625. Plaintiff brought error.

A similar action was brought by the Indianapolis & Vincennes Railroad Company. 33 N. E. 432. The questions involved in this latter case are also disposed of in the following opinion.

On March 6, 1891, the legislature of the state of Indiana passed an act entitled 'An act concerning taxation, repealing all laws in conflict therewith, and declaring an emergency' (Laws 1891, pp. 199-291), which, expressly repealing 'all laws and parts of laws within the purview of this act,' provided in itself a complete and comprehensive system of taxation. By it all property of individuals and ordinary corporations was subject to valuation and assessment by county officers, while the assessment of railroad property was committed to a state board of tax commissioners, composed of the governor, secretary of state, auditor of state, and two appointees of the governor. To this board, in addition to the assessment of railroad property, was given the duty of equalizing the assessment of real estate throughout the state, as well as of entertaining appeals from the decisions of the several county boards. This method of assessing railroad property by a state board, as distinguished from the assessment of ordinary property through county officers, was not by this act for the first time introduced into the legislation of Indiana, though by it some changes were made in the organization of the state board and in the details of procedure.

By section 129 the board was required to 'convene in the office of the auditor of state, on the first Monday of August each year, for the purpose of assessing railroad property and equalizing the assessment of real estate, as provided in this act,' and 'is hereby given all the powers given to county boards of review.' By section 132 authority was given to adjourn from time to time, with a proviso that 'the duration of their sessions shall not exceed forty days.' Section 3 is in these words:

'Sec. 3. All property within the jurisdiction of this state, not expressly exempted, shall be subject to taxation.'

In section 4 it is provided: 'Shares in corporations, all the property of which is taxable to the corporation itself, shall not be assessed to the shareholder.'

By section 8 personal property was to be listed for taxation as of the 1st day of April in each year.

The property of railroad corporations was divided into two classes,-railroad track and rolling stock,-and, by sections 78 and 80, defined as follows:

'Sec. 78. Such right of way, including the superstructures, main, side or second track and turnouts, turntable, telegraph poles, wires, instruments and other appliances, and the stations and improvements of the railroad company on such right of way, (excepting machinery, stationary engines, and other fixtures, which shall be considered personal property,) shall be held to be real estate for the purpose of taxation, and denominated 'railroad track."

'Sec. 80. The movable property belonging to a railroad company shall be held to be personal property, and denominated, for the purpose of taxation, 'rolling stock."

Between the 1st of April and the 1st of June of each year the railroad companies were required to make certain reports to the county auditors. Section 85 is as follows:

'Sec. 85. At the same time that the lists or schedules as hereinbefore required to be returned to the county auditor the person, company, or corporation running, operating, or constructing any railroad in this state shall, under the oath of such person, or the secretary or superintendent of such company or corporation, return to the auditor of state sworn statements or schedules, as follows:

'First. Of the property denominated 'railroad track,' giving the length of the main and side or second tracks and turnouts, and showing the proportions in each county and township, and the total in the state.

'Second. The rolling stock, whether owned or hired, giving the length of the main track in each county, and the entire length of the road in this state.

'Third. Showing the number of ties in track per mile, the weight of iron or steel per yard used in the main and side tracks, what joints or chairs are used in track, the ballasting of road, whether graveled, stone, or dirt, the number and quality of buildings or other structures on 'railroad tracks,' the length of time iron or steel in track has been used, and the length of time the road has been built.

'Fourth. A statement or schedule showing:

'1st. The amount of capital stock authorized and the number of shares into which such capital stock is divided.

'2d. The amount of capital stock paid up.

'3d. The market value, or if no market value, then the actual value of the shares of stock.

'4th. The total amounts of all indebtedness except for current expenses for operating the road.

'5th. The total listed valuation of all its tangible property in this state. Such schedule shall be made in conformity to such instructions and forms as may be prescribed by the auditor of state.' Section 137 provides:

'Sec. 137. Said board shall also assess the railroad property, denominated in this act as 'railroad track' and 'rolling stock,' at its true cash value, and said board is hereby given the power and authority, by committee or otherwise, to examine persons or papers.'

Between April 1, 1890, and April 1, 1891, the plaintiff in error (plaintiff below) was created by the consolidation of several corporations theretofore existing. Its entire length of main track was 1,145.87 miles, of which 647.42 miles were in Indiana, 27.99 in Illinois, 403.33 in Ohio, 19.48 in West Virginia, and 47.65 in Pennsylvania. The Indiana portion of the property belonging to this corporation, including both railroad track and rolling stock, was assessed in 1890 at $8,538,053. The assessment of the like property under the act of 1891 amounted to $22,666,470. Thereafter and on April 19, 1892, the company commenced this suit in the superior court of Marion county, to restrain the collection of taxes based upon the assessment of 1891, on the double ground that the act of 1891 was unconstitutional, and that, if constitutional, it had been so administered as to create an illegal assessment of the company's property. A tender was made of the amount which would be due according to the valuation placed upon the property in 1890, and, as we understand, this amount has been, under an arrangement between the parties, paid into the different county treasuries. Issue having been joined, the case was heard, and a decree rendered finding the equity of the case with the defendants, and denying the application for an injunction. On appeal to the supreme court of the state this ruling was sustained (133 Ind. 625, 33 N. E. 432); and, to reverse the final decree of that court, the plaintiff sued out this writ of error.

Mr. Justice Harlan and Mr. Justice Brown dissenting.

Jno. M. Butler, A. H. Snow, and S. Q. Pickens, for plaintiff in error.

A. G. Smith, Atty. Gen. Ind., Wm. A. Ketcham, Albert J. Beveridge, and John W. Kern, for defendants in error.

Mr. Justice BREWER, after stating the facts in the foregoing language, delivered the opinion of the court.