Standard Oil Co. of Kentucky v. Limestone County

• Decision Date: 27 June 1929
• Docket Number: 8 Div. 134.
• Citation: 124 So. 523,220 Ala. 231
• Parties: STANDARD OIL CO. OF KENTUCKY v. LIMESTONE COUNTY.
• Court: Alabama Supreme Court

124 So. 523

220 Ala. 231

STANDARD OIL CO. OF KENTUCKY v. LIMESTONE COUNTY.

8 Div. 134.

Supreme Court of Alabama

June 27, 1929

Rehearing Denied Nov. 29, 1929.

Appeal from Circuit Court, Limestone County; James E. Horton, Judge.

Action by Limestone County against the Standard Oil Company of Kentucky. Judgment for plaintiff, and defendant appeals. Affirmed.

Invalidity of commissioners' court order, declaring violation of its regulations for collection of privilege tax a misdemeanor would not affect validity of act or tax levied thereunder. Loc.Acts 1927, p. 135, §§ 1, 2.

Limestone county sued Standard Oil Company of Kentucky to recover an amount alleged to be due the county as a privilege tax upon sales of motor fuels during the month of April, 1929.

The trial was upon an agreed statement of facts, which, so far as here material, are these:

A local act for Limestone county, approved August 5, 1927 (Local Acts 1927, pp. 135, 136) reads as follows:

"To authorize the Court of County Commissioners of Limestone County, Alabama, to levy a tax or privilege license on all persons selling, or keeping in storage for sale, gasoline Woco Pep, or any other motor fuel used by self propelled vehicles, and to provide rules, regulations and machinery for the collection thereof; and to provide penalties for the violation of such rules and regulations.

"Be it enacted by the Legislature of Alabama that:

"Section 1. The Court of County Commissioners of Limestone County, Alabama, may, for the purpose of constructing and maintaining public roads, bridges and ferries in Limestone County, Alabama, impose a tax on gasoline, Woco-pep, or any other motor fuel used by self propelled vehicles sold in the county, or stored in the county for sale, not to exceed three cents (3¢) per gallon; or may impose and collect a privilege license or tax of not more than 3¢ per gallon on all gasoline, Woco Pep, or any other motor fuel used by self propelled vehicles and sold in said county, or stored in said county for sale, for the privilege of selling the same.

"Section 2. That said Court of County Commissioners may also provide rules, regulations and machinery for the collection of such privilege tax or license, and provide penalties for the violation of such rules and regulations.

"Section 3. That all such licenses or taxes to be levied or imposed, and the money derived therefrom shall be used exclusively for the purpose of constructing and maintaining public roads, bridges and ferries in Limestone County, Alabama."

At November term, 1927, the court of county commissioners made an order for the levy of a privilege tax of 3 cents per gallon on motor fuels sold or stored for sale in the county, and prescribing regulations for the collection thereof. Suit for delinquent taxes was authorized, and violation of the regulations was declared a misdemeanor punishable as now prescribed by law.

The gallonage tax to the amount claimed, if legal, was delinquent at the time of suit brought.

Since the levy of this tax, the price of motor fuels sold in Limestone county has been 3 cents per gallon higher than in adjoining counties levying no such tax.

Defendant, by apt grounds of demurrer, raised the several questions going to the constitutionality of the act and regulations made pursuant thereto, which are considered in the opinion. The demurrer being overruled, defendant pleaded the general issue. Judgment went for the county, and defendant appeals.

John S. Coleman, S. M. Bronaugh, and Bradley, Baldwin, All & White, all of Birmingham, for appellant.

Fred Wall and J. G. Rankin, both of Athens, for appellee.

D. P. Wimberly, of Scottsboro, amicus curiæ.

BOULDIN, J. (after stating the case as above).

The purpose of the appeal is to test the constitutionality of the legislative act and the order of the commissioners' court.

1. The act is first assailed as in violation of subdivision 15, § 104, of the Constitution, saying: "The Legislature shall not pass a special, private, or local law. *** "Regulating either the assessment or collection of taxes," etc. (Italics supplied.)

Clearly the act is a local law looking to the levy and collection of a local tax.

With equal clearness the title to the act and the order made in pursuance thereof deals with a privilege tax and not a property tax. The tax is levied in aid of the construction of public roads, bridges, and ferries, a public highway measure.

So, the real inquiry is: Does subdivision 15, § 104, forbid a local law for the levy of privilege taxes for public road purposes, or, if not, does it forbid the incorporation therein of provisions for the collection of such taxes?

Can such law be made complete in itself, or must regulations for collection be by general law?

Admittedly no applicable general law exists.

This constitutional provision was construed by this court the year following its adoption in Sisk v. Cargile, 138 Ala. 164, 35 So. 114. That case involved a local act for Jackson county levying an ad valorem tax under section 215 of the Constitution to pay the interest and principal of road bonds to be issued by the county. Said the court: "*** The gravamen of the present act is the levy of a tax for a defined purpose. The assessment and collection of taxes is a wholly distinct power and duty, vested in a distinct body of magistracy, from that of levying a tax. The constitution is aimed at local legislation tending to confuse the authorities in the administration of the elaborate system of laws regulating the assessment and collection of taxes. It is not aimed at the exercise of the sovereign legislative power to levy taxes for lawful purposes by local or special laws. *** I repeat, the gravamen of the act is the levy of a special tax, a purely legislative power, while the duties of the various officers in relation to the assessment and collection of taxes are ministerial and sometimes quasi-judicial. State v. Brewer, 64 Ala. 287; Perry County v. S. M. & M. R. Co., 58 Ala. 546; Id., 65 Ala. 391; Fox v. McDonald, 101 Ala. 51, 69 [13 So. 416, 21 L. R. A. 529, 46 Am. St. Rep. 98]."

Such statement of the law was not at all new in this state. Speaking by Mr. Justice Stone in Perry County v. Selma, Marion & Memphis Railroad Co., 58 Ala. 547, 559, it was said: "Levy and assessment have very different meanings. The levy of taxes is a legislative function, and declares the subjects and rate of taxation. Burroughs on Taxation, 194; Cooley on Taxation, 244-5. Assessment is quasi-judicial, and consists in making out a list of the taxpayer's taxable property, and fixing its valuation or appraisement. Hilliard on Taxation, 290."

This definition of "assessment" as relating to property taxes rather than privilege taxes obtained at the time our present Constitution was framed.

The aim of subdivision 15, § 104, as directed to uniformity in the system of laws relating to assessment and collection of taxes, was re-affirmed in State v. Bowles, 217 Ala. 458, 462, 116 So. 662.

As to further reasons underlying such provisions, we approve the language of Mr. Justice Kennamer in Sapulpa v. Land, 101 Okl. 22, 25, 223 P. 640, 643, 35 A. L. R. 872, 876, saying: "*** It would be mainfestly unjust for the supreme sovereign power to assess the taxpayer's property at one value, the county at another, the school district at another, and the city at another, all of which would lead to confusion and injustice. *** Section 20 provides the mode by which the legislature is authorized to provide for the collection of county, city, town, or other municipal taxes, which is by general laws."

On its face this announcement shows the court had in mind property taxes rather than local privilege taxes. The policy stated finds expression in our Constitution making the assessment for state purposes the same upon which county taxes as well as municipal are levied. See Perry County v. S. M. & M. R. R., supra.

The case of Sisk v. Cargile, supra, defining the purpose of subdivision 15, § 104, and the distinction between the levy and the assessment of taxes, has been frequently cited as authority by other courts and text-writers. 1 Cooley, Taxation, § 532 and notes; Gray, Limitations of Taxing Power,§§ 1743, 1744; Borrowdale v. Socorro County, 23 N.M. 1, 163 P. 721, L. R. A. 1917E, 456.

Privilege taxes are not assessed as that term was defined by our own court. They usually take the form of license taxes, the amount thereof fixed by the levying statute or ordinance. The taxpayer applies for the license and tenders the amount due. When based upon volume of business done, some evidence of the amount due must be provided for; but we cannot assume that a general constitutional provision of this sort has in view a specific class of privilege taxes of that sort.

Again, local laws relating to public roads are not forbidden by section 104 of the Constitution. At the time of its adoption the entire burden of construction and maintenance of roads and bridges was upon the counties. The Constitution left it so. Not until Amendment No. 1 to section 93, commonly known as the Bankhead Amendment, was the state permitted to engage in road building.

In this situation provision was made in section 215 for the levy of special ad valorem taxes by the counties in aid of road and bridge construction; and in section 221 the state was forbidden to usurp the field of privilege taxation to the exclusion of counties and municipalities.

We need merely mention what has been so often said, that the sovereign power of the Legislature in the matter of privilege taxes is unabridged save in the matter of reasonable classification, uniformity in application to the class, and freedom from invasion of constitutional guarantees against confiscation or...