Williams v. City of Talladega

• Decision Date: 23 December 1912
• Docket Number: No. 44,44
• Citation: 226 U.S. 404,33 S.Ct. 116,57 L.Ed. 275
• Parties: D. G. WILLIAMS, in Err., v. CITY OF TALLADEGA
• Court: U.S. Supreme Court

226 U.S. 404

33 S.Ct. 116

57 L.Ed. 275

D. G. WILLIAMS, in Err.,

v CITY OF TALLADEGA.

No. 44.

Argued November 7 and 8, 1912.

Decided December 23, 1912.

Messrs. Rush Taggart, Willliam M. Williams, John F. Dillon, George H. Fearons, F. N. Whitney, and Ray Rushton for plaintiff in error

[Argument of Counsel from pages 405-409 intentionally omitted] Mr. J. K. Dixon for defendant in error.

[Argument of Counsel from pages 409-411 intentionally omitted] Mr. Justice Day delivered the opinion of the court:

This is a writ of error to review the judgment of the supreme court of the state of Alabama, affirming the judgment of the city court of Talladega. 164 Ala. 633, 51 So. 330.

D. G. Williams, the plaintiff in error, was convicted of doing business in the city of Talladega, as agent of the Western Union Telegraph Company, from October 1, 1908, to December 31, 1908, without taking out and paying for a license, in violation of an ordinance of the city. The ordinance contained a schedule of licenses for divers businesses, vocations, occupations, and professions carried on in the city, among others, the following:

'158. Telegraph company.—Each person, firm, or corporation commercially engaged in business sending messages to and from the city to and from points in the state of Alabama for hire or reward, $100.'

Section 2 of the ordinance declared that the license was exacted in the exercise of the police power of the city, as well as for the purpose of raising revenue for the city. The 4th section provided that any person, firm, or corporation who engaged in any trade, business, or profession for which a license was required, without first having obtained such license, should be guilty of an offense, and upon conviction should be fined not less than $1 and not more than $100, and that each day should constitute a separate offense.

The record discloses that the corporation was organized under the laws of the state of New York, and had accepted the provisions of the act of Congress of July 24, 1866 [14 Stat. at L. 221, chap. 230] (Rev. Stat. §§ 5263-5268, U. S. Comp. Stat. 1901, pp. 3580, 3581), and for several years theretofore and during the years 1907 and 1908, had had an office in the city of Talladega, and was engaged in the business of transmitting messages between private parties and between the departments and agencies of the United States government from Talladega to other points in the state of Alabama, and also from other points in the state of Alabama to Talladega; that during the months of October, November, and December, 1908, Williams was employed by the Western Union Telegraph Company as manager of its office at Talladega; that a license fee of $25 was demanded of him for the quarter ending December 31, 1908, which was refused, and that he was fined $25 and costs, and in the event of his failure to pay the fine and costs he was sentenced to labor on the streets for fifty days. It also appears that the Western Union Telegraph Company pays taxes on its property in the state. In addition to the agreed facts, from which the above statement is taken, it is shown by the testimony of the defendant that the lines of the Western Union Telegraph Company enter and leave the city over the right of way of the Southern Railroad and the Louisville & Nashville Railroad, both of which are public railroads, and that within the city of Talladega the company has lines which leave the right of way of the railroad companies and proceed along public streets to the office of the company; and also that government messages were relayed daily at the Talladega office; that it received messages between the different departments of the government of the United States at this office from points within the state; and that government messages were given a preference and were sent at reduced rates. From the testimony, the supreme court of Alabama found that for the year 1908, not including the month of January, the company did its intrastate business at a net loss of 86 cents.

This case differs from some cases which have been in this court, involving the right to tax the Western Union Telegraph Company, in that it places emphasis upon the alleged immunity from taxation of the class herein involved, because, it is contended, by the act of 1866, Congress, by virtue of the authority given it to establish post roads, conferred Federal franchises upon the company, and made the Western Union Telegraph Company an instrumentality of the Federal government, endowed with franchises to construct, maintain, and operate telegraph lines on the post roads of the United States, with the duty in the operation of those lines not only to serve the government of the United States, but also to serve the public which might wish to transact business over its lines. This being so, it is now insisted that the attempt to impose a license tax upon the company, either by the state of Alabama or any of its municipalities, is an attempt to impose a tax on the franchises so created by the Federal government.

The question made upon this point was considered in Postal Teleg. Cable Co. v. Charleston, 153 U. S. 692, 38 L. ed. 871, 4 Inters. Com. Rep. 637, 14 Sup. Ct. Rep. 1094. In that case the Postal Telegraph Cable Company had accepted the provisions of the act of 1866, and the state statute imposed a license of $500 upon the telegraph company for business done exclusively within the city of Charleston, not including any business done to or from points without the state, and not including any business done by the officers of the United States. It was contended for the telegraph company that the license required by the ordinance was a tax upon it for the privilege of exercising its franchise within the city of Charleston; that the telegraph company having constructed its lines along post roads in the city of Charleston and elsewhere, no state or municipal authority could collect a license fee from it for the privilege of conducting its business, 'thus restraining the powers possessed by it under its franchises and under the acts of Congress;' and furthermore, that the ordinance in question was in interference with interstate commerce and therefore void. It will thus be seen that in that case not only was the contention made as to the interstate commerce feature of the telegraph company's business, but it was specifically claimed that to exact such a license would restrain the powers possessed by it under the franchises created by the act of Congress. After reviewing a number of cases, Mr. Justice Shiras, who delivered the opinion of the court, said:

'It is further contended that the ruling of the cited cases does not cover the case of a telegraph company which has constructed its lines along the post roads in the city of Charleston, and elsewhere, and which is exercising its functions under the act of Congress as an agency of the government of the United States. It is obvious that the advantages or privileges that are conferred upon the company by the act of July 24, 1866 (Rev. Stat. §§ 5263-5268), are in the line of authority to construct and maintain its lines as a means or instrument of interstate commerce, and are not necessarily inconsistent with a right on the part of the state in which business is done and property acquired to tax the same, within the limitations pointed out in the cases heretofore cited.'

In Western U. Teleg. Co. v. Missouri, 190 U. S. 412, 47 L. ed. 1116, 23 Sup. Ct. Rep. 730, this court, again considering the act of 1866, quoting from the opinion of Mr. Justice Miller in Western U. Teleg. Co. v. Atty. Gen. 125 U. S. 530, 31 L. ed. 790, 8 Sup. Ct. Rep. 961, said, speaking by Mr. Justice McKenna:

'These propositions were laid down: That the company owed its existence as a corporation and its right to exercise the business of telegraphy to the laws of the state under which it was organized; that the privilege of running the lines of its wires over and along the mili- tary and post roads of the United States was granted by the act of Congress, but that the statute was merely permissive, and conferred no exemption from the ordinary burdens of taxation; that the state could not, by any specific statute, prevent a corporation from placing its lines along the post roads, or stop the use of them after they were so placed, but the corporation could be taxed in exchange for the protection it received from the state 'upon its real or personal property, as any other person would be.' And, describing the particular tax imposed it was said:

"The tax in the present case, though nominally upon the shares of the capital stock of the company, is in effect a tax upon that organization on account of property owned and used by it in the state of Massachusetts, and the proportion of the length of its lines in that state to...