State v. W.U. Tel. Co.

• Decision Date: 31 May 1882
• Citation: 73 Me. 518
• Parties: STATE OF MAINE v. WESTERN UNION TELEGRAPH COMPANY.
• Court: Maine Supreme Court

73 Me. 518

STATE OF MAINE v. WESTERN UNION TELEGRAPH COMPANY.

Supreme Judicial Court of Maine.

May 31, 1882

ON REPORT.

An action to recover the tax of twenty-five hundred dollars assessed by the Governor and Council upon the defendant corporation, for the year 1880, by virtue of stat. 1880, c 246, which was enacted March 19, 1880, and reads as follows:

" An act for the taxation of telegraph companies. Be it enacted by the senate and house of representatives in legislature assembled, as follows:

Section 1. That every telegraph corporation, company or person doing business within the limits of this State shall annually pay into the State treasury a tax of two and one-half per centum on the value of any telegraph line owned by said corporation, company or person within the limits of this State, including all poles, wires, insulators, office furniture, batteries and instruments, and any circumstances or conditions which affect the value of the property.

Section 2. Every such corporation, company or person shall annually on or before the fifteenth day of April, return to the secretary of state, under the oath of its superintendent, the amount and value of all the property enumerated in section one, owned by it within the limits aforesaid, together with the names and residences of all shareholders living in this State, and the number of shares owned by each on the first day of April annually, and the Governor and Council shall determine said values and assess said tax thereon on or before the first day of May annually. The secretary of state shall thereupon certify said assessment to the state treasurer, who shall forthwith notify the several parties assessed thereof. Said tax shall be paid into the treasury on or before the first day of September annually, and shall be in lieu of all State or municipal taxation on any of the property or shares of said corporations, companies or persons.

Section 3. If any corporation, company or person aforesaid fails to make the return herein provided, the Governor and Council shall proceed to make said assessment on such valuation as they think just, with such evidence as they are able to obtain, and such assessment shall be final. And if any such corporation, company or person fails to pay the tax required by this act, the state treasurer may forthwith commence an action of contract in the name of the State, for the recovery of the same with interest.

Section 4. When such tax is paid, it shall be the duty of the state treasurer to credit to each town such proportion of the tax of each company as the number of shares in said company owned in said town bears to the whole number of said company's shares owned in the State, the remainder to be retained for the use of the State.

Section 5. All acts and parts of acts inconsistent herewith, are hereby repealed, and this act shall take effect when approved."

Henry B. Cleaves, attorney general, for the State, cited: Paul v. Virginia, 8 Wall. 168; Liverpool Ins. Co. v. Massachusetts, 10 Wall. 567; Lafayette Ins. Co. v. French, 18 How. 404; The Cin. Mut. Health Association Co. v. Rosenthal, 55 Ill. 85; Western Union Telegraph Co. v. Mayer, 28 Ohio 521; Hillard on Taxation, 30, § 258; Durach's Appeal, 62 Penn. 491; Cooley's Const. Lim. 3d ed. 496; Comm'rs of Ottawa Co. v. Nelson, 19 Kan. 234; Dyar v. Farmington Village Corpo. 70 Me. 515; 62 Me. 62; Commonwealth v. People's Savinys Bank, 5 Allen 428; Commonwealth v. Hamilton Manufacturing Co. 12 Allen 298; Cheshire v. County Commissioners, 118 Mass. 386; Francis, Treas. v. A. T. & S. F. R. Co. 13 Kan. 220; Society of Savings v. Coit, 6 Wall. 607; State Freight and Tax Cases, 15 Wall. 232; Att'y Gen'l v. Bay State Mining Co. 99 Mass. 148; Commonwealth v. Lowell Gas Light Co. 12 Allen 75; State Railroad Tax Cases, 2 Otto 575; Sharpless v. Mayor of Phila. 21 Penn. 168; Tappan v. Merchants, 16 Wall. 490; Baker v. Cincinnati, 11 Ohio St. 534; Ducat v. Chicago, 48 Ill. 172; DeCamp v. Eveland, 19 Barb. 81; Providence Bank v. Billings et al. 4 Peters 170; Catlin v. Hull 21 Vt. 152; People v. B. & A. Railroad, 70 N.Y. 569; Albany R. R. v. Brownell, 24 N.Y. 345; Home Ins. Co. v. City of Augusta, 50 Geo. 543; Kitson v. Mayor, 26 Mich. 325; Reading Railroad v. Pennsylvania, 15 Wall. 232; State v. Carrigan, 37 N.J.L. 264; McMillen v. Anderson, 16 Albany Law Journal, 335; Gilpatrick v. Saco, 57 Me. 277; Chicago, Burlington and Quincy Railroad Co. v. Paddock, 75 Ill. 616; Rhodes v. Cushman, Auditor, 45 Ind. 85: Gennessee Valley Nat'l Bank v. Supervisors, etc. 53 Barb. 223; Western R. R. Co. v. Nolan, 48 N.Y. 513; Clinton School District's Appeal, 6 P. F. Smith, 315; Stewart v. Maple, 70 Penn. St. 221.

Orville Dewey Baker, (Joseph Baker with him,) for the defendant.

The provisions of the constitution which relate to taxation are these:

" Art. IV, part III. Section 1. The legislature. . shall have full power to make and establish all reasonable laws and regulations for the defense and benefit of the people of this State, not repugnant to this constitution, nor to that of the United States.

Art. I. Section 22. No tax or duty shall be imposed without the consent of the people, or of their representatives in the legislature.

Art. IX. Section 7. While the public expenses shall be assessed on polls and estates, a general valuation shall be taken at least once in ten years.

Section 8. All taxes upon real and personal estate, assessed by authority of this State, shall be apportioned and assessed equally according to the just value thereof.

Section 9. The legislature shall never, in any manner, suspend or surrender the power of taxation."

This law proposes to tax all the property of the corporation, situated in Maine; not the value of the company's stock, but the value of its property. It embraces all the open and tangible property of the company in the State and nothing more. It does not tax the franchise of the corporation because it is not specified, and if to be taxed, should and would be named, as in the railroad tax act, stat. 1880, c. 249. Nor does it tax its capital stock, nor its business or earning capacity, nor its income, net or gross.

The value of the stock is no measure of the taxable value of the property, nor is the value of the property any measure of the value of the stock or franchise. Ins. of Chicopee v. Co. Com'rs, 16 Gray 38; Coml'th v. Hamilton M'f'g Co. 12 Allen 298, 302; Same v. Cary Improvement Co. 98 Mass. at p. 22.

Therefore a tax laid on the franchise, or capital stock, or business or income is not a tax laid on property, and e converso a tax laid on property is not a tax on the franchise, capital stock, business or income.

This tax cannot be sustained upon any principles of constitutional law. It cannot be sustained as an excise tax or license. It has just been decided in a leading case in New Hampshire that an excise cannot be constitutionally imposed and this under a constitution which, though it differs from ours in some particulars resembles it in more. State v. U. S. and Can. Express Co. 23 Alb. Law J. 303; Com. v. Hamilton M'f'g Co. 12 Allen 301.

This tax does not lay or purport to lay an excise or license, but simply a property tax. The subjects of taxation are thus defined by the Supreme Court of the United States in the case of the State Tax on Foreign held Bonds, 15 Wall. 319.

" These subjects are persons, property and business. Whatever form taxation may assume, whether as duties, imposts, excises or licenses, it must relate to one of these subjects."

" Corporations may be taxed, like natural persons, upon their property and business." See also, Glascow v. Rowse, 43 Mo. 479; Cooley on Taxation, 393.

A tax on the " use" of the property would be on its business; on the " capacity" would be on its franchise or capital; on the " productiveness" would be on its income; but a tax on the " value of the property" would be the tax at bar and no other.

The three former taxes would be excises; the last is a tax on property, pure and simple. See Oliver v. Wash. Mills, 11 Allen 274; Provident Institution v. Mass. 6 Wall. 631; Society for Savings v. Coite, 6 Wall. 594; State Tax v. R. R. Gross Receipts, 15 Wall. 284; Com. v. Provident Institution, 12 Allen 312; Same v. Lowell Gas Light Co. 12 Allen 75; The Del. R. R. Tax, 18 Wall. 206; Com. v. People's Five Cent Savings Bank, 5 Allen 428.

As a property tax it cannot be sustained. A property tax to be valid must be proportional and uniform. This is so. 1. Independent of all constitutions and by the nature and definition of taxation itself. Opinions of Justices, 58 Me. 591; Cooley on Taxation, 1, 16, 17; Sutton's Heirs v. Louisville, 5 Dana 28, 31; Knowlton v. Supervisors, 9 Wis. 410; Woodbridge v. Detroit, 8 Mich. 274, 301; Grim v. School District, 57 Penn. St. 433; Cooley's Const. Lim. 616, 617, 622, 625; 2 Kent's Com. 331; Smith's Wealth of Nations, B. 4. c. 2.

By the common opinion of jurists and political writers, by repeated declarations in bills of rights, and by the universal maxims of free government, no man can be held by a property tax to contribute more than his " share" to the common burden. Within that is taxation; beyond it, is confiscation.

2. The same principle is found in the express provisions of our constitution. Const. Art. IX, sec. 8; Jones v. Winthrop Savings Bank, 66 Me. 245; Knowlton v. Supervisors, 9 Wis. 410.

If anything could make more certain the distinct and unequivocal language of the constitution, or emphasize its assertion that taxation must be uniform between classes as well as between individuals of a class, it would be the record proceedings of the constitutional commission which framed the taxation clause now in force.

The construction, put upon the...