Duke Power Co. v. Bowles
| Decision Date | 04 June 1948 |
| Docket Number | 673 |
| Citation | 48 S.E.2d 287,229 N.C. 143 |
| Parties | DUKE POWER CO. v. BOWLES. |
| Court | North Carolina Supreme Court |
Decision must rest upon the construction of pertinent, possibly interdependent statutory laws in force at the time the tax was imposed, particularly the private statutes authorizing the City of Greensboro to levy a franchise tax upon the plaintiff with respect to the privilege granted and the Public Laws which plaintiff claims modify and limit that authority. Therefore, an attempt will be made to set out these laws in the chronological order of their enactment, along with the history of the imposition of the tax from year to year, in parallel statement.
Such bearing as the nature and extent of the chartered or franchised activities and operations of the plaintiff and the facilities of the municipality utilized may have upon the question will be summarized from the record where important and stated in the proper connection.
The defendant municipality derives its authority for the imposition of the tax from Chapter 37, Private Laws of 1923 particularly Section 50. Section 50 is too long for reproduction in its entirety, but pertinent provisions are summarized:
It provides in substance (and in phraseology where that is important), that no franchise shall be granted by the City until the question has been submitted to a vote of the qualified electors of the City and approved by the majority vote; that the franchise shall not exceed 50 years in duration; reserves the right to compel performance with full superintendence, regulation and control within the police powers given the City; provides that the specific grant shall be put in the form of an ordinance and that certain specified rights and obligations shall be therein expressed; and further provides:
'* * * that any and all rights, privileges and franchises that have been heretofore or that may be hereafter, granted to or held by any person, firm or corporation in the streets alleys, sidewalks, public grounds or places in said city, shall be subject to a tax by said city in such amount as the council may think to be just, separate from and in addition to the other assets of such person, firm or corporation, and in addition to a license tax, and the council may require the rendition and assessment thereof accordingly. * * *'
Under this authority the City, having come to terms with plaintiff's predecessor, entered into an agreement taking the form of a contract and incorporated in the City ordinance and in compliance with the statute the question was submitted to the qualified voters and the issuing of the franchise was approved; and on January 30, 1929, the franchise was granted to plaintiff's predecessor, or to put it technically, the proposed franchise, through the approval by referendum, became effective. Subsequently the separate franchised activities became merged; and by contract with the City, trackless trolleys have becme substituted for street railways.
The plaintiff, successor in title to the franchise rights of the former corporation to whom the franchise was given January 30, 1929, is engaged in the business of furnishing and selling electricity, electric light, current, power and gas, and operating trackless trolleys and busses in the City of Greensboro and other territory.
Under the 1923 law, above cited, the City of Greensboro levied and assessed on the plaintiff and its predecessors in title a franchise tax of $5,000 per annum from 1929 to 1935, inclusive. In 1936 the franchise tax was increased to $7,500 by appropriate ordinance. The plaintiff paid to the City the franchise tax of $7,500 down to the year 1946; and on June 26, 1947, paid $7,500 of the franchise tax levied for the fiscal year 1947-1948. On July 15, 1947, after notice, an ordinance was passed further increasing the franchise tax to $15,000 a year. On July 24, 1947, the plaintiff, under written protest, paid to the defendant the remaining sum of $7,500 imposed for the fiscal year 1947-1948 and promptly made a written demand for its refund; and sought judgment for that amount with interest, G.S. s 105-406.
At the time the 1923 statute, authorizing the municipal tax, was passed the State did not impose a separate franchise or privilege tax upon companies furnishing electricity, gas and transportation. Section 83a, Chapter 101, Public Laws 1925, for the first time imposed an annual tax of one per cent on the gross revenues from such business and put these corporations in a separate classification. Section 203, Chapter 345, Public Laws 1929, increased the tax to two per cent, without any provision of the law affecting the Private Laws of 1923, containing the City's authority to tax. By Section 203, Chapter 427, Public Laws 1931, the State tax was again increased to five per cent. In Section 203, Chapter 445, Public Laws 1933, the tax was increased to six per cent; and a limitation was placed on the amount of privilege or license tax which a municipality might impose on such corporations. The pertinent section, 203(5) is as follows:
'(5) Companies taxed under this section shall not be required to pay the franchise tax imposed by section two hundred ten or two hundred eleven of this article, and no county shall impose a franchise or privilege tax upon the business taxed under this section, and no city or town shall impose a greater privilege or license tax upon such companies than that which is now imposed by any such city or town.'
This limitation remained the same in Chapter 371, Public Laws 1935, but was modified in Section 203 (6), Chapter 127, Public Laws 1937, and made to read as follows:
'(6) Companies taxed under this section shall not be required to pay the franchise tax imposed by section two hundred ten or two hundred eleven of this article, unless the tax levied by sections two hundred ten and two hundred eleven of this article exceed the tax levied in this section, and no county shall impose a franchise or privilege tax upon the business taxed under this section, and no city or town shall impose a greater privilege or license tax upon such companies than the aggregate privilege or license tax which is now imposed by any such city or town.'
It is thus incorporated in Section 203 (6), Chapter 158, Public Laws of 1939,--the Permanent Revenue Act,--and is now codified as G.S. s 105-116 (6).
The contention of the plaintiff is that the several Public Laws cited above operated to repeal or modify the Private Laws of 1923 so as to limit the authority of the City to impose a greater franchise tax than that imposed prior to their enactment. It is necessary to compare the 1939 Act with the previously existing Private Law of 1923, critically in point, to settle that question.
In making up the case on appeal it was agreed between the parties that 'the sole question involved in this action is whether the City of Greensboro was authorized under existing laws to levy the tax upon the plaintiff that the plaintiff now seeks to have refunded.'
Judge Armstrong, being of the opinion that upon the facts presented the plaintiff was entitled to the refund demanded, entered a judgment to that effect, from which the defendant appealed.
W. S. O'B. Robinson, Jr., of Charlotte, and R. M. Robinson, of Greensboro, for plaintiff-appellee.
Herman C. Wilson and Brooks, McLendon, Brim & Holderness, all of Greensboro, for defendant-appellant.
Section 50 of Chapter 37, Private Laws of 1923, confers on the City of Greensboro the power to grant a franchise of the sort concerned in this controversy, and provides that it 'shall be subject to a tax by said city in such amount as the council may think to be just' and 'in addition to a license tax.'
The plaintiff is operating under a franchise granted under this authority to a predecessor in title. Prior to 1933 the tax rate was advanced from $5,000 to $7,500 for the fiscal year; and in 1947 the city council, by appropriate ordinance, further increased the tax rate to $15,000. There is no question raised as to whether the tax is excessive or unjust. The appellee contends that the authority of the municipality to increase the tax beyond the prior amount is divested by operation of Section 203 (5), Chapter 45, Public Laws of 1933, and successive statutes of similar import (the legislative history of which is above set out), finally incorporated in the Permanent Revenue Act of 1939, and now appearing in that Act, as codified in the General Statutes, as Section 105-116, Subsection 6. For convenience of comparison we requote the pertinent part of this subsection:
'* * * no county shall impose a franchise or privilege tax upon the business taxed under this section, and no city or town shall impose a greater privilege or license tax upon such companies than the aggregate privilege or...
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