Cumberland & P. R. Co. v. State
Decision Date | 20 February 1901 |
Citation | 92 Md. 668,48 A. 503 |
Parties | CUMBERLAND & P. R. CO. v. STATE. |
Court | Maryland Court of Appeals |
Appeal from circuit court, Allegany county.
Action by the state of Maryland against the Cumberland & Pennsylvania Railroad Company. From a judgment in favor of plaintiff, defendant appeals. Affirmed.
The following are the prayers of plaintiff and defendant:
Plaintiff's prayer: "The plaintiff prays the court to rule as matter of law that under the pleadings and agreed statement of facts herein the plaintiff is entitled to recover the amount of the state taxes levied against the defendant by the acts of assembly of 1800 and 1896 for each of the years from 1891 to 1898, both inclusive, according to the computation of the same made by the comptroller upon the defendant's returns of the gross receipts for each of the years preceding the 31st day of January in each of said years, as set out in said agreed statement, together with interest upon the taxes for each of said years from the 1st day of August after the same were each so respectively levied, and also the penalty of five per cent (without interest) upon the whole amount of said taxes levied by said acts of assembly for default in payment."
Defendant offered six prayers, as follows:
Argued before McSHERRY, C. J., and FOWLER, BRISCOE, PEARCE, PAGE, and SCHMUCKER, JJ.
Robert H. Gordon, Wm. F. Frick, Hugh L. Bond, Jr., and John W. Lord, for appellant.
George R. Gaither and Benj. A. Richmond, for appellee.
This is an appeal from a Judgment rendered by the circuit court for Allegany county in favor of the state of Maryland for the sum of $76,992.73. The state sued to recover from the Cumberland & Pennsylvania Railroad Company certain taxes claimed to be due for the eight years from January 31, 1890, to January 31, 1898. These taxes for each of the six years up to January 31, 1896, were duly assessed under the provisions of section 1 of chapter 559 of the Acts of 1890, and those for the two ensuing years, under the provisions of section 146 of chapter 120 of the Acts of 1896, which repealed and re-enacted the act of 1890. A plea of nil debet was filed by the defendant, upon which issue was joined, and the case was submitted to the court without the intervention of a jury, upon an agreed statement of facts; the plaintiff offering one prayer, which was granted, and the defendant offering six prayers, all of which were rejected; to which rulings the defendant excepted. These prayers will be fully set out by the reporter.
The act of 1890 declared: The act of 1896 increased the tax upon gross receipts of railroad companies worked by steam power, establishing a scale of rates graded according to the earnings per mile, and specifically declaring the tax to be a franchise tax, but leaving unchanged the apportionment according to the mileage within the state. The agreed statement of facts sets out that part of the defendant's gross receipts upon which the taxes had been assessed by the state tax commissioner were derived from the business of interstate commerce, and what part from business exclusively within the state; also what amount of taxes for the period mentioned was claimed by the state upon the entire gross receipts of defendant, and what amount for the same period was admitted to be due by the defendant upon the entire gross receipts upon business done exclusively within the state; and sets out the tender of this last amount by the defendant at the proper times, and its refusal by the plaintiff. It also shows that the defendant's road is operated in Maryland under a charter from the state of Maryland and in West Virginia under a charter from the state of Virginia; that the termini of its road are at the city of Cumberland in Maryland, at the Pennsylvania state line, and at Piedmont in West Virginia; that the whole length of its road Is 32.05 miles, of which 32.44 are in Maryland, and 21 in West Virginia, and that it is chiefly a coal road, forming a connecting link between the Baltimore & Ohio system at Piedmont and the Pennsylvania Railroad system at the state line of Pennsylvania; and that everything necessary to be done by defendant in order to avail itself of the defense made has been duly done.
The single question thus presented for determination is whether the tax sued for is in part invalid, as being a regulation of commerce among the several states, and therefore in contravention of article 1, § 8, of the constitution of the United States. This question, always important in principle, and serious in result, as involving a possible restriction upon the sovereign power of taxation, essential to the states for the maintenance of their existence,—an existence which has been declared "indestructible" by the states themselves,—has in recent years assumed a larger importance and graver aspect by reason of the enormous increase of expenditures by the federal government, involving correspondingly heavy federal taxation upon the citizens of the several states; since, if the states are denied the power, in return for franchises granted by them to corporations of their creation, to require of them their just contribution to the cost of government, the deficiency must be supplied by constantly increasing exactions from their already heavily burdened citizens. The supreme court of the United States, in 1872, recognized and declared the wrong of unduly narrowing the limits of state taxation by its decision in Osborne v. Mobile, 16 Wall. 479, 21 L. Ed. 470, in which it sustained an ordinance of the city of Mobile requiring a license for any railroad or express company to transact in Mobile a business extending beyond the limits of the state of Alabama; Chief Justice Chase saying: "It is as important to leave the rightful powers of the state in respect to taxation unimpaired as it is to maintain the power of the federal government in their integrity;" and this language was concurred in by Justices Fields, Davis, Miller, Bradley, and Strong, who participated in many of the subsequent decisions of that court involving the consideration of that clause of the constitution.
Standing, then, upon the just and impregnable principle announced in the language which we have...
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