Am. Ry. Express Co. v. Holm

• Decision Date: 10 December 1926
• Docket Number: No. 25720.,25720.
• Citation: 169 Minn. 323,211 N.W. 467
• Parties: AMERICAN RY. EXPRESS CO. v. HOLM, Secretary of State.
• Court: Minnesota Supreme Court

169 Minn. 323
211 N.W. 467

AMERICAN RY. EXPRESS CO.
v.
HOLM, Secretary of State.

No. 25720.

Supreme Court of Minnesota.

Dec. 10, 1926.

Appeal from District Court, Ramsey County; Charles Bechhoefer, Judge.

Proceeding by the American Railway Express Company for mandamus to be directed to Mike Holm as Secretary of State and Registrar of Motor Vehicles. From a judgment pursuant to an order sustaining a demurrer to plaintiff's petition and an alternative writ of mandamus, plaintiff appeals. Reversed, and writ to issue.

Syllabus by the Court

Motor vehicles, owned and used by corporations, paying a gross earnings tax, in the operation of their business, are not subject to the tax imposed by Gen. St. 1923, §§ 2672-2720.

[211 N.W. 467]

Davis, Severance & Morgan, of St. Paul, for appellant.

C. L. Hilton, Atty. Gen., for respondent.

WILSON, C. J.

Appeal from a judgment entered pursuant to an order sustaining a demurrer to a petition and alternative writ of mandamus upon the ground that the facts therein stated do not constitute a cause of action. The petition sought to compel the registrar of motor vehicles to approve applications for registration of a number of automobiles and to assign numbers and issue registration cretificates without the payment of the usual tax.

The record presents the inquiry as to whether a public service corporation, required by statute to pay a gross earnings tax, is also required to pay a tax upon motor vehicles owned and employed by it in the conduct of its business, as a condition to the right to use such vehicles upon state highways.

Prior to the adoption in November, 1920, of article 16 to our Constitution, state money could not be used in the construction of highways. Cooke v. Iverson, 108 Minn. 388, 122 N. W. 251,52 L. R. A. (N. S.) 415. Section 3 of said article 16 authorizes the Legislature to provide by law for the taxation of motor vehicles using the public streets and highways on a more onerous basis than other personal property; provided, however, that any such tax on motor vehicles shall be in lieu of all other taxes thereon, except wheelage taxes which may be imposed by municipalities. Provision is made for the exemption of motor vehicles owned by nonresidents and used transiently or temporarily on our highways.

Under such authority the Legislature enacted sections 2672 to 2720, G. S. 1923. The amendments in 1925 are not here important. It is provided by section 2675 that no motor vehicles, except those owned and used solely in the transaction of official business by foreign powers, federal government, the state or political subdivisions thereof, as mentioned in section 2673, may use the highways until they shall have been registered and the taxes thereon paid. The law makes no provisions for the registration of, or the furnishing of number plates for, motor vehicles not subject to taxation except those owned by the state and its political subdivisions. By section 2676 it requires every owner of a motor vehicle, except those exempted by sections 2673 and 2685, to register; and sections 2677, 2678, say that, upon payment of the tax, the registration certificate and number plates shall issue. The law does not expressly mention motor vehicles owned and used by corporations paying a gross earnings tax. Its language is such that it must mean all motor vehicles except those specifically exempted. Such conclusion finds support in the fact that section 3, art. 16, of the Constitution requires that the proceeds of such tax shall be devoted exclusively to highway purposes. The expression of certain ones as exempt excludes all others. One who seeks shelter under an exemption must present a clear case, as the law is to be construed in favor of the public. Camas Stage Co. v. Kozer, 104 Or. 600, 209 P. 95, 25 A. L. R. 27;Portland v. Kozer, 108 Or. 375, 217 P. 833;Los Angeles, etc., v. Flood Control District (Cal. App.) 248 P. 532;Pac. Gas & El. Co. v. Roberts, 168 Cal. 420, 143 P. 700. This is because the exemption is in derogation of the general rule and in no way infringes upon the rule that, where a statute is capable of two constructions and the intent of the Legislature is in doubt, such doubt must be resolved in favor of the taxpayer. State ex rel. Western Union Tel. Co. v. Minn. Tax Commission, 132 Minn. 93, 155 N. W. 1061;State ex rel. Inter State Mining Co. v. Armson, 166 Minn. 230, 207 N. W. 727.

Appellant pays the gross earnings tax under section 2268, G. S. 1923, which says that it ‘shall be in full and in lieu of all taxes and assessments upon its property.’ This legislation rests on constitutional authority. Appellant now says that this law has not been repealed by the constitutional amendment (article 16), nor by the enactment of the law authorized thereby. This claim rests on the familiar rules of construction, viz. (1) that repeals by implication are not favored; and (2) that particular provisions are not destroyed by subsequent general enactments. The state answers this claim by saying that

[211 N.W. 468]

the lieu provision of the gross earnings tax law is destroyed by the Constitution which allows no exemption, as well as by the legislative act which does not exempt cars in the class of appellant. It also asserts that the Constitution and statutes are not general provisions of law but are indeed as specific and particular as the gross earnings statute, if not more so.

If the gross earnings tax was a constitutional instead of a legislative enactment, appellant's position would be more persuasive. Pac. Gas & El. Co. v. Roberts, supra. But it has been held that a statute exempting municipal property from taxation does not relieve the municipality from the necessity of obtaining a license to operate motor vehicles on the public highways. State v. Preston, 103 Or. 631, 206 P. 304, 23 A. L. R. 414. Where automobiles are owned by a municipality, and by statutory enactment are exempt from taxation, the Legislature may by a general law impose license fees upon every owner of motor vehicles as a condition precedent to the use of the highways, and, in the absence of a specific exception, the motor...