Coca-Cola Co. v. Skillman

• Decision Date: 09 December 1907
• Docket Number: 13073
• Citation: 91 Miss. 677,44 So. 985
• Court: Mississippi Supreme Court
• Parties: COCA-COLA COMPANY v. SKILLMAN

44 So. 985

91 Miss. 677

COCA-COLA COMPANY v. SKILLMAN

No. 13073

Supreme Court of Mississippi

December 9, 1907

FROM the chancery court of Alcorn county, HON. JOHN Q. ROBINS Chancellor.

The Coca-Cola Company, a non-resident corporation, and certain merchants of Corinth, Miss. appellants, were complainants in the court below, and Skillman, Tax Collector of Alcorn county, appellee, defendant there. From a decree sustaining defendant's demurrer to the complainants' bill and dismissing the suit, complainants, declining to amend appealed to the supreme court.

Complainants sought to enjoin the tax-collector from collecting the privilege tax imposed by Code 1906, § 3790, which, being preceded by a section, 3771, providing that "A tax on privileges is levied, etc," is as follows:

"Sec 37,0. Coca-cola, Colavin, etc.-- On each

factory or bottling establishment for the bottling of

coca-cola, celery-cola, afri-cola, hecks-cola cola-beta,

and colavin, nervola, and nervo-cola, or any similar

or proprietary drink, the sum of

$ 50.00

"And on each depot for the distribution or shipment

of coca-cola, celery-cola, afri-cola, hecks-cola,

cola-beta, and colavin, nervola, and nervo-cola, or any

similar or proprietary drink, the sum of

150.00

"Provided this act shall not be construed to subject

the bottling establishments to the tax both as

manufacturer and distributor.

"Same, on each retail dealer in coca-cola celery-cola,

afri-cola, hecks-cola, cola-beta, colavin, nervola,

and nervo-cola, or any similar or proprietary drink,

in cities of over three thousand inhabitants

25.00

"Same, in cities of not more than three thousand

and over two thousand inhabitants

10.00

"Same, in towns of two thousand or less inhabitants

5.00

"Same, on each person or firm selling any of the

above drinks in bottles

2.50"

Appellants' contention was that the statute in question is unconstitutional and void for the following alleged reasons:

"(1) It contravenes amendment 15, Sec. 1, of the Constitution of the United States, and Sec. 14 of the Bill of Rights of the State of Mississippi, in that it deprives complainants of their property without due process of law.

(2) It violates that provision of the Constitution of Mississippi prohibiting class legislation and legislation which discriminates in favor of one person as against others.

(3) It violates Sec. 112 of the Constitution of Mississippi, providing that all taxation shall be equal and uniform throughout the state and property shall be taxed according to its value and shall be assessed for taxes by uniform rules, according to its true value, while this privilege tax is determined by the number of inhabitants that live in the city or town.

(4) It violates Sec. 112 of the Mississippi Constitution, denying the county the right to levy any tax in addition to this state tax.

(5) It violates Sec. 14 of the Mississippi Constitution, since it denies to complainants the right to acquire, own, enjoy, dispose of, and contract in reference to their property.

(6) It is in restraint of lawful trade and commerce, and is against the public policy of the state."

Affirmed.

Candlers, Thompson & Hirsch; R. L. D. McAlister and Candler & Candler, for appellants.

The words, "or proprietary" as used in the Code section in issue, are intended as explanatory of the word, "similar," and it was obviously the intention of the Legislature to explain wherein the similarity must exist, in order to render the drink subject to taxation. Not only the drinks named in the Code section, but also all similar (that is, proprietary) drinks should be taxed, according to the intention of the Legislature. Had a different meaning been intended, the word, "and" would have been used instead of "or."

Treating the statute as a license tax upon the manufacturers, distributors, bottlers and retailers of proprietary drinks alone, we submit that the statute is clearly and palpably repugnant to the uniformity clause of the state constitution. The only legitimate distinction between a so-called "proprietary" drink and one that does not fall within that class, is that the exclusive right to manufacture or sell the former is vested in some particular person. According to this view of the statute, under the plain meaning of the words therein as defined by the dictionaries, no matter how similar two drinks may be as to color, taste, smell and effect, if one is manufactured by a private formula, or if its label is protected by copyright, while the other may be manufactured by the general public, the first is subject to the occupation tax while the second is relieved from all burdens of taxation.

It is conceded that the constitutional requirement that taxation shall be uniform, applies primarily to a tax on property, and does not operate in such manner as to prevent unequal taxation on various classes of business or occupations. But it is universally held that an occupation tax must be uniform on all the individuals of the class taxed. In the present case "proprietary drinks" are merely those members of the class of soda-fountain beverages whose manufacturers have the proprietary right to the formula of their manufacture. They are the branded cattle, as distinguished from the large herds of mavericks which roam the fields of non-alcoholic beverages, and to classify proprietary drinks as a separate group for taxation is entirely without reason, and cannot stand the constitutional test of uniformity within the class taxed. It would be just as reasonable to place a tax specially on trade marked articles; in fact that is practically what the statute seeks to do.

Classification of business or occupation for taxation must be reasonable. 21 Am. & Eng. Ency. Law (2 ed.), 804; State v. Alsabrook, 154 Mo. 375; Pullman Co. v. State, 64 Tex. 274; Ex parte Frank, 52 Cal. 606; Ames v. People, 25 Colo. 508; County Comm'rs v. Dunn, 21 Colo, 185; Ottumva v. Zekind, 95 Ia. 622; New Orleans v. Louisiana Bank, 20 La. Ann., 373.

The Legislature may select the subjects of taxation, and may classify them; but all of the same class must be taxed alike. Vicksburg Bank v. Worrell, 67 Miss. 47; s.c., 7 So. 219.

Taxation must be uniform on members of the same class of business. Hill v. Abbeville, 59 S.C. 396; Hoefling v. San Antonio, 85 Tex. 228; 15 L. R. A., 608; Nashville v. Althrop, 45 Tenn. 554; Peoria v. Gugenheim, 61 Ill.App. 374.

The case of Vicksburg Bank v. Worrell, 67 Miss. 47; s.c., 7 So. 219, relied upon by the learned attorney-general as controlling this case, is stronger authority for the appellants than for the appellee. The second head-note or syllabus in that case lays down broadly the principle upon which our case rests, viz., that an occupation tax, to be constitutional must be uniform within the class selected for taxation. On its facts it is distinguishable from the case at bar. In the case cited an occupation tax was laid upon all banks, graduated according to their "capital and assets." All banks in Mississippi were subject to the tax; and the graduation of the tax according to the ability of the bank to pay, was not only not arbitrary, but was reasonable and just. It is true that the learned court said that "the subjects of taxation may be classified at the discretion of the Legislature," but it adds the significant requirement that all of the same class must be taxed alike.

We submit that the different authorities cited by the learned attorney-general for appellee are not in point. And, in conclusion, we further submit that the cases of Rodge v. Kelly, 88 Miss. 209; s.c., 40 So. 552, and Hyland v. Sharp, 88 Miss. 567; s.c., 41 So. 264, are absolutely controlling of the question here presented for consideration. In the two cases cited the Legislature had laid an occupation tax on money lenders, (not on all money lenders) who took a certain sort of security, viz., household furniture, wearing apparel, etc. as security for the loans. In the case at bar the Legislature undertook to impose a similar tax upon manufacturers, distributors and dealers in "soft drinks" or non-alcoholic beverages, and not on dealers in all sofe drinks, but only those which are classified as "proprietary drinks."

In addition to the cases above cited, we call the court's attention to the following authorities supporting our views above presented: Ozan Lumber Co. v. Bank, 145 F. 344; St. Louis v. Spiegel, 75 Mo. 145.

R. V. Fletcher, attorney-general, for appellee.

It must be borne in mind that the statute does not impose a tax upon the sale of coca-cola alone, but it includes the sale of celery-cola, afri-cola, hecks-cola, cola-beta, colavin, nervola and nervo-cola or any similar or proprietary drink. The Legislature has not selected the proprietary drink known as coca-cola for taxation, but has imposed a uniform tax upon a variety of proprietary drinks, and, to make sure that one particular beverage was not selected to be taxed, has provided that other similar or proprietary drinks shall be taxed at the same rate.

The basis of classification under the statute is not to be determined by the question of whether or not the beverage is proprietary, but by the question, whether or not the beverage contains some ingredient which...