Postalco v. City of Richmond

• Decision Date: 17 March 1919
• Docket Number: No. 169,TELEGRAPH-CABLE,169
• Citation: 39 S.Ct. 265,249 U.S. 252,63 L.Ed. 590
• Parties: POSTALCO. v. CITY OF RICHMOND
• Court: U.S. Supreme Court

249 U.S. 252

39 S.Ct. 265

63 L.Ed. 590

POSTAL TELEGRAPH-CABLE CO.

v CITY OF RICHMOND.

No. 169.

Argued Jan. 22, 1919.

Decided March 17, 1919.

Messrs. John N. Sebrell, Jr., of Norfolk, Va., and Bynum E. Hinton, of Washington, D. C., for appellant.

[Argument of Counsel from pages 253-255 intentionally omitted] Mr. H. R. Pollard, of Richmond, Va., for appellee.

Mr. Justice CLARKE delivered the opinion of the Court.

The appellant, the Telegraph Company, in its bill filed in the District Court of the United States for the Eastern District of Virginia, sought to enjoin the city of Richmond and its officers from collecting an annual license tax of $300 imposed upon the company by ordinance 'for the privilege of doing business within the city of Richmond, but not including 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,' and also from attempting to collect an annual fee of $2, imposed by another ordinance, for each telegraph pole which the company maintained or used in the streets of the city.

The allegations of the voluminous bill essential to be considered are: That the company accepted the act of Congress of July 24, 1866 (14 Stat. 221, c. 230 [Comp. St. §§ 10072-10077]), entitled, 'An act to aid in the construction of telegraph lines,' etc., and is engaged in transmitting messages by telegraph, intrastate and interstate—this is admitted; and the following which are denied, viz. that the cost of doing the intrastate business transacted by the company at Richmond is greater than the receipts from it, and that since both taxes must be paid, if at all, from receipts from interstate commerce they constitute such a burden upon that commerce of the company as to render them unconstitutional and void.

The evidence introduced on the trial was largely in the form of affidavits, together with a transcript of the evidence taken in a former case, which was stipulated into the record.

The District Court held the taxes valid and dismissed the bill. On the constitutional questions involved a direct appeal brings the case into this court for review.

Except for the contention that this record shows affirmatively and clearly that the taxes complained of are necessarily unreasonable and a burden upon interstate commerce, the case could well be disposed of, without discussion, on the authority of decided cases.

That the city of Richmond has authority, under the statutes of Virginia and its charter, to impose an occupation or license tax on the business of the telegraph company done within the city is clear enough. Virginia Code, § 1042; Charter of the City of Richmond, § 67; Postal Telegraph-Cable Co. v. Norfolk, 101 Va. 125, 43 S. E. 207; Postal Telegraph-Cable Co. v. Norfolk, 118 Va. 455, 87 S. E. 555. Assuming the existence of this power in the city, since interstate and government service are expressly excluded from liability for the license charge, the following cases sustain the validity of the tax: Postal Telegraph-Cable Co. v. Charleston, 153 U. S. 692, 14 Sup. Ct. 1094, 38 L. Ed. 871; Emert v. Missouri, 156 U. S. 296, 15 Sup. Ct. 367, 39 L. Ed. 430; Kehrer v. Stewart, 197 U. S. 60, 25 Sup. Ct. 403, 49 L. Ed. 663; Western Union Telegraph Co. v. Richmond, 224 U. S. 160, 32 Sup. Ct. 449, 56 L. Ed. 710; Williams v. Talladega, 226 U. S. 404, 416, 33 Sup. Ct. 116, 57 L. Ed. 275.

The principle of these cases, and of many others cited in the opinions, is that, as against federal constitutional limitations of power, a state may lawfully impose a license tax, restricted, as it is in this case, to the right to do local business within its borders, where such tax does not burden, or discriminate against, interstate business, and where the local business purporting to be taxed, again as in this case, is so substantial in amount that it does not clearly appear that the tax is a disguised attempt to tax interstate commerce. Such a tax is not, as is argued, an inspection measure, limited in amount to the cost of issuing the license or supervising the business, but is an exercise of the police power of the state for revenue purposes, restricted to internal commerce, and therefore within the taxing power of the state. Postal Telegraph-Cable Co. v. Charleston, Williams v. Talladega, supra, and Western Union Telegraph Co. v. Alabama State Board of Assessment, 132 U. S. 472, 473, 10 Sup. Ct. 161, 33 L. Ed. 409.

A statute of Virginia requires all telegraph companies doing business in the state to transmit all messages, state or interstate, which are tendered by other companies or by individuals upon payment of the usual charges. This requirement that the appellant shall engage in intrastate business, construed with the ordinance imposing the license tax, results, it is argued, in imposing a burden upon its interstate business for the reason that the net receipts from its intrastate business are insufficient to pay the tax, and therefore payment, if compelled, must be made from the interstate receipts. If the facts were as thus asserted it well might be that this tax would be invalid (Pullman Co. v. Adams, 189 U. S. 420, 23 Sup. Ct. 494, 47 L. Ed. 887; Williams v. Talladega, 226 U. S. 404, 416, 417, 33 Sup. Ct. 116, 57 L. Ed. 275), but a careful examination of the record fails to convince us that it contains that clear and convincing evidence that the tax thus falls upon interstate commerce which is necessary to justify a finding that the ordinance is unconstitutional and void.

There remains to be considered the fee, as it is called in the ordinance imposing it, of $2 for each pole maintained or used in the streets of the city of Richmond. This character of tax has also been the subject of definite decision by this court and has been sustained where not clearly shown to be a direct burden upon interstate commerce or unreasonable in amount, having regard to the purpose for which it may lawfully be imposed. St. Louis v. Western Union Telegraph Co., 148 U. S. 92, 13 Sup. Ct. 485, 37 L. Ed. 380; Western Union Telegraph Co. v. Borough of New Hope, 187 U. S. 419, 23 Sup. Ct. 204, 47 L. Ed. 240; Postal Telegraph-Cable Co. v. Baltimore, 156 U. S. 210, 15 Sup. Ct. 356, 39 L. Ed. 399; Atlantic & Pacific Telegraph Co. v. Philadelphia, 190 U. S. 160, 23 Sup. Ct. 817, 47 L. Ed. 995; Western Union Telegraph Co. v. Richmond, 224 U. S. 160, 32 Sup. Ct. 449, 56 L. Ed. 710. These decisions do not conflict with Postal Telegraph-Cable Co. v. New Hope, 192 U. S. 55, 24 Sup. Ct. 204, 48 L. Ed. 338, or Postal Telegraph-Cable Co. v. Taylor, 192 U. S. 64, 24 Sup. Ct. 208, 48 L. Ed. 342. In the former of these cases the decision of this court rests upon its conclusion that the jury found the tax unreasonable in...