Case Name: THE PEOPLE, Respondent, v. WELLS, FARGO & COMPANY, Appellant
Court: Supreme Court of California
Jurisdiction: California
Decision Date: 1902-02-17
Citations: 135 Cal. 503
Docket Number: S. F. No. 2136
Parties: THE PEOPLE, Respondent, v. WELLS, FARGO & COMPANY, Appellant.
Judges: 
Reporter: California Reports
Volume: 135
Pages: 503–512

Head Matter:
[S. F. No. 2136.
In Bank.
February 17, 1902.]
THE PEOPLE, Respondent, v. WELLS, FARGO & COMPANY, Appellant.
War Tax on Express Company—Bight to Collect from Shipper-Substantial Besult—Increase of Charge—Criterion.—An express company to which has been tendered its regular charge, previously made, for transportation of a package may refuse to transport it without payment by the shipper of the burden of the one-eent war tax, where the imposition of such burden upon the shipper is in effect a reasonable increase in the regular rate charged for transportation to all shippers. The substantial result, and not the mode or intention of shifting the burden of the tax, is the criterion of the lawfulness of the charge.
Id.—Case Applied.—The case of American Express Company v. Michigan, 177 U. S. 404, is applicable to the facts of this case, and is conclusive of the law applicable thereto. [Henshaw, J., Van Dyke, J., and Garoutte, J., dissenting.]
APPEAL from a judgment of the Superior Court of the City and County of San Francisco. James M. Troutt, Judge.
The complaint, besides alleging the unlawful exaction of the internal-revenue tax of one cent from the plaintiff, alleged that,1 ‘the defendant is, and ever since the twelfth day of July, 1898, has been, unlawfully and without right asking and de manding of all persons within this state who do and transact any express business with defendant in this state, the payment by such person of the internal-revenue tax.” The answer expressly admitted this averment, with the exception of denying that its action was unlawful or without right. The answer also claimed that it was the duty of the shipper, and not of the express company, to pay the tax.
Further facts are stated in the opinion of the court.
E. S. Pillsbury, and Alfred Sutro, for Appellant.
Tirey L. Ford, Attorney-General, and George A. Sturtevant and William M. Abbott, Deputies Attorney-General, for Respondent.

Opinion:
THE COURT.
Mandamus brought by the state to compel the defendant corporation, an express company, to accept, carry, and deliver a certain package offered to it, for transportation, the offer being accompanied by a tender of twenty-five cents. The defendant refused to accept the package for transportation without further payment by plaintiff of one cent, or of a one-cent documentary internal-revenue stamp, as provided by the United States statute of June 13, 1898, known as the "War Revenue Act." These facts were admitted by defendant's answer, and plaintiff moved for and obtained judgment upon the pleadings. From that judgment the defendant appeals.
On April 6th last, a majority of the court handed down an opinion affirming the judgment of the court below; but upon defendant's petition a rehearing was granted. Upon the former hearing it was conceded that unless the facts of this case could be distinguished from the facts in the case of American Express Co. v. Michigan, 177 U. S. 404, the judgment should be reversed; and that is the question now before us for reconsideration.
The supposed distinction between this case and the ease above cited was thus stated: "In the Michigan case the express company shifted the burden by a reasonable change in its rate. In the present case the question before the court may thus be put: May an express company, to which has admittedly been tendered its regular charge for the transporta tion of a package, refuse to accept and transport that package upon its arbitrary demand that something more than the regular charge shall be paid?"
It may at once be conceded that the said stamp tax is imposed by the act of Congress upon the express company. It issues the receipt or bill of lading upon which the stamp is required to be placed, and must cancel the stamp. The act is silent as to any duty connected therewith imposed upon the shipper, or by whom the cost of the stamp shall be borne. The first and principal question for determination, therefore, is whether the express company can shift the burden of the tax from its shoulders to those of the shipper; and this question was unequivocally decided in said case by the supreme court of the United States. It was there said (p. 410): "It is also to be observed that the second and third propositions, which involve the one to shift the burden of the tax by exacting that the one cent be provided, and the other the power to increase rates within the limits of the requirement that the charges as increased be reasonable, both depend upon the same considerations. Indeed, the question into which all the issues are ultimately resolvable is whether the right exists to shift the burden, of course ever circumscribed by the duty of not exceeding reasonable rates. If it does not,—that is, upon the hypothesis that it not only can be, but is, forbidden,—then it must result that all methods adopted to attain the prohibited result are void. On the contrary, if the right to seek to shift the burden obtains, then the substantial result of what is done becomes the criterion, and the mere fact that the motive announced, for a reasonable increase of rates, is declared to be a shifting of the burden cannot prevent the exercise of the lawful right."
But two modes of shifting the burden of this tax have been suggested, and both affect the shipper and carrier in the same manner and to precisely the same extent. One is to require the shipper (taking this case as an example) to pay twenty-five cents and to furnish a one-cent stamp, or to pay twenty-six cents, the carrier to furnish the stamp, and the other to pay twenty-six cents; and as said in the foregoing quotation, "if the right to shift the burden obtains, then the substantial result of what is done becomes the criterion." In the two examples stated the result is the same, and was accomplished in practi cally the same maimer and at an equal cost to the shippers. But on the facts as stated by Mr. Justice White in American Express Co. v. Michigan, 177 U. S. 404, that case and the ease at bar aré identical. In the complaint in the state court in that ease the people alleged that the express company, in order to avoid the payment of the stamp tax, refused to accept any goods for transportation unless the shipper attached the stamp to the bill of lading or receipt, or furnished the money or means for that purpose to the said company; and the answer alleged that the express company had "the right or privilege of insisting that those who offered packages to be carried by express should either furnish the one-eent stamp or provide the means of paying for it. It was, moreover, alleged that the company had in effect but increased its rates on each shipment by adding to the previous rates the sum of the stamp tax." The effect is the same here, and was accomplished in precisely the same manner. We see no ground upon which the two cases can be distinguished, and on the authority of American Express Co. v. Michigan, 177 U. S. 404, the judgment is reversed, with directions to dismiss the action.