The State ex rel. Armour Packing Company v. Stephens

• Decision Date: 13 December 1898
• Citation: 48 S.W. 929,146 Mo. 662
• Parties: The State ex rel. Armour Packing Company v. Stephens et al
• Court: Missouri Supreme Court

48 S.W. 929

146 Mo. 662

The State ex rel. Armour Packing Company v. Stephens et al

Supreme Court of Missouri

December 13, 1898

Record of board of equalization quashed.

Edward C. Wright and Frank Hagerman for relator.

(1) The law violates section 8, article X, of the Constitution because the tax exceeds the limit therein fixed. Brookfield v. Toocy, 141 Mo. 619; Arnold v Hawkins, 95 Mo. 569; Black v. McGonigle, 103 Mo. 192. (2) If this law be declared to create a tax on property as distinguished from the use thereof, it is void because the property is not taxed in proportion to its value as required by section 4, article X, of the Constitution. Life Ass'n v. Board, 49 Mo. 512; State v Railroad, 75 Mo. 208; Board v. Railroad, 59 Ala. 551. (3) The tax authorized is clearly illegal because it covers property having no situs in the State. Relator has a packing house in Kansas; it has specially constructed cars in which to transport its own products from its packing house to the consumer in other States, who buys from it; it does business for no one else; it carries products for no one except for itself; it has a customer in Chicago who orders a car load of meat; the meat is loaded into relator's car in Kansas, there placed in a train for through shipment to the consumer at Chicago; it passes through the State of Missouri. That use is counted under the provisions of this law for the imposition of a tax upon property. There is no difference in that case in principle between taxing the freight that is in that car and the car itself. The use is merely transitory and in no way pertains to business in the State; yet, under the law, the use is counted, for the statute gives no way by which such business may by the board be distinguished from a use strictly within the State. Fargo v. Michigan, 121 U.S. 230; Bain v. Richardson, 105 N.C. 362; 2 Elliott on Railroads, sec. 755; People ex rel. v. Wemple, 131 N.Y. 64; People ex rel. v. Wemple, 138 N.Y. 1; Railroad v. Pennsylvania, 15 Wall. 232.

Edward C. Crow, Attorney-General, and Sam B. Jeffries, Assistant Attorney-General, for respondents.

(1) Relator claims this is not a property tax, it is not a direct tax on the cars as such. We think it is in the nature of an excise tax for the right to have the corporate capacity to do business in this State, and not a tax on the privilege or franchise, which, when incorporated, the relator may exercise. Home Ins. Co. v. N. Y., 134 U.S. 599; Maine v. Railroad, 142 U.S. 217; Cooley on Taxation, p. 5. (2) A tax may be imposed on a corporation on account of its property within the State and may take the form of a tax for the privilege of exercising its franchise within the State if the ascertain ment of the amount is made dependent in fact on the value of its property situated within the State and if payment be not made a condition precedent to the right to carry on the business. Railroad v. Pennsylvania, 158 U.S. 438; Maine v. Railroad, 142 U.S. 217; Postal Cable Co. v. Adams, 155 U.S. 688; Postal Cable Co. v. Adams, 14 So. Rep. 36; Seibert v. Pacific Express Co., 14 U.S. 339; Adams Express Co. v. Ohio State Auditor, 165 U.S. 194. (3) This law does not operate directly to exercise or assert control over interstate commerce and is therefore valid. Seibert v. Pacific Express Co., 142 U.S. 339; Maine v. Railroad, 142 U.S. 217; Postal Telegraph Co. v. Adams, 155 U.S. 688; Railroad v. Pennsylvania, 158 U.S. 438. (4) The tax in this case is in the nature of an excise tax upon the relator, and that a tax of this character is within the power of a State to levy there can be no question. Maine v. Railroad, 142 U.S. 217; Postal Telegraph Co. v. Adams, 155 U.S. 688; Seibert v. Pacific Express Co., 142 U.S. 339; Poeple ex rel. v. Wemple, 131 N.Y. 64; People ex rel. v. Wemple, 138 N.Y. 11; Home Ins. Co. v. New York State, 134 U.S. 594. (5) The act imposes an excise tax for the right given by the State to do business in a corporate capacity, and not a tax on the business which, when incorporated, the relator may carry on. Home Ins. Co. v. N. Y., 134 U.S. 599. (6) A domestic corporation can be subjected to an excise or franchise tax even though it is engaged in both State and interstate business, and the tax may be measured by its whole capital or business or in any other way in the discretion of the legislature without taking any notice of its business arising from interstate commerce, providing no hostile discrimination is made against that part which is interstate commerce business. Seibert v. Pacific Express Co., 142 U.S. 339; People ex rel. v. Wemple, 131 N.Y. 64; People ex rel. v. Wemple, 138 N.Y. 1. (7) The same kind of a tax can be laid upon a foreign corporation doing both State and interstate business in this State. Woodruff v. Parham, 8 Wall. 123; Osborne v. Mobile, 16 Wall. 479; Seibert v. Pacific Express Co., 142 U.S. 339. (8) The form of the statute is immaterial. It is the operation of the statute that determines whether or not it is constitutional or unconstitutional. State Freight Tax case, 15 Wall. 272; Maine v. Railroad, 142 U.S. 228.

Marshall, J. Gantt, C. J., Burgess, Brace and Williams, JJ., express their views in a separate opinion. Robinson, J., concurs as to 2d paragraph. Sherwood, J., concurs as to 2d paragraph, and as to 1st paragraph thinks it must affirmatively appear from the record that the Board of Equalization has jurisdiction. Williams, J., concurring.

OPINION

In Banc.

Certiorari.

Marshall J. --

This is an original proceeding, by certiorari, to quash the assessment, for the years 1896 and 1897 against relator, made by the State Board of Equalization. It is submitted upon the petition, return and motion to quash, which are set out in full for a better understanding of the controversy.

The petition is as follows:

"1. Lon V. Stephens is Governor of the State of Missouri, having in January, 1897, succeeded his predecessor, William J Stone, who was such Governor from 1893 to 1897. Edward C. Crow is Attorney-General of the State, having in January, 1897, succeeded R. F. Walker, his predecessor, who was Attorney-General from 1893 to 1897; Frank Pitts is State Treasurer, having succeeded, in January, 1897, his predecessor, Lon V. Stephens, who was State Treasurer from 1893 to 1897; James M. Seibert is now and has been since January, 1893, State Auditor, and A. A. Lesueur is now and has been since January, 1893, Secretary of State; the State Board of Equalization is now and has at all the times hereinafter mentioned been composed of the Governor, Attorney-General, State Treasurer, State Auditor, and Secretary of State. The matters hereinafter set forth are of record in the offices of the said officers of the State Board of Equalization.

"2. The Armour Packing Company is now, and was at all the times hereinafter stated, a corporation, organized and existing under and by virtue of the laws of the State of New Jersey, with its chief office therein, having complied with the act of 1891, so as to do business in this State and engaged at Kansas City, in the State of Kansas, in the general packing business, that is to say, in killing and dressing food animals and the sale of meats thereof. In this business it has always been necessary to ship in cars the dressed meats from the packing houses in the State of Kansas into and through all the States of the Union and through all the counties in this State traversed by railroads, which includes most of the counties therein; and to that end and for such purpose it has always owned a large number of refrigerator cars specially constructed so as to preserve at a cool temperature dressed meats therein packed for shipment over the various roads of the country, which cars, when loaded and ready for shipment, are placed in the trains operated by railroad companies and hauled to their respective destinations. These cars have painted thereon 'Kansas City Dressed Beef Line,' and there is no corporation or company of that line and no person doing business in that name.

"3. The legislature of this State in 1895, passed, and the Governor approved, an act in words and figures as follows:

"'An act to provide for the assessment and taxation of railway cars other than those which are the property of railroad companies, by amending article 8 of chapter 138, Revised Statutes of Missouri, 1889, relating to assessment and taxation of railroads, by adding thereto eight new sections.

"'Section 1. Car companies must file statement of mileage made by cars -- railroad companies required to file statement with Auditor -- statements to be laid before State Board of Equalization -- duty of State Board of Equalization -- two per cent State tax to be levied -- duty of Auditor to furnish car company with statement showing aggregate mileage, etc. -- when tax is to be paid -- penalty for refusal to make statement -- duty of Auditor and Attorney-General as to delinquents.

"'Be it enacted by the General Assembly of the State of Missouri, as follows:

"'Section 1. That article 8 of chapter 138, Revised Statutes of Missouri 1889, be and the same is hereby amended by adding thereto eight new sections, to be known and designated as sections 7723a, 7723b, 7723c, 7723d, 7723e, 7723f, 7723g, and 7723h, in words and figures as follows:

"'Sec 7723a. The president or other chief officer of every car company, car trust, mercantile company or corporation other than a railroad company operating a line of railroad, and every individual owning any stock cars, furniture cars, ... tank cars, sleeping cars or any other kind of cars, shall, on or before the first day of January in each year, make to the State Auditor a true, full and accurate statement, verified by the affidavit of the officer or person making the same, showing the...