Central Pacific Railroad v. Howard

By the Court: The lands mentioned in the complaint were assessed for the purposes of taxation, in the year 1874. The patent for said lands was issued to the plaintiff on the 17th day of March, 1875. The twenty-first section of the act of Congress of July 27, 1866 (14 U. S. Stats, at Large, 299), provides that whenever in any grant of land, made or hereafter to be made, the United States has reserved the right to appoint commissioners to examine the roads, the costs, charges and pay of such commissioners shall be paid by the respective companies; and that in case any company shall refuse or [235]neglect to make such payments, no more patents for lands shall be issued to such company until such payments are made. The act of Congress of July 25, 1866 (14 U. S. Stats, at Large, 239), under which the plaintiff claims title, provides, in the fourth section, for the appointment of commissioners to examine the railroad and report its condition to the President of the United States. It is not alleged in the complaint that such commissioners had been appointed, or that payment for the services of the commissioners had been made when the lands were assessed, or the taxes levied.

The question presented is whether the lands were at that time subject to taxation by the State.

A similar question was considered in Railway Company v. Prescott (16 Wall. 604). It was provided by the act granting the lands involved in that case, that before any of the lands granted should be conveyed to the company, the cost of surveying, selecting and conveying said lands should first be paid by the company into the Treasury of the United States. It was admitted that such costs had not been paid by the company at the time the lands were assessed to the company, and it was held that the lands were not subject to State taxation. The doctrine of that case is decisive of the question here presented, if the commissioners had not been appointed, or payment for their services had not been made before the lands were assessed.

It is contended, on behalf of the defendant, that in the absence of any allegation in the complaint in respect to the payment for the services of the commissioners, it is to be presumed that such payment was made before the lands were assessed. But that position is not tenable. The issuing of the patent does not raise the presumption that the payment was made at any particular time, but if the time of the payment is material it must be expressly alleged. As it does not appear that the plaintiff was entitled to a patent for the lands when they were assessed, we are compelled to hold that they were not subject to taxation by the State.