Postal Telegraph-Cable Co. v. Miller

Decision Date11 November 1929
Docket Number28106
Citation124 So. 434,155 Miss. 522
CourtMississippi Supreme Court

Division B

APPEAL from circuit court of Hinds county, First district, HON. W H. POTTER, Judge.

Action by W. J. Miller, state tax collector against the Postal Telegraph-Cable Company. From a judgment for plaintiff, defendant appeals. Affirmed.


Fitts & Fitts, of Birmingham, Ala., and Flowers, Brown & Hester, of Jackson, for appellant.

The statutory provisions relied upon by the taxing authorities as sustaining the contested tax are Sections 237 and 239 of Chapter 118 of the Laws of 1926. It is obvious from the language of these sections that the legislature intended to sanction a tax on each separate and distinct business carried on by any individual or concern, but did not intend to permit separate taxes against different phases or branches of a single business.

Ex parte Simms, 25 So. 280 (Fla., 1898); Southern Express Co. v. R. M. Rose, 124 Ga. 581, 53 S.E. 185 (1906); American Tobacco Co. v. City of Danville, 125 Va. 12, 99 S.E. 733 (1919); 4 Cooley on Taxation (4 Ed.), sec. 1684.

The transmission of communications by the human voice operating on the same wires, strung upon the same poles, as those used for the transmission of communications by the Morse instrument is not to be regarded as a business separate and distinct from the transmission of communications by the latter method.

Telephone Cases, 126 U.S. 2, 8 S.Ct. 788; Attorney-General v. Edison Telephone Co., 6 Q. B. 244 (1880); National Telephone Co. v. Postmaster-General, 82 L. J. K. B. 1197 (1913), 109 L. T. 562; Anderson Dictionary of Law; Cook on Corporations (8. Ed.), sec. 930; Cumberland Tel. & Tel. Co. v. United Electric Ry. Co., 42 F. 273, (C. C. M. D. Tenn., 1890); Sunset Tel. & Tel. Co. v. Pomona, 172 F. 829; Chesapeake & P. Tel. Co. v. Baltimore & Ohio Tel. Co., 66 Md. 399, 7 A. 809 (1887); Northwestern Tel. Exchange Co. v. Chicago, M. & St. P. Ry. Co., 79 N.W. 315, 317 (Minn., 1899); State v. Central N. J. Tel. Co., 53 N.J.L. 341, 21 A. 460; Wray v. Mott, 84 N.J.L. 769, 86 A. 1103 (1913); Eels v. American Tel. & Tel. Co., 143 N.Y. 133, 38 N.E. 202; Peoples Tel. & Tel. Co. v. Berks and D. T. Road, 199 P. 411, 49 A. 284; Commonwealth v. Pennsylvania Tel. Co., 42 Leg. Int. 180; Cochranton Tel. Co. v. Public Service Commission, 263 P. 506, 107 A. 23; Wisconsin Tel. Co. v. City of Oshkosh, 62 Wis. 32, 21 N.W. 828; City of Texarkana v. Southwestern Tel. & Tel. Co., 106 S.W. 915; San Antonio & A. P. Ry. Co. v. Southwestern Tel. & Tel. Co., 93 Tex. 313, 55 S.W. 117; The Supreme Court of Kansas v. Missouri & K. Tel. Co., 78 P. 886, 889; Iowa Union Telephone Co. v. Board of Equalization, 67 Iowa 250, 25. N.W. 155; Franklin v. Northwestern Telephone Co., 69 Iowa 97, 28 N.W. 461; Davis v. Pacific Tel. & Tel. Co., 127 Cal. 312, 59 P. 698; McLeod v. Pacific States Tel. & Tel. Co., 52 Ore. 22, 95 P. 1009; State Public Utilities Commission v. Postal Telegraph-Cable Co., 285 Ill. 411, 120 N.E. 795.

An occupation tax is an excise exacted for the privilege of carrying on a business in its entirety. Telephonic communication and telegraphic communication are both phases of one and the same art and consequently the business is one and single.

The statute does not impose a tax on the business.

The tax is imposed on the company according to its pole line mileage. No effort was by the legislature made to impose a privilege tax on the right to conduct a telegraph business or to conduct a telephone business.

The legislature was without authority to impose a tax upon the privilege of doing a telegraph or telephone business in this state. An attempt to do so would be in violation of the Commerce clause of Article 1 of the Constitution of the United States.

Miller, State Revenue Agent v. I. C. R. Co., 145 Miss. 422, 111 So. 558; Postal Telegraph-Cable Co. v. Adams, 155 U.S. 688, 39 L.Ed. 311.

The act should be strictly construed.

State ex rel. Collins, Attorney-General v. Grenada Compress Co., 123 Miss. 191, 85 So. 137; Railway v. Clark, 95 Miss. 689, 49 So. 177; Middleton v. Lincoln County, 122 Miss. 673, 84 So. 907.

Franklin, Easterling & Rosenthal, of Jackson, and P. C. Canizaro, of Vicksburg, for appellee.

In Mississippi telegraph and telephone companies are recognized by the statutes as separate and distinct.

Ala., etc., R. R. Co. v. Cumberland Tel., etc., Co., 88 Miss. 438, 41 So. 258.

The intention of the legislature was to place thirty-five cents per mile for each mile of pole line on the long distance telephone business. The tax is not on the company, but it is on the business itself. The privilege tax for the telegraph business is based upon each mile of pole line which it operates in this state, and the privilege tax on long distance telephone business is for a like amount for each mile of pole line which it operates in this state. Thus, the distinctions of the statute are very plain and apparent.

Pullman Palace Car Co. v. Adams, 30 So. 757, 78 Miss. 814; Osborne v. Florida, 164 U.S. 650, 17 S.Ct. 214, 41 L.Ed. 586.

The statute does not violate the commerce clause of Act 1 of the Constitution of the United States.

The legislature was careful to restrict the privilege tax for the business within the state.

37 C. J. 209, 210; 37 C. J. 210, Note 19 and Note 20.

It is stated by appellant that the privilege tax law should be strictly construed in favor of citizens and against the Government. The rule, however, does not compel an adherence to the mere letter of the law, or to a strict grammatical construction so as to defeat the plain legislative intent.

37 C. J. 213; 37 C. J. 230; Planters Lumber Co. v. Wells, 112 So. 9; Mitchell v. City of Meridian, 67 Miss. 644; Memphis & Little Rock R. R. Co. v. State, 42 Am. Rep. 673.

Argued orally by Wm. C. Fitts and J. T. Brown, for appellant, and by Lamar F. Easterling and P. C. Canizaro, for appellee.


Anderson, J.

Appellee brought this action against appellant in the first judicial district of Hinds county to recover of appellant the privilege tax imposed by section 194, chapter 118, of the Laws of 1926 (Hemingway's Code of 1927, section 7762), of thirty-five cents per mile for each mile of pole line operated by appellant in this state, over which appellant carries on a long-distance telephone business. There was a judgment for appellee for the amount sued for, from which judgment appellant prosecutes this appeal.

The cause was tried on facts agreed to by the parties, embodied in writing, and made part of the record, which, leaving off the formal parts, follows:

"The Postal Telegraph-Cable Company is a corporation organized under the laws of the state of Delaware, and is engaged in the telegraph business in the state of Mississippi. It owns a telegraph pole line in the state of Mississippi over which it transmits messages by telegraph in the ordinary course of its business as such telegraph company, and on this pole line it paid to the state of Mississippi as and when due the privilege tax of thirty-five cents per mile imposed by section 193 of chapter 118 of the Laws of 1926.

"The Postal Telegraph-Cable Company does not own or maintain any telephone exchanges in the state of Mississippi, but in order to facilitate the business of certain of its patrons in the state of Mississippi who do a large telegraph business, it has installed telephones in their places of business, and they are thus enabled to talk direct to persons in other towns, provided there is a telephone of the Postal Telegraph-Cable Company installed in the place of business of the person to whom it is desired to talk. No connection is or can be made under such arrangement to any other phone than a phone of the Postal Telegraph-Cable Company. Such telephones are not installed in residences, but only for the use and convenience of the larger business concerns in the state, who desire such service. The connection between these phones is made over and along the telegraph wires of the Postal Telegraph-Cable Company, and over and along the same pole line that is maintained for its telegraph business.

"No additional pole line is maintained for the telephone business. The same wires that are used in the company's telegraph business are also used for the telephone business. Messages by telephone and telegraph are transmitted over these wires at one and the same time, the same wire being used for both purposes at the same time. No rental or other charge is made by the company for the use of the telephone equipment furnished as aforesaid, but a charge is made for each conversation over the line, which charge is approximately twenty-five per cent less than a long-distance telephone call of equal length would be according to the rates in effect over the line of the Southern Bell Telephone Company, which is a telephone company engaged in the local and long-distance telephone business in Mississippi.

"The Postal Telegraph-Cable Company has not paid the additional privilege tax of thirty-five cents per mile on its pole line over which telephone messages are transmitted as aforesaid, which is sought to be imposed and collected under the provisions of section 194 of chapter 118 of the Laws of 1926.

"Any one desiring to talk to a person having one of the phones of the Postal Telegraph-Cable Company can do so by going to the office of the Postal Telegraph-Cable Company and calling such person. This statement, together with the interrogatories and answers thereto filed herein, shall constitute the agreed statement of facts on which this case may be tried."

The applicable provisions of the Privilege Tax Code are section 193 and the second paragraph of section 194, and ...

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