Majority
Headnote
Taxation op Street Railroads—Jurisdiction op State Board over “ Rah,roads ”—Construction op Constitution.—Section 10 of article XIII of the state constitution, providing for the assessment of all “railroads" operated in more than one county by the state board of equalization, is not to be construed as including “street railroads,” though operating in more than one county. [McFarland, J., and Henshaw, J., dissenting.]This is an appeal by the plaintiff from the judgment of the court below in favor of the defendant. This appeal is on the judgment-roll alone. The plaintiff is the owner of a street railroad running from the intersection of Market Street and Steuart Street, in the city and county of San Francisco, to the town of Baden, in San Mateo County, with a branch to Golden Gate Park, at the intersection of Eighteenth and Guerrero streets, a total distance of twenty-three miles, of which eighteen and four tenths miles is situated in San Francisco, and the remainder in the county of San Mateo. During the times here involved the defendant was operating the road in more than one county; that is to say, it was operated as a continuous line running from the terminus in San Francisco to Baden, in San Mateo County. The assessor of San Francisco for the year 1899 made an assessment of the property of the plaintiff, including its franchise, roadway, road-bed, rails, and rolling-stock situated in the county of San Francisco. In the same year the state board of equalization made a valuation of the entire line of the plaintiff’s road, and apportioned the same between the county of San Mateo and the city and county of San Francisco, according to the mileage of the road situated in each county respectively. The question which of these two assessments is the one sanctioned by law is the sole question in the case.
It is conceded that, if the word “railroads,” as used in section 10 of article XIII of the constitution, is to be construed to include street railroads, the assessment of the state board of equalization must prevail, and the judgment must be reversed. The entire section in question is as follows: “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. ’ ’
A good deal is said in the briefs with respect to the rule of construction to be applied to such cases, but there is no better
As to the word used, it is manifest from an examination of the numerous cases cited on each side of the question that the word “railroad” may or may not include street railroads, according to the circumstances, and that in order to determine whether it does or not, we cannot consider the word itself as of any consequence, but must in every case look to the “context, the object in view, and the evils intended to be remedied. ’ ’
The context of the constitution as a whole, apart from this particular section, affords us little aid. It nowhere refers to street railroads in express terms. It was held in Railroad Commissioners v. Market-Street R. R. Co., 132 Cal. 678 , that the word, as used in sections 22 and 23 of article XII, providing for the supervision of railroads and railroad corporations by a board of commissioners, did not include street railroads. Yet it is not unlikely, notwithstanding What is said in the opinion in that case, that the same word, as used in some of the other sections in the same article, would be properly construed to include street railroads. We must therefore refer to the immediate context of the article and section in question, and to the “object in view, and the evils to be remedied.”
The general subject of article XIII, in which the section involved occurs, is the taxation and assessment of property and persons. Section 1 declares the general policy of the law to be, that all property is to be taxed in proportion to its value, and that the value is to' be ascertained in the manner provided by law. The general rule with respect to the manner of ascertaining the value is declared in the section
Since the adoption of the constitution, the growth of the state in population and wealth, and the ingenuity of man in making applications of the power of electricity, has made feasible and profitable the operation of ordinary street railroads in more than one county. The railroad in question is strictly a street railroad. It is expressly found by the court that it is a street railroad throughout its entire length, and if at any place it operates upon a roadway obtained from private individuals, and not upon the public streets, or in any other manner than as a street railroad, that fact does not appear in the record. The question presented is whether or
It is conceded, of course, that the mere matter of the motive power for the propulsion of the cars is entirely immaterial. There is nothing in the purpose of the provision, nor in the evils which it was designed to remedy, nor in its practical application, which gives to the means of moving the cars the least significance in the decision of the question before the court.
So, also, we think it must be conceded that with respect to the evils of double assessments, conflicting claims, and inequality in values between the different counties, there is no reason apparent why a street railroad should not be held to come within the scheme provided by the constitution for the assessment of railroads operating in more than one county.
It was chiefly upon these grounds that the decision was placed in the opinion first rendered in this case. If there were no greater distinctions between the two classes of railroads than these, the conclusion that street railroads come within the object and purpose of the constitutional provision would be correct. Upon further consideration of the subject, however, we are of the opinion that other differences exist which were not considered in the former prevailing opinion, and which are sufficient to prevent the operation of the rule of construction contended for by the appellant. That rule cannot properly be applied where the new subject possesses characteristics so different from the old that to bring it within the scope of the pre-existing law would cause serious and substantial injustice. The different character of the franchise possessed by one class of roads from that possessed by the other, and the very serious interference with one of the fundamental principles upon which the power of taxation rests, which would arise from the operation of the constitutional plan, present sufficient reasons why a street railroad should be considered as not within the terms of this section of the constitution. The franchise of an ordinary railroad is obtained upon terms and conditions equally applicable to all roads of its class by a compliance with the general law which empowers corporations to construct and operate a railroad between the designated termini, located, it may be, in counties widely separated. (Civ. Code, sec. 291.) At the time the
The incorporation of a street-railroad company, of course, gives the corporation the power to do the business of operating street railroads, or some particular street railroad, as the case may be, as a natural person might do, and this power is doubtless a part of its general corporate franchise. But it is not to this that we now refer, but to the special permission to lay tracks in the streets, without which the power included in the grant of incorporation cannot be exercised.
In the case of an ordinary railroad the right which it may acquire to operate its road along a public street is, strictly speaking, a mere right of way, similar to the right it may acquire from landowners along the route. It is a part of its roadway, and not a part of the franchise, within the meaning of the word in the phrase in question. It imposes no implied obligation upon the grantee or donee to facilitate the local public use of the street by carrying persons from place to place thereon. The right which a street railroad obtains from the city to lay its track and operate its road on a street, on the contrary, is the most valuable part of its franchise. It
It is plainly the general policy of the law that property situated in one county or city should be taxable in that county or city for local purposes for its actual value, and that that local subdivision alone should have the benefit of this value for the purpose of raising its revenue. This indeed is the basis of all local taxation, and it is recognized by. the section in question, that the property which receives the benefit of local government shall pay its proportion of the expenses thereof, apportioned according to actual value. It would be a very anomalous condition of affairs, therefore, if a franchise granted by one municipality, and entirely local to that municipality, should be assessed by a system which would permit a part of its value to be taken from the assessment of the municipality in which it is situated and transferred to another municipality, and there made the basis of an assessment for the benefit of that local government. Yet this is precisely what the proposed system would do. If the differences in the amounts were very small as compared to the whole, as could justly be said in the case of an ordinary railroad, perhaps this would not be a sufficient reason for supposing that the constitutional convention did not intend to include street railroads in the scheme. But a consideration of the different circumstances existing in the case of the respective classes of railroads, and the difference in the character of business transacted by them, shows that in the case of street railroads the difference in value would be very considerable. A street railroad in a city, as its name implies, operates its ears over the streets in common with the public, and as a part, and in furtherance, of the public use to which such streets are dedicated. The value of the system does not rest to any great extent upon the value of the space of ground which is occupied by the track. That space is also subject to general public use as a part of the street, and, considered merely as land, the interest of the railroad therein is of very
It is easily seen that in the dense population of a city the value per mile of track of a street railroad must necessarily be very much greater than in the more sparsely populated country outside of the city. In the case of a street railroad operated partly within and partly without a city, whether in more than one county or not, it is evident that if the entire value of the franchise and roadway of the railroad as a whole is ascertained, and the amount divided between the portion inside the city and the part outside, in proportion to' the length of track in each territory respectively, a large part of the value of property situated within the city would be arbitrarily taken from the city valuation and transferred to that of the county, thus, if the road is operated in more than one county, causing an injury to the city and a benefit to the county, which it cannot be supposed was intended. In
The possibilities of escaping taxation in the particular case here before the court may be of slight importance to the plaintiff, because the rate of taxation may be substantially the same in the city and county of San Francisco as in San Mateo County, but in the case of a railroad operated in a city situated far from the county line the method of assessing such a railroad operated in more than one county would enable such a road to escape taxation upon a large proportion of the value of its property. For instance, in the county of Los Angeles a street-railroad system having lines extending in many directions throughout the city of Los Angeles might ,/yun a branch outside of the city, but within the county, for a distance of thirty miles before reaching the county line. So long as it was operated only within the county it would be assessed according to its value in the city and county, respectively, by the assessor of that county for county and state taxation, and by the assessor of the city for municipal purposes. But by extending the line for one mile beyond the county line, and thus making it a road operated in more than one county, the comparatively larger value of that part of the road situated within the city goes into the general sum, and becomes merely a part of the value of the entire system. 'The trackage within the city would then be valued at the
There has recently come into existence a certain class of railroads, known as interurban roads, which are a sort of hybrid, having in some respects the characteristics of the ordinary railroad, and in others those of the street railroad. Within the limits of the cities which they enter they usually pass along the streets, and perform the ordinary functions of street railroads, stopping where desired to let passengers on or off, and serving the public need for local street travel. Outside the cities, on their way from one city or town to another, they frequently travel upon a roadway obtained from private persons, not upon a public road, and stop, as in case of ordinary railroads, only at stations established by them for that purpose. They also often convey freight as well as' passengers. Whether or not these railroads, when operated in more than one county, are to be classed as street railroads or as ordinary railroads to be assessed by the state board of equalization, and, if the latter, whether they may be attached to a system of street railroads, and so make the entire mileage of such system subject to assessment by the state board, or must, for the purpose of such assessment, be limited exclusively to the part of the system traversed by the
Dissent
The judgment of the court below is affirmed.
Beatty, C. J., Lorigan, J., Angellotti, J., and Van Dyke, J., concurred.
I dissent, and adhere to the former decision and to the opinion then delivered; and I desire to add only the following, which seems to be too obvious to be surmounted by any kind of reasoning: The word “railroad” is frequently used in the constitution without any other defining or qualifying phrase, and where the meaning of the word, standing alone, comes in question in determining the application of some provision of the law, it is no doubt occasionally difficult to decide whether, in the particular matter involved, it should be construed to include “street railroad.” But in the provision here in question—“all railroads operated in more than one county in this state”—the word “railroads” does not stand alone; the important, significant, and controlling part of the phrase is “operated in more than one county.” The thought in the minds of the framers of the constitution, as shown by the language used, was to provide for the assessment of a railroad, with its rolling-stock, franchises, etc., running through and being operated in more than one county. And the thing intended to be provided for is in its very nature applicable to any railroad which is operated in more than one county.
I do not see the force of the suggestion that the dense population of a city makes a mile of track within it more valuable than a mile in a more sparsely settled country outside of the city. The same fact exists as to all railroads. The great overland railroads pass through counties which are thickly settled and cities having dense populations, and also through almost entirely unsettled mountain and desert regions, and the parts of these railroads lying within the former are more valuable than those lying within the latter. If they were divided, for the purpose of taxation, into sections corresponding with county and city lines, cities and some counties would receive more revenue from taxation of these roads than they
Henshaw, J., concurred with McFarland, J.
The following is the opinion of the court in Bank rendered on the 1st of July, 1903, referred to in the dissenting opinion of Mr. Justice McFarland:—
This appeal is on the judgment-roll. The facts are undisputed, and the single question presented for determination is whether under the constitution of this state the franchises, rails, and rolling-stock of a street railroad operated in more than one county should be assessed by the state board of equalization or by the assessors of the several counties through which the railroad passes. It is conceded that, if the word “railroads,” as used in section 10 of article NIII of the constitution of the state, includes street railroads, the judgment should be reversed. The section of the constitution to which reference has been made reads as follows: “. . . 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, towns, townships, and districts.”
It has been said by this court (Ferguson v. Sherman, 116 Cal. 176 ) that the word “railroad,” as used in law, is broad enough to include street railroads, and many cases have arisen where the courts have held that the word does in its signification include such. Each case is to be determined upon its own facts, having in view the circumstances, the context, the presumed intention of the lawmakers, and the
It is thus an assured and ascertained fact that the framers of the' constitution recognized a broad distinction for purposes of taxation between railroads operated in but one county and railroads operated in more than one county, and that they set forth a different scheme of taxation for the different kinds of roads. In People v. Central Pacific R. R. Co., 105 Cal. 576 , further differences and distinctions are pointed out in justification of the classification made by the constitution, and practical examples given of the difficulties that would arise were it attempted to enforce by delinquent tax sales the assessments, if made in the separate counties by the local assessors.
It may be here noted that the constitution itself nowhere employs the phrase “street railroad” or “street railway,” but when it speaks at all upon the subject uses the word “railroad.” True, some provisions could in their nature have no application to street railroads operated within a single city or-a single county, but this is no argument against the proposition that, where the constitution speaks generally of railroads all railroads, of whatever class, which by fair interpretation and intendment come within the meaning of the word, are meant to be included. For, as was said by the supreme court of Maryland, in Oler v. Baltimore etc. R. R. Co., 41 Md. 583 , where it is decided that railroad did include street railroad, “Had they not been made parts of the law, it might have furnished an argument that would not have been without weight that such railroads were intended to be excluded from its operation; but we do not understand that their being in the law can furnish any sound reason for the exclusion of
Electric roads themselves were first operated upon the streets of a municipality. They next extended out upon the suburban roads and county highways. They now run freely between counties. They are projected over all parts of the state, and, if the expressed conviction of many prominent engineers is to be credited, it will not be long before even between states they will to a great extent have supplanted the present steam railroads.
Nor can any well-founded distinction be made because they run, where possible, along and upon streets and highways. They do not always do so. They frequently traverse lands upon their own acquired rights of way; and when they are operated in two or more counties of the state, no reason appears why they should not be held to come within the provisions of the section of the constitution under consideration, and many reasons, as above pointed out, demand that they should be.
Cases cited
- People v. Central Pacific Railroad 105 Cal. 576 p. 236