Mahlon Pitney

“ There is little to the contrary except the general presumptions arising from the statutory duty of assessors to assess at fair cash value and from the oath customarily required of individual taxpayers, and a large number of stereotyped affidavits made by former assessors to the effect that they endeavored to follow the law and assess all property at its fair cash value, and if any property was otherwise assessed it was unintentional, and not pursuant to any agreement between the assessor and the taxpayer. ”

“ It is not to be supposed that the legislature intended to require that, in making the mileage apportionment, which, as already shown, is not conclusive but evidential upon the valuation of the taxable franchise, fractional interests in the controlled roads should be taken into the account, but rather that a controlled road should be treated the same as a road owned. ”

“ Value of franchise-how determined-lines extend beyond state or county.-Where the line or lines of any such corporations, company or association extend beyond the limits of the state or county, the statement shall, in addition to the other facts hereinbefore required, show the length of entire lines operated, owned, leased or controlled in this state, and in each county, incorporated city, town or taxing district, and the entire line operated, controlled, leased or owned elsewhere. ”

“ The Board's next step was to apportion to Kentucky a certain part of this total value, which, of course, included both tangible and intangible assets; after which it proceeded to deduct the assessed value of the tangible assets in Kentucky. Plaintiff insists that these steps should have been reversed; that the Board, having valued the total capital stock of the company, including assets tangible and intangible, should first have deducted the entire tangible assets wherever situate, and next have assigned a proper portion of the intangible to Kentucky. ”

“ It is urged that, although it be true that the local assessors in each county assessed other property at less than its cash value, plaintiff is not entitled to relief for this reason if its property was not assessed at more than its fair cash value, even though it was assessed at a higher percentage than other property. ”

“ Kentucky, as requiring the deduction of tangible property from the gross value of all corporate assets, whether such tangible property be within or without the state.' The question of apportionment, or of the particular method to be pursued in making the assessment, was not involved in this case, any more than in Adams Exp. Co. v. Kentucky, supra. It is true, as the court said, that if tangible property having a situs outside the state were included in the valuation, the purpose of the law to tax only intangible property would be defeated. ”

“ The Board first found the fair cash value of plaintiff's capital stock, hereafter termed its unit, to be $262,252,566. This valuation it arrived at by capitalizing at 6 per cent what it took to be plaintiff's net income from operations on its own account for the year ending June 30, 1912, as of which date the assessment speaks, less what it took to be its net income from certain property which it took to be nontaxable. ”

“ Louisville & N. R. Co. 149 Ky. 829, 838, 150 S. W. 37, the very point was considered by the court of appeals, which declared: 'If the railroad company owns a majority of the stock of another company, so that it may elect its directors and dictate its policy, there can be no doubt that it controls it within the meaning of the statute, and that such other railroad should be included in the report required to be made to the auditor. ”

“ They have not gone at it in the right way. But they have in fact found such to be its value. It is possible that, if they had gone at it in the right way, they would have found such to be the value thereof. . . . I will therefore dispose of the case on the basis that it was that much. This is not such an exactness as I always like to attain, but the case is one where exactness is not, and only approximation is, attainable. Taking 60 per cent of $92,181,766 would give $55,309,059.60 as the value of the portion of plaintiff's unit in Kentucky. ”

“ There are numerous assignments of error by each party, but, without specifying these, the questions raised will be disposed of in the order of convenience. Of course, the Federal jurisdiction, having been invoked upon substantial grounds of Federal law, extends to the determination of all questions involved in the case, whether resting upon state or Federal law. ”

“ The company, insisting that the correct valuation was $180,489, paid to Kentucky the tax on this amount, reserving the question of its liability for a claimed balance of $464.84, and of the method or basis upon which its franchise should be valued for taxation by the Board, to be determined by the courts. ”

“ Stat., which require the auditor to keep account of taxes collected, keep a correct list of balances due by individuals to the commonwealth, audit and enter in account all demands payable at the treasury, report to the attorney general all public debtors who fail to render their accounts at the proper time or to pay the money in their hands due the commonwealth into the treasury, and grant written authority to the treasurer to receive money from public officers or other persons, due to the commonwealth. ”

“ The facts found in this case bring it within the ruling that, in the case last mentioned, was made upon admitted facts, because of the provisions of the Constitution and laws of the state. In this case, as in that, we find it unnecessary to pass upon the merits of the question whether a like result would be reached by the application of the 'equal protection' clause of the 14th Amendment. ”

“ But from the valuation on the mileage basis the value of all tangible property is deducted before the taxation is applied.' The matter of apportionment was not there involved, nor what method or order was prescribed by the statute; the question at the moment being whether the tax was a true franchise tax, or merely a property tax upon intangible property. The significant thing was that the value of tangibles was to be deducted ”