Western Union Telegraph Co. v. State.

• Decision Date: 31 March 1909
• Citation: 121 S.W. 194
• Parties: WESTERN UNION TELEGRAPH CO. v. STATE.
• Court: Texas Court of Appeals

121 S.W. 194

WESTERN UNION TELEGRAPH CO. v. STATE.

Court of Civil Appeals of Texas.

March 31, 1909.

Appeal from District Court, Travis County; Geo. Calhoun, Judge.

Action by the State against the Western Union Telegraph Company. Judgment for plaintiff, and defendant appeals. Affirmed.

Hume, Robinson & Hume and Spoonts, Thompson & Barwise, for appellant. R. V. Davidson, Atty. Gen., and Jas. D. Walthall, Asst. Atty. Gen., for the State.

KEY, J.

The state of Texas, acting by its Attorney General, brought this suit against the Western Union Telegraph Company, a foreign corporation, chartered under the laws of the state of New York, alleging that the defendant had failed to comply with an act of the Legislature, approved May 16, 1907 (Laws 1907, p. 500, c. 22), requiring every foreign corporation obtaining a permit to do business in this state to pay fees as follows: $50 for the first $10,000 of its authorized capital stock, and $10 for each additional $10,000 or fractional part thereof. It is alleged in the petition that the authorized capital stock of the defendant is $100,000,000, which would require the payment by appellant of $100,040 in order to obtain the state's permit to do business. It is also alleged that the defendant is engaged in a general telegraph business, extending over the entire domain of the United States, and extending into every portion of the state of Texas, and that, long prior to and continuously since the year 1897, it has exercised within the state of Texas corporate powers and franchises not conferred upon it by law, and continued its business within the state by receiving, transmitting, and delivering, within the state of Texas, messages and telegraphic communications from various and numerous points within the state to other points within the state. This is a mere summary of the facts set forth in detail in the petition, which concludes with a prayer for judgment ousting the defendant from the exercise of the corporate power of transacting any telegraphic business wholly within the state, and enjoining it from the further exercise of such corporate rights and franchises.

The defendant admitted in its answer that its capital stock was $100,000,000, and that it had not paid to the state the fees prescribed by Act May 16, 1907, and asserted that it was not required to pay any fees to the state of Texas, nor obtain any certificate of authority from it to transact any of its business within said state. By way of an affirmative defense, the defendant filed an elaborate answer, averring, in substance: That it is a New York corporation, chartered to do a telegraph business throughout the United States. That under said authority, and long prior to 1907, it had constructed numerous lines of telegraph throughout the United States and the state of Texas, and has continuously been, and is still, operating same under the charter referred to. That since the year 1889 it has, with the consent and acquiescence of the states, districts, and territories referred to, including the state of Texas, established and equipped its said business at great expense, and that in the state of Texas said business embraces 794 different stations. That it has accepted and is bound by the terms and conditions of Act Cong. July 24, 1866, c. 230, 14 Stat. 221, entitled "An act to aid in the construction of telegraphic lines, and to secure to the government the use of the same for postal, military and other purposes," and is therefore an instrument of interstate commerce and an agency of the United States government for the transaction of public business, and that to exclude it from domestic and nongovernmental business within this state would seriously cripple and affect its efficiency as an instrument of interstate and governmental business, thereby contravening the federal Constitution. That only a small part of its property has an actual location and situs in this state, and therefore the state has no power to require it to pay a license tax based upon its entire capital stock, the greater portion of which is beyond the limits of the state.

The trial court sustained a general demurrer to the special answer referred to, and upon trial rendered judgment for the state enjoining the defendant from doing any domestic or wholly intrastate business within the state, save and except for the government and officers of the United States. The judgment recognizes and does not interfere with the defendant's right to transact interstate business and business of any and every character for the federal government. The defendant interposed various exceptions to the state's petition, which were overruled, and the questions thereby raised are presented to this court for decision.

The first proposition urged is that the legislative enactment of May 16, 1907, and all previous enactments upon the same subject, prescribing the conditions upon which foreign corporations doing a telegraph business might transact business in this state, are so broad and comprehensive that they necessarily include within their scope and purport interstate and governmental business, as well as domestic or intrastate business, and are therefore violative of the federal Constitution and absolutely void. The Act of May 16, 1907, uses the language: "Each foreign corporation obtaining a permit to do business in this state shall pay fees as follows: $50 for the first $10,000 of its authorized capital stock, and $10 for each additional $10,000 or fractional part thereof." The former statutes relating to the same subject contained language as broad as the one quoted. Counsel for appellant have cited decisions of the Supreme Court of the United States and other federal decisions construing other legislative enactments of similar breadth and scope and tending to sustain the contention urged. However, as to the construction of state legislation, the cases referred to are not controlling, and many state courts have held that such statutes should be construed in subordination to the provisions of the federal Constitution and as applying only to subjects within the lawful jurisdiction of the state Legislature, and, when so construed by state courts of last resort, the Supreme Court of the United States has accepted such constructions and upheld such statutes. Osborne v. Florida, 33 Fla. 162, 14 South. 588, 25 L. R. A. 120, 39 Am. St. Rep. 99, affirmed in Osborne v. Florida, 164 U. S. 650, 17 Sup. Ct. 214, 41 L. Ed. 586; State v. Western Union Tel. Co., 75 Kan. 620, 90 Pac. 299; L., N. O. & T. Ry. Co. v. State, 66 Miss. 662, 6 South. 203, 5 L. R. A. 132, 14 Am. St. Rep. 599, affirmed in Louisville, etc., Ry. Co. v. Miss., 135 U. S. 587, 10 Sup. Ct. 348, 33 L. Ed. 784; Lacy v. Packing Co., 200 U. S. 226, 26 Sup. Ct. 232, 50 L. Ed. 451; Kehrer v. Stewart, 117 Ga. 569, 44 S. E. 854; Id., 197 U. S. 60, 25 Sup. Ct. 403, 49 L. Ed. 663; Waters-Pierce Oil Co. v. Texas, 177 U. S. 28, 20 Sup. Ct. 518, 44 L. Ed. 657; McCullogh v. Virginia, 172 U. S. 102, 19 Sup. Ct. 134, 43 L. Ed. 382; Horn Silver Mining Co. v. New York, 143 U. S. 305, 12 Sup. Ct. 403, 36 L. Ed. 164; People ex rel. Roberts, 171 U. S. 661, 19 Sup. Ct. 58, 43 L. Ed. 323; Ratterman v. Western Union, 127 U. S. 411, 8 Sup. Ct. 1127, 32 L. Ed. 229; Western Union Tel. Co. v. Mass., 125 U. S. 530, 8 Sup. Ct. 961, 31 L. Ed. 790; Ashley v. Ryan, 153 U. S. 436, 14 Sup. Ct. 865, 38 L. Ed. 773; Postal Tel. Co. v. City of Charleston, 153 U. S. 692, 14 Sup. Ct. 1094, 38 L. Ed. 871; Peik v. Chicago, etc., 94 U. S. 164, 24 L. Ed. 97; Chicago, etc., v. Ackley, 94 U. S. 179, 24 L. Ed. 99. The cases cited apply the rule that if a statute is capable of two constructions, one of which will render it valid and the other render it invalid, the former will be adopted, and some of them hold that, by the use of the phrase "business in this state," the Legislature intended that the statute should apply to domestic or intrastate, and not to foreign, or interstate, business.

In State v. Western Union Telegraph Co., 75 Kan. 620, 90 Pac. 299, a case to which further reference will be made, the Supreme Court of that state expressed the rule on the subject in the following manner: "This court has declared too often to make a repetition of the statement necessary here that if an act of the Legislature be susceptible of two interpretations, one of which would render it obnoxious to some paramount constitutional provision, while the other would place it in harmony with the fundamental law, that interpretation must be preferred which will sustain the act, rather than the one which will destroy it. The court must therefore, in the discharge of its duty, take it for granted that the Legislature did not intend to fly in the face of the federal Constitution and try to exclude foreign corporations engaged in interstate commerce from doing interstate business here, unless they first procured permission from the charter board. It must be presumed that the Legislature intended to act within the scope of its lawful powers. No words of the statute may be construed to relate to subjects within the exclusive jurisdiction of Congress. Nothing contained in the act can be viewed as having any relation whatever to the right of the defendant freely to enter the state and here transact all business of an interstate character which it may desire to undertake. And the court must necessarily hold that the words `business in this state' mean, when applied to commerce, domestic business only; business which originates, is carried on, and is completed, within the jurisdiction of this state."

If the rule of construction contended for by appellant should prevail, and every statute should be held to embrace everything falling within its literal terms, much of the legislation of this state in reference to common carriers would contravene the federal Constitution, because such legislation is in general terms and, not in so many words, restricted to intrastate business....