Allen v. Pullman Palace Car Company

• Decision Date: 16 November 1903
• Docket Number: No. 27,27
• Citation: 48 L.Ed. 134,24 S.Ct. 39,191 U.S. 171
• Parties: J. W. ALLEN, Comptroller of the State of Tennessee, Plff. in Err. , v. PULLMAN'S PALACE CAR COMPANY
• Court: U.S. Supreme Court

191 U.S. 171

24 S.Ct. 39

48 L.Ed. 134

J. W. ALLEN, Comptroller of the State of Tennessee, Plff. in Err.,

v PULLMAN'S PALACE CAR COMPANY.

No. 27.

Argued October 16, 1903.

Decided November 16, 1903.

This is a writ of error to review the judgment of the circuit court for the middle district of Tennessee in suits brought by the Pullman's Palace Car Company to recover from the state of Tennessee moneys paid under protest for taxes levied and collected by virtue of certain laws of the state requiring the payment of sums for the years 1887 to 1893, inclusive. These statutes are set forth in the opinion. The cases were tried to the court without the intervention of a jury, and separate findings of fact and law were made. From the findings of fact it appears that the Pullman Company, a sleeping car company, operated its cars in Tennessee under a contract with railroad companies traversing the state. These contracts required the Pullman Company to furnish the cars, keep the same in order, and to hire the porters and conductors. The railroad companies paid the Pullman Company for the privileges afforded, furnishing light, heat, and water for the cars, and repairing damages due to accident and casualty. The special finding of facts as to the manner of operation in transporting the cars of the Pullman Company sets forth:

During the years 1887 the company operated sleeping cars, as follows: A car left Nashville and went to Memphis nightly and on this car tickets were sold to passengers from Nashville to Memphis, and not beyond. This car remained in Memphis during the day, returning to Nashville the following night, and going no further. The next night, it went from Nashville by way of Chattanooga to Atlanta, Georgia. It remained in Atlanta during the day, and returned the next night from Atlanta to Memphis. On the trip from Memphis tickets were sold from Nashville to Atlanta and to intermediate points in the state of Tennessee. On the nights the cars left Nashville for Memphis and Atlanta for Nashville, a car left Memphis for Nashville and another left Nashville for Atlanta, selling tickets from Memphis to Nashville and intermediate points, and no further, and from Atlanta and intermediate points to Nashville and no further. The car from Memphis to Nashville went on the trip to Atlanta before making a return trip to Memphis, and the car making the trip from Atlanta to Nashville went on the trip the following night to Memphis before making a return trip to Atlanta. The same cars were not used continuously in this service, but were changed from time to time, there being four cars performing the service at all times.

During the year 1887 the East Tennessee, Virginia, & Georgia Railroad Company ran two sleepers of its own, doing a business between Knoxville and Chattanooga, Tennessee. During the years 1889, 1890, 1891, 1892, and 1893 the company has operated sleeping cars between Nashville and Memphis and Atlanta and Nashville, as above set forth. From 1887, continuously, the Pullman Company has operated its cars on the lines of the Nashville, Chattanooa, & St. Louis Railway, the Louisville & Nashville Railroad, East Tennessee, Virginia, & Georgia Railroad, now the Southern Railway, the Newport News & Mississippi Valley Railroad, Illinois Central Railroad, and Cincinnati Southern Railroad, and all other railroads within the state of Tennessee whereon sleeping cars are used, and has taken up, carried, and put down passengers within the state.

In 1887 sleeping cars were operated during a portion of the year between Nashville and Memphis, and did not pass beyond the limits of the state. It was agreed that, without either party waiving any rights, the plaintiff's claim would be abated $1,234.

The gross receipts of the plaintiff per year from lines running into the state of Tennessee was about $500,000. The gross receipts per year from passengers carried locally in Tennessee was about $25,000.

The cars actually used on all these lines during each year would numver over one hundred.

Messrs. John J. Vertrees and Charles T. Cates, Jr., for plaintiff in error.

[Argument of Counsel from pages 174-176 intentionally omitted] Messrs. William Burry and J. S. Runnells for defendant in error.

Statement by Mr. Justice Day:

After making the foregoing statement, Mr. Justice Day delivered the opinion of the court:

The taxes in controversy were levied under certain revenue laws of the state of Tennessee. Those for the years 1887 and 1888 provided: 'That the rate of taxation on the following privileges shall be as follows: Sleeping cars: Each company doing business in the state, on each car, per annum, $500.' Section eight of the act provided: 'That any and all parties, firms, or corporations exercising any of the foregoing privileges must pay this tax, as set forth in this act, for the exercise of such privilege, whether they make a business of it or not.'

The Tennessee act of 1877, imposing a tax upon the running of sleeping cars, was before this court for consideration in the case of Pickard v. Pullman Southern Car Co. 117 U. S. 34, 29 L. ed. 785, 6 Sup. Ct. Rep. 635. That act provided: 'That the running or using of sleeping cars or coaches on railroads in Tennessee, not owned by the railroads upon which they are run or used, is declared to be a privilege, and the companies shall be required to pay to the comptroller by the first day of July following fifty dollars ($50) for each and every said cars or coaches used or run over said roads; and if the said privilege tax herein assessed be not paid as aforesaid, the comptroller shall enforce the payment of the same by distress warrant.'

It was held that the tax was a burden upon interstate commerce, and void because of the exclusive power of Congress to regulate commerce between the states. Unless the statute now under consideration can be distinguished from the one then construed, the Pickard Case is decisive of the present case. Both taxes were imposed under the power granted by the Constitution of Tennessee to lay a privilege tax. This power is held by the supreme court of the state to give a wide range of legislative discretion. Any occupation, business, employment, or the like, affecting the public, may be classed and taxed as a privilege. Knoxville & O. R. Co. v. Harris, 99 Tenn. 684, 53 L. R. A. 921, 43 S. W. 115. In the act of 1877 the running and using of sleeping cars on railroads in the state, when the cars are not owned by the railroads upon which they are run, is declared to be a privilege. Under the act of 1887, the tax is specifically imposed upon a privilege. Under the act of 1877, the tax imposed was $50 for each car or coach used or run over the road. Under the act of 1887, each company doing business in the state is required to pay $500 per annum for the same privilege. The distinction, except in the amount of annual tax exacted, is without substantial difference. Under the earlier act the tax is required for the privilege of running and using sleeping cars on railroads not owning the cars. In the later act it is enacted for the privilege of doing business in the state. This business consists of running sleeping cars upon railroads not owning the cars, and is precisely the privilege to be paid for under the first act, neither more nor less. In neither act is any distinction attempted between local or through cars or carriers of passengers. The railroads upon which the cars are run are lines traversing the state, but not confined to its limits. The cars of the Pullman Company run into and beyond the state as well as between points within the state. The act in its terms applies to cars running through the state as well as those whose operation is wholly intrastate. It applies to all alike, and requires payment for the privilege of running the cars of the company, regardless of the fact whether used in interstate traffic or in that which is wholly within the borders of the...