Postal Tel Cable Co v. City Council of Charleston

• Decision Date: 14 May 1894
• Docket Number: No. 1,009,1,009
• Citation: 38 L.Ed. 871,153 U.S. 692,14 S.Ct. 1094
• Parties: POSTAL TEL. CABLE CO. v. CITY COUNCIL OF CHARLESTON et al
• Court: U.S. Supreme Court

153 U.S. 692

14 S.Ct. 1094

38 L.Ed. 871

POSTAL TEL. CABLE CO.

v CITY COUNCIL OF CHARLESTON et al.

No. 1,009.

May 14, 1894.

R. S. Guernsey and T. Moultrie Mordecai, for appellant.

Charles Inglesby, for appellees.

Mr. Justice SHIRAS delivered the opinion of the court.

On the 1st day of July, 1892, the Postal Telegraph Cable Company, a corporation of the state of New York, filed in the circuit court of the United States for the district of South Carolina a bill of complaint against the city of Charleston, a municipal corporation of the state of South Carolina, and William L. Campbell and Glenn E. Davis, citizens of the state of South Carolina, and, respectively, sheriff and treasurer of said city, seeking to restrain the collection of a license imposed upon the said Postal Telegraph Cable Company by an ordinance of the city council of Charleston. A preliminary injunction was granted enjoining the defendants from proceeding to collect said license until the hearing of the cause on its merits. Answers were filed by the city and by the city treasurer and city sheriff, and issue was joined by repli- cations. The complainant put in evidence tending to sustain the allegations of the bill.

The facts, as disclosed by the bill, answers, and evidence, were substantially these:

The Postal Telegraph Cable Company, a corporation of the state of New York, has an office in the city of Charleston; is engaged in sending and receiving messages by wire to and from points inside and outside of the state of South Carolina; and has its lines over the post roads, highways, and railroads in the city of Charleston, and in several of the states. The company has accepted the provisions of the act of congress approved July 24, 1866, whereby it has put its lines at the service of the United States for postal, military, and other purposes, and given precedence to its business. The company has offices in other cities and towns in South Carolina, several of which have adopted ordinances exacting licenses from the company. During the year commencing January 1, 1892, and for several years prior to that time, the company has been engaged in the business of receiving and sending telegrams for private persons and for the public between the city of Charleston and other places within the state of South Carolina, and also in sending telegraphic communications between the governmental departments of the United States, and was and is engaged in the telegraph business for the purpose of interstate commerce. By an act approved December 17, 1881, the general assembly of the state of South Carolina authorized the city council of Charleston to impose a license tax, not exceeding $500, on all persons engaged in any business, trade, or profession in the city of Charleston. By an ordinance entitled 'An ordinance to regulate licenses for the year 1892' the city council enacted that every person, firm, company, or corporation engaged in any trade, business, or profession within the city of Charleston should obtain, on or before the 20th day of January, 1892, a license therefor. The provision relating to telegraph companies is as follows: 'Telegraph companies or agencies, each, for business done exclusively within the city of Charleston, and not including any business done to or from points without the state, and not including any business done for the government of the United States, its officers or agents, $500.' A penalty, for failure to take out the license, of 50 per cent. of the amount of the tax was provided for, and a continuing penalty of 50 per cent. for each day's business done without taking out such license. The Postal Telegraph Cable Company, after notification, declined and failed to take out and pay for such license, and, on May 28, 1892, in pursuance of the terms of the ordinance, the license tax of $500, with penalty of 50 per cent., was assessed against the company, and put in the hands of the city treasurer for collection, who issued execution therefor, addressed to the city sheriff, requiring him to proceed to collect said license tax and penalty by distress and sale.

At the final hearing, on June 21, 1893, the temporary injunction was dissolved, and the bill dismissed with costs. From this decree the present appeal was taken.

We do not deem it necessary to discuss the contention that the ordinance imposing the license tax in question is invalid by reason of its disregard of provisions of the constitution of South Carolina. The supreme court of that state has, in several cases, judicially settled that the power to raise revenue by a license tax on business, given by statute to the city council of Charleston, does not violate any provision of the state constitution. State v. Hayne, 4 S. C. 413; In re Jager, 29 S. C. 443, 7 S. E. 605.

It is claimed that the license required by the ordinance is a tax upon the telegraph company for the privilege of exercising its franchise within the city of Charleston, and not an exercise of the police power granted to the city by the state; that the Postal Telegraph Cable Company having constructed its lines along post roads in the city of Charleston and elsewhere, no state or municipal authority can exact a license for the privilege of conducting its business, thus restraining the powers possessed by it under its franchises and under the acts of congress; and that the ordinance in question is an interference with interstate commerce, and therefore void.

The questions thus suggested have been so frequently and so recently considered and decided by this court, in well-known cases, that our duty will be sufficiently performed by briefly citing and applying those cases.

That this license is not a condition upon which the right to do business depends, but is a tax, is shown by the case of Home Ins. Co. v. City Council of Augusta, 93 U. S. 122. There the city council of the city of Augusta passed an ordinance which imposed a license tax of $250 'on each and every fire, marine, or accidental insurance company located, having an office, or doing business within the city of Augusta.' The Home Insurance Company, a corporation of the state of New York, and having an agency in the city of Augusta. refused to recognize the obligation of the ordinance, and filed a bill in the superior court of Richmond county in the state of Georgia to enjoin the city council from collecting the license tax. That court, having refused the injunction prayed for, and having dismissed the bill, the case went to the supreme court of Georgia, which affirmed the decree of the superior court, and the case was then brought to this court.

It was argued on behalf of the insurance company that, as it had complied with the provisions of the laws of Georgia which authorized foreign insurance companies to do business in that state, it was not competent for a municipal corporation of the state to impose an additional condition on the right of the company to do business. But it was held, citing License Tax Cases, 5 Wall. 462, that the license in question must be regarded as nothing more than a tax; that the penalty provided was a mode of enforcing its payment; and that the license, when issued, was only a receipt for the tax, and not a grant of an authority to conduct business on condition of paying the license.

In Wiggins Ferry Co. v. City of East St. Louis, 107 U. S. 376, 2 Sup. Ct. 257, where a ferry company, authorized by an act of...