After the trial court and the superior court had disposed of
this case without any federal question's having been raised, the
railroad company moved to set the judgment aside and transfer the
case to the Court of Appeals on the ground that the statutes, as
construed by the state court in its opinion, were invalid and in
violation of the Constitution. This motion being denied an appeal
was granted to the Court of Appeals, where it was claimed in
argument that the state statute as construed impaired the
obligation created by the charter of the company and denied the
equal protection of the laws in contravention of the Fourteenth
Amendment.
Held that the record did not show that a
federal question had been raised below in time and in a way to give
this Court jurisdiction.
This was a case instituted in the Louisville Chancery Court by
the Louisville & Nashville Railroad Company against the City of
Louisville by the filing of an agreed case under the following
provisions of the Civil Code of Practice of the Kentucky:
"SEC. 637. Parties to a question which might be the subject of a
civil action may, without action, state the question and the facts
upon which it depends, and present a submission thereof to any
court which would have jurisdiction, if an action had been brought.
But it must appear by affidavit that the controversy is real and
the proceedings in good
Page 166 U. S. 710
faith to determine the rights of the parties. The court shall
thereupon hear and determine the case and render judgment as if an
action were pending."
"SEC. 638. The case, the submission, and the judgment shall
constitute the record."
"SEC. 639. The judgment shall be with costs, and may be
enforced, and shall be subject to reversal, in the same manner as
if it had been rendered in an action, unless otherwise provided in
the submission."
The agreed case commenced as follows:
"The Louisville & Nashville Railroad Company and the City of
Louisville hereby state to the court the facts hereinafter
presented, and submit to the court for decision the question
hereinafter stated."
Then followed a statement of facts, and the stipulation thus
proceeded:
"Upon the foregoing facts, was the Louisville & Nashville
Railroad Company entitled to a discount -- and, if so, then to what
discount -- upon the tax bills mentioned herein on February 4,
1892, when it offered to pay said bills less a discount, or on
February 6, 1892, when it paid the amount of said bills under
protest?"
"If the court shall be of the opinion that the railroad company,
at the time of the said tender or payment, was entitled to a
discount upon the amount of said tax bills, then judgment may be
entered for the amount of such discount, with interest from
February 6, 1892, until paid, in favor of the Louisville &
Nashville Railroad Company against the City of Louisville for the
amount of such discount and the costs of this proceeding; but if
the court shall be of the opinion that said railroad company was
not entitled to any discount on said bills on said day of tender or
payment, then judgment may be entered dismissing the case and
giving judgment for costs of this proceeding in favor of the City
of Louisville against the Louisville & Nashville Railroad
Company. The right of appeal from the judgment of the Louisville
Chancery Court is not waived."
The case was heard, and the chancellor entered the following
judgment:
Page 166 U. S. 711
"This agreed case having been submitted in chief, and the court,
being sufficiently advised, delivered a written opinion, which is
now filed, and in accordance therewith it is considered by the
court that plaintiff, the Louisville & Nashville Railroad
Company, had no right to any discount on its tax bill when it paid
or tendered payment of same as shown in said agreed case, and that
this said action be, and it is therefore, dismissed, and that
defendant recover of plaintiff its costs herein expended."
The plaintiff excepted and carried the case by appeal to the
superior court of Kentucky, and the judgment of the chancellor was
affirmed.
Opinions were delivered by the chancellor and by the superior
court.
After the judgment of affirmance, the railroad company "moved
the court to set aside the submission and judgment, and transfer
this case to the Court of Appeals or to grant an appeal to the
Court of Appeals" on these grounds:
"This day came appellant, by counsel, and stated to the court
that it believes the statutes involved in this action, as to the
taxation of railroad property in the City of Louisville, as
construed by the court in its opinion lately delivered herein, to
be invalid, and to be in violation of the Constitutions of the
State of Kentucky and of the United States, and that it desired to
be heard on the question of the validity of said statutes, and
thereupon moved the court to set aside its judgment and the order
of submission herein and to transfer this action to the Court of
Appeals, and came appellant further, by counsel, and moved the
court to grant it an appeal from its judgment herein to the Court
of Appeals in the event the court should overrule the preceding
motions above set forth."
The superior court overruled the motion to set aside the
judgment and submission, and transfer the cause, but granted the
appeal to the Court of Appeals, which being duly prosecuted, the
judgment was again affirmed. 29 S.W. 865.
A writ of error was allowed from this Court by the Chief Justice
of the Court of Appeals.
Page 166 U. S. 712
The assignment of errors in the brief of counsel is as
follows:
"1st. That the statutes involved, according to the construction
put upon them by the Court of Appeals of Kentucky, do, in substance
and effect, impose a different rate of taxation upon the property
of the Louisville & Nashville Railroad Company from that which
is imposed upon other property, either real or personal, in the
City of Louisville; and"
"2d. That this violates the obligation of the contract contained
in the charter of the Louisville & Nashville Railroad Company,
whereby it was agreed that its property should not be assessed
higher than other real property, thus conflicting with the
provision of the Constitution of the United States which forbids
any state to pass a law impairing the obligation of a contract;
and"
"3d. That, independently of the question of contract, these
statutes, as construed by the Court of Appeals, impose a different
rate of taxation upon the property of railroad companies from that
which is imposed upon property of the same kind, in the same place,
and under the same circumstances when owned by any other class of
persons than railroad companies, and that therefore it comes within
the inhibition of the Fourteenth Amendment of the Constitution of
the United States, which provides that no state shall deny to any
person within its jurisdiction the equal protection of the
laws."
MR. CHIEF JUSTICE FULLER, after stating the facts in the
foregoing language, delivered the opinion of the Court.
By the terms of the agreed case, the only questions submitted to
the Chancery Court of Louisville were whether the railroad company
was entitled to a discount on certain tax bills, and, if so, what
discount, and it was stipulated that, if the court should be of
opinion that the company was not entitled to any
Page 166 U. S. 713
discount, then judgment should be entered dismissing the case,
with costs. The chancellor, in his opinion, pointed out that the
Act of the General Assembly of Kentucky entitled "An act to revise
and amend the tax laws of the City of Louisville," approved May 12,
1884, provided for a discount of three percent on taxes paid in
January, of two percent on those paid in February, and of one
percent on those paid in March, but that the assessments for
taxation to which the act related did not in terms include railroad
property, the assessment of which was provided for by chapter 92 of
the General Statutes of Kentucky. This chapter provided for the
assessment of railroad property by state authority for state,
county, city, and town purposes, for enforcement of payment by
penalties on its chief officer, and required payment by a named
day, but it nowhere, in terms or by implication, allowed any
deduction for prompt payment of state, county, city, or town taxes,
and it forbade assessments or collections of such taxes in any mode
other than that therein designated.
The chancellor held that such a deduction was
pro tanto
in the nature of an exemption, and that exemptions were not
allowable except where express authority affirmatively appeared
therefor, and that no such authority appeared here, and he then
said:
"The ground of inequality in taxation, so much relied on by
plaintiff's counsel, is not entitled to much weight, for the
principle, if such there be, is misapplied. Taxes are imposed in
this state on corporations by classes. No member of a class can
complain if he is treated like all in the same class. If it be
wrong not to allow deductions to banks, railroads, gas companies,
etc., for prompt payment of taxes, then the legislature can remedy
the wrong. In the present condition of the statute, the courts
cannot."
And the court, being of opinion that the company was not
entitled to any discount, entered judgment strictly in accordance
with the stipulation of the parties. There was no intimation in the
agreed case that any constitutional question was submitted for
determination, and no such question was propounded. The matter was
one of construction merely.
The superior court had no appellate jurisdiction of an
Page 166 U. S. 714
appeal involving the validity of a statute (Kentucky Codes 1895,
p. 472), as was conceded at the bar, and yet plaintiff in error
prosecuted its appeal to that court. After the superior court had
gone to judgment the railroad company made its motion to set the
judgment aside and transfer the case to the Court of Appeals on the
ground that it believed the statutes,
"as construed by the court in its opinion lately delivered
herein, to be invalid, and to be in violation of the constitutions
of the State of Kentucky and of the United States."
Even then, the company did not indicate in any way in what
particulars the statutes were in contravention of either of those
instruments. This motion was overruled, and an appeal allowed to
the Court of Appeals. The Court of Appeals arrived at the same
conclusion as the other courts, and rejected the claim for a
discount as not permitted by the statute. The court closed its
opinion thus:
"The city is not allowed to fix any value on appellant's
property. The penalty on those failing to pay taxes to the city is
not made to apply to the appellant, and it is plain, we think, that
the charter provision or the law in regard to the assessment,
collection, and payment of the taxes of the citizen within the
municipality does not include railroads or such corporate property,
and equally apparent that the legislature, in regard to these
corporations, can enact a different system or mode of assessment
and collection from that under which taxes are ordinarily
collected, and the discount allowed the citizen to encourage the
prompt payment of taxes is not a discrimination in his favor as
against appellant, nor is it open to constitutional objection.
Kentucky Railroad Tax Cases, 115 U. S.
321."
The record does not disclose that any federal question was
specifically raised in the Court of Appeals, and the sole reference
in the opinion to constitutional objection is in the language above
quoted. Doubtless that reference was by way of answer to the
contention that the statute might fail altogether unless construed
to include railroad companies.
In
Powell v. Brunswick County, 150 U.
S. 433,
150 U. S. 439,
we said:
"As many times reiterated, it is essential to the
maintenance
Page 166 U. S. 715
of jurisdiction upon the ground of erroneous decision as to the
validity of a state statute, or a right under the Constitution of
the United States, that it should appear from the record that the
validity of such statute was drawn in question as repugnant to the
Constitution, and that the decision sustained its validity, or that
the right was specially set up or claimed and denied. If it appear
from the record by clear and necessary intendment that the federal
question must have been directly involved, so that the state court
could not have given judgment without deciding it, that will be
sufficient; but resort cannot be had to the expedient of importing
into the record the legislation of the state as judicially known to
its courts, and holding the validity of such legislation to have
been drawn in question, and a decision necessarily rendered
thereon, in arriving at conclusions upon the matters actually
presented and considered. A definite issue as to the validity of
the statute or the possession of the right must be distinctly
deducible from the record before the state court can be held to
have disposed of such a federal question by its decision."
And see Oxley Stave Co. v. Butler County, ante,
166 U. S. 648, in
which this subject is largely considered, and the authorities
cited.
The agreed case presented no issue as to the validity of the
statute, but simply the question of its construction. The company
did not sue to recover back the taxes it had paid on the ground of
the invalidity of the laws under which they were levied, but to
recover the discount allowed to taxpayers by a particular statute.
The Chancery Court was shut up by the agreement to determine
whether the company was or was not entitled to that discount. The
construction by the Chancery Court was concurred in by the superior
court and by the Court of Appeals, and the judgment of the Chancery
Court, rendered as stipulated, was affirmed. It is now said that,
as the proper construction of the statute was definitively settled
by the Court of Appeals, this Court can take jurisdiction at that
stage of the case because, as thus construed, the statute impaired
the obligation of a contract created by the charter of the company
(which was not mentioned in the agreed
Page 166 U. S. 716
case), and because it denied the equal protection of the laws in
contravention of the Fourteenth Amendment, although no definite
issue in either respect was tendered throughout the proceedings,
unless the mention of the Constitution of the United States on the
motion to set aside may be so regarded. We do not think that was
sufficient.
Writ of error dismissed.
