Memphis Union Station Co. v. Stratton

• Decision Date: 03 March 1945
• Parties: MEMPHIS UNION STATION CO. v. STRATTON.
• Court: Tennessee Supreme Court

186 S.W.2d 621

182 Tenn. 323

MEMPHIS UNION STATION CO. v. STRATTON.

Supreme Court of Tennessee.

March 3, 1945

Appeal from Chancery Court, Shelby County; L. D. Bejach, Chancellor.

Consolidated suits by Memphis Union Station Company against G. B Stratton, clerk, and others, to recover certain privilege taxes paid under protest. From an adverse decree, complainant appeals.

Affirmed.

Canada, Russell & Turner, of Memphis, for complainant.

S. W Polk, Charles C. Crabtree, and Kenneth C. Larkey, all of Memphis, for defendant.

NEIL Justice.

The complainant filed its original bill in the Chancery Court of Shelby County to recover certain privilege taxes paid under protest. It appears that seven suits were instituted, four of them being against the collecting officials for the State of Tennessee and Shelby County and three against the collecting officials for the City of Memphis. The taxes sought to be recovered were levied upon the complainant as a 'Railroad Terminal Company' pursuant to Item 80 Chapter 108, Public Acts of 1937, and Chapter 408, Private Acts of 1915, which is an amendment to the city charter of Memphis.

Item 80 reads as follows:

'Item 80--Railroad Terminal Companies (Whether operated by owners or leased) In counties of 90,000 inhabitants or over, each per annum $750.00. In counties of from 50,000 to 90,000, each per annum $400.00. Each railroad company receiving and discharging passengers or freight in Tennessee and paying no ad valorem [tax] on its freight and passenger cars, shall pay a privilege tax of $750.00 per annum.'

The private act above referred to authorizes the levy of a privilege tax by the City of Memphis of $750 per annum on railroad terminal companies.

Complainant contended in the trial court that it was not subject to the privilege tax because it was not a railroad terminal company within the meaning of the statute. The Chancellor held that it was liable for the tax, and dismissed all the suits, from which decree complainant has appealed to this Court. There is but one assignment of error, as follows:

'The Court erred in holding and decreeing that complainant, Memphis Union Station Company, was, during the years 1939, 1940, 1942, and 1944, a railroad terminal company or was doing business as a railroad terminal company within the meaning of Chapter 108, Public Acts of 1937, Item 80, or Private Acts of 1915, Chapter 408, as amended by Private Acts of 1919, Chapter 801, or that the Memphis Union Station Company was subject to the provisions of either of said Acts and in holding that the privilege taxes levied by said Acts were lawfully levied and collected for the respective years and in therefore dismissing the bills and denying recovery.

'R. 132.

'This was error on the part of the Chancellor because the complainant, Memphis Union Station Company, during the years referred to, was not a railroad terminal company and was not doing business as a railroad terminal company within the meaning of the taxing statutes but was doing business as a passenger station company.'

It appears that in the court below complainant averred non-liability on two theories: 'First, because by far the major portion of business done by complainant was interstate in character, and, second, because complainant for the years involved was not doing business as a railroad terminal company within the meaning of the taxing statute.' At the final hearing, according to the brief of counsel, the first ground was abandoned. It rested its right of recovery upon the sole ground that 'it was not doing business as a railroad terminal company.'

The question of non-liability is clearly stated by able counsel, as follows:

'The sole question in this appeal is whether the Memphis Union Station, in the light of its operations, is a railroad terminal company within the meaning of these statutes.'

The words 'these statutes' clearly refer to the Act of 1937 and the Private Acts of 1915, to which we have made reference.

It is urged upon us that since this Court used the words 'Railroad Terminal Company' and 'Terminal Railroad Company' interchangeably in the construction of the taxing statutes, as in State v. Union R. Co., 129 Tenn. 705, 168 S.W. 575, Ann.Cas.1915D, 1240, and Ryan v. Louisville & N. Terminal Co., 102 Tenn. 111, 50 S.W. 744, 45 L.R.A. 303, we should rest our decision upon the definition of these words as announced by the Court; or, rather, to consider the definition, as found in United States v. Terminal Railroad Association of St. Louis, 224 U.S. 383, 32 S.Ct. 507, 56 L.Ed. 810, in construing the meaning of our taxing statutes.

Appellant earnestly insists that it is not a railroad terminal company in the light of what it does and does not do within its corporate authority. We readily agree that consideration must be given to what it does in deciding if it is a railroad terminal company, such as the legislature had in mind when the statutes were enacted. Moreover, in arriving at legislative intent, in designating railroad terminal companies liable for the payment of a privilege tax, the Court should not be entirely controlled by any narrow technical definition, but by what a terminal company has authority to do and what it actually does. If what it fails to do or elects not to do under its charter is determinative of liability under the statute, the result would be that every person, firm, or corporation engaged in a particular business which is classified as a privilege could escape liability by merely refraining from doing some of the things generally regarded as part of such business. In Aero Mayflower T. Co. v. Georgia Pub.Serv. Comm., 295 U.S. 285, 55 S.Ct. 709, 711, 79 L.Ed. 1439, 1443, 1444, it was said (Cardozo, J.): 'One who receives a privilege without limit is not wronged by his own refusal to enjoy it as freely as he may.' See also our own case, Nashville Water Co., Inc., v. Dunlap, 176 Tenn. 79, 86, 138 S.W.2d 424, 427, wherein it was said (Smith, Spl. J.): 'As the company is endowed by the charter with all the rights and privileges of a public utility, the fact that it has not wholly exercised these powers and privileges cannot legally change its character.'

In the instant case it is argued that appellant is 'operating merely a passenger station facility which might be carried out by each railroad separately for its own benefit, or which may be carried out by all of them jointly,' and that its facilities are not made available to the several railroad lines it serves for handling freight traffic, etc. It is argued that the tax imposed is 'for the privilege of doing a certain type of business and not a tax for the privilege of doing business in a certain form.' In other words, that the Memphis Union Station is 'not exercising a privilege, for the exercise of which the tax is levied.' In support of this argument counsel have cited State v. Union R. Co., 129 Tenn. 705, 168 S.W. 575, Ann.Cas.1915D, 1240, and Illinois Central R. Co. v. City of Memphis, 21 Tenn.App. 327, 110 S.W.2d 352, 354.

In State v. Union R. Co., supra, the Court held that a 'terminal corporation' was liable for a privilege tax where it assisted railroad transportation companies.

In the Illinois Central Railroad case the Court of Appeals held that the company was not liable for the tax because it was not a railroad terminal company within the meaning of the statute; that it 'is not incorporated as a railroad terminal company under the Acts of 1893, Chapter 11, Code §§ 4060-4065.'

It is here insisted that these decisions should be controlling. In the instant case, however, defendants have pointed...