Opinion · Supreme Court of the United States
Thomas v. Kansas City Southern Railway Co.
Thomas v. Kan. City S. Ry. Co., 261 U.S. 481 (1923)
- Type
- Opinion
- Court
- Supreme Court of the United States
- Jurisdiction
- Federal
- Date
- 1923-04-09
- Topic
- general
Mr. Justice Brandéis delivered the opinion of the Court. The Legislature of Arkansas created, by a special law, the Little River Drainage and Levee District of Sevier County, No. 1, a body corporate, and defined its boundaries. Act 186 of Acts of 1915, p. 747, amended by Act 79 of Acts of 1917, p. 348. This suit was brought in the federal court for the Western District of Arkansas, Texar-kana Division, by two railroad companies to restrain enforcement of a tax levied in the year 1918 under that act.
Citator
UpLaw has not yet analyzed Thomas v. Kansas City Southern Railway Co.. The absence of a flag is not a finding that it is good law.
- Authority status
- pending
- Cited by
- 54 opinions
- Distinguished
- 1 times
Headnotes
- Constitutional Law — Equal Protection A state legislature may, if consistent with its own constitution, establish a drainage district, set its boundaries, and apportion the cost by fixing the bases of assessment and taxation; the legislature's determination that lands will be benefited by the improvement is ordinarily conclusive and cannot be assailed under the Fourteenth Amendment unless it is palpably arbitrary or discriminatory. 261 U.S. at 483
- Tax Law — Assessment of Railroad Property A portion of a railroad's franchise may consistently with the Federal Constitution be included as real estate within a drainage district, and to justify an assessment upon property the benefit from the improvement need not be direct; in the case of a railroad it may consist of gains derived from increased traffic. 261 U.S. at 483
- Constitutional Law — Equal Protection Vague speculation as to future increased traffic receipts will not justify a basis of taxation that necessarily produces manifest inequality; an assessment scheme that imposes a heavy burden on a railroad deriving no direct benefit while requiring the lands receiving large direct benefit to bear only a small part of the burden, and that depends for its fairness on a prophecy of future readjustment, is grossly discriminatory and violates the Fourteenth Amendment. 261 U.S. at 484
THOMASv. KANSAS CITY SO. RY.,261 U.S. 481(1923)
43 S.Ct. 440
THOMAS, SHERIFF AND COLLECTOR, ET AL.v. KANSAS CITY SOUTHERN RAILWAY
COMPANY ET AL.
APPEAL FROM THE CIRCUIT COURT OF APPEALS FOR THE EIGHTH CIRCUIT.
No. 303.
Argued March 9, 12, 1923.
Decided April 9, 1923.
APPEAL from a decree of the Circuit Court of Appeals which
affirmed a decree of the District Court permanently enjoining the
appellant drainage district and state officials from enforcing a
special drainage improvement tax, levied upon property of the
appellee railroad companies.
The estimated cost of the improvement was about $75,000. For the purpose of defraying a part of this cost the directors levied, in the year 1918, a tax of $7,346.12, being 6 per cent. Of the assessed value of all real estate within the district. Of this amount it levied upon the railroads $4,194.60, being 6 per cent. of the assessed value of their property. Upon the 12,000 acres of land, being all the other real estate in the district, the directors laid, in the aggregate, taxes of $3,151.52, being 6 per cent. of its assessed value. Thus, 57 per cent. of the burden was imposed upon the railroads and 43 per cent. upon the owners of all the other real estate. Plaintiffs claimed that the tax was void. After a hearing, at which much evidence was introduced, the District Court entered a decree for a permanent injunction. Its decree was affirmed by the Circuit Court of Appeals, on the ground that the facts reveal an instance of discrimination so palpable and arbitrary as to amount to a denial of equal protection of the laws. 277 F. 708. The case is here on appeal.
The applicable rules of law are settled. The legislature of a State may, if consistent with its constitution, establish a drainage district; may set the boundaries; and may apportion the burden by fixing the basis of assessment and of taxation. The legislature's determination that lands will be benefited by a public improvement for which it authorizes a special tax, is ordinarily conclusive. Its action in so doing cannot be assailed under the Fourteenth Amendment, unless it is palpably arbitrary or discriminatory.Houckv.Little River Drainage District,239 U.S. 254,262;Valley Farms Co. v.County of Westchester,ante, 155. A proportion of the franchise of a railroad may, consistently with the Federal Constitution, be included as real estate within the district. To justify an assessment upon property the benefit from the improvement need not be a direct one. It may, in case of a railroad, consist of gains derived from increased traffic.Page 484Bransonv.Bush,251 U.S. 182. But vague speculation as to future increased traffic receipts will not justify a basis of taxation which necessarily produces manifest inequality. CompareKansas City Southern Ry. Co. v.Road Improvement District No.6,256 U.S. 658,661. In the case at bar the lower courts concurred in their findings of controverted facts. We accept these findings.Dunv.Lumbermen's Credit Association,209 U.S. 20. The question for decision is whether facts, admitted and found, establish that the tax levied upon plaintiffs violates rights guaranteed by the Fourteenth Amendment.
The district is wholly rural. Little River bounds it on the west and south. It contains about 12,000 acres of rich land. Only one-tenth is under cultivation. The rest is wild and untillable, because marshy or subject to overflow. The aggregate assessed value of the 12,000 acres was in 1918 only $52,525.33. The lands were then worth from $8 to $40 an acre. The proposed improvement would increase their value at least $250,000.00. Along the northerly part of its western boundary the district is traversed for a distance of about two miles, by a single-track railroad. The total length of track within the district, including a detour line and sidings, is 3.61 miles. The railroad is owned by the Texarkana and Fort Smith, and is operated by the Kansas City Southern, as part of its line from Missouri to the Gulf. The railroad property is 40.43 acres in area; and is assessed at $69,910.00. It would derive no direct benefit from the construction of the ditches and embankment designed to drain and to protect the district from overflow; because the tracks are laid upon a fill or dump (with the exception of one trestle) and are above flood level. The railroad would derive some measure of indirect benefit; because the drained land would doubtless be cultivated, and more extensive cultivation would probably increase traffic over the line.Page 485
The tax laid imposes upon the railroad, which can receive no direct or immediate benefit, a very heavy burden; and the lands which will receive a large direct (and possibly immediate) benefit, are required to bear only a very small part of the burden. The market value of the 12,000 acres may increase largely before any additional land is cultivated, or even before the improvement is made. The railroad can derive the indirect benefit, through increased traffic, only after the drainage of the wild lands has been effected and the reclaimed lands are being cultivated. The work of reclamation had not even begun. Obviously there could not be any increase in traffic receipts during the year 1918, in which the tax is laid. Appellants argue that the assessed valuation of the lands would probably be greatly raised in later years; that the assessment upon the railroad property would probably not be raised; that the proportion of the annual burden imposed upon the railroad would diminish from year to year; and that, in course of time, the aggregate of the taxes levied upon each piece of property would be thus adjusted so as to correspond to the benefits received. This argument is relied upon to save the scheme of apportionment. But it rests wholly upon prophecy. The fact is that the tax levied is grossly discriminatory. The best that can be said of the scheme of taxation (so far as it concerns the railroad) is that the burdens imposed will grow less, as its ability to bear them grows greater.Affirmed.Page 486