Blue Coach Lines, Inc. v. Lewis

• Decision Date: 24 June 1927
• Citation: 220 Ky. 116
• Parties: Blue Coach Lines, Inc. v. Lewis, et al. Reo Bus Lines Company v. Fuller, Sheriff.
• Court: United States State Supreme Court — District of Kentucky

220 Ky. 116

Blue Coach Lines, Inc. v. Lewis, et al.

Reo Bus Lines Company v. Fuller, Sheriff.

Court of Appeals of Kentucky.

Decided February 4, 1927.

Rehearing Denied June 24, 1927.

1. Taxation. — Ky. Stats., section 4077, prior to amendment by Acts 1926, c. 75, providing that certain enumerated companies and "every other like company, corporation, or association, . . . having or exercising any special or exclusive privilege or franchise not allowed by law to natural persons, or performing any public service," shall pay a franchise tax, held to cover duly licensed operators of bus lines on public highways.

2. Constitutional Law. — Police power includes right to regulate by statute all occupations, which, by their prosecution, actually injure or are highly calculated to injure members of the public.

3. Licenses. — Authority under police power to regulate occupations tending to injure public carries with it power to collect fees, which, in the aggregate, are sufficient to defray administrative expenses, and to also repair any special injuries attributable to the occupation regulated or to the means and instrumentalities employed by it.

4. Licenses. — Fees and charges against operators of bus lines on public highways, imposed by Acts 1924, c. 81, as amended by Acts 1926, c. 112, measured by capacity, weight, and tag charge, held, not an ordinary occupation tax levied solely for general revenue, but a charge exacted for regulation and to repair injuries, being in the nature of rent for highways plus sum for expense of administration so that charge is not double taxation, by reason of Ky. Stats., section 4077, imposing a franchise tax on operators of bus lines.

5. Taxation. — Franchise tax, imposed on operators of bus lines by Ky. Stats., section 4077, is not for regulation and repair of injuries, but is an ad valorem property tax on the value of the special privilege enjoyed.

6. Carriers. — Fees and charges imposed for police purposes on operators of bus lines by Acts 1924, c. 81, as amended by Acts 1926, c. 112, held not illegal because measured by seating capacity and weight of bus and charge for tag required of each bus, thus being mere means of estimating the charge that each bus should bear.

Appeals from Franklin Circuit Court.

R.W. KEENON for appellants.

F.E. DAUGHERTY, Attorney General, GARDNER K. BYERS, Assistant Attorney General, JOHN W. FARMER and JAMES PARK for appellees.

OPINION OF THE COURT BY JUDGE THOMAS.

Affirming.

The questions involved in these two appeals are (1) whether duly licensed and qualified operators of bus lines, over the public highways between fixed termini, are liable to pay a franchise property tax, as provided by section 4077 of the present Kentucky Statutes before it was amended by chapter 75, Acts of 1926, so as to expressly include them, and if so, then may the commonwealth assess and collect such franchise tax both before and since the amendment referred to, and also collect the specified and graduated fees and charges provided by chapter 81, section 19, of the Acts of 1924, and the additional ones provided for by section 27 of chapter 112 of the amendatory Act of 1926 when it became effective? The two actions were brought in different courts. The first one in the caption was filed and heard in the Franklin circuit court, and the second one was filed and heard in the Fayette circuit court. The petitions in each raised and presented the above stated questions, and both courts by their judgments answered them in the affirmative and dismissed the petitions, and from those judgments the plaintiffs, who are the appellants here, prosecute these appeals which have been consolidated and ordered heard together.

The action in the Franklin circuit court was brought against the members of the state tax commission and the commissioner of motor transportation, and sought to enjoin the tax commissioners from certifying any franchise valuation for taxation against the plaintiff in the action either before or since the amendment to section 4077, supra, and, if that should not be done, then to enjoin the commissioner of motor transportation from collecting any of the license fees or charges, under chapter 81 of the 1924 Acts, or chapter 112 of the 1926 Acts, supra, because, as alleged, no such franchise tax was permissible before the amendment to section 4077, but, if so, then the collection by the commissioner of motor transportation of the fees and charges in the chapter referred to would be double taxation, and therefore unconstitutional and void. The Fayette county action only sought to enjoin the sheriff of that county from collecting the certified franchise tax by the members of the tax commission. In each action plaintiffs averred full compliance by them of the requirements in chapters 81 of the 1924 Act and 112 of the 1926 Act, with reference to the payment of license fees and charges therein specified.

It is argued that plaintiffs in no event are liable for a franchise tax, under the provisions of section 4077, before such occupations were expressly enacted into it by the amendment thereto in 1926. That section before the amendment, and so far as pertinent to the question, reads:

"Every railway company or corporation, and guarantee or security company, gas company, water company, ferry company, bridge company, street railway company, express company, electric light company, electric power company, telegraph company, press dispatch company, telephone company, turnpike company, palace car company, dining car company, sleeping car company, chair car company, and every other like company, corporation or association, also every other corporation, company or association having or exercising any special or exclusive privilege or franchise not allowed by law to natural persons, or performing any public service, shall, in addition to other taxes imposed on it by law, annually pay a tax on its franchise to the state, and a local tax thereon to the county, incorporated city, town or taxing district, where its franchise may be exercised.

The 1926 amendment added to the enumerated lists of occupations liable to such a tax that in which each plaintiff is engaged, but it is our conclusion that the language of the section before that amendment was sufficiently broad to include the business of plaintiffs conducted in the manner it is, and that the amendment only rendered certain that which was, to say the least of it, unsettled.

It will be noted that, immediately following the enumerated lists of occupations subject to the taxation contained in the original section, there is this language:

"And every other like company, corporation, or association, also every other corporation, company or association having or exercising any special or exclusive privilege or franchise not allowed by law to natural persons, or performing any public service."

It will be presumed that the Legislature meant something by employing that general language in the statute, and that "something" could have been nothing more or less than to include, as subject to a franchise tax, other corporations and associations than those enumerated, which were "every other like company, corporation or association," and also those "having or exercising any special or exclusive privilege or franchise not allowed by law to natural persons," or such as performed "any public service." It was the conception of the Legislature that all companies so engaged possessed certain privileges not allowed by law to natural persons, and which augmented the value of their property to the extent of the value of such privilege, and which privilege is the right (or franchise) to operate that particular business, and is one of a special nature not allowed by law to natural persons. Generally speaking, a natural person may ordinarily engage in any lawful occupation, but if the occupation is such as to authorize and justify the police power to limit the number of those who may engage in it, and to withhold the privilege except upon validly enumerated conditions, then it becomes special and exclusive, or limitedly so, in its nature; and it would seem to inevitably follow...