Postal Telegraph-Cable Co. v. Adams

• Decision Date: 04 December 1893
• Court: Mississippi Supreme Court
• Parties: POSTAL TELEGRAPH-CABLE CO. v. WIRT ADAMS, STATE REVENUE AGENT

14 So. 36

71 Miss. 555

POSTAL TELEGRAPH-CABLE CO. v. WIRT ADAMS, STATE REVENUE AGENT

Supreme Court of Mississippi

December 4, 1893

October 1893

FROM the circuit court of the first district of Hinds county, HON J. B. CHRISMAN, Judge.

Action by the state revenue agent against the Postal Telegraph-Cable Company. The declaration contains two counts. The first seeks recovery of privilege taxes for the years 1888 and 1889, and the second count demands ad valorem taxes for the same years based upon an assessment made by the revenue agent. The defendant demurred to the second count on the ground that the statutes conferring authority on the revenue agent to assess for ad valorem taxes, and to bring suit therefor, are unconstitutional. The demurrer was sustained, and the cause proceeded as an action for the recovery of privilege taxes only.

To the first count defendant interposed several pleas, by which it attacks the validity of the act of 1888, so far as it exacts a privilege tax from defendant, a foreign Corporation. These pleas aver that defendant is a corporation, chartered by the state of New York, and owning and operating lines of telegraph in and across many states of the Union; that its lines in the state of Mississippi are used by it in receiving and sending messages to and from other states; that the privilege tax sought to be enforced against it is a burden on, and an interference with, interstate commerce, and therefore repugnant to the constitution of the United States.

Defendant in its pleas, also avers that it had duly and regularly availed of the act of congress, approved July 24, 1866 (now title 65 of the Revised Statutes of the United States), entitled "An act to aid in the construction of telegraph lines, and to secure to the government the use of the same for postal, military and other purposes;" that the defendant had filed with the postmaster-general its written acceptance of the restrictions and obligations of said act of congress, and, pursuant thereto, the postmaster-general had designated defendant as one of the telegraph companies that must transreit messages for the United States at a price and rate fixed by him; that the obligations and privileges thus incurred are still in force, and that defendant has, since 1886, been continuously engaged, as a governmental agent of the United States, in transmitting messages for the government between various offices on its lines, not only from points within the state of Mississippi to other points within the said state, but also to and from points in other states; that its lines in the state of Mississippi and adjoining states are located along the various highways, which are post-roads of the United States. Defendant, in view of these facts, which it alleges constitute it an agency under the federal government, contends that the privilege tax sought to be enforced against it is illegal.

The plaintiff demurred to these pleas of the defendant, the demurrer was sustained, and, defendant declining to plead further, judgment was rendered in favor of plaintiff for the amount of the privilege taxes for 1888 and 1889, and from this judgment defendant appeals.

Affirmed.

R. S. Guernsey, Mordecai & Gadsden and Brame & Alexander, for appellant.

1. The statute in question is a burden and a charge upon interstate commerce.

2. Appellant is a corporation of the state of New York. Its business is that of interstate commerce, and no state can exact from it a license tax for the privilege of enjoying its franchise within its jurisdiction.

3. Even if the tax be considered as a tax on gross receipts, the statute is fatally defective in not confining the operation of the tax to the receipts derived from intra state business.

4. Appellant having accepted the provisions of the act of congress, of 1866, is a governmental agent. A part of its ordinary business is the transmission of messages of a public nature for the United States government. The privilege tax in question is an interference with this business, and is therefore void. The statute is general. It is made penal for appellant to transact any of its business in this state without first paying the tax.

5. While the tax is measured by the number of miles of wire operated in this state, it is nevertheless a privilege or license tax, pure and simple. Viewed as an ad valorem tax, it would not be equal and uniform, since other property is not taxed in this way.

In support of the main points, see Foster v. Master & Warden, 94 U.S. 246; Moran v. New Orleans, 112 Ib., 69; Gloucester Ferry Co. v. Pennsylvania, 114 Ib., 196; Pickard v. Pullman Co., 117 Ib., 34; Railroad Co. v. Maryland, 21 Wall., 456; Pensacola Tel. Co. v. Tel. Co., 96 U.S. 1; Tel. Co. v. Texas, 105 Ib., 460; Philadelphia Steamship Co. v. Pennsylvania, 122 Ib., 326; Tel. Co. v. Pendleton, 122 Ib., 347; Ratterman v. Tel. Co., 127 Ib., 411; Leloup v. Port of Mobile, 127 Ib., 640; Lyng v. Michigan, 135 Ib., 161; McCall v. California, 136 Ib., 104; Crutcher v. Kentucky, 141 Ib., 47.

Williamson & Potter, for appellee.

It is conceded that appellant transmits messages, private as well as governmental, between points wholly between points in Mississippi, as well as interstate messages. It will also be noticed that the law imposes the privilege tax in lieu of all other taxes. Moreover, the very franchise of the corporation, the right to be a corporation, as distinguished from its material assets, is itself property, and subject to taxation. The tax in question is reasonable, being less than the ad valorem tax would be, and it affects the interstate traffic of appellant only incidentally. We submit that the authorities sustain the validity of the tax. See Home Insurance Co. v. New York, 134 U.S. 594; Maine v. Grand Trunk Railway Co., 142 Ib., 217; Horn Silver Mining Co. v. State, 143 Ib., 305; Ficklin v. Taxing District, 145 Ib., 1; Moore v. Eufaala (Ala.), 11 So. 921; Lumberville Bridge Co. v. State, 26 At. Rep., 711; 8 Wall., 168; 18 Ib., 206; 95 U.S. 80; 100 Ib., 428; 107 Ib., 365; 125 Ib., 530; 141 Ib., 18; 143 Ib. , 805.

OPINION

WOODS, J.

This action was instituted by the revenue agent of the state for the recovery of a privilege tax alleged to be due by the appellant for the years 1888 and 1889, under § 585, code of 1880, and the amendment thereto contained in § 1, ch. 3, acts of 1888. Under the statute thus amended, among other provisions, we find this language: "A tax on privileges is levied as follows, to wit: On each telegraph company operating 1,000 miles or more, which shall be in lieu of other state, county or municipal taxes, $ 3,000; on each telegraph company operating less than 1,000 miles of wire, for each mile of wire, $ 1." The declaration alleges that the appellant operated, in the aggregate, during the years named, three hundred and ninety-one and twenty-eight one hundredths miles of wire in the state of Mississippi, and was, therefore, under the statute, liable for a tax of $ 391.28 for each year named.

It will be thus seen at once that this is a tax imposed upon a telegraph company, in lieu of all others, as a privilege tax, and its amount is graduated according to the amount and value of the property measured by miles. It is to be noticed that it is in lieu of all other taxes, state, county, municipal. The reasonableness of the imposition appears in the record, as shown by the second count of the declaration and its exhibits, whereby the appellant seems to be burdened in this way with a tax much less than that which would be produced if its property had been subjected to a single ad valorem tax.

The pleas bring in question the validity of our statute, and aver its conflict with the interstate commerce clause of the constitution of the United States.

The record presents a federal question, and we acknowledge ourselves bound to follow the decisions of the court of last resort of the United States, if that court shall be found to have adjudicated it. Our difficulty arises from our inability to say with confidence what the supreme court of the United States has finally determined in cases of like character. The reported opinions of that court are so irreconcilable in their variances and seeming conflicts, in our view, that it is with diffidence that the impartial student can affirm what will or will not follow in any given state of case.

If the line of decisions adopted in Pensacola Tel. Co. v Western Union Tel. Co., 96 U.S. 1, 24 L.Ed. 708; Western Union Tel. Co. v. Texas, 105 U.S. 460, 26 L.Ed. 1067; Gloucester Ferry Co. v. Pennsylvania, 114 U.S. 196, 29 L.Ed. 158, 5 S.Ct. 826; Pickard v. Pullman Southern Car Co., 117 U.S. 34, 29 L.Ed. 785, 6 S.Ct. 635; Robbins v. Taxing District, 120 U.S. 489, 30 L.Ed. 694, 7 S.Ct. 592; Leloup v. Port of Mobile, 127 U.S. 640, 32 L.Ed. 311, 8 S.Ct. 1380; and Crutcher v. Kentucky, 141 U.S. 47, 35 L.Ed. 649, 11 S.Ct. 851, stood alone, the settlement of the controversy in the case at bar would be made, without great difficulty, in accordance with the contention of the appellant. But the numerous other cases decided by the same great tribunal, in which was involved the same or like questions as are to be found in those just named, and in which contrary views seem to have been upheld, involves the controversy in much apparent, and, as we think, some real difficulty. If we had for our guidance only the other line of decisions, embracing State Tax on Railway Gross Receipts, 15 Wall. 284, 21 L.Ed. 164; Osborne v. Mobile, 16 Wall. 479, 21 L.Ed. 470; Wiggins Ferry Co. v. East St. Louis, 107 U.S. 365, 27 L.Ed. 419, 2 S.Ct. 257; Western Union Tel. Co. v. Massachusetts, 125 U.S. 530, 31 L.Ed. 790, 8 S.Ct. 961; Maine v. Grand Trunk Railway Co., 142 U.S. 217, 35 L.Ed. 994, 12 S.Ct. 121; Ficklen v....