Warrior Water Co. v. Long

• Decision Date: 28 June 1928
• Docket Number: 6 Div. 179
• Citation: 117 So. 656,218 Ala. 125
• Parties: WARRIOR WATER CO. v. LONG.
• Court: Alabama Supreme Court

117 So. 656

218 Ala. 125

WARRIOR WATER CO. v. LONG.

6 Div. 179

Supreme Court of Alabama

June 28, 1928

Appeal from Circuit Court, Walker County; R.L. Blanton, Judge.

Action by the Warrior Water Company against E.W. Long, as Judge of Probate of Walker County, to recover license paid under protest. Judgment for defendant, and plaintiff appeals. Transferred from Court of Appeals under Code 1923, § 7326. Reversed and rendered.

Arthur Fite, of Jasper, for appellant.

Sowell & Gunn, of Jasper, for appellee.

THOMAS J.

The trial was had before the judge of the court without a jury and upon an agreed statement of facts. The judgment was for the defendant as probate judge, and plaintiff was taxed with the costs.

The appellant pursued the proper remedy for the redress of his wrongs, if such there were. Ala. Con. C. & I. Co. v Herzberg, 177 Ala. 248, 59 So. 305; Woco-Pep Co. of Montgomery v. City of Montgomery, 213 Ala. 452, 105 So. 214

.

The counsel for appellant has stated the question involved, which is found in subdivision (a) of "Schedule 89, Public Utilities," p. 427, General Acts 1919. It reads as follows:

"Where no existing public utility is taken over such license tax for the first year, as well as for the second year, shall be based upon the the first year's business but shall in no event be less than one hundred dollars for the first year's business. Any person, firm or corporation establishing a new public utility shall pay to the state the sum of one hundred dollars, and shall also at the same time execute a bond, payable to the state of Alabama, to insure payment of whatever sum, in addition to the one hundred dollars, may be due when at the end of the first year the amount of the gross receipts for that year are ascertainable." (Italics supplied.)

It is further provided by the Revenue Act of 1919, § 377, p. 445:

"If any business licensed by this act shall commence after the first day of April in any year, the amount of the license shall be one-half of the year's license. In all other cases the license shall be taken out for the full term of one year, unless a shorter term is fixed by the provisions of this act. In all cases where the amount of license is rated according to the population of the town, city, or county, the population of such town, city or county as fixed by the last preceding United States Census shall govern." (Italics supplied.)

It is the insistence of counsel for appellee that the foregoing provisions of the statute were within and present a sound basis for a distinction of class for levying a minimum license tax upon a new public utility. Under the authorities state and federal, the act with its classification is not void, since it is not discriminatory, arbitrary unreasonable, and without foundation. Woco-Pep Co. of Montgomery v. City of Montgomery, 213 Ala. 452, 457, 105 So. 214; Quartlebaum v. State, 79 Ala. 4 (Judge Stone's sewing machine tax case); Williams v. State ex rel. Schwarz, 197 Ala. 46, 47, 72 So. 330, Ann.Cas.1918D, 869, for authorities; Republic I. & S. Co. v. State, 204 Ala. 469, 86 So. 65; Gamble v. Montgomery, 147 Ala. 682, 39 So. 353, (the trading stamp case); Ex parte Birmingham v. O'Connell, 195 Ala. 60, 63, 70 So. 184; Saks v. Birmingham, 120 Ala. 190, 24 So. 728; O'Hara v. State, 121 Ala. 28, 25 So. 622; N. C. & St. L. Ry. v. Attalla, 118 Ala. 362, 24 So. 450; Williams v. Talladega, 164 Ala. 633, 649, 51 So. 330; Kidd v. Alabama, 188 U.S. 730, 23 S.Ct. 401, 47 L.Ed. 669; Singer Co. v. Brickell, 233 U.S. 304, 34 S.Ct. 493, 58 L.Ed. 974, reviews the Alabama Case; 37 C.J. p. 198, § 52, subsec. 2; In re Clark's Guardianship, 104 Okl. 245, 230 P. 891, 43 A.L.R. 595, note; City of Louisville v. Sagalowski & Son, 136 Ky. 324, 124 S.W. 339, 136 Am.St.Rep. 258; In re Haskell, 112 Cal. 412, 44 P. 725, 32 L.R.A. 527; Ex parte Lemon, 143 Cal. 558, 77 P. 455, 65 L.R.A. 946. See, also, State v. Goldstein, 207 Ala. 585, 93 So. 308, for authorities.

Under the Fourteenth Amendment, Constitution of the United States, and section 221, Constitution of Alabama, in Ex parte City of Birmingham v. O'Connell, supra, the court said, of the right to fix a rule of municipal license tax and toll the same:

"This court is of the opinion that satisfactory reason and authority justify the conclusion that such a classification is well grounded, and that, being so warranted, there is wrought by the section no illegal or unwarranted discrimination against any effected by the section; that the section in and of itself, or when considered in connection with other pertinent tax laws, does not offend any provision of the Constitution of Alabama nor the Fourteenth Amendment to the Constitution of the United States. *** The matter presented for decision in Kidd v. Alabama, 188 U.S. 730, 23 S.Ct. 401, 47 L.Ed. 669, arose out of a statute of this state which exempted from taxation in this state the stock of domestic and foreign railroad companies that listed for taxation here substantially all of their property. A classification of particular objects of taxation in Alabama was by the statute effected. It readily appears that the distinction made in that instance was predicated of a condition created by the presence or the absence of a listing for taxation of substantially all of the property of the corporation concerned, the failure to list substantially all of its property for taxation requiring the taxation of the corporation's stock, and, on the other hand, the act of so listing its property gave the corporation exemption from taxation on its capital stock. In that case the Supreme Court (Justice Holmes writing), said: 'We see nothing to prevent a state from taxing stock in some domestic corporations and leaving stock in others untaxed on the ground that it taxes the property and franchises of the latter to an amount that imposes indirectly a proportional burden on the stock.' ***

"This decision (Kidd v. Alabama) is, as we understand it, rested upon the affirmative fact that a distinction in respect of taxation may be taken and made effective in a statutory system; that is, grounded in substantial considerations suggestive of equity and natural justice in the imposition of the burdens of taxation."

The power to tax an occupation is not dependent upon and limited by its ability "to earn a profit" as the business or occupation is conducted; there may be competition or negligence or other contributing causes or considerations entering into and affecting the extent of business or occupation in the extent of business or ability to earn a profit. Williams v. City of Talladega, 164 Ala. 633, 649, 51 So. 330, Id., 226 U.S. 404, 33 S.Ct. 116, 57 L.Ed. 275; N.C. & St. L. Ry. v. Attalla, 118 Ala. 368, 24 So. 450; Woco-Pep Co. of Montg. v. City of Montgomery, supra. The evidence shows that the appellant was constructing its plant during the tax year and went into its business operations on September 1st, 1927, and showed a gross receipt for that month of $317.06. It is immaterial for such segment of the year whether this sum represented a profit or loss to the new business. A sufficient and reasonable time and due opportunity must be shown to challenge a taxing statute on the grounds that it is oppressive and confiscatory. Hale v. State (Ala.Sup.) 116 So. 369, 370; Woco-Pep Co. of Montgomery v. City of Montgomery, supra; Williams v. City of Talladega, 164 Ala. 633, 51 So. 330.

In the case of Quartlebaum v. State, 79 Ala. 1, 4, Mr. Chief Justice Stone declared the rule to be that:

"Much must be left to the discretion of the Legislature, for exact equality of taxation can never be reached. So long as the burden falls with equal weight upon every member of a given class, natural and artificial persons alike, it is difficult to formulate an argument that such levy violates any provision of our own, or of the Federal Constitution. Neither of them requires a horizontal tax."

And the observation as to such general rule has not been departed from in this or federal jurisdiction, and is not void if, in the administration of the law, the classification is reasonable and its application or administration does not offend the requirements as to equality. The Legislature made a general class of new public utilities, intended and declared that all new public utilities should come under that class, then subdivided the class into those which "took over old public utilities," and operated them and those which "did not take over old public utilities," but proceeded with construction. Under the agreed statement of facts, appellant comes within the last class or subdivision thereof. All public utilities coming under the provisions of that class, or the several subdivisions thereof, are treated alike. The distinction is inherent in the condition of operation and preparation therefor and is reasonable and sufficient classification for taxing purposes. General classifications may be subdivided into particular classes or reclassify members of a general class so long as there may be a substantial as distinguished from a fictitious basis for doing so. Soon Hing v. Crowley, 113 U.S. 703, 5 S.Ct. 730, 28 L.Ed. 1145, 1147. And this the Legislature has done in the instant statute and in so doing was within its power under organic law.

The assessment of other properties as stocks, bonds, moneys etc., was held a sufficient basis for distinction, to cover stocks in foreign railroad corporations owned by the person against whom such other assessment was made, in Kidd v. State, 188 U.S. 730, 23 S.Ct. 401, 47 L.Ed. 669; State v. Kidd, Ex'r, 125 Ala. 413, 28 So. 480. In Republic I. & S. Co. v. State, supra, the distinction for such classification was the method of taking the coal from the mine, held not to apply to wagon mines which do not...