Paul v. Pacific Railroad Company.

equalization, to discriminate against property of this class, and to make it bear, in violation of the constitution of the state, more than its proportionate share of the public burdens. A great deal of evidence has been produced here for the purpose of showing that, in general, other property throughout the state is valued at from fifty to sixty or sixty-six per cent of its actual value, whereas the valuation placed by the state board of equalization on this railroad property is not only equal to, but in excess of, its full value, and the distinct charge is made in the bill that this was done from a premeditated design to make this property contribute more than its share of the public burdens.

A large amount of evidence has been taken on that point. We have gone over that evidence, and while we cannot say that the result is, in our minds, quite clear that these valuations, relatively considered, are not excessive, yet we are of opinion that a mere error in judgment, on the part of any body of this kind, in fixing the valuation of property, is not subject to judicial revision or control; and if the bill could rest on no other ground it would have to be dismissed. In other words, the charge of fraud, which is made against this body, is not sustained.

That leaves simply a question whether this body was acting in excess of the rightful jurisdiction conferred upon it by the statute. The claim on the part of the complainant is that the statute then in force-for in this regard it has since been amended, and the same question cannot again arise-created the state board of equalization, with only the power to equalize taxes, that is, to equalize the aggregate valuation. It is acknowledged that they have the power to do that, but it is denied that the statute gave them the power to act as an original assessing body, to go over all the railroads of the state and ascertain their property, and make an original assessment, de novo, based on the value of the specific articles which compose the property of these companies.

Now, it is a question of law as to what powers were conferred on that body by the statute of 1873. The question of fact is whether, if that body had only the powers of a board of equal

Paul v. Pacific Railroad Company.

ization, they undertook to exercise the powers of an assessing body. The statute is this: "The said board shall proceed to adjust and equalize the aggregate valuation of the property of each one of the railroad companies, liable to taxation, under the provisions of this act,”—“shall proceed to adjust and equalize the aggregate valuation.” "The board shall have power to summon witnesses, by process issued to any officer authorized to serve subpoenas, and shall have the power of a circuit court to compel the attendance of such witnesses, and compel them to testify; they shall have power to increase or reduce the aggregate valuation of the property of any railroad company included in the statements or returns made by the railroad companies and clerks of the county courts, and any other property belonging to said railroad companies which may be otherwise known to them, as they may deem just and right."

Since that time a statute has been passed by the legislature of Missouri inserting, in addition to these words, the power to แ 'assess," but that statute has no relation to this controversy. This question was very elaborately argued before the full bench when Mr. Justice MILLER was here, and although, I believe, nothing very positive was stated about it in the remarks which were made, and no definite conclusion was announced, we reached quite a satisfactory one, which was that the law limited the functions and powers of this body to the work of equalizing, and that they had not the functions and powers of an original assessing body; and upon further reflection, that is still our judgment. This makes it necessary to consider whether what the state board of equalization did was an adjustment and equalization of values, or whether it was an original assessment. Judge TREAT and myself have gone through the evidence in this respect and have not reached a conclusion exactly in accord. Judge TREAT is of opinion that what they did can be reconciled with a fair view of simply adjusting and equalizing the aggregate valuations. I am of opinion, taking the whole of that evidence together, that this body undertook to make, and did make, a specific assessment of this property-undertook to inquire originally, and did inquire

Paul v. Pacific Railroad Company.

originally, into the value of each locomotive, sleeping car and freight car, the value of lands and of all specific property, just as fully and completely as they could have done had they been undertaking to assess it originally; and, indeed, while this is charged in the bill, the answer hardly denies it, but, on the contrary, asserts in terms, whether meant to do so or not, that they did assess it, and that their assessment was just. So, taking the pleadings and the proofs together, I am of opinion that they did undertake to make, and did make, an original assessment.

Now, this being so, what is the result of it? The result is that they were acting ultra vires. It was contended on the argument before us, by the companies, that this would have the effect of vitiating the entire assessment, and that no tax at all could be collected, and it has since been pressed upon us that that is the true view of the matter; but that was settled at the other argument. We held then, under the circumstances of the case, that this did not have the effect to vitiate the whole proceeding, but that, if they undertook to do what they had no authority to do, it would be just the same as if they had not done it at all; that the valuations as fixed by the county courts would be the true valuations in the premises, and that these companies must pay taxes on the valuations for this year as fixed, not by themselves, .but by the county courts of the respective counties. And that will be the decision now. If it becomes necessary to refer this to a master in order to ascertain what those valuations are, we will make that reference, and, perhaps, it would be better to have a master, if the case is going to remain so that the amounts due, on this basis, can be ascertained and required to be paid or collected. There will be no injunction, except for the excess over the amounts fixed by the county courts.

I am the more reconciled to this view, because, in my judgment, it effects an equitable result. It cannot be said that the state is not getting its full share of revenue, if these companies are required to pay, in the absence of any valid action on the part of the state board of equalization, on the value as fixed by the several counties in which this property is situated. That makes it

Paul v. Pacific Railroad Company.

about the same amount the companies paid the year before, and a showing supplemental has been made, that the taxes for the year afterward were assessed and paid on just about the same valuation. There is no reason to suppose that these roads were worth twice as much in 1873 as they were the following year; and, from the evidence, the extent of this assessment is shown by a comparison of the percentage of taxation imposed by this action with that imposed on other railroads elsewhere, which may be presumed to be not far from the same value. Of course this is only a comparison of the taxes with the net earnings. The assessment on the Chicago and Northwestern Railroad is 8 65-100 per cent; on the Chicago, Rock Island, and Pacific, 4 91-100, or about five per cent; on the Chicago, Burlington, and Quincy, 5 76-100, or about six per cent; on the Lake Shore and Michigan Southern, 10 80-100 per cent; on the Illinois Central, 4 60-100 per cent; and on the Missouri, Kansas, and Texas for 1873, the year here in question, it was 38 73-100 per cent.

The judgment of the court is that the injunctions may remain to restrain the collection of taxes in excess of the amount fixed in the aggregate, by the various county courts, through which the roads run.

ORDERED ACCORDINGLY.

NOTE. Upon the announcement of the foregoing opinion, Mr. Bowman, counsel for the state and counties, said that they acquiesced in the decision of the court, and, upon his motion, the cases were referred to a master to carry into effect the order of the court; and the court ordered those roads in the hands of its receivers at once to pay the taxes due from them on the above basis.

We append a report of the rulings of TREAT, J., in Ketchum et al. v. The Pacific Railroad, in the circuit court for the eastern district of Missouri, September, 1876.

KETCHUM et al. v. THE PACIFIC RAILROAD et al.

1. Tax Bills.-Presumption.-In a suit to collect taxes, tax bills, purporting to be certified by duly authorized officers, are presumed to be correct, and the burden of proof as to their legality lies upon those contesting them.

2. Constitutional Law.—Board of Equalization.-Under the new constitution of Missouri, the board of equalization created by section 18, article 10, became at once the only board for those purposes, and was clothed with all the powers of the previous board.

Ketchum v. Pacific Railroad Company.

3. Power of Board of Equalization.-The board of equalization, under the new constitution, has power to act as an original assessing body.

4. Case in Judgment.-Law Governing.-Section 11 of article 10 of the new constitution of Missouri, which took effect November 30, 1875, limits the rate of taxation for local purposes to an amount less than that allowed under the previous law. The levies in controversy were not ascertained until the summer of 1876, although the date at which the assessments were made relates back to the first of August, 1875: Held, that the rates prescribed by the new constitution must control.

5. Power of Court over Wrong Assessment.-Section 12 of the act of March 24th, 1873, provides that for the purpose of levying school taxes in counties on railroad property, the county courts shall ascertain from the returns in the office of the clerk of the county court, the average rate levied for school purposes by the school boards, and shall charge to the railroad companies taxes at said rates on the proportionate value of their property, certified to the clerk by the state auditor. Section 65 of the act of March 26th, 1874, requires the district boards to ascertain and report to the county court the amount they will require for school purposes for the ensuing year, and thereupon the county clerk shall assess the amount so returned on all taxable property in said districts, as shown by the last annual assessment. The defendants offered to prove, by the records of the county courts, that the rate for school purposes had been ascertained by taking the amount required by each school board and dividing it by the total property in the district, exclusive of railroad property, as shown by the last assessment, and that in extending this rate upon the taxable property, the valuation of the railroad property within the district was included: Held, inadmissible. A court cannot assume the functions of an assessor, and reduce the assessable value, nor include omitted property which is taxable. It must rely upon the assessment. If it exceeds the legal or constitutional limit, the court must cut it down. The functions of the court are not to value or assess, but simply to decide whether the rate is in excess, and at that point its functions cease.

6. —. Mistake of Fact.—In a suit for the recovery of taxes, the court cannot go behind the assessment and valuation made by the board of equalization, as to the number of miles of a railroad in a specified county. It cannot equalize and adjust the amount of taxable property in a county, nor correct mistakes of fact made by the board of equalization.

7. Penalties under Act of March 15th, 1875.-Receivers appointed by the court being in possession of the defendant road, during vacation, the tax bills in question were presented to them for payment. Doubts existing as to the legality of some of the levies, an arrangement was entered into between the attorneys of the receivers and petitioners, that the advice of the court should be taken upon the question: Held, that the defendant company did not come within the terms of the act of March 15th, 1875, which provides a penalty of two and one-half per centum where any railroad shall fail to pay taxes levied upon it, but that the court would award interest at the rate of ten per cent per annum from the day the taxes became due, in lieu of the penalty. 8. Attorneys' Fees under Act of March 29th, 1875.-Section 4 of the act of March 29th, 1875, allows a sum equivalent to five per cent of the sum recovered to be sued for as attorneys' fees "whenever any railroad company shall fail or shall have heretofore failed, within the time prescribed by law, to pay any taxes assessed and levied against it," etc.: Held, that the petitions in this suit were not suits for the recovery of taxes, within the meaning of said act: Held, further, that the amicable arrangement entered into between the parties to settle the amount of taxes due, by asking the advice of the court, did not come within the act.

(Before TREAT, J.)

The defendant railroads being in the hands of receivers appointed by this court, a number of counties filed their intervening petitions, asking for the payment of taxes assessed against the companies while in pos