City Council Of Augusta v. Augusta & A. Ry. Co

• Decision Date: 15 July 1908
• Citation: 61 S.E. 992,130 Ga. 815
• Court: Georgia Supreme Court
• Parties: CITY COUNCIL OF AUGUSTA et al. v. AUGUSTA & A. RY. CO.

130 Ga. 815

61 S.E. 992

CITY COUNCIL OF AUGUSTA et al.

v.AUGUSTA & A. RY. CO.

Supreme Court of Georgia.

July 15, 1908.

Commerce — Interstate Commerce — Taxation.

Where a city grants permission to an electric railway company, exclusively engaged in the transportation of interstate freight and passengers, to use certain of its streets by running its cars over the tracks of a local street railway company, under the terms, conditions, and limitations specified in the contract between the two companies, it cannot impose a specific annual tax on the business of such railway company for running its cars in the city's streets. Such a tax is laid on the business of carrying on interstate commerce, and amounts to a regulation of it, which under the federal Constitution belongs solely to Congress.

[Ed. Note.—For cases in point, see Cent. Dig. vol. 10, Commerce, § 114.]

(Syllabus by the Court.)

Error from Superior Court, Richmond County; H. C. Hammond, Judge.

Action by the Augusta & Aiken Railway Company against the City Council of Augusta and others. Judgment for plaintiff, and defendants bring error. Affirmed.

The Augusta & Aiken Railway Company, a South Carolina corporation, is an interurban railroad company, and operates an electric railroad from Aiken, S. C., to Augusta, Ga. In April, 1903, it entered into a contract with the Augusta Railway Company, a street railway, for the use of the latter's tracks in the city of Augusta, subject to the approval of the city council of Augusta. On October 6, 1903, the city council of Augusta passed an ordinance granting permission to use the streets of Augusta by running its cars upon the tracks of the Augusta Railway Company on certain streets, under the terms, conditions, and limitations set out in the contract between the Augusta & Aiken Railway Company and the Augusta Railway Company, and providing that the grant to use the streets should expire with the charter of the Augusta Railway Company. Pursuant to this contract and ordinance, and on the faith thereof, the Augusta & Aiken Railway Company engaged in the business of transporting freight and passengers to and from Augusta over the tracks of the Augusta Railway Company, and had expended large sums, and assumed large obligations in carrying out its contract with the local company in compliance with the ordinance. On December 29, 1905, the city council of Augusta enacted a "business license ordinance, " the caption and material parts of which are as follows: "An ordinance to fix the annual and specific taxes and licenses of the city of Augusta on business occupations and professions for the year 1906, and to provide for the collection of the same." Section 1 of the ordinance ordains: "That the following annual and specific taxes and licenses on business occupations and professions, to be paid by the person or persons carrying on or engaged in said business occupations or professions, * * * shall be levied and collected, * * * and execution [with a penalty], upon the amount of said taxes and licenses, shall be issued and enforced for all such annual and specific taxes and licenses, " etc. "Sec. 2. On the business of the following, viz.: * * * Upon every railroad company not exempted by contract or otherwise, for running cars on the streets of Augusta, $1,666.66." And on December 14, 1906, a similar ordinance was passed in the same language for the levy and collection ofa similar specific tax and license on business occupations and professions for the year 1907. Upon the authority of these ordinances, the city council of Augusta caused to be issued executions against the Augusta & Aiken Railway Company for the amount of the tax for each of the years 1906 and 1907. The Augusta & Aiken Railway Company filed their petition to enjoin the levy and collection of the tax, on the grounds that it did not do any intrastate business; that it was solely engaged in the transportation of freight and passengers to and from the city of Augusta and points in the state of South Carolina, and did not enter into the business of transporting freight or passengers from any points within the limits of the city of Augusta or the state of Georgia to any other such point; and that it was not operating a street railroad, but an interurban railroad company. The court enjoined the levy and collection of the fi. fas., and the city excepted.

C. Henry Cohen, for plaintiffs in error.

Boykin Wright and Geo. T. Jackson, for defendant in error.

EVANS, P. J. (after stating the facts as above). The first contention advanced by the defendant in error as a reason why it is not liable for the tax which the city of Augusta is asserting its right to collect is that, inasmuch as it is a railroad company engaged exclusively as a common carrier of interstate freight and passengers, it is within the protection of the commerce clause of the Constitution of the United States, which reserves to Congress the exclusive power to regulate commerce among the several states. A long line of decisions of the Supreme Court of the United States, beginning with the case of Brown v. Maryland, 12 Wheat. 419, 6 L. Ed. 678, has firmly established the proposition that a tax laid on the occupation or business of carrying on interstate commerce is a burden on that commerce, and amounts to a regulation of it, which under the Constitution of the United States belongs solely to Congress. Williams v. Fears, 110 Ga. 589, 35 S. E. 699, 50 L. R. A. 685. It is admitted in the record that the defendant in error is a railroad company, exclusively engaged in transporting freight and passengers to and from the city of Augusta in this state to and from points in the state of South Carolina, and that it does not handle any intrastate business. This being true, the city of Augusta cannot legally impose a tax on its...