State v. American Refrigerator Transit Co.

• Citation: 237 S.W. 78
• Decision Date: 06 February 1922
• Docket Number: (No. 133.)
• Parties: STATE ex rel. ARBUCKLE v. AMERICAN REFRIGERATOR TRANSIT CO.
• Court: Supreme Court of Arkansas

Page 78

237 S.W. 78

STATE ex rel. ARBUCKLE v. AMERICAN REFRIGERATOR TRANSIT CO.

(No. 133.)

Supreme Court of Arkansas.

February 6, 1922.

Appeal from Pulaski Chancery Court; Jno. E. Martineau, Chancellor.

Suit by the State of Arkansas, on the relation of John D. Arbuckle, against the American Refrigerator Transit Company, to recover a privilege tax. Decree for the State for only the amount tendered by the defendant, and relator appeals. Affirmed.

The Attorney General of the state of Arkansas, proceeding under sections 9823-9830 of Crawford & Moses' Digest, providing for the assessment and collection of an excise or privilege tax on private car companies doing business in this state, brought this suit in the chancery court against the American Refrigerator Transit Company, a foreign corporation, to recover a privilege tax levied against it by the said Tax Commission under the provisions of the act for the years 1918, 1919, and 1920.

The defense to the suit is that the American Refrigerator Transit Company was not doing business in the state during the years named, and therefore was not liable for the tax provided by the statute.

The parties have agreed upon the facts. The American Refrigerator Transit Company is a foreign corporation incorporated under the laws of the state of New Jersey and has its principal office in the city of St. Louis, Mo. The company owns and controls 5,000 refrigerator cars which are used by the various railroads of the United States and for the use of which the railroads pay the company one cent per mile for each mile traveled by its cars, both empty and loaded, over the lines of the respective railroads. We copy from the agreed statement of facts the following:

"The gross receipts tax assessed by the state of Arkansas for the years in question is based upon the aforesaid mileage allowance paid the American Refrigerator Transit Company by the railroads for all of the mileage made by the said A. R. T. cars within the state of Arkansas without distinction as between intrastate and interstate movements.

"The defendant company has nothing whatever to do with the transportation of the freight shipped in its cars, but, as heretofore stated, simply rents or leases its cars to the railroads for a mileage allowance of one cent per mile, and, in order that this mileage may be calculated, it receives from the railroad companies waybills showing the movements of its cars and the freight transported therein.

"For each of the three years hereinafter mentioned the American Refrigerator Transit Company has paid to the state of Arkansas a property tax assessed pursuant to Act 224 of Acts of 1915 of the state of Arkansas."

The records of the company show that the mileage paid it for the use of cars where the points of origin and the destination are both within the state of Arkansas aggregate for the period of time named in this lawsuit the sum of $356.06, and the company tenders to the state of Arkansas the sum of $17.80, the amount due on this basis. The remainder of the amount claimed is for cars moving from points without the state of Arkansas to points within the state, or vice versa, or where the cars are moved from a point without the state through the state of Arkansas to a destination outside the state of Arkansas.

The chancellor found the issues in favor of the defendant, the American Refrigerator Transit Company, and it was decreed that the plaintiff should not recover of the defendant any sum except the sum of $17.80, which the defendant tendered in court to the plaintiff.

To reverse that decree this appeal has been prosecuted.

J. S. Utley, Atty. Gen., and A. L. Rotenberry and J. C. Marshall, both of Little Rock, for appellant.

E. B. Kinsworthy and B. S. Kinsworthy, both of Little Rock, for appellee.

HART, J. (after stating the facts as above).

As above stated, this suit is based upon sections 9823-9830 of Crawford & Moses' Digest, providing a method for the assessment and collection of an excise or privilege tax on private cars doing business in this state. Under the provisions of the act the state cannot collect an excise or privilege tax unless the private car companies are doing business within the state during the period of time for which it is sought to assess and collect the privilege tax.

The defendant company is a private car company created by the laws of the state of New Jersey with its principal office in the city of St. Louis, Mo. It owns the cars sought to be taxed. It made a contract in St. Louis, Mo., with the railroad companies operating out of said city for the use of its cars at one cent for each mile traveled by the cars over the lines of the railroad companies. The routes are at the will of the railroad companies, and the defendant has nothing to do with the transportation of the freight hauled in its cars. The cars pass through the state both ways, hauling freight or go from a point in the state to a point without the state or come from a point without the state to a point within the state.

It is the contention of counsel for the state that the act was intended to tax as a privilege the using of cars for...