Court Opinion

ID: 7137115
Source: CourtListenerOpinion
Date Created: 2022-07-24 15:25:09.657511+00
Date Added: 2024-06-11T16:14:39.844279
License: Public Domain

Hobson, J.
(dissenting).
Appellee manufactures oil from cotton seed. When oil is manufactured, it must be placed in some vessel for delivery to the customer. To deliver its oil to its customers, appellee uses large tanks, and, as these tanks are too large to be shifted from car to car, it owns cars on which its tanks are carried; the railroad company using its oars and charging it for hauling them. It is not in the carrying business, it only delivers the oil it makes to its customers, and it has adopted this method of delivery by means of tanks on oars because more convenient. By the revenue act of 1906, the manner of assessing certain corporations is provided by section 1, art. 4 (Laws 1906, p. 126, c. 22). The manner of assessing all other corporations is regulated by article 11. It is insisted that appellee is one- of the corporations to be assessed under section 1, art. 4. That section names 20 kinds *363of corporations. It includes, also, “every other like company, corporation or association,” and1 “every other corporation, company or association having or exercising any special or exclusive privilege or franchise not allowed by law to natural persons or performing any public service.” It is conceded that appellee is not one of the 20 corporations named. It is also conceded that appellee neither has nor exercises any special or exclusive privilege or franchise not allowed by law to natural persons, and that it performs no public service; but it is insisted that it is a like company, corporation, or association to those named', and this is the only question in the case. Section 1, art. 4, is verbatim the same as section 4077, Ky. St. 1903. The opinions- of this court construing that section are therefore applicable. In Aetna Life Insurance Company v. Coulter, 15 Ky. 801, 74 S. W. 1050-2, 25 Ky. Law Rep. 193, this court in determining what was a like company or corporation, said: “In determining the meaning of the word “like” in this section, we must follow the rule noscitur a sociis. All the 20 named corporations have special or exclusive privileges or franchises not allowed by law to natural persons. The word dike’ must be read not only in connection with the preceding words, but with the following clause. The likeness which the Legislature had in mind is in having or exercising some special or exclusive privilege or franchise not allowed by law to natural persons, or performing some public service. In Levi v. Louisville, 97 Ky. 405, 30 S. ”W. 976, 28 L. R. A. 480, 16 Ky. Law Rep. 872, this court said that the board of valuation was created “to value every and all corporations, associations or companies having or exercising any special privilege or franchise not allowed by law to natural persons. ’ And *364in Board of Councilmen of City of Frankfort v. Stone, 108 Ky. 400, 56 S. W. 679, the court said: “The franchise primarily in view under section 4077, Ky. St. 1903, is any special or exclusive privilege not allowed by law to natural persons.’ In the interpretation of all statutes levying taxes, a cardinal rule is that their provisions are never extended by implication beyond the fair meaning of the terms used, and in every case of doubt they are construed more strongly against the government, and in favor of the taxpayers, because burdens are not to be imposed unless the in* tention of the Legislature to impose them is distinctly shown.” In the case of Fidelity & Casualty Company v. Coulter, supra, the court, having the same question before it again said: “A: company which is in name an insurance company, but is doing a guarantee or security business in this state, is a like corporation, within the meaning of section 4077, Ky. St. .1903, and is.therefore embraced by it.”
It is manifest that, if what the court said in these cases is still recognized as the law of the state, appellee cannot be held assessable under article 4, for, if the likeness which the Legislature had in mind is in “having or exercising some special or exclusive privilege or franchise not allowed by law to natural persons or performing some public service,” it must be admitted that appellee is not a like corporation, as manifestly it exercises no special or exclusive privilege and performs no public service. The rule referred to in these opinions that taxes are never 'levied by implication, and that tax laws are construed more strongly against the government, is universally held, and to hold appellee a like corporation to those named in the statute is entirely to ignore this principle of construction as well as the-rule of noscitur a *365sociis. By section 6 of article 4. every natural person engaged in the business of any of the corporations named in the first section of the article is required to be assessed and taxed as the corporations therein named. In Louisville Tobacco Warehouse Company v. Commonwealth, 106 Ky. 165, 49 S. W. 1069, 57 L. R. A. 33, it was pointed out that the purpose of the Legislature in this provision was to reach persons or associations having .or exercising some special or exclusive privilege or franchise not allowed by law to natural persons or performing some public- service. In other words, what the Legislature had in mind was the taxation in a certain way of public service corporations, and it provided that any association or person engaged in the business of any of these corporations should be taxed in the same way. In the case of the Tobacco Warehouse Company and in Marion National Bank v. Burton, 90 S. W. 948, 28 Ky. Law Rep. 870, 10 L. R. A. (N. S.) 947, the court said: “From these provisions it is manifest that the so-called'franchise tax is in reality a property tax upon all the intangible property of the corporations named in this act.’’ In Standard Oil Company v. Commonwealth, 119 Ky. 79, 82 S. W. 1021, 26 Ky. Law Rep. 985, the court said: “Franchise taxes are collected, but they are imposed only on the tangible property of those corporations classed as public service corporations, or such as enjoy special or exclusive privileges not allowed by law to natural persons. Section 4077, Ky. St. 1903. Mere trading corporations are not included.’ ’
Appellee is a mere trading corporation. It is not/ in any sense a public service corporation. The Legislature named in section 4077 palace-car companies, sleeping-car companies, dining-ear companies, and *366chair-car companies, and then it added the words, “and every other like company.” What it had in mind was that there might be other car companies like those named performing public service. It did not have in mind taxing transportation in a peculiar way, simply because the goods were transported in a car, rather than a wagon. If the aeroplane should be made a success, and a company should be organized to carry goods through the air, it would be a like company to those named; but the farmer who brings his hay to market in his wagon is not engaged in the business of any of the corporations named' in the first section of the article. As. far as this act goes, there can be no valid distinction between the- farmer who hauls his hay to market in his own wagon, and the appellee who hauls its own oil to its customers in its own tank; one is no more within the spirit of the statute than- the other. Drummers now travel with a large assortment of trunks, and when they get to a town they hire a room and display their samples. If a large house should own a car in which these samples were displayed, and, instead of the expense of hauling the trunks and opening and displaying the samples at every town, should send a drummer out in a car and’ let him use the car to display his samples, would it be contended that that firm, or company should be taxed under article 4? If a farmer ran 100 of his own wagons hauling his own, hay, or a mercantile house put out 500 drummers ini such cars with its own samples, would it affect the application of the statute? In other words, does the operation of the statute depend on the quantity of his own goods the owner hauls? If -so-, where will you draw the line? And by what authority do you draw it there? Again, a great many men own private cars *367in which, they take trips from time to time, and in which they live more or less while on the journey, and carry no little freight and baggage. Nearly all circuses that travel through the country now own their own cars and simply hire the railroads to pull them. Not a few theatrical companies travel in the same way. But did any one ever suppose that these people were in the transportation business within the meaning of article 4? A large number of the coal mines of the state are operated by the owners, who bring out the coal in cars to a tipple, which is sometimes several miles from the mouth of the mine. Are these people in the transportation business, and to be taxed under article 4! And, if not, why not, if appellee may be taxed! No distinction can be made which rests on the size of the vehicle or the fact that it runs on a track. A corporation doing a public service business would fall under the statute, though it used vehicles smaller than the farmer’s wagon and requiring no track to run on. The distinction must rest on the character of the business, and to say that the statute applies to all those engaged in the business of carrying their own goods is entirely lo abandon the position heretofore expressly held by the court that it applies only to public service corporations, and to make it include practically not only all industrial corporations, but the majority of natural persons engaged in the business of producing. If appellee is taxable under the statute, why must not' the grocer who delivers his goods to his customers in his wag'ons be taxed under it! The court undertakes to lay down no rule by which in future it may be determined how a given corporation may be taxed, and if the rule heretofore laid down by the court is discarded, and it is held that the statute includes the *368carrying business and all carrying of goods either by the owner or by anybody else, who is it that will be exempt from the operation of this section, for wlm does not carry his own goods ! The court cannot mean to say that the statute has any special reference to carrying by a ear, rather than in any other vehicle, for certainly a corporation who carried in automobiles or launches for the public would be a like company to those named in the statute. The application of the statute cannot depend upon the character of vehicle used, and, if it does net depend upon this, where can you draw a line when you discard the rule which the court has heretofore laid down!
The case of Louisville Tank Line v. Commonwealth, 123 Ky. 81, 93 S. W. 635, 29 Ky. Law Rep. 257, lends no support to the opinion. The appellant in that ease was organized to operate as a carrier tank cars. It had a special franchise. It was a public service corporation, organized for this purpose and enjoying all the privileges of such a corporation. It was not engaged in carrying its own goods. It was carrying the goods of others. When a corporation is engaged in the carrying business, it is immaterial under the statute whether it carries for 1 person or 50. The whole oil trade of the state is now in the hands of the Standard Oil Company, and to have exempted the Louisville Tank Line from the statute, would have been to allow the application of the statute to' depend on the number of persons engaged in the oil business. The holding that the Louisville Tank Line, which is a public service corporation, is taxable under the statute, is no authority for holding ’ that appellee, a mere private corporation, may be so taxed. As this court has heretofore expressly held, appellee is not a like company because it transports *369goods on cars as the tank line transports 'them. The likeness the statute refers to is likeness in serving the public, not in the manner the goods are transported. So a carrier company which, carried in the air or in pneumatic tubes under the ground would be a like company, if it had a franchise to carry and was a public service corporation. The likeness is in having the franchise to serve the public or being in the business of serving the public.
Heavy penalties are provided in article á for disobedience of its provisions. _ It is important therefore that people should know for certain who comes under this article, so they may not incur the penalties. This court, that nobody might suffer, undertook to lay down a broad general rule to define who comes under it, declaring that it embraced only the public service companies. "When that rule is now departed from, who can tell what persons who trusted the rulings of this court for their guidance will suffer? And when the court thus abandons the rule itself declared, and disregards its' own decisions, how is business to be conducted?
For these reasons I dissent from the opinion of the court.
Barker and Lassing, JJ,, concur in this dissent.