Teche Lines, Inc. v. Board of Supervisors of forrest County

CourtUnited States State Supreme Court of Mississippi
Citation165 Miss. 594,142 So. 24
Decision Date10 October 1932
Docket Number30064

(Division B.)

1 AUTOMOBILES. Certificate of public convenience and necessity granted to bus company held special "franchise" (Code 1930, section 7120).

"Franchises" are special privileges conferred by government upon individuals, and which do not belong to citizens of the country, generally, of common right.


Franchise granted to bus company is in nature of personal property and taxable (Code 1930, sections 7120, 7121, 7123; Const. 1890 sections 112, 178, 181).


Franchise granted to nonresident corporation to operate bus in state held not exempt from taxation (Code 1930, sections 3136, 7120).


Claim of exemption from taxation should never be enlarged by construction.


Statute granting exemption from taxes must be strictly construed against claimed exemption.


Under state's sovereign power to tax, it may lawfully tax all property within state.


Personal property may be separated from owner for tax purposes and may be taxed, on its account, at place where it is, although not place of owner's domicile.


Difficulty of collecting tax does not affect power of state to tax (Const. 1890, section 112).


Situs for purpose of taxation of franchise granted to nonresident corporation to operate bus in state was in Mississippi, and situs of particular property involved was in county through which bus line operated (Code 1930, section 7120; Const. 1890, section 112).


That defendant's busses were operated in both intrastate and interstate business did not deprive state of right to tax franchise conferring authority to operate intrastate transportation (Code 1930, section 7115 et seq.; Const. U.S. article 1, section 8, subsection 3).


Nonresident bus corporation was not entitled to relief from taxation of franchise conferring authority to operate bus in intrastate transportation because highway was built at joint cost of state and United States and was designated as federal state highway (Code 1930, section 7120; Federal Highway Act section 9 [23 USCA section 9]).


Franchise granted to bus company to operate busses Held taxable, notwithstanding it does not grant exclusive right to operate its business over highway (Code 1930, section 7120).


(Division B. Oct. 10, 1932.)

[144 So. 486. No. 30064.]

Division B

May 23, 1932

Suggestion Of Error Sustained October 10, 1932.

APPEAL from circuit court of Forrest county.

HON. W. J. PACK, Judge.

The Board of Supervisors of Forrest County back-assessed Teche Lines, Incorporated, with taxes for certain year on its right or franchise to do business in county, and the order was affirmed by the circuit court, and the taxpayer appeals. Affirmed.

On suggestion of error.

Suggestion of error sustained, and the judgment appealed from reversed, and the proceedings dismissed.

For former opinion, see 142 So. 24.

Affirmed. Suggestion of error sustained.

T. J. Wills, of Hattiesburg, and J. M. Stevens, of Jackson, for appellant.

A special franchise as generally defined is the right to do something on the public highway, which, except for the grant, would be a trespass.

2 Cooley on Taxation (4 Ed.), sec. 857.

The property of each corporation or joint stock company (whether organized under the laws of this state or any other state or county) shall be assessed and taxed as that of a person.

Intangible property owned by a corporation or joint stock company organized under the laws of any state or country other than Mississippi shall be exempt from taxation and shall not be returned for assessment.

Sec. 3136, Code of 1930.

Before the certificate can be assessed for taxation, it must be such property right as is subject to a warrant for the collection of any taxes due thereon, and salable as property, and so as to convey by sale to any purchaser the right to operate thereunder.

The word franchise may have a restricted meaning, to denote a special privilege conferred upon certain individuals, associations, and corporations, not enjoyed by the citizens generally.

Wells, Fargo, & Co. v. Harrington, 169 P. 463.

Intangible property of a foreign corporation is not taxable at all in the state unless it has a business situs in the state or it is so provided by statute.

2 Cooley on Taxation (4 Ed.), page 1085, sec. 492.

Neither section 3136, Code of 1930, nor any other statute of Mississippi undertakes to fix the business situs of intangible property of a foreign corporation. On the contrary section 3136 expressly provides that the intangible property of a foreign corporation shall be exempt from taxation and shall not be returned for assessment.

Prior to the enactment of the motor transport law, anyone had the lawful right to operate motor vehicles on the highway of Mississippi, and especially over a highway which comes within the definition of a United States highway and under the jurisdiction of the highway commission.

The effect, therefore, of the motor transportation law was to restrict rather than enlarge the rights and privileges of a common carrier, but notwithstanding its enactment, the Mississippi Railroad Commission could not forbid bus lines to operate in interstate commerce without a permit.

Michigan Public Utilities Company v. Duke, 266 U.S. 570; Buck v. Kuykendall, 267 U.S. 308, 69 L.Ed. 623; Bush & Sons v. Maley, 267 U.S. 317, 69 L.Ed. 627.

It is true that in some instances double taxation is permitted, but our court has expressly ruled that no intent will be imputed to the Legislature to provide double taxation.

State v. Simmons, 70 Miss. 485, 12 So. 477.

Taxing statutes are to be strictly construed.

Planters Lumber Company v. Wells, 147 Miss. 279, 112 So. 9; Miller v. Railroad Company, 146 Miss. 422, 111 So. 558.

The situs of a foreign corporation for the taxation of all its personal property is within the state where it is incorporated until the enactment of a law fixing the taxable situs within this state, and also upon the general proposition so well settled that no intent will be imputed to the Legislature to impose double taxes.

State ex rel. Knox v. Union Tank Car Company, 151 Miss. 797, 119 So. 310; Barber Asphalt Paving Co. v. City of New Orleans, 6 So. 794, 41 La. Ann. 105; State v. Smith, 8 So. 294, 68 Miss. 79; Hunt v. Turner, 45 So. 509, 54 Fla. 654; Gulf Refining Co. v. Tillinghast, 94 So. 418, 152 La. 847; Virginia v. Kernochan, 30 A.L.R. 601; State v. Smith, 68 Miss. 79, 9 So. 294; Adams v. Colonial and U. S. Mortgage Company, 34 So. 482, 17 L.R.A. (N.S.) 138.

The situs for the taxation of shares of stock is at the domicile of the owner.

First National Bank of Boston v. Main, 76 U. S. (L. Ed.) 211.

The Legislature had a perfect right to exempt the intangible personal property of a foreign corporation, including the franchise here owned and possessed by the Teche Lines.

City of Jackson v. Deposit Guaranty Bank & Trust Co., 160 Miss. 752, 133 So. 795.

The certificate involved could not be levied upon on a distress warrant to enforce a tax lien and could not be sold by the sheriff and tax collector of Forrest County.

Gulf Refining Company v. Cleveland Trust Company, 108 So. 158.

The certificate is a unit and is not divisible into parts and there is no authority of any kind which could authorize the taxing authorities to divide it into competent parts according to county lines, and the purchaser of any certificate under a tax warrant or judgment of the court would have to buy the the entire certificate or get nothing.

Section 7120, Code of 1930.

Any taxes upon this license, will be in effect a tax upon interstate commerce.

If the State requires a bus company to obtain a permit to operate motor vehicles over this U. S. highway, and then immediately requires the bus company to pay a tax on the permit, that this, in effect, is exacting a toll from the bus company for the use of a Federal highway, and violates both the spirit and the letter of the statute.

Chapter 1, section 9, Federal Highway Act.

The State Tax Commission would be the proper assessor of this property if assessed at all.

Section 3200, Code of 1930; Sections 3208, 3212, Code of 1930.

The general rule as to the situs of invisible and intangible personal property--as notes, bonds, etc.--is that it follows the domicile of the owner, and it is held to be taxable at such domicile. But it is an exception to the general rule that, where such credits acquire a business situs different from that of the domicile of the owner, then they may be taxed at such business situs. A business situs is to be connected with the idea of more or less of permanency of location of such credits, or with a purpose to incorporate them when collected into the mass of property in the state.

City of Vicksburg v. Ammons Packing Co., 24 So. 224; 37 Cyc., pages 955, 960, 963.

The purpose of a franchise tax is to reach the intangible property of the corporation, and make it liable to taxation as like property of individuals.

Board of Councilmen of the City of Frankfort v. Stone, Auditor, 58 S.W. 373.

The franchise, if assessed at all, must be assessed as one unit.

State ex rel. Milwaukee, St. R. R. Co. v. Anderson, 90 Wis. 550; Chicago & N.W. R. Co. v. Forrest County, 95 Wis. 80, 70 N.W. 77.

The notion of organic unity may be made a means of unlawfully taxing the privilege, or property outside the state, under the name of enhanced value of good will, if it is not closely confined to its true meaning. That would be...

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