Roberts v. Federal Land Bank of New Orleans

• Citation: 189 Miss. 898,196 So. 763
• Decision Date: 10 June 1940
• Docket Number: 34205
• Court: Mississippi Supreme Court
• Parties: ROBERTS, SHERIFF, v. FEDERAL LAND BANK OF NEW ORLEANS

196 So. 763

189 Miss. 898

ROBERTS, SHERIFF, v. FEDERAL LAND BANK OF NEW ORLEANS

No. 34205

Supreme Court of Mississippi, Division B

June 10, 1940

Suggestion Of Error Affirmed As Modified, September 10, 1940.

APPEAL from the circuit court of Hinds county, HON. J. P. ALEXANDER Judge.

Action by the Federal Land Bank of New Orleans against John W Roberts, Sheriff of Hinds County, to recover back the amount of privilege taxes paid under protest on certain motor vehicles. Judgment for plaintiff, and defendant appeals. Affirmed.

On suggestion of error the court retaxed the costs, relieving John W. Roberts, sheriff, from liability therefor, since he was acting in his official capacity in prosecuting this appeal, and decided that the costs should be paid out of the appropriation for cases in which the state fails.

Affirmed.

Russell Wright, Assistant Attorney-General, for appellant.

As to the question of whether or not the Federal Land Bank of New Orleans has been granted immunity from the payment of this privilege license fee, I simply refer to and adopt the original brief filed by W. E. Gore and T. N. Gore in Craig, State Tax Collector v. Federal Land Bank of New Orleans et al., 194 So. 589, 189 Miss. 309.

Every penny of the money which is derived from the sale of automobile tags and the collection of the privilege license thereon, under Chapter 148 of the Laws of 1938, regular session, is returned to the counties and paid into the county road fund, and not one penny is used for any other purpose than that of the county road fund except the $ 1.00 fee which the sheriff himself keeps for the issuance of such tag, and the sheriff's commission for collection, as provided in Section 12 of such act. It is peculiarly applicable to the Federal Land Bank, because the nature of the business the Federal Land Bank is engaged in is essentially making loans on rural farm lands, which are served by the county highways and not by the state highways generally. The cars of the Federal Land Bank, we must assume, travel on county roads in the appraisal of the farm lands to a much greater extent than such cars traveling on state highways, and it is these county roads which are in part kept up by the sale of the license tags and the payment of the privilege license as reasonable compensation for the use of these roads.

Section 3 of Chapter 148 provides that the privilege tax is levied as reasonable compensation for the use of highways, and there is no justification or basis for the use by the Federal Land Bank of the county highways without the payment of this reasonable compensation when its cars travel back and forth upon such county highways in and about the business of the Federal Land Bank.

The court erred in taxing the costs of this procedure against the sheriff and tax collector, who was being sued in his official capacity. There is no statute by which the state is made liable for costs, and the state cannot be required to pay such costs.

Booze v. Yazoo City, 95 Miss. 699, 49 So. 518.

The sheriff may not relieve himself of liability for failure to collect taxes even if the statute levying such taxes is unconstitutional. Therefore, this sheriff and tax collector had the duty imposed upon him by law of making this collection in his official capacity, and having so made the collection, he was acting officially and not personally, and the court, we respectfully submit, was in error in taxing him with the costs.

W. E. Gore, of Jackson, amicus curiae.

The three questions involved here are: (1) the power of the Congress to forbid this kind of taxation; (2) whether it has been forbidden; and (3) whether the Federal Constitution impliedly forbids the state to impose such taxation as compensation for the use of its roads.

The questions here presented are analogous to, and almost identical with, the questions involved in the case of Craig, State Tax Collector, v. Federal Land Bank of New Orleans et al., 194 So. 589, 189 Miss. 309, except there is no state statutory exemption involved here, as there was said to be there, the contention of the appellee here and in that case erroneously having been sustained. This statutory exemption is still before this court on suggestion of error.

The brief of appellant there on suggestion of error will, I believe, be worth something, as it reflects the construction placed on the Federal Constitutional limitation of the taxing power of the state, by the Comptroller General, the Secretary of the Treasury, and other officers of the Federal Government. The regulations there fully set out show that these officers held the constitutional limitation on the state's power to apply only where the Federal Government itself was hindered, impeded and burdened in the exercise of federal functions.

It is respectfully submitted that this construction is in harmony with all the decisions of the United States Supreme Court which have been rendered since the federal officers so construed the Federal Constitution, and which have not been overruled by that court.

Fed. Land Bank of St. Paul v. De Rochford (N. D.), 287 N.W. 522.

E. F. Steiner, Beverly C. Adams, and T. H. Hedgpeth, all of New Orleans, La., for appellee.

Federal land banks are agencies and instrumentalities of the United States Government.

Smith v. Kansas City Title & Trust Co., 255 U.S. 180, 65 L.Ed. 377, 41 S.Ct. 243; Fed. Land Bank of St. Louis v. Priddy, 295 U.S. 229, 79 L.Ed. 1408, 55 S.Ct. 705; Fed. Land Bank of N. O. v. Tatum, 174 Miss. 264, 164 So. 319; Craig v. Fed. Land Bank of N. O. (Miss.), 194 So. 589.

Agencies of United States can perform only governmental, not proprietary functions.

Graves v. O'Keefe, 83 L.Ed. 577; State Tax Comm. of Utah v. Van Cott, 306 U.S. 511, 59 S.Ct. 595, 83 L.Ed. 927, 120 A. L. R. 1466; Osborne v. Bank of U.S. 6 L.Ed. 204, 9 Wheat. 738; Ala. v. U.S. 38 F.2d 897.

Federal land banks are immune from state taxation under Laws and Constitution of the United States.

Sec. 13, Federal Farm Loan Act (12 U.S.C. A. 781); Sec. 26, Federal Farm Loan Act (12 U.S.C. A. 931); Austin v. Alderman, 19 L.Ed. 226, 7 Wall. 695; Owensboro National Bank v. City of Owensboro, 173 U.S. 664, 43 L.Ed. 850, 19 S.Ct. 537; Bank of Calif. v. Richardson, 248 U.S. 476, 63 L.Ed. 372, 39 S.Ct. 165.

Congress has not only the power to create a corporation to facilitate the performance of governmental functions but has the power to protect the operations thus validly authorized. "A power to create implies a power to preserve." McCulloch v. Md., 4 Wheat. 426, 4 L.Ed. 606. This power to preserve necessarily comes within the range of the express power conferred upon Congress to make all laws which shall be necessary and proper for carrying into execution all powers vested by the Constitution in the Government of the United States. Const., Art. 1, Sec. 8, p. 18. In the exercise of this power to protect the lawful activities of its agencies, Congress has the dominant authority which necessarily inheres in its action within the national field. Houston, E. & W. T. R. Co. v. U.S. 234 U.S. 342, 351, 352, 58 L.Ed. 1341, 1348, 1349, 34 S.Ct. 833. The exercise of this protective power in relation to state taxation has many illustrations.

Pittman v. H. O. L. C., 308 U.S. 21, 84 L.Ed. 16; Keifer & Keifer v. R. F. C., 306 U.S. 381, 83 L.Ed. 784.

Courts have, without exception, sustained immunity of federal land banks and other federal agencies from state taxation.

Fed. Land Bank of Columbia v. State Highway Dept. (S. C.), 173 S.E. 284; Johnson v. Md., 254 U.S. 51, 65 L.Ed. 126; Fed. Land Bank of N. O. v. Crosland, 67 L.Ed. 703, 261 U.S. 374; Pittman v. H. O. L. C., 308 U.S. 21, 84 L.Ed. 16; M. G. West Co. v. Johnson, 66 P.2d 1211; Miss. State Tax Com. v. Brown (Miss.), 193 So. 795; Farmers & Merchants Nat. Bank v. Dearing, 91 U.S. 29, 23 L.Ed. 196; M'Culloch v. Md., 4 Wheat. 316, 4 L.Ed. 579.

Chapter 148 of the Laws of 1938 is a direct tax on federal agency and is prohibited by federal law.

Chap. 148, Miss. Laws of 1938; State v. Lawrence, 105 Miss. 58, 61 So. 975; Chap. 120, Laws of 1914; State v. Lawrence, 108 Miss. 291, 66 So. 745; Williams v. City of Albany, 216 Ala. 408, 113 So. 257; Conecuh County v. Simmons, 19 Ala. App. 65, 95 So. 488; Mills v. Court of County Com'rs, 204 Ala. 40, 85 So. 564; Vernor v. Secretary of State, 179 Mich. 157, 146 N.W. 338; Ingels v. Riley, 53 P.2d 939, 5 Calif. (2d) 154; Saviers v. Smith, 128 N.E. 269, 101 Ohio 132; Cleveland Refining Co. v. Phipps, 277 F. 463; State ex rel. McClung v. Becker, 288 Mo. 607, 233 S.W. 54; Solberg v. Davenport, 211 Iowa 612, 232 N.W. 477; State v. Caplan (Vt.), 135 A. 705; Commonwealth v. Boyd, 188 Mass. 79, 74 N.E. 255; Carley & Hamilton v. Snook, 281 U.S. 66, 12 U.S.C. A. 931.

Argued orally by Russell Wright, for appellant, by W. E. Gore, amicus curiae, and by E. F. Steiner, for appellee.

OPINION

Ethridge, P. J.

The appellant, John W. Roberts, Sheriff of Hinds County, Mississippi, demanded of the Federal Land Bank of New Orleans privilege taxes upon certain motor vehicles operated in the State, which tax was imposed by Chapter 148, Laws of 1938. The Federal Land Bank paid the taxes under protest, and this suit was brought for the purpose of recovering the money so paid.

The declaration set forth that privilege taxes, including accrued penalties, also license plates, were paid for ten automobiles, totaling $ 131.37, which amount was paid by the bank under protest. The bank owned and operated the ten automobiles over the public highways in the State of Mississippi in carrying on the business of the Federal Land Bank exclusively; as contemplated and prescribed by the Act of Congress creating the bank as an instrumentality of the United States Government and not subject...