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and enjoined the collection of such tax, and | laid and apportioned between the state and required the state treasurer to execute a re-county, etc., by the defendants, the state ceipt in full to the complainant, which had auditor, who is one of them, certifies to the paid the amount of the tax which it regard-county clerks their proportion of the tax. ed as justly due. Reversed.

The bill prays for an injunction against See same case below, 131 Fed. 282.

such an apportionment and certification, and The facts are stated in the opinion. also against collection by the officers of the

Messrs. William 0. Davis, Henry L. state. There was a general demurrer to the Stone, and Napoleon B. Hays for appel- bill, and an answer and replication. The delants.

murrer was overruled. Much evidence was Messrs. James P. Helm and Helm Bruce taken, and at the final hearing a decree was for appellee.

entered by the circuit court enjoining the

defendants as prayed, and requiring the deMr. Justice Holmes delivered the opin- fendant Hager, treasurer of the state, to exeion of the court:

cute a receipt in full of the state taxes on This is a bill brought by the railroad com- the franchise for 1902, the plaintiff having pany, appellee, a Kentucky corporation, paid the sum which was due on its view of against citizens of Kentucky, the members the case. 131 Fed. 282. The defendants apof the state board of valuation and assess- pealed to this court. It may be assumed ment, and, respectively, auditor of public from an affidavit filed, if not from the pleadaccounts, treasurer, and secretary of state. ings that the amount in controversy is over The only ground of jurisdiction alleged is $2,000. See United States v. Trans-Missouri that, under the tax laws of the state of Ken-Freight Asso. 166 U. S. 290, 310, .1 L. ed. tucky, as administered by its executive offi- | 1007, 1017, 17 Sup. Ct. Rep. 540. cers, the railroad company is deprived of the From a consideration of different kinds of equal protection of the laws, contrary to the evidence the circuit court reached the con14th Amendment. The Constitution of the clusion that the county assessors had sys. state requires all. property not exempted tematically and intentionally undervalued from taxation to be assessed at its fair cash the property assessed by them. In the first value; but the bill alleges that the county place it found a settled habit of undervalu. assessors uniformly assess the property as- ing, recognized by the legislature and the sessed by them, which is the great body of state court, before the adoption of the Contangible property in the state, below its stitution of 1891, which required the fair cash value. It alleges that, in like manner, cash value to be assessed. It found that the board of equalization equalizes the coun- while the value of land had increased or, at ty assessments at a percentage not above 80 least, had not diminished since 1891, the per cent of the fair cash value of the prop- assessments had varied very little, while erty taxed. On the other hand the defend those of 1891 were not more than 70 per ants, who assess the franchise tax on the cent of the value at any time. It considrailroad company, are alleged to have as-ered testimony that from 1893 to 1896 the sessed the company's property in Kentucky assessinents were equalized at 70 per cent, at its full value, viz., $33,788,724.50, for the following earlier statutes, notwithstanding year 1902, and then, deducting the tangible the Constitution of 1891. It then compared property locally taxed, $23,103,825, to have tabulated statements of sales in the different made the taxable franchise $10,774,899.50. counties, which were required by statute to Whereas, if 80 per cent of the value of the be furnished to the board of equalization, company's property had been taken, then, with the local assessments and with the rededucting as before, the taxable franchise sults reached by the last-named board. It would be only a little over $4,000,000. thus found an additional and independent

The railroad company contends that when reason for believing that there was systemthere is a uniform and general undervalua- atic undervaluation in the counties, and it tion of other property, then the only way inferred from comparisons and from testiin which the company can be put on an mony to that effect that the board paid litequality with other taxpayers is by a similar tle attention to the tabulated statements, undervaluation in its case. The railroad even on a basis of 80 per cent, but really company contends further that although was governed by the assessment of the previ. this contravenes the letter of the statute, ous year. Finally, it confirmed its conthe requirement of equality so far out- clusions by direct testimony as to the pracweighs the requirement of a tax on the full tice in certain counties and the rules pracvalue of property, that if, by misconduct tically adopted by the board. The reasoning elsewhere, both cannot be observed, the rule is careful and elaborate, and cannot be read of equality must prevail. It should be men without an impression that probably it is tioned that the franchise tax is both state correct to the extent of establishing a genand local, and that after the same has been 'eral undervaluation of land.

On the other hand, there was testimony | hand, in a proper case, a bill may be brought that the statements of sales did not afford to restrain apportionment and certification satisfactory evidence of average values, or to the counties. Fargo v. Hart, 193 U. S. at least, for various reasons, were not re- 490, 495, 503, 48 L. ed. 761, 764, 767, 24 garded by the board of equalization as af- Sup. Ct. Rep. 498. The question is whether fording it. Most of the members of the such a case has been made out, and we may board testified that they tried in good faith assume, for purposes of decision, without deto reach fair cash values, and there were ciding, that, if we otherwise agreed with the many affidavits to a like effect as to the railroad company's contention, the injuncpast and present conduct of the county as- tion might be granted, although the fransessors. It was sworn that, so far as per chise was valued as the law requires in centages of the reported sales were used, every respect except in the proportion they were used on an estimate of what pro which the assessment bore to the other portion actual values would bear to the sums valuations. The decisions are not agreed named in the deeds. The circuit court, upon this point. while regarding it as the condition of equi- We have stated as much as we deem necestable relief that the property other than sary to the answering of the question just that of the plaintiff should have been under-put. It must be obvious on even that short valued systematically and intentionally, statement how uncertain are the elements hardly dealt with this evidence in its bear of the evidence, and in what unusual paths ing on the question of intent. Yet, of course, it moves. On the face of their records the no court would venture to intervene merely proceedings of the defendants, of the county on the ground of a mistake of judgment on assessors, and of the equalizing board al} the part of the officer to whom the duty of are regular. If it be a fact that the franassessment was intrusted by the law. chise of a Kentucky corporation is taxed at

The other half of the plaintiff's case is a different rate from the tangible property that its franchise was valued at its full in the state, there can be no question that cash value. It might even require consid- the state had power to tax it at a different eration, if necessary, whether it ought not to rate, so far as the Constitution of the United be shown further that the appellants, in States is concerned. Bell's Gap R. Co. v. valuing the franchise, consciously adopted Pennsylvania, 134 U. S. 232, 33 L. ed. 892, a different standard from that which they 10 Sup. Ct. Rep. 533; Merchants' & M. Nat. understood to be adopted in the counties. Bank v. Pennsylvania, 167 U. S. 461, 464, On the foregoing questions one of the three 42 L. ed. 236, 237, 17 Sup. Ct. Rep. 829; appellants testified that he had dissented Magoun v. Illinois Trust & Sav. Bank, 170 from the majority on several occasions, be- U. S. 283, 295, 42 L. ed. 1037, 1043, 18 Sup. lieving that the assessments were higher Ct. Rep. 594. It is doubtful, at least, if than those for other kinds of property, and any further question should have been asked that he understood that the majority as in this case.

- in this case. Missouri v. Dockery, 191 U. sessed the franchise at its full value. One S. 165, 48 L. ed. 133, 63 L. R. A. 571, 24 testified that he thought at the time, and Sup. Ct. Rep. 53. But as the claim of right still thought, that the franchise was valued under the United States Constitution was lower than it ought to be. The third was not merely colorable (Penn. Mut. L. Ins. Co. not explicit, but showed that the valuation v. Austin, 168 U. S. 685, 695, 42 L. ed. 626, was reduced after hearing. Different well- 630, 18 Sup. Ct. Rep. 223), and as the evi. known modes were used in approaching the dence is here, we have considered the evi. valuation, but probably there was an ele- dence also, and our conclusion from that, as ment of arbitrary judgment at the end. well as from the law, is that the bill must This certainly was the case in regard to the be dismissed. proportion of mileage in the state, which, Looking first at the assessment of the by the statutes, was to “be considered” in franchise, there is no such certainty that fixing the value of the franchise, and which it was made on a different scale of values the appellants contend was underestimated from that adopted elsewhere as would warso much as to compensate for any other mis- rant an attack upon it under the 14th take, if there was any, which is denied. Amendment, even if otherwise that attack

We need not stop to show that so much of could be maintained. But the supposed inthe bill as seeks an injunction against col-fringement of the 14th Amendment is the lecting the state tax, and the portion of the only ground on which the railroad company decree which orders a receipt to be executed could come into the circuit court, and if that on the part of the state, cannot be main ground fails, and obviously fails, the court tained. See Coulter v. Weir, 62 C. C. A. should be very cautious, at least, in interfer429, 127 Fed. 897, 906, 912. On the other 'ing with the state's administration of its

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(196 U. S. 611) taxes upon other considerations which would | SCOTTISH UNION & NATIONAL INSURnot have given it jurisdiction.

ANCE COMPANY, Appt., The undervaluation in the counties, looked at from the point of view just indicated, WILLIS G. BOWLAND, as Treasurer, and also does not appear to have been such as to L. Ewing Jones, as Auditor of Franklin warrant the action of the court. It is not

County, Ohio; Arthur I. Vorys, as Supercontended that a mere undervaluation would intendent of Insurance, and William S. be enough. It is admitted that it must have

McKinnon, as Treasurer of the State of been systematic and intentional. There is, Ohio. (No. 360.) no doubt, a natural inclination to think such an undervaluation probable when it is sug- WILLIS G. BOWLAND, as Treasurer, and gested. But what is the proof? The state L. Ewing Jones, as Auditor of Franklin Constitution, whatever the statutes may County, Ohio, et al., Appts., have said, seems popularly to have been understood to have made a great change in the SCOTTISH UNION & NATIONAL INSURlaw. Practice before its adoption, there

ANCE COMPANY. (No. 361.) fore, hardly can raise a presumption as to practice afterwards, even on the liberal as

State taxation of foreign corporationsumption that it properly could be consid

bonds deposited with state official-exered in evidence. It is obvious that the ac

emptionsdue process of law in collection cidental sales in a given year may be a mis- of taxes distraint - equity adequate leading guide to average values, apart from

remedy at law. the testimony that some, at least, of the conveyances did not report true prices, yet they 1. Bonds in which a foreign insurance company furnish the chief weapon of attack. The is required by Ohio Rev. Stat. § 3660, as a testimony as to the board of equalization

condition of doing business in Ohio, to invest

a portion of its capital stock, to be deposited taking 80 per cent of the reported sales was

with the superintendent of insurance, for the explained by the members of the board. It

protection of the local policy holders, are would be going very far to assume that they “personal property" within the meaning of g were committing perjury because, to another 2744, requiring insurance companies to list

for taxation all their personal property, mind, the sales seemed more significant and

which, by, the terms of that section, is to in. the explanations not very good. Inequality,

clude moneys and credits within the state, we repeat, is nothing, unless it was in pur- and is also defined in § 2730 as including the suance of a cheme. To make out that

capital stock, although the taxation of "inscheme the anomalous course was followed of

vestments in bonds” provided for in 38 2730,

2731, extends only to such securities as are in putting members of a tribunal established the hands of individual residents, owned by by law upon the witness stand to testify to theniselves or held by them for others, since the operations of their minds in doing the these last sections were not intended to limit work intrusted to them. Fayerweather v.

other sections of the tax law, but were en

acted to carry out a general purpose to tax all Ritch, 195 U. S. 276, 306, 307, ante, p. 58, personal property within the state. 25 Sup. Ct. Rep. 58.

But the prevailing 2. The imposition of a privilege tax on foreign testimony was that no such scheme was en

insurance companies by Ohio Rev. Stat., À tertained.

2745, does not bring such companies within Whatever we may surmise or apprehend,

the exception from the operation of g. 2744 making allowance for a certain vagueness of

which that section makes in favor of corpora

tions whose taxation elsewhere is specifically ideas to be expected in the lay mind, for the

provided for, and hence does not relieve them reasonable differences of opinion among the from the duty, under that section, to return most instructed and competent men, and for

for taxation bonds deposited by them with the uncertainty of the elements from which a

the superintendent of insurance for the protec

tion of the local policy holders, as a condition judgment was to be formed in the first in

of doing business in Ohio. stance, considering the still greater uncer

Due process of law is not denied a foreign tainty of those from which the local judg- insurance company by distraining its personal ment must be controlled, if at all, by persons property under the authority of Ohio Rev.

Stat. § 1095, to satisfy personal taxes law. having only, the printed record before them,

fully levied. considering further that to maintain the bill

4. The exemption of United States bonds from imputes perjury to many witnesses whose

state taxation does not prevent their discharacter is not impeached, and, finally, re- traint, under Ohio Rev. Stat. § 1095, to satcalling once more that we are dealing with a

isfy taxes lawfuily levied on unexempt perof local policy holders, as a condition of do- | Franklin county, Ohio, until withdrawn on ing business in the state, when made before April 2, 1903, when United States bonds

sonal property of the owner of such bonds. case that properly was not cognizable in the

5. The lawful substitution by a foreign insurcircuit court, we are of opinion that the

ance company of United States bonds in place bill must be dismissed.

of municipal bonds deposited by it with the Decree reversed.

superintendent of insurance for the protection

were substituted therefor. list its property for taxation for a certain year, prevents the levy of any tax thereon for

The insurance company is transacting the that year.

business of insurance in Ohio, but it avers 6. Equity will not Interfere by injunction with that its home office is in the city of Edin

the prosecution of civil suits against a foreign burgh, Scotland, and its chief office and corporation to recover taxes levied on its per managing agency for this country is at sonal property within the state, on the ground Hartford, Connecticut, from which office it that the corporation is not personally liable therefor, since this objection may be set up as conducts its business in Ohio. a defense by answer in the actions at law. Acting under the Ohio statute, & 27810

(94 Ohio Laws, 62), the auditor of Frank. [Nos. 360, 361.)

lin county, by notice served on one of the

local agents of the Scottish Union & NaArgued January 4, 5, 1905. Decided Feb- tional Insurance Company, notified it to apruary 20, 1905.

pear and show cause why the said bonds

should not be taxed against it on the dupliCR ROSS APPEALS from the United States cate of Franklin county, Ohio, and taxes col

Circuit Court for the Southern District lected thereon for the years 1895 to 1900, inof Ohio to review a decree holding liable to clusive. The auditor entered upon the tax taxation municipal bonds deposited by a for- duplicate taxes against the insurance comeign insurance company with the superin- pany for $2,700 each for the years 1895 to tendent of insurance as a condition of doing 1897, inclusive, and $2,750 each for the years business in Ohio, except so far as such taxes 1898 to 1900, inclusive, and 5 per cent penwere levied when United States bonds had alty thereon. On November 15, 1900, the been substituted before the time for return treasurer of Franklin county brought a ing property for taxation, and refusing to civil action against the company for taxes restrain the execution of a distress warrant, so assessed. This action, at the time of the though enjoining the collection of the taxes filing of the bill, was still pending in the by civil actions. Reversed for error in en- court of common pleas of Franklin county, joining the prosecution of the civil actions Ohio. to collect the taxes, and remanded for fur- On December 4, 1903, another notice was ther proceedings.

served upon the company, through its local

agent, and the auditor entered taxes against Statement by Mr. Justice Day:

such company for the years 1901, 1902, and These cases are cross appeals from a de 1903, in all, the sum of $8,935.50. On April cree rendered in the circuit court upon bill 2, 1904, the treasurer of Franklin county and demurrer. The Scottish Union & Na procured a warrant of distraint, and upon tional Insurance Company, a corporation of such warrant demanded of the superintendGreat Britain, filed its bill to enjoin the de- ent of insurance and the state treasurer the fendants, Willis G. Bowland, treasurer, and United States bonds so substituted on April L. Ewing Jones, auditor, of Franklin county, 2, 1903, for such municipal bonds, for the Ohio; Arthur I. Vorys, superintendent of in- purpose of seizing and selling the same to surance, and William S. McKinnon, treas- satisfy the taxes which had been assessed urer, of the state of Ohio, from the collection against the company with respect to the of taxes levied on certain bonds deposited by municipal bonds for the years 1895 to 1900, the complainant under the laws of Ohio inclusive. It is averred that to permit the regulating the right of foreign insurance collection of these taxes by suit for personal companies to do business in that state. It judgment or distraint will be violative of appears from the averments of the bill that complainant's treaty rights as a subject of the bonds were deposited under § 3660 of Great Britain, and will be taking complainthe Revised Statutes of Ohio, as amended in ant’s property without due process of law, 1894. 91 Ohio Laws, 40. They were munic- in violation of the 14th Amendment to the ipal bonds of the county of Lucas and state Constitution of the United States. of Ohio. Fifty thousand dollars thereof was The prayer of the bill is that the defend. deposited on September 14, 1894, and $50,- ant the treasurer of Franklin county be re000 on November 7, 1894. The bonds were strained from collecting or attempting to registered in the name of the superintendent collect any of the taxes against the comof insurance, in trust, for the benefit and plainant personally; that the said treasurer security of the policy holders of the insur- be restrained from collecting or attempting ance company, residing in Ohio, and were to collect said taxes or any portion of them delivered by him to the state treasurer for by distraint against either such bonds of safe keeping, and remained in the office of the United States so deposited or any perthe treasurer of the state at Columbus, 'sonal property of complainant which may

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now or hereafter be situated in the county | senting the insurance company conceded of Franklin or in the state of Ohio; that the that there was legislative power to impose defendants the superintendent of insurance the taxes in question. A reference to the and treasurer of the state of Ohio be en-decisions of this court makes it perfectly joined from delivering or attempting to de- plain that such taxation is within the power liver said United States bonds or any part of the state. New Orleans v. Stemple, 175 thereof to the said county treasurer, and for U. S. 309, 44 L. ed. 174, 20 Sup. Ct. Rep. such other relief as equity and good con- 110; Bristol v. Washington County, 177 U. science may require.

S. 133, 44 L. ed. 701, 20 Sup. Ct. Rep. 585; The respondents having interposed de- Blackstone v. Miller, 188 U. S. 189, 47 L. ed. murrers to the bill, the court held that the 439, 23 Sup. Ct. Rep. 277; State Assessors v. municipal bonds on deposit in Ohio were Comptoir National D’Escompte, 191 U. S. subject to taxation under the laws of the 388, 403, 48 L. ed. 232, 238, 24 Sup. Ct. Rep. state; that there was no personal liability 109; Carstairs v. Cochran, 193 U. S. 10, of the complainant on account of said taxes, 48 L. ed. 596, 24 Sup. Ct. Rep. 318. and therefore a civil action to recover the The contention for the company is, that taxes should be enjoined; that for the year conceding the power of the state, it has 1903 the collection of taxes could not be en- never been exercised in the only way to forced, as the United States bonds were make it effectual, which is by statutory ensubstituted before the time for returning actment, and that the policy and statutes property for that year; that the bonds of Ohio have never authorized taxation of might be seized by distraint to satisfy the bonds deposited under the conditions shown taxes levied upon the municipal securities in this case. for the years they were on deposit, and the The question therefore, is, Have the statcourt therefore refused to enjoin the execu- utes of Ohio, read in the light of the contion of the distress warrant except for the struction placed upon them by the supreme taxes and penalty for the year 1903, and court of the state, conferred the right to tax rendered a decree enjoining the collection of these municipal bonds?

? the taxes by civil action.

Before entering upon a consideration of

a Both parties appealed; the company from the statutes we may say, in general terms, so much of the decree as permitted distraint that we agree with the learned counsel for of the United States securities for the col- the insurance company, that the scheme of lection of taxes levied with respect to the taxation of personal property in Ohio inmunicipal bonds, the treasurer and auditor volves the requirement that it shall be reof Franklin county from so much of the de- turned or listed by some person or corporacree as denies the right of the state to prose- tion whose duty it is by law to return or list cute a civil action against the company to such property. Provision is not made for recover the taxes aforesaid, and from so assessing or taxing personal property by promuch thereof as restrained the officials from ceedings in rem, but before a recovery for attempting to collect the taxes assessed taxes can be justified, either by action or against the municipal bonds for the year distraint, it must appear that it was re1903.

quired to be returned for the purpose of

taxation under some law of the state. Messrs. Judson Harmon, Hartwell The proceedings under which the taxes for Cabell, and W. 0. Henderson for the Scot- the years included in this case were charged tish Union & National Insurance Company. against the insurance company by the audi

Messrs. Augustus T. Seymour, Edward tor of Franklin county are under a statute L. Taylor, Jr., Karl T. Webber, Thomas N. (Ohio Rev. Stat. § 2781a) having for its Ross, and Wade H. Ellis for Bowland et al. purpose the correction of returns by those

whose duty it was to return property for Mr. Justice Day, after making the fore- taxation, and making correction of returns going statement, delivered the opinion of the so as to include property which should have court:

been returned, but had been omitted, by These cases may be considered together, as some person charged by law with that duty. they are appeals from a single decree, and Was it the duty of the insurance company involve the right to assess and collect taxes or any one acting for it to return these muupon the municipal bonds deposited by the nicipal bunds for taxation? They were reinsurance company under the laws of Ohio. quired to be deposited under § 3660, Ohio

A considerable part of the opinion of the Rev. Stat. as amended, which reads as folcourt below and the discussion in the briefs lows: of counsel goes to the question of the power "Sec. 3660.

. 3660. [Certain

[Certain companies must of the state to tax bonds, held as these were, make deposit.] A company incorporated within its jurisdiction. At the oral argu- by, or organized under, the laws of a forment, however, the learned counsel repre- 'eign government, shall deposit with the so

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