American Barge Line Co. v. Cave

• Decision Date: 13 September 1946
• Docket Number: Civil Action No. 1029.
• Parties: AMERICAN BARGE LINE CO. v. CAVE, City Treasurer, and seven other cases.
• Court: U.S. District Court — Eastern District of Louisiana

68 F. Supp. 30

AMERICAN BARGE LINE CO. v. CAVE, City Treasurer, and seven other cases.

Civil Action No. 1029.

District Court, E. D. Louisiana, New Orleans Division.

September 5, 1946.

As Amended September 13, 1946.

Arthur A. Moreno, of New Orleans, La., for plaintiffs.

Howard Lenfant, of New Orleans, La. for City of New Orleans.

Fred S. LeBlanc, Atty. Gen., and W. C. Perrault, Asst. to Atty. Gen., for State of Louisiana.

CAILLOUET, District Judge.

These eight suits were consolidated for the purpose of trial, the pleadings in each being, substantially, of the same general pattern.

Each one of the four plaintiffs in interest in said suits seeks to recover from the Commissioner of Public Finance and ex-officio Treasurer of the City of New Orleans, and from the State Tax Collector for the City of New Orleans, respectively, a stated sum of money paid, under protest, in settlement of claimed ad valorem taxes levied under assessments made by the Louisiana Tax Commission, upon and against certain watercraft of the plaintiff in interest; each such plaintiff, resisting payment, having availed itself of the provisions of the Act No. 330 of 1938, 6 Dart Louisiana General Statutes, §§ 8444.1-8444.3, and the sum paid, in each instance, having been duly segregated and being still so held, pending the outcome of the particular suit relating thereto.

The original defendant Commissioner of Public Finance and ex-officio City Treasurer, in four of said eight suits, having been succeeded in office by Lionel G. Ott, substitution was effected in due course, under the provisions of Rule 25(d) of the Federal Rules of Civil Procedure, 28 U.S. C.A. following section 723c, and each plaintiff now seeks judgment against said substituted officer, in lieu and in stead of Jess S. Cave, whose term of office has expired.

At the trial, the parties stipulated that the decision reached herein shall be controlling in like suits filed by the plaintiffs, respectively, relative to collected "taxes" of 1945.

In each suit, the plaintiff in interest contends that its corporate domicile is beyond the borders of the State of Louisiana and that none of its "taxed" property, all of which plaintiff operates in interstate commerce traffic upon navigable waters of the United States, has ever acquired a situs within this State.

It is uncontroverted that none of the watercraft of either the American Barge Line Company, DeBardeleben Coal Corporation, and Mississippi Valley Barge Line Company was ever physically present within Delaware, the State of their incorporation, but some, if not all, of the "taxed" property of the Union Barge Line Corporation was so present within Pennsylvania, under whose laws this particular plaintiff was created and enjoys corporate existence, as is made to appear by said plaintiff's amended complaint and the evidence.

The complaints all aver, substantially, that the assessment of plaintiffs' respective watercraft and marine equipment by the Louisiana Tax Commission was without authority of law because said tangible property had no tax situs within the State of Louisiana, having only repeatedly come into the State as occasion demanded while in interstate commerce movements, and for that purpose alone, and having remained in Louisiana only so long as such interstate commerce operations on the State's navigable waters made necessary.

Furthermore, plaintiffs allege that all such assessments so made by said Tax Commission were otherwise illegal in that they were predicated on a mileage basis, arrived at by assuming a certain number of miles to have been traveled by plaintiffs' respective watercraft during the tax year on the navigable waters of Louisiana and likewise assuming, by contrast, a certain mileage traveled by said marine equipment beyond the borders of the State, and then establishing, proportionately, the tax claimed to be due in Louisiana; said Tax Commission not having known, in any instance, the actual mileage traveled, nor having known whether or not all of the watercraft and marine equipment of the plaintiff in interest had come into the State of Louisiana during said tax year.

Plaintiffs also plead and urge that all such assessments were furthermore capricious and arbitrary, because they were actually made without knowledge of the value of any of the "taxed" property and rested solely upon the assumed existence of arbitrarily adopted values; and, finally, that the assessment and collection of the taxes, which plaintiffs now seek to recover, were and are unconstitutional, inasmuch as the same violate the 14th Amendment to the Constitution of the United States, and Article 1, Section 2, of the Bill of Rights of the Constitution of Louisiana, by taking property without due process of law.

To all of which contentions, defendants make reply, substantially, as follows: The taxes collected impose no unconstitutional burden upon interstate commerce; their assessment and collection do not violate the constitutional requirement of due process; the Tax Commission's criticized manner of assessing was resorted to, because the plaintiffs arbitrarily withheld pertinent information from the Commission when requested by it to supply the same for the purposes of assessment; the method of assessment adopted was in compliance with the provisions of the amended Section 29 of Act 152 of 1932, 6 Dart Louisiana General Statutes, § 8370, which direct that "rolling stock or movable property of any railroad company, telegraph company, canal company or other transportation company, whose line lies partly within this state and partly within another state, or states, or whose sleeping cars run over any line lying partly within this state or partly within another state or states, shall be assessed in this state in the ratio which the number of miles of the line within the state has to the total number of miles of the entire lines."

Subsequent to the trial, the cause was re-opened upon joint request of the parties, for the purpose of admitting as evidence their written stipulation to the effect that:

"The Louisiana Tax Commission, in accordance with Louisiana law, preparatory to making an assessment on the water craft equipment of each of the plaintiff corporations, requested definite information from each corporation as to the number of their water craft, the value of each vessel, the total mileage travelled by said water craft in Louisiana waters during the taxable years in question, as compared to the total mileage traversed by said water craft during the said taxable years, and other pertinent information in connection therewith and in each case the plaintiff corporations refused to furnish this specific information, whereupon the Louisiana Tax Commission assessed, based upon the best information available to the said commission, as shown by the testimony of J. H. Cain, C. C. Zatarain, H. H. Huckaby, John H. Fetzer and Sidney J. Mann, the total valuation of the water craft owned by said plaintiff corporations and allotted to Louisiana a percentage thereof which the Louisiana Tax Commission believed to be the correct proportion of the mileage traversed by said water craft in Louisiana as compared to the mileage traversed over the entire water route of said plaintiff corporation."

Considering the stipulations entered into between the parties and the testimony adduced from witnesses at the trial (or produced thereat by depositions), as well as the documentary evidence forming part of the respective records, it is found that the paid taxes sought to be recovered are those relating to the years 1944 and 1945 except that, as to Union, the taxes involved are those of 1945.

The following other facts are likewise found, viz.:

(1) The American Barge Line Company, which will hereafter be referred to simply as American, while the names of the remaining three plaintiffs, for the like reason of brevity and convenience, will be written: Mississippi Valley, Union, and DeBardeleben, respectively, is, as previously stated, a Delaware corporation, and so are Mississippi Valley and DeBardeleben. None of the stockholders of either American or Mississippi Valley reside in Delaware, and the great majority of the DeBardeleben stockholders are likewise non-residents thereof. None of the officers and directors of either of said three named corporations reside in Delaware, but the designated agent of each for the service of process in that State, Trust Corporation of Delaware, is there domiciled.

Union is a corporation organized and existing under the laws of Pennsylvania, with its domicile in the city of Pittsburgh, said State, where it maintains its principal business office.

Each of the four named corporations are lawfully engaged in transportation of freight upon inland waters of the United States, under authority of a certificate of public necessity and convenience issued to each by the Interstate Commerce Commission.

The "taxed" towboats of American and DeBardeleben are enrolled under the United States shipping regulations pertaining to vessels engaged in domestic commerce (Title 46, Chap. 12, U.S.C.A.), at Wilmington, Delaware, and there, too, they have voluntarily registered their barges; while the towboats of Union are enrolled at Pittsburgh, and the watercraft of Mississippi Valley are enrolled at St. Louis, Missouri. But this has little or no bearing as concerns the place of taxation. 51 Am. Jur. (1944), § 913, pp. 807-809.

Under neither Delaware nor Pennsylvania law is such marine equipment as is used in interstate commerce by American, Mississippi Valley, DeBardeleben, and Union, respectively, subject to state taxation.

(2) The towboats of American regularly operate between Pittsburgh and New Orleans, and occasionally make a trip from St. Louis to New Orleans. Its barges ply on the Mississippi and Ohio Rivers, between Pittsburgh and New Orleans, and up the Cumberland, the Tennessee, the Monongahela and Kanawha Rivers; they operate,...