Rabren v. Pullman Co.

• Decision Date: 04 November 1971
• Docket Number: 3 Div. 454
• Citation: 254 So.2d 324,287 Ala. 623
• Parties: Harvey L. RABREN, as Commissioner of Revenue of State of Alabama v. The PULLMAN CO., a Corp.
• Court: Alabama Supreme Court

Page 324

254 So.2d 324

287 Ala. 623

Harvey L. RABREN, as Commissioner of Revenue of State of Alabama v. The PULLMAN CO., a Corp.

3 Div. 454.

Supreme Court of Alabama.

Nov. 4, 1971.

MacDonald Gallion, Atty. Gen., Willard W. Livingston, Counsel, Dept. of Revenue and Asst. Atty. Gen., Herbert I. Burson, Jr., Asst. Counsel, Dept. of Revenue and Asst. Atty. Gen., for appellant.

J. M. Williams, Jr., Rushton, Stakely, Johnston & Garrett, Montgomery, for appellee.

SIMPSON, Justice.

The facts in this case are not in dispute and were stipulated between the parties as follows:

'1. Plaintiff (Pullman) is an Illinois corporation with its principal place of business in Chicago, Illinois, and is authorized to do business in the State of Alabama.

'2. Defendant is Commissioner of Revenue of the State of Alabama and is charged with the duty of collection (sic) the license tax described in Title 51, Section 186, Code of Alabama, Recompiled 1958.

'3. That heretofore on December 27, 1967, the plaintiff paid tax described in Title 51, Section 186, Code of Alabama, Recompiled 1958, to Defendant, under protest, in the amount of Twenty Thousand ($20,000.00) Dollars, for the year 1968.

'4. This action was begun on February 23, 1968 in the manner prescribed by Title 51, Section 890, Code of Alabama, Recompiled 1958.

'5. Plaintiff is engaged in the business of operating sleeping cars and chair cars commonly called Pullman cars. During the year 1967 the total car miles of its operations throughout the United States totalled 163,792,727, and in 1968 it totalled 115,220,007. That during the year 1967 its total car mileage in lines touching Alabama was 12,488,508 and the total car mileage of its interstate operations within the State of Alabama was 2,675,375, and in 1968 its total car mileage in lines touching Alabama was 8,013,745 and the total car mileage of its interstate operations within the State of Alabama was 1,797,745.

'6. The number of its cars assignable to the State of Alabama on a line mileage basis for the year 1967 was 10.52, and for the year 1968 was 6.64. If the Company was required to assess its property for ad valorem tax purposes for said years, the ad valorem taxes due would be substantially less in amount that (sic) the $20,000.00 license fee.

'7. Plaintiff's total revenue for the years 1967 and 1968, respectively, was $6,264.00 and $3,995.00, for travel between terminal points within the State of Alabama and for sales in Alabama for commissary items in Pullman Company's interstate operations.

'8. Plaintiff does no intrastate business in the State of Alabama and except for its cars moving through Alabama in interstate operations, it owns no real or personal property within the State of Alabama.

'9. That the statute levying the $20,000.00 tax was enacted July 15, 1935 and codified as Section 186 of Title 51, Code of Alabama 1940, and that Plaintiff, The Pullman Company, a corporation, has complied with the statute and paid the $20,000.00 each year since the enactment of the statute through the year 1967.'

As indicated in the stipulation of facts, the Pullman Company paid under protest the license tax levied under Section 186, Title 51, on December 27, 1967, and sought in this proceeding to have the same refunded under the provisions of Title 51, § 890, Code. The trial court rendered its judgment holding:

'* * * that the business done by the Plaintiff in the operation of its sleeping cars, chair cars and other cars, commonly known as Pullman cars, in the State of Alabama, is business that is exclusively interstate in character; and that the tax levied under Title 51, Section 186, Code of Alabama * * * when levied on the business done by the Plaintiff within the State of Alabama, is a direct tax upon business done in interstate commerce.

'It is, therefore, Considered, Ordered and Declared that the tax levied by Title 51, Section 186, Code of Alabama, Recompiled 1958, when levied on the business done by the Plaintiff in the State of Alabama violates the Commerce Clause of the Constitution of the United States, * * * and is therefore unconstitutional, illegal and void and that the tax in the amount of $20,000.00 paid by the Plaintiff under protest and collected by the Defendant was illegally and invalidly collected, and is due to be and should be refunded to the Plaintiff, * * *.'

From that judgment the Commissioner of Revenue perfected this appeal.

Title 51, § 142 of the Code provides:

'It shall be the duty of the department of revenue to assess for taxation all property of all railroad companies, street and suburban railroad companies or persons or companies operating railroad or street railroads, or suburban railroads or sleeping cars in this state; * * * and all property not required by law to be listed for taxation with the county tax assessor; and the owner, president, general manager, agent, trustee, receiver or other person or persons having control of the company's affairs in this state shall make returns of all property of said company located in this state to the department of revenue. Provided, that if any sleeping car company shall pay the license or privilege tax of twenty thousand dollars as provided in section 186 of this title, such company shall not be assessed for taxation under this chapter.'

Title 51, § 186, provides:

'License tax on sleeping, palace, parlor, chair, and buffet cars.--Every person who engages in the business of operating cars usually termed sleeping, palace, parlor, chair, buffet cars or by whatever name called shall be deemed to be a sleeping car company or association engaged in the business of operating or running sleeping cars * * * and doing business in the state of Alabama and shall annually pay in advance on or before the first day in January of each year to the state of Alabama a license or privilege tax in the sum of twenty thousand dollars.'

The Revenue Commissioner in brief seems to concede that the statute under which the tax was paid (§ 186) is violative of the United States Constitution but says that since the taxpayer paid the tax for many years and ignored the constitutional question it has 'ratified it application by payment'. We cannot agree with this contention. As pointed out in Sadler v....