Santa Clara County v. Southern Pacific Railroad Company

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SANTA CLARA CO UNTY v. SO UTHERN PAC. R. C O ., 118 U.S. 394 (1886)

118 U.S. 394

COUNTY OF SANTA CLARA

v.

SOUTHERN PAC. R. CO. 1

PEOPLE OF THE STATE OF CALIFORNI A

v.

CENTRAL PAC. R. CO.

SAME

v.

SOUTHERN PAC. R. CO.

Filed May 10, 18 86

[118 U.S. 394, 396] D. M. Delmas, A. L. Rho des, for Santa Cl ara County . [118 U.S. 394, 397] E. C. Marshall, for plaint iffs in error.

Wm. M. Evarts, Geo. F. Ed munds , and S. W. Sanderson , for defendant s i n error.

After stating the facts in the foregoing language, Mr. Justice HARLAN delivered the opinion of the court.

These several actions were brought-the first one in the superior court of Santa Clara county, California, the others in the superior court of Fresno county, in

the same state-for the recovery of certain cou nty and st ate taxes claimed to b e due from the Sou thern P acific Railroad Co mpany and the Central P acific Railroad

Company under assessments made by the state board of equalization upon their respective franchises, road-ways, road-beds, rails, and rolling stock. In the

action b y Santa Clara county t he amoun t claimed is $13,36 6.53 for the fiscal year of 1882 . For that sum, wit h 5 per cent. penalty, in terest at th e rate of 2 per

cent. per month from December 27, 188 2, cost o f advertis ing , and 10 p er cent. for atto rney's fees, judg ment is asked again st t he South er Pacific [118 U.S. 394,

398] Railroad Company. In the other action ag ainst the same company t he amount claimed is $5,029 .27 for the fiscal year of 188 1, with 5 p er cent. added fornon -payment of taxes and cost s of coll ection. In th e action again st th e Central Pacific Railroad Company ju dgment is asked for $25,950.50 for the fiscal year o

1881, wit h li ke penalty and costs of collection. The answer in each case puts i n iss ue all the material allegations of the complaint, and sets up various special

defenses, to which reference will be made further on. Wi th i ts ans wer the defendant , in each case, filed a p etit ion , with a proper bond , for the removal o f the

action int o the circuit court of the Uni ted States for the dis trict, as one arising under the consti tuti on and l aws of the United States. The right o f removal was

recognized by the state court, and the action proceeded in th e circuit court. Each case, the parties having filed a writt en stipu lation waiving a jury, was tried

by the court. There was a special find ing of facts, upon whi ch jud gment w as entered in each case for the defendant. The general ques tio n to be determined i s

whether the judgment can be sustained upon all or either of the grounds upon which th e defendants rely.

The case as made by the pl eadings and the sp ecial find ing o f facts is as follows:

By an act of congress approved July 27, 1866, the Atlantic & Pacific Railroad Company was created, with power to construct and maintain, by certain

designated routes, a continu ous railroad and telegraph l ine from Springfield, Missouri, to the P acific. For the purpose-which is avowed by congress-of

facilitating the construction of the line, and thereby securing the safe and speedy transportation of mails, troops, munitions of war, and public stores, a right o

way over the publ ic domain w as given t o the company, and a liberal grant of the public lands was made to it . The railroad so to be const ructed, and every part

of it, was declared to b e a post rout e and mili tary road, subject to th e use of the Un ited States for post al, mili tary, naval, and all other government servi ce, and

to such regulations as congress might impose for restricting the charges for government transportation. By the [118 U.S. 394, 399] eighteenth section of the act,

the Southern Pacific Railroad Company,-a corporation previously organized under a general statute of California passed May 20, 1861, (St. Cal. 1861, p.607 ,)-was auth orized to con nect wit h the At lant ic & Pacific Railroad at s uch poi nt, near the bou ndary line of that s tate, as the former company deemed most

sui table for a railroad t o San Francisco, with ' uni form gauge and rate of freight o r fare with said road;' and in cons ideratio n thereof, and 'to aid in its

construction,' the act declared th at it should have similar grants of land, 'subject to all the condi tions and limitations' provid ed in s aid act of congress, 'and

shall be required to construct its road on like regulations, as to time and manner, with the Atlantic & Pacific Railroad.' 14 St. p. 292, 1, 2, 3, 11, 18. In

November, 1866 , the Atl antic & P acific Railroad Co mpany and the Sout hern P acific Railroad Co mpany filed in the office of the secretary of the interio r their

respective acceptances o f the act.

By an act of the legi slatu re of California, passed Ap ril 4, 187 0, to aid in giv ing effect to th e act of congress relating to the Sout hern Pacific Railroad Co mpany,

it was declared that 'to enable the said company to more fully and completely comply with and perform the requirements, provisions, and conditions of the

said act o f congress, and all oth er acts o f congress n ow i n force, or which may hereafter be enacted, the st ate of California hereby consent s to said act; and th e

said company, its successors and assigns, are hereby authorized to change the line of its railroad so as to reach the eastern boundary line of the state of

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California by such route as the company shall determine to be the most practicable, and to file new and amendatory articles of association; and the right,

power, and privi lege is h ereby granted to , conferred upo n, and vested i n them to const ruct, maintain, and operate, by steam or other pow er, the said railroad

and telegraph line mentioned in said acts of congress, hereby confirming t o and v esting i n the s aid company, its su ccessors and assigns , all the right s,

privileges, franchises, power, and authority conferred upon, [118 U.S. 394, 400] granted to, or vested in said company by the said acts of congress, and any act

of congress w hich may b e hereafter enacted.'

Subsequently, by the act of March 3, 1871, congress incorporated the Texas Pacific Railroad Company, with power to construct and maintain a continuous

railroad and telegraph line from Marshall, in the state of Texas, to a point at or near El Paso, thence through New Mexico and Arizona to San Diego, pursuing,

as near as might be, the thirty-second parallel of latitude. To aid in its construction, congress gave it, also, the right of way over the public domain, and made

to it a liberal grant of public lands. The nineteenth section provided 'that the Texas Pacific Railroad Company shall be, and it is hereby, declared to be a

military and post road; and for the purpose of insuring the carrying of the mails, troops, munitions of war, supplies, and stores of the United States, no act ofthe company nor any law of any state or territory shall impede, delay, or prevent the said company from performing its obligations to the United States in that

regard: provided, that said road shall be subject to the use of the United States for postal, military, and all other governmental services, at fair and reasonable

rates of compensati on, not to exceed the price paid b y priv ate parties for the same kind of service, and the go vernment sh all at al l t imes have th e preference in

the use o f the s ame for th e purpo se aforesaid.'

The twenty-third secti on of that act has special reference to the South ern Pacific Railroad Company, and is as foll ows:

'Sec. 23. That, for the pu rpose of connecting the Texas Pacific Railroad wi th t he city of San Francisco, the Southern P acific Railroad Company of

California is hereby auth orized (subj ect to th e laws of California) to cons truct a lin e of railroad from a poin t at or near Tehacapa Pass, by way o f Los

Angeles, to the Texas Pacific Railroad, at or near the Colorado river, with the same rights, grants, and privileges, and subject to the same limitations,

restrictions, and conditions, as were granted to said Southern Pacific Railroad Company of California by the act of July 27, 1866: provided, however,

that this section shall in no way [118 U.S. 394, 401] affect or impair the right s, present or pros pectiv e, of the At lanti c & Pacific Railroad Co mpany, or

any ot her company.'

Und er the authori ty of this l egisl ation , federal and state, the Southern Pacific Railroad Company cons tructed a line of railroad from San Francisco, connecti ng

ith the Texas & Pacific Railroad (formerly th e Texas Pacific Railroad) at Sierra Banca, in Texas: and, wi th o ther railroads , it is operated as on e contin uous

lin e (except for that part of the route occupi ed by t he Central P acific Railroad) from Marshall, Texas, to San Francisco. It is stated in t he record that t he

South ern Pacific Railroad Company o f California, since the commencement of this action , has completed its road to t he Colorado river, at or near the Needles,

to connect with the At lantic & P acific Railroad, and t hat wit h th e latter road it constitut es a continu ous l ine from Springfield, Missouri, to the P acific, except

as to the connection, for a relatively s hort d ist ance, over the road of the Central P acific Railroad Company.

On the seventeenth of December, 1877, the said Southern Pacific Railroad Company, and other railroad corporations then existing under the laws of

California, were legally cons oli dated, and a new corp oration thereby formed und er the name of the Sou thern P acific Railroad Co mpany, the p resent defendant

in error, 59.30 miles of whose road is in Santa Clara county and 17.93 miles in Fresno county.

On the first of April, 1875, this company was indebted to divers persons in large sums of money advanced to construct and equip its road. To secure that

ind ebtednes s, it executed on that d ay a mortgage for $32, 520,000 o n it s road, franchises, roll ing s tock, and appu rtenances, and on a large number of tracts of

land, in d ifferent count ies of California, aggregating ov er 11,000,000 acres. These lands were granted to th e company by congress u nder the abov ementioned

acts, and are used for agricultural, grazing, and other purposes not connected with the business of the railroad. Of those patented, 3,138 acres are in Santa

Clara county, and 18, 789 acres in Fresno county. When these proceedings were instituted, no part of its above mortgage debt had been paid, except the

accruing i n- [118 U.S. 394, 402] terest and $1,632,000 of the principal, leaving out standing against it $ 30, 898,000.

In the year 1852, California, by legislative enactment, granted a right of way through that state to the United States for the purpose of constructing a railroad

from the At lanti c to the P acific ocean; declaring that t he interests of California, as well as t he whol e Unio n, 'require the immediate actio n of the go vernment of

the United States for the construction of a national thoroughfare, connecting the navigable waters of the Atlantic and Pacific oceans, for the purpose of thenational safety, in the event o f war, and to promote the hig hest commercial interests of the Republ ic.' St. Cal. 1852 , p. 150. By an act pass ed July 1, 1862 ,

congress incorporated the Un ion P acific Railroad Company, with p ower to construct and maintain a contin uous railroad and telegraph line t o the w estern

ound ary of what was then Nevada territory, 'there to meet and con nect wit h th e line of the Central Pacific Railroad Company of California.' 12 St. 489, 1, 8.

The declared object of extendi ng go vernment aid t o these enterprises was to effect the const ructio n of a railroad and teleg raph lin e from the Miss ouri riv er to

the P acific, which, for all pu rposes of communication, travel, and transp ortation, so far as the publ ic and th e general government are concerned, should be

operated 'as one connected, continuous line.' St. Cal. 1852, 6, 9, 10, 12, 17, 18.

In 1864 the state of California passed an act to aid in carrying out the provisions of this act of congress, the first section of which declared that 'to enable said

company more full y and completely to comply wit h and perform the provi sio ns and con dit ion s of said act of congress, the said company, their successors and

assigns, are hereby authorized and empowered, and the right, power, and privilege is hereby granted to, conferred upon, and vested in them, to construct,

maintain, and operate the said railroad and telegraph line, not onl y in the state of California, but also in t he said territories lying east of and between said st ate

and th e Missou ri river, with s uch branches and extensio ns of said railroad and t elegraph line, or either of them, as said company may deem necessary or proper,

and also t he right o f way for said railroad and telegraph line over any lands belonging to [118 U.S. 394, 403] this state, and on, over, and along any streets,

roads, highways, rivers, streams, water, and water-courses, but the same to be so constructed as not to obstruct or destroy the passage or navigation of the

same, and als o the rig ht to condemn and appropriate to the us e of said company such priv ate property, right s, privil eges, and franchises as may be proper,

necessary, or convenient for the purposes of said railroad and telegraph, the compensation therefor to be ascertained and paid under and by special

proceedings, as prescribed in the act providing for the incorporation of railroad companies, approved May 20, 1861, and the act supplementary and

amendatory thereof, said company to 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 said company shall have priority of transportation and transmission over said line of railroad and telegraph, hereby

confirming to and vesting in said company all the rights, privileges, franchises, power, and authority conferred upon, granted to, and vested in said company

y said act of congress, hereby repealing all l aws and parts of laws inconsist ent or in conflict wi th t he provisions of this act, or the rights and privi leges

herein granted.'

In 187 0 th e Central Pacific Railroad Company of California and the West ern Pacific Railroad Company formed themselves in to o ne corporatio n und er the name

of the Central P acific Railroad Company, the defendant i n one of these actions , 61.06 miles o f whos e road is in Fresno cou nty . The company complied wi th the

several acts of congress, and th ere is in op eration a cont inu ous l ine of railway from the Miss ouri riv er to the P acific ocean, the Central Pacific Railroad

Company owning and operating the portion thereof between Ogden, in the territory of Utah, and San Francisco.


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When the present action w as insti tuted against this company the U nited States had and now h ave a lien, created by the acts of congress of 1862 and 1864, for

$30,000,000, with a large amount of interest, upon its road, rolling stock, fixtures, and franchises; and there were also outstanding bonds for a like amount

iss ued by t he company prior to January 1, 1875, and secured by a mortgage upon the same property.

Such were the relations which t hese two companies held to [118 U.S. 394, 404] the Unit ed States and to t he state when t he assessments in question were made

for purpo ses of taxatio n.

It is necessary now to refer to those p rovisions of the constit ution and laws o f the state whi ch, it is claimed, sustain these assessments. The constitut ion o f

California, adopted in 1879, exempts from taxation growing crops, property used exclusively for public schools, and such as may belong to the United States,

or to that st ate, or to any of her county or municipal corporati ons, and declares th at the legi slature 'may provide, except in t he case of credits secured by

mortgage or trus t deed, for a reduction from credits of debts due to bon a fide residen ts' o f the st ate. It is provided in t he first s ection o f article 13 that, wit h

these exceptions, 'all property in the state, not exempt un der the laws of the United States, shall be t axed in p roportion 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

oth er matters and t hin gs, real, personal, and mixed, capable of private ownershi p.'

The fourth section of the same article provi des: 'A mortgage, deed of trust , contract, or other obligatio n by which a debt is secured, shall , for the purp oses of

assessment and taxation, be deemed and treated as an int erest in th e property affected thereby. Except as to railroad and o ther quasi publ ic corporatio ns, in

case of debts s o secured, the value of the property affected by such mortgage, deed of trust , contract, or oblig ation , less the valu e of such securit y, shall b e

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 w hich the p roperty affected thereby is situate. The taxes so levied shall be a lien up on th e property and security, and may be paid by either party t o such

security . If paid b y the ow ner of the security, the tax so levied u pon t he property affected thereby shal l become a part of the debt so secured; i f 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 be [118 U.S. 394, 405] paid by any such d ebtor or debt ors, after assessment and b efore the tax levy, the

amount of such l evy may lik ewise be retained b y such d ebtor or debtors, and shall be computed according to the tax levy of the precedin g year.'

The ninth section makes provision for the election of a state board of equalization, 'whose duty it s hall be t o equalize the valuation of the taxable property of

the several counties in the state for the purpose of taxation.' The boards of supervisors of the several counties constitute boards of equalization for their

respective counties, and they equalize the valuation of the taxable property therein for purposes of taxation; assessments, whether by the state or county

oards, to 'con form to the true value in money of the property' con tained i n the assess ment roll . Id . 9.

The tenth section declares: 'A ll p roperty, except as hereinafter in th is 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, road-bed, rails, and rolling stock of all railroads operated in more

than one county in th is st ate shall be assessed by the state board of equalization at their actual value, and th e same shall be apportioned to the counties, cities

and counties, cities, towns, to wnships , and districts i n whi ch such railroads are located, in proportion to t he number of miles of railway l aid in such counties,

cities and counties, cities, towns, townships, and districts.'

The assessments in q uestion, it i s contended, were made in conformity w ith t hese constituti onal provisio ns, and with w hat is k nown as section 3 664 of the

Po lit ical Code of California. That section made it t he duty of the st ate board of equali zation, on o r before the first Mon day in May in each year, to 'ass ess the

franchise, roadway, road-bed, rails, and rolling, stock of railroads operated in more than one county,'-to which class belonged the defendants. It required every

corporation of that class, by certain officers, or by such officer as the state board should designate, to furnish the board with a sworn statement showing,

among o ther thi ngs, in d etail, for the year ending March 1st , the whol e number of miles o f railway ow ned, operated, or leased by it i n the st ate, the value

thereof[118 U.S. 394, 406] per mile, and all o f its property o f every kind located in the st ate; th e number and value of its engines, passenger, mail, express,

aggage, freight, and other cars, or property u sed in operating and repairing its railway in the state, and on railways which are parts o f lines extending beyond

the li mits of the state. It is also directed that 'th e said property shall be assessed at its actual value;' that t he 'assessment shall be made upon th e entire railway

ithin the state, and shall include the right of way, road-bed, track, bridges, culverts, and rolling sto ck;' and that 't he depots, station g rounds, shops,

uildings, and gravel beds shall be assessed by the assessors of the county where situated, as other property.' It further declares:

'On o r before the fifteenth day of May in each year, said b oard shall transmit to the county assesso r of each county t hrough whi ch any railway,

operated in more than one county, may run, a statement showing the length of the main track or tracks of such railway within the county, together with

a descriptio n of the whole of said tracks within the county, includ ing t he right o f way by metes and bo unds, or other description s ufficient for

ident ification, and the assessed v alue per mile o f the same, as fixed by a pro rata di strib uti on per mile of the assess ed value o f the wh ole franchise,

roadway, road-bed, rails, and rolli ng st ock of such railway wit hin this state. Said statement shall be entered on the assessment roll of the county. At

the first meeting o f the bo ard of sup ervisors, after such st atement is received b y the coun ty asses sor, they shal l make, and cause to be entered in the

proper record book, an order stating and declaring the length of the main track, and the assessed value of such railway lying in each city, town,

townshi p, school-district, or lesser taxing d istrict in their county through w hich such railway runs, as fixed by t he state board of equalization, which

shall const itute t he taxable value of said p roperty for taxable purposes in such city, town , township , school, road, or other district.'

These companies, within due time, filed with the state board the detailed statement required by that section.

At the trials below no record of assessment against the respective defendants, as made by the state board, was given in evidence, and there was introduced no

ritten evi dence of the a [118 U.S. 394, 407] ssessment, except an official communi cation from the stat e board t o each of the ass essors of Santa Clara and Fresno

counties, called, in the special findings, the assessment roll for the particular county. The roll for Fresno county, in 1881, relating to the Southern Pacific

Railroad Company, is as follows:

Original - A ssessment Book of the Property of Fresno County for the Year 1881. Assessed to all Know n Ow ners or Claimants, and when Unk nown to

Unknown Owners or Claimants. []

Value of Total the franchis e, value Total roadway, of all value DE SCRIPTION O F PROP ERTY roadbeds, property after rails, and after equali zation Total

rolling-stock deductions. by the tax. Taxpayer's Real estate other than city and town of railroads (Changes State Name lots. Subdivision of sectioons or as

apportioned by the Board metes and bounds. City and town lots. to the county county of Improvements. Personal property. by the State boards of

equalization. Board of equalization E qualization. to b e noted in red ink.) []

Southern SIR: The state board Pacific of equalization on the second day $295,845 $602,869 $602,869 $10,246.78 Railroad of May, 1881, assessed, for the

year Company. 188 1, the South ern Pacific Railroad Company for its franchis e, roadway, road-bed, rails, and roll ing sto ck, in the st ate of California, in the


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aggregate sum of $11 ,739,915. The entire li ne of main track of said railroad o f said co mpany in th e said st ate is 7 11.51 miles. The length of the main track of

said railway in Fresno county is 1 7.93 miles. The descripti on of the whole of the main t rack of the railw ay of the said South ern Pacific Railroad Company, and

the right of way for the same, in the county of Fresno, is as follows: Beginning at the town of Huron, and running easterly in the direction of Goshen, in Tulare

count y, to th e east line of Fresno coun ty. The assessed value per mile of said railway, as fixed by a pro rata dist ribut ion per mile of the assessed valu e of the

hole franchise, roadway, road-bed, rails, and rolling stock as such railway of the said company within this state is $16,500. The apportionment of the

assessment of the said franchise, roadway, road-beds, rails, and rolling stock, by this board, for and to Fresno county, is $295,845. WARREN DUTTON,

CHAIRMAN, M. M. DREW, D. M. KENFIELD, T. D. HEISKEL L, State Board of Equal izatio n, E. W. MASLIN, Clerk. [] [118 U.S. 394, 408] There were similar

roll s in reference to the Central P acific Railroad i n th e same county, for the same year, and the Sou thern P acific in Santa Clara county for 188 2. For each of

those years the board of supervisors of the respective counties made an apportionment of the taxes among the legal subdivisions of such counties.

It is stated in the finding s that the delinqu ent lis ts for those years, so far as they related to the taxes in question, were duly made up i n form correspondingith the original assessment roll; that, in pursuance of section 3738 of the Political Code of California, the board of supervisors of the respective counties

duly passed an order, entered on th e minutes, disp ensing w ith the dupl icate assessment roll for that year; t hat th e comptroller of the state transmitted a letter

to the tax collector of the coun ty, in p ursuance of the prov isi ons o f sectio n 389 9 of that Code, directing h im to o ffer the property for sale but once, and, if there

ere no bona fide purchasers, to withdraw it from sale; that the tax collector, in obedience to the provisions of that section, transmitted to the comptroller,

ith his i ndorsement thereon of the action had in the premises, a certified copy of the entry upon the delinqu ent list relating to t he tax in question in t hese

several actions; that such indorsement shows that the tax collector had offered the property for sale, and had withdrawn it because there was no purchaser for

the same; and that th e comptrol ler, in pursuance of the provisi ons o f the same sectio n, transmitt ed to th e tax collecto r of the coun ty a lett er directing h im to

ring suit.

In each case there were also the following findings: 'The state board of equalization, in assessing said value of said property to and against defendant,

assessed the full cash value of said railroad, roadway, road- bed, rails , rollin g sto ck, and franchises, wit hou t deduct ing therefrom the valu e of the mortgage, or

any part th ereof, given and existing thereon as aforesaid, to secure the i ndebtedness of said company to the hol ders of said bonds, not withst anding t hey had

full knowledge of the existence of the said mortgage; and in making said assessment the said state board of equalization did not consider or treat said

mortgage as an interest in said property, but as- [118 U.S. 394, 409] sessed t he who le valu e thereof to t he defendant, in the same menner as if there had been no

mortgage thereon. The state board of equalization, in making the supposed assessment of said roadway of defendant, did knowingly and designedly include in

the valu atio n of said roadway the valu e of fences erected upo n the l ine betw een said roadway and t he land of cotermino us prop rietors. Said fences were valued

at $30 0 per mile.'

The special ground s of defense by each of the defendant s were: (1) That it s road is a part of a conti nuou s pos tal and milit ary route, constructed an d maintained

nder the authority of the United States, by means in part obtained from the general government; that the company having, with the consent of the state,

ecome subject to th e requirements, condi tio ns, and provi sio ns of the acts of congress, it t hereby ceased to be merely a state corporatio n, and became one of

the agencies or inst rumentalities employed by t he general go vernment to execute its constitut ional p owers; and t hat th e franchise t o operate a postal and

military route, for the transportation of troops, munitions of war, public stores, and the mails, being derived from the United States, cannot, without their

consent, be subjected to state taxation. (2) That the provisions of the constitution and laws of California, in respect to the assessment for taxation of the

property of railway corporations operating railroads in more than one county, are in violation of the fourteenth amendment of the constitution, in so far as they

require the assessment of their property at its full money value, without making deduction, as in the case of railroads operated in one county, and of other

corporations, and of natural persons, for the value of the mortgages covering the property assessed; thus imposing upon the defendant unequal burdens, and

to th at extent denying to it the equal protection of the laws. (3) That what is known as s ection 3664 o f the Po liti cal Code of California, under the authority of

hich, in part, the assessment was made, was not constitutionally enacted by the legislature, and had not the force of law. ( 4) That no void assessment

appears in fact to hav e been made by the st ate board. (5) That no i nterest i s recoverable in th is actio n unt il after jud gment. (6) [118 U.S. 394, 410] That t he

assessment upon which the action i s based is vo id, because it i ncluded property which the st ate board of equalization had no jurisdiction , under any

circumstances, to assess; and that, as such i llegal part was so bl ended with the balance that i t cannot be separated, the entire assessment must be treated as a

nullity.

The record contains elaborate opinions stating the grounds upon which judgments were ordered for the defendants. Mr. Justice FIELD overruled the first of

the special defenses above named, but sust ained the second. The circuit judge, in addition, held that section 3664 o f the P olit ical Code had not been passed

in the mode required by the state constitution, and consequently was no part of the law of California. These opinions are reported as the Santa Clara Railroad

Tax Case, in 9 SAWY. 165, 210 ; S. C. 18 Fed. Rep. 385.

The proposit ions embodied i n th e conclusions reached in the circuit court were discussed wit h marked ability by counsel who appeared in this court for the

respective parties. Their importance cannot well be over- estimated; for they not only involve a construction of the recent amendments to the national

constitut ion i n their application t o the consti tutio n and the legis lation of a state, but up on their determination, if it were necessary to consid er them, would

depend t he syst em of taxation devi sed by that st ate for raising revenue, from certain corporatio ns, for the sup port o f her government. These questio ns belong t o

a class which this court should not decide unless t heir determination i s essential to the dispos al of the case in which they arise. Whether the present cases

require a decision of them depends upon t he soundness of another proposit ion, upon w hich the court below, in view of its conclusions up on oth er issues, did

not deem it necessary to pass. We allude to the claim of the defendant, in each case, that the entire assessment is a nullity, upon the ground that the state board

of equalization i ncluded therein property which i t was withou t ju risdiction to assess for taxation. The argument in behalf of the defendant is t hat the st ate

oard knowin gly and designedly included i n i ts assessment o f 'the franchise, roadway, road-bed, rails, and rolling-stock' of[118 U.S. 394, 411] each company,

the value of the fences erected upon the line between its roadway and the land of coterminous proprietors; that the fences did not constitute a part of such

roadway, and therefore could only be assessed for taxation by the proper officer of the several counties in which they were situated; and that an entire

assessment which includes property not assessable by the st ate board against the party assessed, is void, and t herefore insufficient to support an action; atleast, when-and s uch is cl aimed to be th e case here-it does no t appear with reasonable certainty, from the face of the assess ment or otherwise, what p art of the

aggregate valuation represents the property so illegally included th erein.

If these positi ons are tenable, there will be no occasion to consider the grave questions of constituti onal law u pon w hich the case was determined below; for,

in that event, the judgment can be affirmed upon the ground that the assessment cannot properly be the basis of a judgment against the defendant.

That th e state board purposely in cluded in its assessment and valuatio n the fences erected on the lin e between the railroads and the lands of adjacent

proprietors, at the rate of $300 per mile, is undoubtedly true; for it is so stated in the special finding of facts, and that finding must be taken here to be

indis putable. It is equally true that th at tribunal h as no general power of assessment, but onl y ju risdiction to assess 't he franchise, roadway, road-bed, rails,

and rolling stock' of railroad corporations operating roads in more than one county, and t hat all ot her property of such corporations, sub ject to t axation, is

assessable only 'in the county, city, city and county, tow n, township , or district in wh ich it i s situ ated, in the manner prescribed by l aw.' Such is t he


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declaration of the state constitution. People v. Sacramento Co., 59 Cal. 324; article 13, 10. It must also be conceded that 'fences' erected on the line between

these railroads and the lands of adjoining proprietors were improperly included by the state board in its assessments, unless t hey constitu ted a part of the

'roadway.' Some light is th rown upon this q uestion b y that clause of section 366 4 of the Politi cal Code of California-which, in the view [118 U.S. 394, 412] we

take of these cases, may be regarded as having been legally enacted- providing that 't he depots, station grounds, shops, buil dings, and gravel beds' sh all be

assessed in the county where situated as other property. From this it seems that there is much of the property daily used in the business of a railroad operated

in more than one county t hat is n ot assessable by the st ate board, but onl y by t he proper authorities o f the municipality where it is si tuated; so t hat, even if it

appeared that the fences assessed by the state board were the property of the railroad companies, and not of the adjoining proprietors, they could not be

included i n an assessment by that bo ard unless t hey were part of the roadway it self; for, as shown, t he jurisdi ction o f that b oard is restricted to the assessment

of the 'franchise, roadway, road-bed, rails, and rolli ng st ock.' We come back, then, to the vi tal in qui ry, whether the fences could b e assessed und er the head of

roadway. We are of opinio n that they canno t be regarded as part of the roadway for purposes of taxatio n.

The constitution of California provides that 'land, and improvements thereon, shall be separately assessed,' (article 13, 2;) and, although that instrument does

not define what are improvements upon land, the Political Code of the state expressly declares that the term 'improvements' includes 'all buildings, structures,

fixtures, fences, and improvements erected upon o r affixed to the land.' Sectio n 361 7. It wou ld s eem from these prov isions that fences erected upo n th e roadway,

even if owned by th e railroad company, must b e separately assessed as 'improvements ,' in th e mode required in the case of depot s, station grou nds, sho ps, and

uildings owned by the company; namely, by local officers in the county where they are situated. The same considerations of public interest or convenience

pon wh ich rest existing regulation s for the assessments of depots, station grounds, shops, and build ings of a railroad company operated in more than one

count y wou ld appl y equally to t he assessment and valuati on for taxation of fences erected upo n th e line of railway of the same company.

In San Francisco & N. P . R. Co. v. State Board of Equal izatio n, 60 Cal. 12, 34, which was appli ca- [118 U.S. 394, 413] tion, on certiorari, to annul certain orders

of the state board assessing the property of a railroad corporation, one of the questions was as to the meaning of the words 'road-bed' and 'roadway.' The court

there said: "The road-bed is the foundation on which the superstructure of a railroad rests.' Webster. The roadway is the right of way, which has been held to

e the property liable to taxation. Appeal of North Beach & M. R. Co., 32 Cal. 499. The rails in place constitute the superstructure resting upon the road-bed.'

This definition was approved in San Francisco v. Central Pac. P. Co., 63 Cal. 467, 469. In the latter case the question was whether certain steamers owned by

the railroad company, upon w hich were laid railroad tracks, and wi th wh ich it s passeng er and freight cars were transported from the eastern sho re of the bay o f

San Francisco to it s western shore, where the railway again commenced, were to be assess ed by th e city and cou nty of San Francisco, or by t he state bo ard of

equalization. The contention of the company was that they constituted a part of its road-bed or roadway, and must therefore be assessed by the state board; but

the su preme court of the st ate held ot herwise. After observing th at all th e property of the company, oth er than its franchise, roadway, road-bed, rails , androlling stock, was required by the consti tutio n to be assessed by the l ocal assessors, the court said: 'They are certainly not the franchise of the defendant

corporation. They may constitute an element to be taken into computation to arrive at the value of the franchise of the corporation, but they are not such

franchise. It is equally as clear that they are not rails or rolling stock. ... Are they, then, embraced within the words 'roadway' or 'road-bed,' in the ordinary and

popular acceptation of such wo rds as appli ed to railroads? These two words, as applied to common roads, ordinarily mean the s ame thin g, but as applied t o

railroads their meaning is not the same. The 'road-bed' referred to in section 10, in our judgment, is the bed or foundation on which the superstructure of the

railroad rests. Such is the definition given by both Worcester and Webster, and we think it correct. The 'roadway' has a more extended signification as applied

to railroads. In addition to t he part denominated [118 U.S. 394, 414] road-bed, the roadway includes whatever space of ground the company is allowed by law

in wh ich to const ruct its road-bed and lay its t rack. Such space is defined in subdivi sion 4 of the seventeenth section and the twenti eth section of the act 'to

provide for the incorporation o f railroad companies,' etc., approved May 20, 1861 . St. 1861, p. 607 ; San Francisco & N. P . R. Co. v. State Board, 60 Cal. 12.'

The argument in support o f the proposit ion, that t hese steamers- constit uting, as t hey did, a necessary li nk in the lin e of the company's railway, and upon

hich rail s were actually laid for the runn ing of cars- were a part either of the road-bed o r roadway of the railroad, is much more cogent t han th e argument that

the fences erected up on th e line betw een a roadway and the land s of adjoi nin g proprietors are a part of the roadway its elf. It seems to t he court th at the fences

in q uesti on are not, wit hin t he meaning o f the lo cal law, a part of the roadway for purposes of taxatio n, but are 'improvements' as sessable by the lo cal

authorities of the proper county, and therefore were improperly included by the state board in its valuation of the property of the defendants.

The next inquiry that naturally arises is whether the different kinds of property assessed by the state board are distinct and separable upon the face of theassessment, so that the company, being thereby in formed of the amount of taxes levied upo n each, could be held t o have been in d efault i n not tendering such

sum, if any, as was legall y due. Upon the transcrip t before us, this quest ion must be answ ered in the negat ive. No record of assessment, as made by th e state

oard, was int roduced at t he trial, and p resumably n o such record exist ed. Nor is t here any documentary evidence of such assessment, except th e official

communication of the state board to the local assessors, called, in the finding s, the assessment roll of the county. That roll shows only the aggregate valuation

of the company's franchise, roadway, road-bed, rails, and rolli ng s tock in the state; the length of the company's main t rack i n th e state; i ts l ength i n th e

count y; the assessed value per mile of the railway, as fixed by the pro rata dis tribu tio n per mile of the assessed valu e of its w hole franchise, roadway, road-bed,

rails, [118 U.S. 394, 415] and rolling stock in the state; and th e apportionment of the property so assessed to the count y.

It appears, as already st ated, from the evid ence, that t he fences were included in th e valuation of the defendants ' property ; bu t und er what head, whether of

franchise, roadway, or road-bed, does no t appear. Nor can it b e ascertained, with reasonable certainty, either from the assessment rol l or from other evidence,

hat was th e aggregate valuation of the fences, or what part of such valuation was apportioned to the respective counti es through which th e railroad was

operated. If the presumption i s that the state board included in it s valuation onl y such property as it had jurisdiction under the state constit ution t o assess,

namely, such as could be rightfully classified under the heads of franchise, roadway, road- bed, rails, or rolling stock, that presumption was overthrown by

proof that it di d, in fact, include, und er some one or more of these heads, the fences in qu estio n. It was then i ncumbent upon t he plain tiff, by satis factory

evidence, to separate that which was illegal from that which was legal,-assuming, for the purposes of this case only, that the assessment was in all other

respects legal,-and th us impose upo n th e defendant t he duty of tenderin g, or enable the court to render judg ment for, such amount , if any, as was jus tly due.

But no such evidence was introduced. The finding that the fences were valued at $300 per mile is too vague and indefinite as a basis for estimating theaggregate valuation of the fences included in the assessment, or the amount thereof apportioned to the respective counties. Were the fences the property of

adjacent proprietors? Were they assessed at that rate for every mile of the railroad within the state? Were they erected on the line of the railroad in every

count y throu gh wh ich it was operated, or only in s ome of them? Wherever erected, were they ass essed for each side of the railway, or only for one side? These

questions, so important in determining the extent to w hich t he assessment includ ed a valuation of the fences erected upo n th e line b etween the railroad and

coterminous proprietors, find n o sol ution in t he record presented to thi s court.

If it b e suggest ed that, und er the circumstances, the court [118 U.S. 394, 416] might have assumed that the state board included the fences in their assessment at

the rate of $30 0 per mile for every mile of the railroad wit hin the st ate, countin g one or bot h sid es of the roadway, and, havin g thu s eliminated from the

assessment the aggregate so found, giv en jud gment for such su m, if any, as, upon th at basis , would have been due upo n the valuatio n of the franchise,

road-bed, roadway, rails, and rolling stock of the defendant, the answer is that the plaintiff did not offer to take such a judgment; and the court could not have

rendered one of that character witho ut con cludi ng t he plainti ff hereafter, and upon a proper assessment, from claiming agains t the defendant t axes for the years


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in question upon such of its p roperty as constitu ted it s franchise, roadway, road-bed, rails, and rolling stock. The case, as presented to the court below , was

therefore one in wh ich th e plaint iff soug ht judgment for an entire tax arisi ng up on an assess ment of different kind s of property as a uni t; s uch assessment

includin g property not legally assessable by t he state board, and the part of the tax assessed against the latter property not being separable from the oth er part.

Upon such an iss ue, the law, we think, is for the defendant. An assessment of that kind is i nvalid, and wil l not support an action for the recovery of the entire

tax so levied. Cooley, Tax'n, 295, 29 6, and autho riti es there cited; L ibb y v. Burnham, 15 Mass. 147; State v. City of Pl ainfield, 38 N. J. Law, 94; Gamble v.

Witty, 55 Miss. 35; Stone v. Bean, 15 Gray, 45; Mosher v. Robie, 2 Fairf. 137; Johnson v. Colburn, 36 Vt. 695; Wells v. Burbank, 17 N. H. 412.

It results th at the court below might have given jud gment in each case for the defendant upon the ground that th e assessment, which was t he foundation of the

action, included property of material value which t he state board w as with out jurisdiction to assess, and the tax levied upon which cannot, from the record, be

separated from that imposed upon other property embraced in the same assessment. As the judgment can be sustained upon this ground, it is not necessary to

consider any other question s raised by t he pleadings and the facts found b y the court. [118 U.S. 394, 417] It follows that th ere is no occasion to determinender what circumstances the plaintiffs would be entitled to judgment against a delinquent taxpayer for penalties, interest, or attorney's fees; for, if the

plaintiffs are not entitled to judgment for the taxes arising out of the assessments in question, no liability for penalties, interest, or attorney's fees could result

from a refusal or failure t o pay su ch taxes. Judg ment affirmed.

Footnotes

[ Footnote 1 ] S.C. 18 Fed. Rep. 385 .[ Santa Clara County v. South ern Pac. R. Co. 118 U.S. 394 (1886) ]


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