Court Opinion

ID: 3250417
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:21:27.763732+00
Date Added: 2024-06-11T12:43:42.656269
License: Public Domain

I think the whole case rests upon the single point whether the appellee had the power to levy the tax in controversy as a privilege tax, i. e., one for revenue, or as a license tax in name, but really one for revenue.
In the general revenue bill (Acts 1911, p. 159), a privilege tax based on mileage is provided for against telegraph companies, and it enacts that no telegraph company paying the state tax shall be liable to pay "any additional privilege tax, except licenses required by cities and towns."
The point is made that this exempted appellant from this privilege tax, but the lower court decided that it did not, and overruled the demurrers to the complaint, and sustained them to the pleas setting up this defense. The writer is of the opinion that the defense is good, and that this question is decisive of this appeal.
It is evident that it is highly improper to exercise an unlawful power by giving it a name, merely, inconsistent with its real nature. The judiciary in Alabama have accepted the distinction between the two taxes shown, in the case of Van Hook v. City of Selma, 70 Ala. 361, 45 Am. Rep. 85, as being that the privilege tax is one for revenue, while the license tax is merely for regulation and police supervision. And it is highly essential that the substance of things shall not be confused by giving them names merely, not signifying or conforming to their nature.
The state has no power whatever to collect revenue from subjects not open to it for taxation, yet it may regulate or police such matters and exact a license tax for such purpose; such tax, however, being of so light a nature as it may not possibly interfere with or burden the exercise of the business, being merely to pay the cost of a necessary police protection.
And there is another distinction, recognized by all the courts, viz.: That a power to tax for revenue must be reasonably exercised under the controlling, though implied, limitation that taxes for revenue are levied on individual units of society for the necessary purpose of governmental protection of the whole society, and must not be so exercised as to amount to a practical confiscation.
In considering the nature of the tax in question in this case, it should be noted that the city of Decatur is a comparatively small municipality, and the nature of the business taxed is one not calling for a large and expensive police supervision or regulation. It is usually conducted in small cities by a few men or women in quiet offices, in sending and receiving messages by electric wires, and a few boys to carry and receive messages. There is no crowd to supervise or regulate, no inducements to turbulence or misconduct of any sort. In fact, the business cannot be conducted, except in quiet and orderly offices. It is not necessary to reasonably incur more than nominal expense in the policing of a telegraph business in a small city of some 5,000 or 6,000 inhabitants in a state where inebriety is prohibited by its laws and made highly penal. And when a tax in its effect exceeds greatly such nominal cost of policing, and eats into and practically appropriates all or the greater part of the profits of the business conducted on the most economical basis, there is no escaping the fact that the tax is in fact one in its nature levied for revenue, and that calling it one for policing regulation is an evasion and a subterfuge.
The pleas in this case show the tax in question a privilege tax, or one for revenue; and conceding all the rights and privileges of a legislative body to tax its subjects heavily, the writer simply looks, in the first place, into the right of the appellee to levy this privilege tax, for it is not a license tax, though so named. *Page 683 
It is admitted that the Legislature and the courts have not always preserved the distinctive difference between the two taxes in speaking generally of taxation; but the distinction exists, and is recognized, when attention is called to the necessity of discriminating between them.
The taxation by a city is really indirectly by the state, and to serve state purposes, in a large sense. The city lives by and through and for the purposes of the state, and its power to levy taxes is by its permission and by its authority. When the Legislature speaks, and uses plain language, which cannot be changed or warped from its plain and ordinary meaning, except when a different or narrower or larger meaning is necessary to avoid absurdity or calamity, courts are no more at liberty to misunderstand the command which the language imparts than a soldier is authorized to disobey lawful orders of his superior officer by taking a bypath when ordered to follow the main road.
There the state levies a privilege tax on lines of telegraph companies extending through its entire area, and says, in effect, that this tax is maximum levy for revenue, and "no telegraph company which has paid this tax shall be liable to pay any additional privilege tax in this state, etc.,in this state" (not to this state). Notwithstanding the appellee brings an action of assumpsit based upon two ordinances set out in the record, in which the levies are called "a license or privilege tax" of $200 per annum.
It appears to the writer as being nothing short of a quibble or subterfuge to say that an additional privilege tax may be levied by cities and towns by calling the tax "a license tax."
The Legislature discloses in its language that it had in mind taxation by cities, and not merely taxation by counties, for it said, in substance: But this tax for revenue by us shall not interfere "with licenses by cities."
Our courts are not at liberty to evade this command of our law given by the Legislature, and it is clear to the writer, under the pleas in this case, that this is a tax for revenue, and not a license for police regulation, and for this reason it was unlawfully levied by the appellee against the appellant.
                          On Rehearing.