Postal Tel.-cable Co. Of Norfolk Inc v. City Of Norfolk

• Decision Date: 13 January 1916
• Citation: 87 S.E. 555,118 Va. 455
• Court: Virginia Supreme Court
• Parties: POSTAL TELEGRAPH-CABLE CO. OF NORFOLK, Inc. v. CITY OF NORFOLK.

87 S.E. 555

118 Va. 455

POSTAL TELEGRAPH-CABLE CO. OF NORFOLK, Inc.

v.CITY OF NORFOLK.

Supreme Court of Appeals of Virginia.

Jan. 13, 1916.

Error to Circuit Court of City of Norfolk.

Proceeding by the City of Norfolk against the Postal Telegraph-Cable Company of Norfolk, Incorporated. The company was fined in the police court, and appealed to the circuit court. Judgment there going against the company, it brings error. Affirmed.

Robert W. Shultice, of Norfolk, W. W. Cook and R. H. Overbaugh, both of New York City, and J. N. Sebrell, Jr., of Norfolk, for plaintiff in error.

George Pilcher, of Norfolk, for defendant in error.

KELLY, J. This writ of error brings in question the validity of a license tax assessed against the plaintiff in error for the year 1912 under an ordinance of the city of Norfolk, the material part of which is as follows:

"Any person who shall engage in the business of sending telegrams from the city of Norfolk to a point within the state of Virginia, or of receiving telegrams in the city of Norfolk, from a point in the state of Virginia, excepting, however, telegrams sent to or received by the government of the United States or this state, or their agents or officers, shall pay a license tax of $500.00, and in addition $1 per pole on each pole and $1 on every hundred feet of conduit in the streets or alleys of the city of Norfolk owned or used by said person. * * * Nothing in this ordinance shall be construed as imposing a license tax on * * * interstate commerce."

The company refused to pay the tax, and a fine was imposed by the police justice of the city. The company took an appeal to the circuit court, where a jury was waived and all matters of law and fact were submitted to the court, and the judgment here complained of was rendered against the company. The errors assigned may be considered under two general heads.

1. The local property of the company was assessed for taxation, and the taxes thereon were paid for the year 1912. It appears from the evidence that the cost of inspection and supervision exercised by the city over the property was very small. It is contended on behalf of the company that, in these circumstances, the license fee is not maintainable as an inspection or police tax because excessive, and not maintainable as a revenue tax because, there being also an ad valorem tax for revenue, the license tax would result in double taxation.

We do not think the tax in question can be regarded as an inspection tax. The city claims that the business of the company "cannot be reached by an ad valorem system" (Va. Const § 170), and that this tax was a revenue measure, and was charged i for the privilege of doing business in the city. This would seem to be the correct interpretation of the ordinance. Robinson v. Norfolk, 108 Va. 14, 20, 60 S. E. 762, 15 L. R. A. (N. S.) 294, 128 Am. St. Rep; 934. It is true that the tax is graduated to some extent by the number of poles and feet of conduit owned by the company, but the ordinance operates upon all alike, and, if the city did not violate any constitutional inhibitions, it had the right to adopt its own method in fixing the amount. The graduation of license taxes (not merely inspection taxes), according to amount or extent of business, either with or without a fixed minimum, is a common and widely approved practice. Judson on Taxation, § 450; Clark v. Titusville, 184 U. S. 329, 22 Sup. Ct. 382, 46 L. Ed. 569; Howland v. Chicago, 108 111. 500; St. Louis v. Bircher, 7 Mo. App. 169; Va. Tax Bill, § 36; Code 1904, p. 2214; Ould & Carrington v. City of Richmond, 23 Grat. (64 Va.) 464, 14 Am. Rep. 139; Petersburg v. Cocke, 94 Va. 244, 248, 26 S. E. 576, 36 L. R. A. 432; Postal Tel. Co. v. City of Norfolk, 101 Va. 125, 43 S. E. 207 (ordinance substantially the same as in this case except that the fixed minimum was $250 instead of $500); Commonwealth v. Werth, 116 Va. 604, 609, 82 S. E. 695.

Nor is there any merit in the contention that a license tax for revenue, as this one clearly is, results in double taxation when the properties owned by the company and employed in its business have also been subjected to an ad valorem tax. This question is so well settled by the decisions in this state that we need not do more in this connection than to mention a few of them. Commonwealth v. Moore & Goodsons, 25 Grat. (66 Va.) 951, 961; Morgan's Case, 98 Va. 812, 814, 35 S. E. 448; Bradley v. Richmond, 110 Va. 521, 524, 66 S. E. 872, and cases cited.

2. The second proposition upon which the company relies for a reversal of the judgment is that the license tax in question is an illegal burden on interstate commerce (the company doing a large interstate business), and is also confiscatory, and hence violative of the United States Constitution.

The soundness of this position depends in our view of the case, solely upon the correctness and sufficiency of the method used by the company in its effort to demonstrate, as a matter of calculation and bookkeeping, that the tax is a burden on interstate commerce and confiscatory, as alleged. The calculation adopted by the company shows, according to figures taken from the, evidence and employed in the petition, that the tax exceeded the net income from intrastate business at the Norfolk office for the year 1912 by the sum of $1.82, allowing nothing for interest on investment; and, according to figures taken from the evidence and employ-ed in the reply brief for the company, the calculation...