Corporate Personhood – SANTA CLARA COUNTY v. SOUTHERN PACIFIC – The RailRoading of America
Who Framed Roger Rabbit; an allegory of the 1886 Court Case that destroyed the State Corporate Charter System and Allowed the total Confiscation of the public domain by the Hoodwink of Corporate Personhood, aka Judge Doom.
SANTA CLARA COUNTY v. SOUTHERN PAC. R. CO., 118 U.S. 394 (1886)
Full Text (link)
COUNTY OF SANTA CLARA
SOUTHERN PAC. R. CO.
PEOPLE OF THE STATE OF CALIFORNIA
CENTRAL PAC. R. CO.
SOUTHERN PAC. R. CO.
Filed May 10, 1886
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 county and state taxes claimed to be due from the Southern Pacific Railroad Company and the Central Pacific 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 by Santa Clara county the amount claimed is $13,366.53 for the fiscal year of 1882. For that sum, with 5 per cent. penalty, interest at the rate of 2 per cent. per month from December 27, 1882, cost of advertising, and 10 per cent. for attorney’s fees, judgment is asked against the Southern Pacific Railroad Company. In the other action against the same company the amount claimed is $5,029.27 for the fiscal year of 1881, with 5 per cent. added for non-payment of taxes and costs of collection.
In the action against the Central Pacific Railroad Company judgment is asked for $25,950.50 for the fiscal year of 1881, with like penalty and costs of collection.
The answer in each case puts in issue all the material allegations of the complaint, and sets up various special defenses, to which reference will be made further on. With its answer the defendant, in each case, filed a petition, with a proper bond, for the removal of the action into the circuit court of the United States for the district, as one arising under the constitution and laws of the United States. The right of removal was recognized by the state court, and the action proceeded in the circuit court.
The general question to be determined is whether the judgment can be sustained upon all or either of the grounds upon which the defendants rely.
The case as made by the pleadings and the special finding of 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 continuous railroad and telegraph line from Springfield, Missouri, to the Pacific. 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 of way over the public domain was given to the company, and a liberal grant of the public lands was made to it. ….
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 consolidated, and a new corporation thereby formed under the name of the Southern Pacific Railroad Company, the present defendant in error, 59.30 miles of whose road is in Santa Clara county and 17.93 miles in Fresno county.
In 1870 the Central Pacific Railroad Company of California and the Western Pacific Railroad Company formed themselves into one corporation under the name of the Central Pacific Railroad Company, the defendant in one of these actions, 61.06 miles of whose road is in Fresno county. The company complied with the several acts of congress, and there is in operation a continuous line of railway from the Missouri river to the Pacific ocean, the Central Pacific Railroad Company owning and operating the portion thereof between Ogden, in the territory of Utah, and San Francisco.
Such were the relations which these two companies held to the United States and to the state when the assessments in question were made for purposes of taxation.
It is necessary now to refer to those provisions of the constitution and laws of the state which, it is claimed, sustain these assessments. The constitution of 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 state, or to any of her county or municipal corporations, and declares that the legislature ‘may provide, except in the case of credits secured by mortgage or trust deed, for a reduction from credits of debts due to bona fide residents’ of the state.
It is provided in the first section of article 13 that, with these exceptions, ‘all property in the state, not exempt under the laws of the United States, shall be taxed in proportion 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 other matters and things, real, personal, and mixed, capable of private ownership.’
The ninth section makes provision for the election of a state board of equalization, ‘whose duty it shall be to 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 boards, to ‘conform to the true value in money of the property’ contained in the assessment roll. Id . 9.
The tenth section declares: ‘All property, except as hereinafter in this 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 this state shall be assessed by the state board of equalization at their actual value, and the same shall be apportioned to the counties, cities and counties, cities, towns, townships, and districts in which such railroads are located, in proportion to the number of miles of railway laid in such counties, cities and counties, cities, towns, townships, and districts.’
The special grounds of defense by each of the defendants were:
Struck Down (1) That its road is a part of a continuous postal and military route, constructed and maintained under 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, become subject to the requirements, conditions, and provisions of the acts of congress, it thereby ceased to be merely a state corporation, and became one of the agencies or instrumentalities employed by the general government to execute its constitutional powers; and that the franchise to 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.
***Upheld *** (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 that extent denying to it the equal protection of the laws.
****Creating Constitutional Corporate Protections, Corporate Sovereignty****
Upheld (3) That what is known as section 3664 of the Political Code of California, under the authority of which, in part, the assessment was made, was not constitutionally enacted by the legislature, and had not the force of law.
Upheld (4) That no void assessment appears in fact to have been made by the state board.
Upheld (5) That no interest is recoverable in this action until after judgment.
Upheld (6) That the assessment upon which the action is based is void, because it included property which the state board of equalization had no jurisdiction, under any circumstances, to assess; and that, as such illegal part was so blended with the balance that it cannot be separated, the entire assessment must be treated as a nullity.
Mr. Justice FIELD overruled the first of the special defenses above named, but sustained the second.
The circuit judge, in addition, held that section 3664 of the Political Code had not been passed in the mode required by the state constitution, and consequently was no part of the law of California.
The propositions embodied in the conclusions reached in the circuit court were discussed with 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 constitution in their application to the constitution and the legislation of a state, but upon their determination, if it were necessary to consider them, would depend the system of taxation devised by that state for raising revenue, from certain corporations, for the support of her government.
These questions belong to a class which this court should not decide unless their determination is essential to the disposal of the case in which they arise.
Whether the present cases require a decision of them depends upon the soundness of another proposition, upon which the court below, in view of its conclusions upon other 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 included therein property which it was without jurisdiction to assess for taxation.
If these positions are tenable, there will be no occasion to consider the grave questions of constitutional law upon which 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.
It results that the court below might have given judgment in each case for the defendant upon the ground that the assessment, which was the foundation of the action, included property of material value which the state board was without 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.
Understanding The Great Shell Game of America