Columbia Gaslight Co. v. Mobley

• Decision Date: 11 March 1927
• Docket Number: 12176.
• Citation: 137 S.E. 211,139 S.C. 107
• Parties: COLUMBIA GASLIGHT CO. v. MOBLEY, County Treasurer. PARR SHOALS POWER CO. v. SAME.
• Court: South Carolina Supreme Court

137 S.E. 211

139 S.C. 107

COLUMBIA GASLIGHT CO. v. MOBLEY, County Treasurer.

PARR SHOALS POWER CO. v. SAME.

No. 12176.

Supreme Court of South Carolina

March 11, 1927

Appeal from Common Pleas Circuit Court of Richland County; C. C Featherstone, Judge.

Separate actions by the Columbia Gaslight Company and by the Parr Shoals Power Company against W. M. Mobley, County Treasurer of Richland County.From an order overruling a demurrer in each case, the defendant appeals.Affirmed.

The decree and order of the circuit judge in each case, which were affirmed by the Supreme Court on appeal, are as follows:

In Gaslight Company Case.

Plaintiff is a South Carolina corporation owning real and personal property in Richland county, consisting of a gas manufacturing plant and distributing system.By a lease executed June 30, 1911, and a supplemental lease executed May 1, 1920, plaintiff leased all of its property to the Columbia Railway, Gas & Electric Company(hereinafter spoken of as the "Columbia Company"), for a term expiring in 1941 and since June 30, 1911, plaintiff has been an inactive and nonoperating lessor corporation, and has not engaged in furnishing or supplying in any manner any commodity or service to the public, or any portion thereof for compensation or otherwise.

These are ultimate facts alleged in the complaint and admitted by the demurrer, on which the matter comes before me for disposition.

Proceeding under section 7 of ActNo. 533, approved March 6, 1922, and section 4810 of the Code of 1922, the Comptroller General assessed $47.39 against plaintiff as its pro rata share of the expenses of the railroad commission of South Carolina for the year 1923, and, "under the order and direction of the Comptroller General," this amount was charged on defendant's books against plaintiff to "be collected by"defendant"in the manner provided by law for the collection of taxes from such corporation."(Quotations are from section 4810 of the Code.)

Plaintiff paid the $47.39 to defendant under protest, and brings this action to recoup such payment, under section 512 of the Code of 1922, vol. 3.

The first ground of demurrer is that this money has gone into the state treasury, so that the state is the real party in interest, and that the suit is in effect one against the state without its consent.But section 512 authorizes such a suit against the county treasurer in the case of state as well as county taxes, and supplies the state's consent to be sued, provided the payment in question is a "tax" within the meaning of this section.The second ground of the demurrer makes the point that it is not such a "tax," so that the first two grounds turn on this single question.

In Railway v. Gibbes,24 S.C. 60, a suit was brought under the same statute(section 512) to recoup a similar assessment on the ground that the statute imposing the assessment (section 4810) was unconstitutional.The point that the assessment was not a tax within section 512 was not specifically referred to as the discussion, both on circuit and on appeal, was limited to the merits, the constitutional question.The fact, however, that neither the learned Attorney General nor the court questioned the propriety of the remedy, and that the case was disposed of on its merits, makes it at least persuasive authority against the defendant's contention here.I will, however, briefly consider this contention as a de novo proposition.

It would seem to be an exceedingly inequitable situation if plaintiff cannot use the simple remedy provided by section 512 to secure a judicial determination of the question whether it is a "public utility" within the act of 1922, and liable as such for this assessment.The well-defined policy of our statutes(see, also, section 513) is to require payment under protest and suit to recover rather than an injunction proceeding.The benefits to the state are self-evident.The court should be reluctant to hold that a party who has bona fide paid his money in reliance on this remedy cannot thereby secure a decision as to the legality of such payment.This is merely a question of remedy, and the remedial statute should be liberally construed in a case of this character, if such construction be necessary to reach and decide the merits.25 R. C. L. p 1076, § 298;Trammell v. Mfg. Co.,102 S.C. 483, 86 S.E. 1057.

In my opinion, however, the suit is within the ordinary and generally accepted meaning of the language used in section 512.This section applies to all cases in which any taxes are charged upon the county treasurer's books and collected by him.The $47.39 was so charged and so paid."A tax is 'a pecuniary burden imposed for the support of the government'--'a demand of sovereignty.'A tax is not a debt.It is not contractual.It is involuntary on the part of the subject."Columbia Ry., Gas & Electric Co. v. Carter,127 S.C. 473, 121 S.E. 377.So was this $47.39.If it was not a tax, what was it?

It has all the attributes and passes all the tests of a "tax."It was "assessed" to raise revenue for a "public purpose"--the support of an agency of the administrative department of our government.It is part of the $39,889.38 appropriated by section 40 of the Appropriation Act of 1923(33 Stat. 277).Any governmental charge imposed for the purpose of raising revenue is a tax regardless of the name by which it is called.State v. Columbia, 6 S.C. 1;Teleg. Co. v Winnsboro,71 S.C. 231; 50 S.E. 870.The charge, irrespective of what it may be called, is "manifestly an excise tax, laid under the benefit theory of taxation upon the public service corporation named for the privilege of exercising their corporate franchise and carrying on their business within the state."Columbia Ry., Gas & Electric Co. v. Jones, 119 S.C. 480, 494, 112 S.E. 267, 272.The measure for the tax is the expense of the railroad commission prorated amongst the companies liable in proportion to their gross receipts.

Section 7 of ActNo. 533 of 1922 is silent as to the name of the burden.But section 4810 speaks of it both as "an assessment" and as a "tax."It requires "the assessment" to be charged up and collected in the manner provided by law for the collection of taxes, and then remitted to the state treasurer "in like manner as other taxes collected by them for the state."

I have no hesitation in reaching the conclusion that the suit is properly brought.

The question going to the merits is whether plaintiff is a "corporation or public utility under the jurisdiction of the railroad commissioners as provided for in this act," within section 7 of ActNo. 533 of 1922.If it is such a corporation or public utility, then it is subject to this assessment.If it is not, then the assessment has been wrongfully made against and collected from it.

Section 1 of ActNo. 533 of 1922 establishes the railroad commission, but provides that its powers over public utilities shall be prescribed by law.Section 6 vests in the commission power and jurisdiction to regulate the rates and service "of every public utility in this state," and to fix just and reasonable standards, etc., to be observed and followed by "every public utility in this state."This section, however, does not in anywise define what are "public utilities" within the meaning of this term as used in this statute, and the statute is elsewhere entirely silent as to what corporations this classification includes.

While the railroad commission is created by section 14 of article 9 of our Constitution, the Constitution does not undertake to specify its jurisdiction, but contemplates that this is to be fixed by statute.The history of the statuory jurisdiction of the commission shows that the Legislature has never seen fit to extend its powers over all corporations and persons that could constitutionally be subjected to its control--that is, over all public utilities.Prior to 1922 the railroad commission had been given jurisdiction over steamboat lines, steam railroads, interurban electric railroads, telephone, telegraph, and express companies, but other public utilities, such as urban electric railroads, gas companies, electric and power companies, were not within its control.The state did not (prior to 1922) exercise any supervisory control over the rates or service of urban electric railroads.A statute approved in 1910 created the Public Service Commission, which was entirely separate and distinct from the railroad commission, and vested in it supervisory control over the rates and service of gas and electric companies.See26 Stat. 564, codified assections 922-925 of the Code of 1912.If we consider only ActNo. 533, approved March 6, 1922, the matter of the jurisdiction of the railroad commission would be in great confusion, because this act does not specify what control it undertakes to vest in the railroad commission, and nowhere says what it means by "every public utility in this state."

There is, however, another statute adopted at the same session which clarifies the situation.This is ActNo. 525, found at page 938 of the statutes of 1922.Although this act was not approved until March 24th, its number and location in the statute book clearly indicate that in passing ActNo. 533the Legislature had in mind that ActNo. 525 was pending, and knew that it was to be a part of the statute law on this subject-matter.We must, therefore, look to ActNo. 525 and construe ActNo. 533 in connection with it, not only because both are a part of the general statute law on the same subject-matter, but also because the peculiar circumstances of their adoption make this necessary to correctly interpret the legislative intention.ActNo. 533 is the mere...