but it is provided that these are not to be deemed mandatory; that all available evidence must be considered; and that the method of calculation which will best bring about a fair valuation shall be adopted. Art. 7419. to enjoin the collection of the tax as-, is required to submit a preliminary essessed for the year 1915 upon the so- timate of the valuation, and to give called intangible property of the com- the company an opportunity to be pany within that county. The trial court heard thereon, so that changes may denied the relief prayed; and, on de- be made before the valuation is defendants' cross action and a plea in re-clared effective. Some methods of calconvention, entered judgment against the culation are set forth in the statute; plaintiffs for the amount of the tax. The court of civil appeals reversed this judgment and granted the injunction. Tex. Civ. App. -, 197 S. W. 1043. Its judgment was in turn reversed by the supreme court of the state, [139] which affirmed the judgment of the trial court. The board duly submitted its prelimTex. -, 229 S. W. 493. The case inary estimate. This it later amended comes here on writ of error under § 237 upon the discovery of an error. Thereof the Judicial Code, as amended; and upon a hearing was held at which the also on a petition for a writ of certiorari, company introduced evidence. The consideration of which was postponed board adhered to its own estimate as until the hearing on the writ of error. amended. The aggregate assessment for The claims are that the statute under the year 1915 upon this railroad's propwhich the taxes were assessed is obnox-erty within Harris county was $1,709,332. ious to the 14th Amendment; and that Of this amount, $603,227.44 was on inrights guaranteed by it have been denied tangible property. The tax rate was in the administration of the statute. $1.09 per $100 of valuation. Under the laws of Texas, ad valorem taxes for both state and county purposes are laid upon the property of a railroad in every county in which its line is located. The value is determined separately for tangible and for intangible property. The assessment of the tangi- The contention that the statute vioble property is made by county officials. lates the 14th Amendment is wholly The assessment of the intangible prop-without merit. It has long been settled erty is fixed by the state tax board. It that the due process clause does not prevalues the intangible property of the company as a whole; and then apportions the amount among the several counties on a mileage basis. Upon the aggregate of the assessments of the tangible and the intangible property, so made for each county, the tax is laid by the county officials at the rate found to be necessary, and collected by the county's tax collector.1 Intangible values of a railroad company have been declared by the highest court of the state to mean "the values of the railroad properties above the value of its physical assets." Missouri, K. & T. R. Co. v. Shannon, 100 Tex. 379, 390, 10 L.R.A. (N.S.) 681, 100 S. W. 138. Under the statute the value of the intangible is to be determined by deducting the value of the tangible from the value of the entire railroad property. Art. 7420. To enable the state board to determine the values, the company is required to furnish data. Arts. 7415-7419. The board, on the other [140] hand, 1 See 1911. Rev. Civ. Stat. chap. 4, title 126, arts. 7407 to 7426, Act of April 17, 1905, as amended May 16, 1907. See also chaps. 12, 13, title 126. The amount of the tax so laid was $6,605.34. The trial court found that the actual value of the tangible property alone in Harris county was $3,205,202.09; and that the assessment upon this was only 34 per cent of that value. clude a state from taxing the intangible state, 2 See State R. Tax Cases, 92 U. S. 575, 23 L. ed. 663; Indianapolis & St. L. R. Co. v. Vance, 96 U. S. 450, 24 L. ed. 752: Kentucky R. Tax Cases, 115 U. S. 321, 29 L. ed. R. Co. v. Wright, 151 U. S. 470, 38 L. ed. 414, 6 Sup. Ct. Rep. 57; Columbus Southern 238, 14 Sup. Ct. Rep. 396; Western U. Teleg. Co. v. Taggart, 163 U. S. 1, 41 L. ed. 49, 16 Sup. Ct. Rep. 1054: Adams Exp. Co. v. Ohio State Auditor, 165 U. S. 194, 220, 41 L. ed. 683, 695, 17 Sup. Ct. Rep. 305; Adams Exp. Co. v. Kentucky, 166 U. S. 171, 41 L. ed. 960, 17 Sup. Ct. Rep. 527. 3 Kidd v. Alabama, 188 U. S. 730, 732. 47 L. ed. 669, 672, 23 Sup. Ct. Rep. 401; Cream of Wheat Co. v. Grand Forks County, 253 U. S. 325, 330, 64 L. ed. 931, 40 Sup. Ct. Rep. 559. 1928. ror is dismissed. The contention that to review in this proceeding. Southern the due process and equal protection R. Co. v. Watts, 260 U. S. 519, 527, 67 clauses have been violated in adminis- L. ed. 375, 387, 43 Sup. Ct. Rep. 192. tering the statute is rested upon many claims. Two of them are substantial. The writ of certiorari is, therefore, granted. But, for the reasons to be stated, the judgment below must be affirmed. 43 The receivers also contend that the tax is void, under the equal protection clause, because the tangibles were intentionally and systematically assessed by the county authorities at not more than 38 per cent of their actual value, while The company has 1,106 miles of road intangibles were assessed by the state and extends into thirty-seven counties. board at their full value. Where illegal The alleged cost of its "road and equip- discrimination was practised, it is imment" to June 30, 1915, was $46,502,- material whether it was effected by a 041.55; its alleged depreciated value (as single assessing board or through the of two independent boards. of June 30, 1914), $37,243,133.44; its action value as fixed by the railroad commission, Greene v. Louisville & Interurban R. Co. $34,013,092.07. A foreclosure was effect- 244 U. S. 499, 513, 61 L. ed. 1280, 1288, ed in 1911. The reorganization largely 37 Sup. Ct. Rep. 673, Ann. Cas. 1917E, reduced the capitalization, leaving out- 88; Southern R. Co. v. Watts, 260 U. S. 526, 67 L. ed. 375, 387, standing a mortgage debt of only $25,- 519, 239,000, and capital stock of $4,822,000. Sup. Ct. Rep. 192. Under the laws of The net earnings of the company in 1911 Texas the assessments are made by the to 1914 were so small that, if the prop- separate action of two independent erty were capitalized on the basis of 7 boards using different methods, but the per cent, it would appear to have been taxes upon the tangible and the intangi worth less than $30,000,000 in 1912, and ble property of railroads are laid at the in 1914 less than $1,000,000. In the same rate, and are collected by the same latter year the company, unable to pay county officers. It is the settled law of its fixed charges, again passed into re- the state that equitable relief will not ceivers' hands. The state tax board fixed be granted, on the ground of discriminathe value of the physical property in tion, against an excessive assessment of 1915 at $28,372,810, and of the in- either one, if, taking the tax on tangible tangibles at $10,743,233; making the and the tax on intangible property tovalue of the entire property $39,116,033. gether, the taxpayer is not called upon The receivers contend that, even if the to pay, on the average, on a higher peras centage of the actual value than are othvalue of the entire property was found by the state board, the physical er persons and property. Missouri, K. property was undervalued, resulting in & T. R. Co. v. Hassell, 57 Tex. Civ. App. an overvaluation of the intangibles so 522, 123 S. W. 190; Baker v. Druesedow, Tex. 229 S. W. 493. Thus, the gross as to amount to a denial of due There was evidence, taxes on the two kinds of property are process of law. including statements made by the re-treated by its courts as parts [143] of ceivers, which supports the state board's a single ad valorem tax on railroads. valuation. The trial court, upholding Their construction of the state statutes The trial court this valuation, found that it represented is binding upon us. the honest judgment [142] of the state board; and that there was evidence of arbitrary action improper motives on its part. holding of the trial court proved by the highest court of the state. There is no evidence of arbitrary action, of fraud, or of gross error in the system on which the valuation was made, to justify the claim of denial of due process. Pittsburgh, C. C. & St. L. R. Co. v. Backus, 154 U. S. 421, 434, 38 L. ed. 1031, 1039, 14 Sup. Ct. Rep. 1114; Maish v. Arizona, 164 U. S. 599, 610, 41 L. ed. 567, 571, 17 Sup. Ct. Rep. 193. Mere errors of judgment are not subject no or of This was ap 45 per found on adequate evidence that the aggregate assessment placed upon the tangible and the intangible property of the railroad in Harris county was about cent of their aggregate true value, whereas the other property in the county was assessed at about 50 per cent of its true value. Thus the railroad was not, in essence, subjected to any discrimination. Compare Davenport Nat. Bank v. Board of Equalization, 123 U. S. 83, 31 L. ed. 94, 8 Sup. Ct. Rep. 73. The requirement of the equal protection clause was satisfied. Affirmed. 215 EDWARD HINES YELLOW PINE TRUS-, for storage purposes, so as to be entitled TEES et al., Appts., V. UNITED STATES OF AMERICA et al. (See S. C Reporter's ed. 143-149.) Parties suit to set aside order of Interstate Commerce Commission who may maintain. 1. The mere fact that persons injured by an order of the Interstate Commerce to maintain a suit to set aside the order merely because he fears that the order may result in the diversion of the equipment of his intended road from transportation uses. [No. 91.] Argued October 18 and 19, 1923. Decided November 12, 1923. Commission eliminating a penalty chargePPEAL by complainants from a de for detention of railroad cars were not parties to the proceeding in which the order was entered does not constitute a bar to a suit by them to set aside the order on the ground that it is in excess of the power of the Commission. Parties injury must be shown to maintain action. 2. One cannot maintain a suit to set aside an order of the Interstate Commerce Commission on the ground that it was in excess of the power of the Commission unless it subjects him to legal injury, actual or threatened. Parties increase of competition right to relief. 3. A shipper whose necessities do not require the use of railroad cars for storage is not injured by an order of the Interstate Commerce Commission eliminating a per diem penalty for use of cars for that purpose which is not shown to be obnoxious to the railroad companies, merely because it subjects him to more effective competition from business rivals whose necessities require the use of cars for storage purposes. Interstate Commerce Commission right to assail order of. 4. The correctness of the findings upon which an order of the Interstate Commerce Commission is based cannot be assailed in a court proceeding where the evidence on which it was made is not before the court. [For other cases, see Interstate Commerce Commission, IV. in Digest Sup. Ct. 1918 Supp.] Parties suit to set aside order of Interstate Commerce Commission anticipated injury. 5. One planning to construct a railroad is not injured by an order of the Interstate Commerce Commission eliminating the per diem penalty for using cars Note.-On parties to appellate proceedings in Federal Supreme Court-see note to Owings v. Kincannon, 8 L. ed. U. S. 727; and Amadeo v. Northern Assur. Co. 50 L. ed. U. S. 723. On jurisdiction and power of Interstate Commerce Commission-see note to United States v. Tozer, 2 L.R.A. 446. As to who is real party in interest within meaning of statutes defining parties by whom actions must be brought-see note to Stewart v. Price, 64 L.R.A. 581. cree of the District Court of the United States for the Northern District of Illinois dismissing a bill filed to set aside an order of the Interstate Commerce Commission. Affirmed. The facts are stated in the opinion. Mr. William S. Bennet argued the cause, and, with Messrs. Homer J. Smith and Edward W. McGrew, filed a brief for appellants: A shipper has a general right to maintain an action to set aside any order of the Commission which interferes with his rights as a shipper. McLean Lumber Co. v. United States, 237 Fed. 460; Interstate Commerce Commission v. Diffenbaugh, 222 U. S. 42, 49, 56 L. ed. 83, 88, 32 Sup. Ct. Rep. 22. Appellant has a recognized standing as a common carrier, subject to the Interstate Commerce Act, and as such it has a further interest, as a transportation matter, in having the Commission's order set aside. Tap Line Cases (United States v. L. ed. 1185, 34 Sup. Ct. Rep. 741; CaldLouisiana & P. R. Co.) 234 U. S. 1, 58 well v. Richmond & D. R. Co. 89 Ga. 550, 15 S. E. 678; Interstate Commerce Commission v. Chicago, R. I. & P. R. Co. 218 U. S. 88, 109, 54 L. ed. 946, 957, 30 Sup. Ct. Rep. 651; Ocmulgee River Lumber Co. v. Ocmulgee Valley Lumber Co. 251 Fed. 161; St. Louis v. Knapp, S. & Co. 104 U. S. 658, 26 L. ed. 883. Cancelation of the penalty charge by order of the Commission works irreparable injury. V. American Paper & Pulp Asso. Baltimore & O. R. Co. 41 Inters. Com. Rep. 512; Car Peddling Case, 45 Inters. Com. Rep. 500. The Commission, as a quasi judicial body, has no authority to issue an order not based on evidence. Interstate Commerce Commission v. Louisville & N. R. Co. 227 U. S. 88, 57 L. ed. 431, 33 Sup. Ct. Rep. 185; Interstate Commerce Commission v. Union P. R. Co. 222 U. S. 541, 546, 56 L. ed. 308, 311, 32 Sup. Ct. Rep. 108; Florida East Coast R. Co. v. United States, 234 U. S. 167, 58 L. ed. 1267, 34 Sup. Ct. Rep. 867. The order of the Commission creates unjust discrimination. Union P. R. Co. v. Updike Grain Co. 222 U. S. 215, 56 L. ed. 171, 32 Sup. Ct. Rep. 39; Reconsignment Case, 47 Inters. Com. Rep. 633; Northern Potato Traffic Asso. v. Great Northern R. Co. 58 Inters. Com. Rep. 360; Kidston v. Delaware. L. & W. R. Co. 74 Inters. Com. Rep. 139; Dodge Bros. v. Director Gen. 62 Inters. Com. Rep. 689; Huffman Bros. Motor Co. v. New York C. R. Co. 74 Inters. Com. Rep. 672; Seaboard Air Line R. Co. v. New Orleans Export Co. 271 Fed. 861; Interstate Commerce Commission v. Baltimore & O. R. Co. 225 U. S. 326, 56 L. ed. 1107, 32 Sup. Ct. Rep. 742, Ann. Cas. 1914A, 504; Re Leases & Grants by Carriers to Shippers, 73 Inters. Com. Rep. 672; Interstate Commerce Commission v. Chicago, R. I. & P. R. Co. 218 U. S. 88, 103, 54 L. ed. 946, 955, 30 Sup. Ct. Rep. 651. The order of the Commission is not in the public interest, so as to keep the railroad in effective operation. common car not then functioning as Liverpool & G. W. Steam Co. v. Phenix Ins. Co. (The Montana) 129 U. S. 397, 32 L. ed. 788, 9 Sup. Ct. Rep. 469; Express Cases, 117 U. S. 1, 29 L. ed. 791, 6 Sup. Ct. Rep. 542, 628; New York C. R. Co. v. Lockwood, 17 Wall. 357, 21 L. ed. 627, 10 Am. Neg. Cas. 624; Elliott, Railroads, 2d ed. § 1396; Santa Fe, P. & P. R. Co. v. Grant Bros. Constr. Co. 228 U. S. 177, 57 L. ed. 787, 33 Sup. Ct. Rep. 474; Baltimore & O. S. W. R. Co. v. Voigt, 176 U. S. 498, 44 L. ed. 560, 20 Sup. Ct. Rep. 385; Elliott, Railroads, § 1396; New York C. R. Co. v. Lockwood, 17 Wall. 357, 21 L. ed. 627, 10 Am. Neg. Cas. 624; United States v. Erie R. Co. 166 Fed. 352; Elliott, Railroads, 3d ed. § 2322; Ex parte Alabama G. S. R. Co. 206 Ala. 400, 19 A.L.R. 978, 90 So. 502; Re Central Elevator & Warehouse Co. 72 Inters. Com. Rep. 176; Chesapeake & O. Coal & Coke Co. v. Toledo & O. C. R. Co. 158 C. C. A. 205, 245 Fed. 917; Empire Refineries v. Guaranty Trust Co. 271 Fed. 668; Norfolk & W. R. Co. v. Clement, 90 Va. 393, 22 L.R.A. 534, 44 Am. St. Rep. 916, 18 S. E. 673. broader than the issues involved; it is an arbitrary finding, without evidence, and therefore void. New England Divisions Case (Akron, C. & Y. R. Co. v. United States) 261 U. S. 184, 67 L. ed. 605, 43 Sup. Ct. Rep. 270; Pittsburgh & O. Min. Co. v. Balti- The finding of the Commissionmore & O. R. Co. 40 Inters. Com. Rep. "There is now a large surplus of service409; Re Coal from Arkansas, 49 Inters. able empty cars, and, generally speakCom. Rep. 727; Chicago & N. W. R. Re-ing, no congestion in the country"-is consignment Rules, 25 Inters. Com. Rep. 623; New Orleans Storage Rules, 28 Inters. Com. Rep. 605; Wilson Produce Co. v. Pennsylvania R. Co. 14 Inters. Com. Rep. 175; Detroit Traffic Asso. v. Lake Shore & M. S. R. Co. 21 Inters. Com. Rep. 261; Car Peddling Case, 45 Inters. Com. Rep. 500; Reconsignment Case, 47 Inters Com. Rep. 624; Re Car Storage Case, 12 Inters. Com. Rep. 570; Cedar Hill Coal & Coke Co. v. Colorado & S. R. Co. 16 Inters. Com. Rep. 387; St. Louis Hay & Grain Co. v. Mobile & O. R. Co. 11 Inters. Com. Rep. 90; Doran v. Nashville, C. & St. L. R. Co. 33 Inters. Com. Rep. 529; C. N. Dietz Lumber Co. v. Atchison, T. & S. F. R. Co. 22 Inters. Com. Rep. 75; Re New York Harbor Storage, 47 Inters. Com. Rep. 141; Farmers' Loan & T. Co. v. Northern P. R. Co. 83 Fed. 252; Interstate Commerce Commission v. Louisville & N. R. Co. 73 Fed. 409; Pennsylvania R. Co. v. United States R. Labor Bd. 261 U. S. 72, 67 L. ed. 536, 43 Sup. Ct. Rep. 278. Railroads, by permitting a shipper to use their idle cars as a warehouse, or as a place for vending their contents, are V. Carroll v. Carroll, 16 How. 275, 287, 14 L. ed. 936, 941; Rush v. French, 1 Ariz. 99, 25 Pac. 825; Re Woodruff, 96 Fed. 321; Interstate Commerce Commission v. Louisville & N. R. Co. 227 U. S. 88, 57 L. ed. 431, 33 Sup. Ct. Rep. 185; Interstate Commerce Commission Union P. R. Co. 222 U. S. 541, 546, 56 L. ed. 308, 311, 32 Sup. Ct. Rep. 108; Florida East Coast R. Co. v. United States, 234 U. S. 167, 58 L. ed. 1267, 34 Sup. Ct. Rep. 867; Philadelphia & R. R. Co. v. United States, 240 U. S. 334, 60 L. ed. 675, 36 Sup. Ct. Rep. 354; Meeker v. Lehigh Valley R. Co. 236 U. S. 412, 59 L. ed. 644, P.U.R.1915D, 1072, 35 Sup. Ct. Rep. 328, Ann. Cas. 1916B, 691; Security Mut. L. Ins. Co. v. Prewitt, 200 U. S. 446, 50 L. ed. 545, 26 Sup. Ct. Rep. 314; Tyler v. Judges of Ct. of Registration, 179 U. S. 409, 45 L. ed. 254, 21 Sup. Ct. Rep. 206. The Commission, by its order and the unreasonable exercise of its powers, has perpetuated a condition that deprives appellant of its property without due authority conferred, although it may process of law, and takes its property not technically do so. for the private use of another without just compensation, in violation of the 5th Amendment of the Constitution. Lake Shore & M. S. R. Co. v. Smith, 173 U. S. 684, 690, 43 L. ed. 858, 861, 19 Sup. Ct. Rep. 565; F. H. Peavy & Co. v. Union P. R. Co. 176 Fed. 409, affirmed in 222 U. S. 42, 56 L. ed. 83, 32 Sup. Ct. Rep. 22; Interstate Commerce Commission v. Illinois C. R. Co. 215 U. S. 452, 54 L. ed. 280, 30 Sup. Ct. Rep. 155; Interstate Commerce Commission v. Stickney, 215 U. S. 98, 54 L. ed. 112, 30 Sup. Ct. Rep. 66; Missouri, K. & T. R. Co. v. Interstate Commerce Commission, 164 Fed. 648; Monongahela Nav. Co. v. United States, 148 U. S. 312, 343, 37 L. ed. 463, 474, 13 Sup. Ct. Rep. 622; West v. Kansas Natural Gas Co. 221 U. S. 229, 253, 55 L. ed. 716, 725, 35 L.R.A. (N.S.) 1193, 31 Sup. Ct. Rep. 564; Buchanan v. Warley, 245 U. S. 60, 74, 62 L. ed. 149, 160, L.R.A.1918C, 210, 38 Sup. Ct. Rep. 16, Ann. Cas. 1918A, 1201. Assistant to the Solicitor General Blackburn Esterline argued the cause and filed a brief for the United States. Mr. P. J. Farrell argued the cause and filed a brief for the Interstate Com merce Commission: Appellant has not, in and by its bill of complaint, shown such an interest in the subject-matter of the order of February 11, 1922, as is necessary to enable it to maintain this suit. Interstate Commerce Commission v. Chicago, R. I. & P. R. Co. 218 U. S. 88, 109, 54 L. ed. 946, 957, 30 Sup. Ct. Rep. 651; Clark v. Kansas City, 176 U. S. 114, 44 L. ed. 392, 20 Sup. Ct. Rep. 284; Smiley v. Kansas, 196 U. S. 447, 49 L. ed. 546, 25 Sup. Ct. Rep. 289. There is no equity in the bill of complaint. Procter & G. Co. v. United States, 225 U. S. 282, 56 L. ed. 1091, 32 Sup. Ct. Rep. 761. Mr. Joseph E. Davies, by special leave, argued the cause, and, with Messrs. Franklin D. Jones and Raymond N. Beebe, filed a brief for appel lee the American Wholesale Lumber Association: V. Procter & G. Co. v. United States, 225 U. S. 282, 297, 56 L. ed. 1091, 1096, 32 Sup. Ct. Rep. 761; Manufacturers R. Co. v. United States, 246 U. S. 457, 481, 482, 62 L. ed. 831, 844, 38 Sup. Ct. Rep. 383; Interstate Commerce Commission Louisville & N. R. Co. 227 U. S. 88, 91, 57 L. ed. 431, 433, 33 Sup. Ct. Rep. 185; Interstate Commerce Commission Union P. R. Co. 222 U. S. 541, 547, 56 L. ed. 308, 311, 32 Sup. Ct. Rep. 108; Interstate Commerce Commission v. Illinois C. R. Co. 215 U. S. 452, 469, 54 L. ed. 280, 287, 30 Sup. Ct. Rep. 155. V. The order is not a violation of the Constitution. Tayloe v. Sandiford, 7 Wheat. 13, 15, 5 L. ed. 384, 385; Sullivan Lumber Co. v. Great Northern R. Co. 58 Inters. Com. Rep. 111; Lowry Lumber Co. v. Director Gen. 58 Inters. Com. Rep. 113, 59 Inters. Com. Rep. 90; Reconsignment Case No. 3, 53 Inters. Com. Rep. 469; Re Advances in Demurrage Charges, 25 Inters. Com. Rep. 315. The constitutional guaranty of due process of law assures the citizen due notice and hearing by a competent tribunal. ed. 1165, 21 Sup. Ct. Rep. 836; Ex parte Simon v. Craft, 182 U. S. 427, 45 L. Stricker, 109 Fed. 150; Charles Marion, 98 Fed. 168. The power does not reside in a government to confer authority on private parties to assess penalties, even by express statute, much less by government regulations. Goldberg, 72 N. J. L. 214, 70 L.R.A. 156, Cigarmakers' International Union v. 111 Am. St. Rep. 662, 61 Atl. 457; Louisville School Bd. v. King, 127 Ky. 824, 15 L.R.A. (N.S.) 379, 107 S. W. 247. order of the Commission would not have The continuance of the penalty by such penalty was special, partial, and constituted due process of law, in that arbitrary, and did not operate on all alike. Caldwell v. Texas, 141 U. S. 209, 35 L. ed. 718, 11 Sup. Ct. Rep. 883, 137 U. 226; Leeper v. Texas, 139 U. S. 462, 35 S. 692, 34 L. ed. 816, 11 Sup. Ct. Rep. L. ed. 225, 11 Sup. Ct. Rep. 579; French v. Barber Asphalt Paving Co. 181 U. S. Connolly v. Union Sewer Pipe Co. 184 324, 45 L. ed. 879, 21 Sup. Ct. Rep. 626; U. S. 540, 46 L. ed. 679, 22 Sup. Ct. Rep. 439. An order of the Interstate Commerce Commission can be enjoined only when it is (a) unconstitutional; (b) beyond the statutory authority of the Commission; or (c) an arbitrary exercise of power which virtually transcends the Į Minnesota Rate Cases (Simpson v. The order is not beyond the statutory powers of the Commission. |