State v. New Orleans Ry. & Light Co

• Decision Date: 12 February 1906
• Docket Number: 15,953
• Citation: 40 So. 597,116 La. 144
• Parties: STATE v. NEW ORLEANS RY. & LIGHT CO
• Court: Louisiana Supreme Court

40 So. 597

116 La. 144

STATE v. NEW ORLEANS RY. & LIGHT CO

No. 15,953

Supreme Court of Louisiana

February 12, 1906

Appeal from Civil District Court, Parish of Orleans; John St. Paul Judge.

Rule by the tax collector against the New Orleans Railway & Light Company to show cause why it should not pay a license. Rule made absolute, and from judgment in favor of the state defendant appeals. Affirmed.

Denegre & Blair, for appellant.

Edward Rightor, for appellee state tax collector.

OPINION

LAND J.

Defendant company was ruled by the tax collector to show cause why it should not be condemned to pay a license tax of $ 1,875, with 2 per cent. per month interest from March 1, 1905, and 10 per cent. attorney's fees, for conducting the business of electric light in the city of New Orleans.

Defendant pleaded for answer that it is exempt from the payment of any license tax as being a "manufacturer" under article 229 of the state Constitution of 1898.

The rule was tried on an agreed statement of facts, and was made absolute as prayed for. Defendant has appealed from the judgment in favor of the state.

It is admitted that, if defendant company is liable at all for the payment of a license tax, the amount sued for is correct.

It is further admitted that defendant employed directly in its electric light plants 90 men, exclusive of solicitors inspectors, metermen, linemen, bill collectors, office force, storekeepers, etc., and consumes upward of 33,000 tons of coal annually in operating its said plant.

Most of the statement of facts consists of a description by a prominent expert in electricity and electric science of the manner in which the electric light business is conducted. This expert tells us that the burning of coal in a furnace under a boiler produces steam, which through the medium of the engine and other machinery produces the "motion power," used to rotate the armature in a certain relation with the magnetic field; that this rotation of the armature produces currents in the wires which compose the armature; and that these currents are carried along wires to lamps, and there, acting on and through carbon rods, finally produce the well-known electric light.

This expert further says:

"The electricity which furnishes the lights does not exist until the armature revolves. The revolution of the armature brings into being something that did not exist before; that is, this electric energy, or energy in this electric form."

This expert explains in detail the modus by which the light "in the arc" is produced, and says that the operation of a dynamo machine is analogous to that of a pump forcing water through a series of pipes. The expert, in concluding his statement, says that "the energy which becomes light has its origin in the burning of coal under the boiler of the engine," or, in other words, that the electricity which produces the flame in the arc is created by using the latent energy of the coal.

The only question in the case is whether defendant company is a "manufacturer," in the sense of article 229 of the Constitution of 1898, which reads in part as follows:

"Art. 229. The General Assembly may levy a license tax, and in such case shall graduate the amount of such tax to be collected from the persons pursuing the several trades, professions, vacations and callings. All persons, associations of persons and corporations pursuing any trade, profession, business or calling may be rendered liable to such tax, except clerks, laborers, clergymen, school teachers, those engaged in mechanical, agricultural, horticultural, and mining pursuits, and manufacturers other than those of distilled, alcoholic or malt liquors, tobacco, cigars, and cotton seed oil."

Article 230 of the same Constitution exempted from parochial and municipal taxation for 10 years from the 1st day of January, 1900, the capital, machinery, and other property employed in mining operations and in the manufacture of a large number of enumerated articles. Electric light plants are not included in the list, and therefore are subject to state and municipal property taxation.

The first Legislature which convened after the adoption of the Constitution of 1898 passed a general license tax law, which is still in force. See Act No. 171, p. 387, of 1898. Section 3 of said act imposed a graduated license tax on manufacturers subject to license under article 229 of the constitution, and section 11 (page 408) for carrying on each business of gaslight, electric light, waterworks, etc. It is to be presumed that section 11 of said act has been enforced from 1898 to the present time and that licenses have been paid in accordance with its provisions.

Article 206 of the Constitution of 1879 and article 229 of the Constitution of 1898 exempt in the same language the same classes of persons from the payment of license taxes. Yet section 4, p. 144, of Act No. 119 of 1880, imposed a license tax "on each business of gaslight, waterworks, telegraphing," etc., "and all other manufacturing and work done with fixed machinery or steam power and not exempted by the Constitution."

In 1884 a new license statute was enacted and a license tax imposed "on each business of gaslight, electric light, waterworks, telegraphing, including local and district telegraphs, telephone exchange," etc.

Hence for more than 20 years the uniform legislative construction of the same provisions in two state Constitutions has been that the business of gas and electric lighting is not exempt from license taxation.

In 1905, for the first time, this construction was challenged in a court of justice by the claim of exemption set up in defendant's answer in this suit.

In Cooper Manufacturing Company v. Ferguson, 113 U.S. 733, 5 S.Ct. 741, 28 L.Ed. 1137, the court said:

"The act was passed by the first Legislature that assembled after the adoption of the Constitution, and has been allowed to remain on the statute book to the present time. It must therefore be considered as a contemporary interpretation entitled to much weight. Stuart v. Laird, 1 Chranch, 299, 2 L.Ed. 115; Martin v. Hunter, 1 Wheat. 304, 4 L.Ed. 97; Cohens v. Virginia, 6 Wheat, 264, 5...