Alward v. Johnson

• Decision Date: 24 February 1931
• Docket Number: No. 41,41
• Citation: 282 U.S. 509,75 A.L.R. 9,51 S.Ct. 273,75 L.Ed. 496
• Parties: ALWARD v. JOHNSON, Treasurer of California
• Court: U.S. Supreme Court

282 U.S. 509

51 S.Ct. 273

75 L.Ed. 496

ALWARD

v JOHNSON, Treasurer of California.

No. 41.

Argued Jan. 8, 1931.

Decided Feb. 24, 1931.

Messrs. Simeon E. Sheffey and Burke Corbet, both of San Francisco, Cal., for petitioner.

Mr. U. S. Webb, of San Francisco, Cal., for respondent.

Mr. Justice McREYNOLDS delivered the opinion of the Court.

A tax reckoned, as required by the State Constitution, upon gross revenues derived from an automotive stage line operated by him during the year 1926 between fixed points in California, was assessed against petitioner, Alward. He paid one-half, $1,489.39, the first installment, and then brought suit in the superior court of Sacramento county to recover $1,057.16, the amount imposed because of receipts under his contract for carrying the mails. He asked judgment for that amount, together with costs, further relief, etc.

Section 15, article 13, of the California Constitution, adopted November 2, 1926, provides:

'Taxes levied, assessed and collected as hereinafter provided upon companies owning, operating or managing any automobile, truck or auto truck, jitney bus, stage or auto stage used in the business of transportation of persons or property as a common carrier for compensation over any public highway in this state between fixed termini or over a regular route, * * * shall be entirely and exclusively for highway purposes, and shall be levied, assessed and collected in the manner hereinafter provided. The word 'companies,' as used in this section, shall include persons, partnerships, joint stock associations, companies and corporations.

'(a) All such companies engaged in the business of transportation of persons, or persons and baggage, or persons and express, or persons, baggage and express where the same is transported on the same automobile, jitney bus, stage or auto stage transporting said persons shall annually pay to the state a tax upon their franchises, cars, equipment, and other property, or any part thereof, used exclusively in the operation of their business in this state, equal to four and one-quarter per cent. Of the gross receipts from operations of such companies, and each thereof, within this state.

'All such companies operating trucks or auto trucks engaged in the business of transporting property shall annually pay to the state a tax upon their franchises, trucks or auto trucks, equipment, and other property, or any part thereof, used exclusively in the operation of their business in this state, equal to five per cent. of the gross receipts from operations of such companies, and each thereof, within this state. * * *

'Such taxes shall be in lieu of all other taxes and licenses, state, county and municipal, upon the property above enumerated of such companies. * * *'

The court below declared that the tax prescribed by the foregoing section of the Constitution is identical in kind with the one inaugurated earlier by section 14, which applies to railroad, telegraph, telephone, etc., companies. Under both sections taxes are laid according to gross receipts.

The complaint alleges, in substance:

The plaintiff is engaged in the business of operating an automotive stage line between Redding and Big Bear Cal., by virtue of a contract entered into with the Post Office Department. The mails are carried by motor vehicles.

The gross income derived from operating the line during 1926 follows: From carriage of passengers, $8,803.31; from carriage of freight, $9,806.43; from carriage of United States mail, $42,286.73.

Based upon these receipts, the following tax was assessed for the year 1927: On gross income from passengers, $374.14; from freight, $490.32; from United States mail, $2,114.32. He paid one-half of the total sum so assessed, the first installment.

In earning this revenue, plaintff employed certain designated automotive property, and no other, the actual market value of which did not exceed $15,000. This was devoted chiefly to carrying the mails and had no value in excess of its actual market value; plaintiff's ability to earn more with it than other persons could with the same amount and character of property arose solely from the fact that he had a contract with the United States government for carrying the mails. Without this the stage line could not be operated profitably.

The assessment against the plaintiff is confiscatory, arbitrary, excessive, and does not take into consideration the actual value of the property involved, and was made without...