Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1892-11-22
A GREAT VICTORY.
Result Of States Litigation with
the Grand Trunk.
"A Most Signal Triumph Won by
Attorney-General LittIefeld,
Which Will Put Upwards ci S20O-00 iase
the States Treasury.

( pozYtsxp. Nov. 2i.--A few days ago q
writ for the purpose of recovering the sum
Of about one hundred and seventy thousand
dollars $1,000 with an ad damnum OF
three hundred and twenty hye thousand
doijars fs325 600 was brought in favor Of
the State Of Maine against the Grand Trunk
Railway. and inasmaeh as this is probably
The last chapter in quite an extended litiga-
tion involving not only large sum OF
money but very interesting legal questions,
A review of the litigation may prove some
hat interesting and instructive.
! Under the statute of the State OF Maine
/ impaslng an annual excise tax upon eorpor-
afisn.. the amount of which was to De de-
/ teruined by the average gross receipts per
mile based upon the number OF miles oper-
ated within the State, "a tax was hrsf assessed
against the Grand Trunk Railway in the
J year I4sI and similar tax has been assessed
/ upon this road for every SUGGESTING year
thereafter.
I The statute provides that If the corpora
ton fails To pay the tax the treasurer OF
STATE NAV proceed TO collect the same With
| interest at ten per cent. The total amount
of taxes III as assessed against the Grand
/ Trunk Railway with interest at ten per cent.
cornu,ted thereon. from 1881 up TO 1891
inclusive. aggregates little more than
| Saoo Ooo Nole of these taxes thus as
.es.ed have ever been paid by the Grand
Trunk Railway but they refused payment
unon the ground that the statute under
which they were assessed was uneonstitn-
/ tional.
1 I'm lss2, Attorney General Cleaves
I,rouyht an action in favor of the State of
Maine against the Grand Trunk Railway
! Company to recover the tax for the year
tsSt and one half of the tax for the year
/ 1852. the other half not then beng due.
The snit was removed into the Circuit Court
| bv the Grand Trunk Hallway Company and
WAS afterwar,l. argued before Judge Webb
4 by Attorney General Cleaves for the state
and 4. T. Strout, Esq. for defendant.
I Judge Webb ruled that the imposition or
/ the tan in question was regulation OF ln-
, terstate and foreign commerce IN conflict
/ u ith the executive powers of Congress un-
der the constitution of the United States,
| and was invalid.
Attorney General Cleayes' term expiring,
/ Attorney General Baker succeeding him,
/ filed exceptions to this ruling of Judge
/ Webb and carried the case to the United
| states supreme Court on writ of error.
| The case was finally reached for argn-
ment in the [ nited States supreme Court
in April, 1891, when it was argued by
! Attorney General Ittlefeld, he having sue
eeeded Attorney General Baker, on behalf
/ of the State of Name and \. A. Strout,
Esq, for the railway company.
! The defense relied upon the long line of
authorities which were generally understood
/ hy the profession to sustain the ruling of
Judge Webb.
The attorney general contended for two
| propositions First he endeavored to dis
! tinguish the pending case from the line OF
I authorities relied upon, and second, he
claimed that the tax should be sustained
upon the ground that 1t was tax upon the
valIe of the franchise and that the method
provided in the statute. basing it upon the
average gross receipts per mile, was proper
method of determining the value of the fran
| chises upon which the tax should be assessed
and one that was cmaently just and fair to
| the corporation that such method OF de-
tcrmining it, value was the only method OF
accurately ascertaining its value from tine
/ to time as the basis of taxation. The
supreme Court by a majority of one over
ruled the decision Of the district judge and
sustained the validity of the tax, stating
among other things, that the ruling of the
court below was founded upon the assump-
ton that reference by the statute to the
| TRANSFORMATION receipts and to "A certain per-
centage of the same in determining the
amount Of the excise tax was in effect the
imposing of the tax upon such receipts and
therefore an interference with interstate
and foreign commerce But the Supreme
Court held that''a resort to those receipts
was simply to ascertain the value of the busi-
ness" done by the corporation and thus obtain
a guide to a reasonable conclusion as to the
amount of the excise tax which should be
levied" and that there was in the case al
bar "no levy by the statute on the receipts
themselves, either in form OF fact" and tha,
the gross receipts as defined by the statute
of the State of Maine constituted simply
the means of ascertaining the value of the
privilege conferred" thus sustaining the
last proposition contended for by Attorney
General l.ittleficd.
This proposition which was clearly an
nounced by the | nited States Supreme
Court for the first time in this case. is gen
orally recognized by the profession as Al
least a new AMI very important distinction
Distinguishing this ease from long line OF
decisions which have arisen under the com,
mefce clause of the constitution. 1t j.
certainly an extremely important PROPOSE
tion SO far as the financial interests of the
Sta,e of Maine are concerned.
After this decision was announced. Mr.
Strout for the railway company, filed q
petition for hearing, which petition was
,lenicd by the court.
The mandate which was sent down by
the Circuit Court in execution of this deci
sion, ordered the Circuit Court to entei
iudpmen, IN favor of the State of Maine
sor the amount of the tax demanded. The
question then arose before Judge Webb a,
10 the proper construction of the mandate
Attorney General Littlefiel1 claiming tha
the interest at ten per cent, followed and
was in legal effect part of the tax as i
was expressly conferred by the statute pro
yi,liny for the assessment and that it wa,
the ,luty of the court to enter judgment fol
the amount of the taxes and interest. L pof
the other hand, Mr. Strout for the railwa,
company contcude4l that judgment sheult
be entered for the principal sum of the
taxes only. without interest.
The amount of the taxes without interes
was si5.6l7.ii. The amount of interes
upon the taxes at the rate of ten per cent
at the time of the entering Of Judgment il
the Circuit Court in accordance with ths
n,au,iate, would have been the sum of SIG,
57l.5j.
Judge Webb construed the mandate a,
excluding the interest in the amount fol
Ii t.V.fsr ont h.a rnyIarad