Commonwealth v. Louisville Transfer Co.

• Citation: 204 S.W. 92,181 Ky. 305
• Parties: COMMONWEALTH v. LOUISVILLE TRANSFER CO.
• Decision Date: 21 June 1918
• Court: Court of Appeals of Kentucky

204 S.W. 92

181 Ky. 305

COMMONWEALTH v. LOUISVILLE TRANSFER CO.

Court of Appeals of Kentucky.

June 21, 1918

Appeal from Circuit Court, Jefferson County, Chancery Branch, Second Division.

Proceeding by the Commonwealth, by, etc., against the Louisville Transfer Company. From an adverse judgment, the Commonwealth appeals. Affirmed.

Mat J Holt, of Louisville, for the Commonwealth.

W. W Crawford, of Louisville, for appellee.

SETTLE C.J.

The material question for decision in this case is whether the appellee corporation, the Louisville Transfer Company, is liable for a franchise tax under Kentucky Statutes, § 4077. The judgment of the circuit court declared it exempt from such tax. From that judgment this appeal is prosecuted.

The proceeding was instituted by a revenue agent of the commonwealth seeking to have an assessment made against appellee for alleged omitted property claimed to have been unassessed for the years 1909 to 1913, both inclusive. The statement filed by the appellant is in two paragraphs, the first alleging the omission from assessment and taxation of a considerable amount of tangible personal property owned by appellee for each of the years mentioned, the second claiming liability upon the part of appellee for the franchise tax under the section of the statute supra. To this paragraph the circuit court sustained a demurrer, following which ruling judgment was entered dismissing the proceeding. The section of the statute in question is as follows:

"Every railway company or corporation, and guaranty or security company, gas company, water company, ferry company, bridge company, street railway company, express company, electric light company, electric power 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 the 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."

It is conceded by counsel for appellant that appellee is not a company of the character specifically mentioned in the section, but insisted by him that it is a company exercising a special or exclusive privilege, and, in addition performing a public service, and for that reason liable to the tax. In other words, counsel urges the following contentions: (1) That appellee is a like company to a ferry company, except that it operates on land instead of water; (2) it is a common carrier; (3) it enjoys special privileges by reason of contracts it has made with railroad companies, which privileges are protected by such contracts and are not allowed to other persons; (4) it is engaged in performing a public service.

Obviously the first contention is unsound. There is no similarity between appellee and a ferry company or individual owner of a ferry. The right to operate a ferry is under statutory authority granted by the county court in the form of a license to the owner of the ferry, under the conditions imposed by the statute, which license has the effect to confer upon the licensee, to the exclusion of all others, the sole right to operate the ferry and the right to condemn land for ferry landings. The privilege franchise thus granted is therefore a special or exclusive one not allowed by law to any other person or corporation.

This is not true of the appellee or its business. It is true appellee is a common carrier, but the statute does not declare that every common carrier shall be liable for a franchise tax. If this were true, every person owning a wagon or automobile that ran it in the transportation of passengers or freight would be liable for a franchise tax. Appellee's business seems to be to carry passengers and trunks or other freight from one railroad station to another or to hotels, residences, or other places, but in conducting such business it exercises no privileges which are not allowed by law to natural persons For any person who owns a wagon, hack, automobile, or other vehicle can do precisely the same business that is conducted by the appellee; consequently the fact that its business gives it the character of a common carrier does not of itself make it liable for a franchise tax. Robertson & Co. v. Kennedy, 2 Dana, 431, 26 Am. Dec. 466.

The franchise tax imposed by the statute supra is actually a property tax upon all the intangible property of the corporations named or mentioned therein. The franchise to appellee under its charter is merely a franchise to exist as a corporation, and not a franchise conferring a special or exclusive privilege which the statute makes the subject of taxation. In other words, the intangible property value intended to be subjected to taxation by section 4077 is...