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The statute that is here invoked is $ 162, Ky. Stats., which reads as follows: "$ 162. Taxes wrongfully collected refunded. When it shall appear to the Auditor that money has been paid into the treasury for taxes when no such taxes were in fact due, he shall issue his warrant on the treasury for such money so improperly paid, in behalf of the person who paid the same.
But, by a line of recent decisions in the Kentucky Court of Appeals, the effect of this section has been confined to cases where the taxes paid either were wholly without warrant in law or were based upon a mistake as to the rate of taxation upon the amount assessed; and it has been held not to authorize the Auditor to correct erroneous assessments, since that official is not entrusted with authority to make assessments. German Security Bank v. Coulter, 112 Kentucky, 577; Louisville City National Bank v. Coulter, 112 Kentucky, 584, 587; Couty v. Bosworth, 160 Kentucky, 312; Bosworth v. Metropolitan Life Ins. Co., 162 Kentucky, 344, 348; Louisville Gas & Electric Co. v. Bosworth, 169 Kentucky, 824, 829, 830.
But, were it otherwise, $ 162 clearly applies to state taxes alone, while the bills of complaint herein have to do with both state and local taxes. A remedy at law cannot be considered adequate, so as to prevent equitable relief, unless it covers the entire case made by the bill in equity. Were we to require a dismissal of these bills as to the state taxes, retaining them as to the local taxes, we should multiply suits, instead of preventing a multiplicity of suits. It is a familiar maxim that “a court of equity ought to do justice completely, and not by halves;” and, to this end, having properly acquired jurisdiction of a cause for any purpose, it should dispose of the entire controversy and its incidents, and not remit any part of it to a court of law. Camp v. Boyd, 229 U. S. 530, 551, 552; McGowan v. Parish, 237 U. S. 285, 296.
(8) It is contended that appellees, if aggrieved, had
another and more equitable remedy than a suit for injunction; that the law of the State provides a method by which, instead of lowering the assessments upon the property of appellees, they could by proper procedure compel the assessment of the property of other taxpayers to be increased so as to come within the constitutional requirement as to fair cash value, and hence that it was the duty of appellees to adopt that method. The reference is to $8 4115–4120, Ky. Stats., which require the county board of supervisors to convene annually and make a careful examination of the assessor's books and each individual list thereof, empowering them to increase or decrease any list; “but the board shall not reduce or raise any assessment unless the evidence be clear and unmistakable that the valuation is not a fair cash value.” By $ 4123, they may hear complaints, summon and swear witnesses, and require them to testify. There is nothing in these provisions to indicate that parties in the situation of the present appellees, who have no different interest in the undervaluation by the county assessors than that which might be possessed by any other citizens of the State, are entitled to be heard to complain that the county assessments are too low. Nor is any case cited where such a complaint has been entertained. The remedy of reassessment appears to be a public, not a private remedy.
We conclude that the decrees of the District Court must be, and they are
MR. JUSTICE HOLMES, MR. JUSTICE BRANDEIS, and MR. JUSTICE CLARKE dissent.
LOUISVILLE & NASHVILLE RAILROAD COMPANY v. GREENE, AUDITOR OF PUBLIC ACCOUNTS, ET AL., INDIVIDUALLY AND AS CONSTITUTING THE BOARD OF VALUATION AND ASSESSMENT OF THE STATE OF KENTUCKY, ET AL.
GREENE, AUDITOR OF PUBLIC ACCOUNTS, ET AL., INDIVIDUALLY AND AS CONSTITUTING THE BOARD OF VALUATION AND ASSESSMENT OF THE STATE OF KENTUCKY, ET AL. v. LOUISVILLE & NASHVILLE RAILROAD COMPANY.
APPEALS FROM THE DISTRICT COURT OF THE UNITED STATES
FOR THE EASTERN DISTRICT OF KENTUCKY.
Nos. 778, 779. Argued January 16, 17, 18, 1917.—Decided June 11, 1917.
Greene v. Louisville & Interurban R. R. Co., ante, 499, followed in
holding: (1) That the federal court has power to decide all questions, its jurisdiction being properly invoked on federal grounds, (2) that this suit, to restrain subordinate state officers from enforcing an unlawful and discriminatory assessment made under color of a valid state law, is not a suit against the State, (3) that plaintiff has not an adequate remedy at law under g 162, Ky. Stats., (4) that unlawful discrimination in taxation resulting from general, systematic undervaluations of other property is remediable by the courts, and (5) that whether such an assessment violates the "equal protection” clause of the Fourteenth Amendment need not be decided by the federal court when full relief is grantable under the state constitu
tion and laws. The right to relief by injunction against unlawful discrimination by
taxing officials exists in respect of state, as well as local, taxes; if what was said in Coulter v. Louisville & Nashville R. R. Co., 196 U. S. 599, 608, imports that an injunction can under no circumstances be awarded with respect to state taxes, it must be deemed to have been overruled by Raymond v. Chicago Union Traction Co., 207 U.S. 20.
Proof comprising a body of official admissions and direct and circum
stantial evidence from unimpeached public and private sources, and which fully sustains a finding that the great mass of property in Kentucky, embracing all tangible property except railroad property and distilled spirits
during a period of years—was systematically and notoriously assessed at not exceeding 60 per cent. of its fair cash value, Held not overcome by general presumptions arising from the duty of assessors to assess at fair cash value, or by numerous stereotyped affidavits of former assessors asseverating their obedience
thereunto.. The findings of an official body such as the Kentucky Board of Valua
tion and Assessment, made after a hearing and upon notice to the taxpayer, are quasi-judicial and, in the absence of fraud, are not to be set aside or disregarded by courts unless it is made to appear that the body proceeded upon an erroneous principle, or adopted an im
proper mode of estimating value. Under the Kentucky law respecting the taxation of the intangible
property of railroad and other public service corporations (88 40774081, Ky. Stats.), the particular method to be pursued by the Board of Valuation and Assessment in ascertaining from the evidence the value of the “capital stock” (i. e., the entire tangible and intangible property) of a railroad system, partly within and partly
outside of the State, is left to the sound discretion of the Board. In estimating the value of plaintiff's "capital stock," the Kentucky
Board of Valuation and Assessment capitalized the plaintiff's income upon a 6 per cent. basis and, in excluding shares held by plaintiff in other corporations owning and paying taxes on property in Kentucky, it estimated their value in the same way, i. e., by capitalizing on a 6 per cent. basis the income derived therefrom. Held: (1) That this method of valuing the shares could not be held fundamentally wrong, although there was evidence that their intrinsic value was much greater than the estimate thus obtained. (2) That the adoption of the 6 per cent. rate instead of a higher, “composite” rate, based on the mileage of plaintiff's railroad in each of thirteen States and the legal rates of interest in those States, respectively,
was likewise a matter for the judgment of the Board. Section 4081, Ky. Stats., as amended by the Act of June 9, 1893, in
providing that the ratio of intrastate to total mileage of any interstate railroad "shall be considered” by the Board of Valuation and Assessment in fixing the value of its corporate franchise (intangible property) liable to taxation in the State, does not require the Board to apportion the value of the railroad's property upon a strict mileage
basis, but merely to consider relative mileage, among other pertinent factors, in the process of valuing that proportion of the prop
erty which is situate within the State. Section 4081, supra, applies to both foreign and domestic corporations,
and is not to be construed as requiring the taxation of tangible assets outside of the State, which, clearly as to foreign corporations, would render it obnoxious to the due process clause of the Four
teenth Amendment. Under $ 4081, supra, the apportionment of “capital stock” to Ken
tucky is first made upon a mileage basis (with such allowances as may be required because of unequal distribution of tangible property within and without the State), and the value of the tangible property in the State is then subtracted and the tax computed on
the difference, representing the intangible property in Kentucky. Total assets, situate partly within and partly without a State, but
organically related, may be taken into consideration as a means of reaching the true cash value of the part within the State, and in the
case of a railroad, the mileage factor may be given its proper weight. Section 4081, supra, requires the Board to take into consideration not
only the mileage operated, but also the mileage controlled, by the
railroad company within and without the State. Under $8 4079, 4081, supra, in determining the percentage apportion
able to Kentucky, the whole of the controlled mileage within and without the State is to be treated as part of the aggregate “capital stock," not only in fixirg the mileage, but also in fixing the valuation,
upon which the apportionment is based. To avoid double assessments, the value of so much of the controlled
mileage as is within Kentucky, and therefore separately assessed in that State, should be deducted (in addition to the value of the tangible property there situate), from the Kentucky apportionment of
the "capital stock." A supplemental bill, filed, after hearing and decision, by permission of
the court but apparently disregarded, is not to be taken as confessed by the defendant for want of answer, when no rule to answer was made upon him and his failure to do so is not explained by the record; nor, in the silence of the record, is error to be imputed to the trial
court for not paying heed to material allegations thus presented. A party attacking a tax assessment is not to be held in default for
omission to introduce evidence on matters which were not deemed material by the taxing authority or in the litigation until found so
by the judge in his decision. It being shown that the valuation made by a taxing board was the