Court Opinion

ID: 8272865
Source: CourtListenerOpinion
Date Created: 2022-10-16 19:37:57.248316+00
Date Added: 2024-06-11T16:43:35.004235
License: Public Domain

White, J.
(dissenting). I am unable to agree with either the reasoning or the result of the majority opinion in this case. I think that the acts of 1906 and 1913 are applicable to and sustain the assessments in question, and that those acts are constitutional.
*230I agree -with the proposition that the general steam railroad legislation and the.street railway legislation provide for the establishment of separate and entirely distinct transportation systems, different in the nature of their respective purposes and of the service they are designed to render. One, the steam railroad system^ imposes such an additional servitude upon a public highway, if it occupies one longitudinally, by reason of the fact that its purpose is to serve others than the highway traveling public, that the acquisition of the estate in the highway of abutting property owners is necessary in addition to its charter and other authority; whereas the other, the street railway system, being a part of the local highway conveniences of traffic,, is a part of the highway servitude, subject to which the abutting property owners hold their titles. The steam railroad, under its legislation, is not a part of the street traffic conveniences of a municipality, whereas the street railway, under its legislation, is a part of such street traffic conveniences.
The legislature, for reasons satisfactory to itself and therefore presumably satisfactory to all the people of the state, whose spokesman it is, has seen fit to impose, for the benefit of the various municipalities, a franchise tax upon street railways performing this local highway service in such municipalities. In doing so it was careful to provide that such tax is hot to apply to the entirely different and dissimilar franchises of the steam railroads to perform their general railroad service.
This tax was first levied by the act of 1900, and then by the act of 1906, supplemented by the act of 1913.
Through all of these acts, as I read them, there rims the same distinction between the true provinces of the two systems. The one which was a part of the local municipal highway or. street service was, as such, to be taxed because of its franchise or permission to be a part of such service; the one which was not a part of that service was not to be so taxed.
Bearing this clear distinction in mind I find no difficulty in sustaining the sufficiency of the title of the act of 1906 with relation to the supplement of 1913. The effect of course *231of the supplement of 1913 is to read its provisions into the act of 1906, and in consequence we have, as the completed legislation, an act entitled, “An act for the taxation of the property and franchises (held to he a franchise tax) of street railway corporations using or occupying public streets, highways, roads, lanes or other public places in this state,” which act in its body, as supplemented, provides for—first, a franchise tax on street railway corporations which acquired their franchise or permission from the state or any municipality, and which, in consequence, have the right to and do occupy the streets in pursuance of such franchise or permission, and second (as provided by the 1913 supplement), a franchise tax on the operation of street railway systems in municipalities either by steam railroad corporations or upon the tracks of steam railroad corporations occupying the streets of such municipalities.
In other words, the act, which by its title is to reach the franchise to perform the class of service properly and technically described as street railway service, provides that the exercise of that franchise is to be taxed, whether such franchise was regularly and formally granted as such in the manner prescribed by the legislature to street railway companies incorporated for that purpose and receiving and exercising municipal permission to occupy its streets, or whether the franchise is in fact being exercised without such legislative and municipal grant, either by a steam railroad company or upon a steam railroad company’s tracks laid in the municipal streets, whether laid for another purpose and by virtue of authority to so lay them for that other purpose, or laid without any authority whatsoever.
The exercise of the franchise to perform a street railway service as a part of the conveniences of the municipal highway, is to be taxed when in - fact exercised, irrespective of whether its exercise is in pursuance of regular grant in the manner contemplated by the legislature, or is the result of an usurpation or assumption of such franchise without the authority so contemplated.
*232It will not do, it seems to me, to hold that this latter usurped franchise cannot be considered as included in the title of the act of 1906 on the ground that that title uses the words “street railway corporations ,” in designating who are to be taxed. If the title had followed the language of the legislation which has provided for the incorporation of street railway “companies” to exercise street railway franchises, there might be more plausibility in the contention that the tax must consequently be limited to- the franchises of street railway “companies” so incorporated. The title in question does not speak of street railway companies, but of street railway corporations, that is, as it seems to me, of all corporations exercising street railway franchises. Such corporations are in fact so far as the exercise of this franchise is concerned street railway corporations. This view is strengthened by the next succeeding words of the title, viz., “using or occupying public streets,” &c. That is, any corporation using or occupying public streets for street railway purposes is included in the object expressed by this title. Certainly that construction, while conforming with the broad comprehension of the word “corporations,” as contra-distinguished from the word “companies” as used in the legislation authorizing the incorporation of street railway “companies,” is in accord with the proper spirit and purpose of the legislation in question, which was to tax in a certain way a particular tiring, viz., the exercise of a certain class of franchises; and this fact, taken in conjunction with the well-recognized and proper duty of the courts to adopt a construction favoring constitutionality of legislative enactment rather than one defeating it, where a doubt exists, seems to me to lead imperatively to a decision sustaining this act of 1913.
But it is said that the act of 1913 has no application to the present case because the tax therein provided is a franchise tax on the exercise of the franchise or permission to operate a street railway system on the streets of Atlantic City, and that in fact the company-prosecutor, the Atlantic City and Shore Railroad Company, which is so operating this street railway, has never been granted the franchise so to do.
*233It seems difficult to understand just why a corporation, which for aught that appears, may have been created in the form of a steam railroad company instead of in that of a street railway company, for the sole purpose of escaping the payment of a tax on the exercise of a street railway franchise, should now be heard to say for its own benefit that a franchise which it is in fact exercising as its own, does not legally exist. Surely it will be time enough to give serious consideration to such a self-serving contention when the company shall hare ceased to exercise the franchise. For reasons best known to itself this company has chosen to assume a legal form in its incorporation which precludes it from receiving the formal permission contemplated by the legislature to do the thing it is actually doing. So far as the municipal consent intended by the legislature is concerned, the company seems to have the substance of it in the acquiescence of the municipality and of the people resident therein, in the operation of the street railway by this company and its predecessor, also a steam railroad company, for the last twenty years and more. What is it then which goes to make up a franchise of the class, the exercise of which is intended by this act of 1913 to be taxed, which this company does not have? ^Nothing hut its legal form of incorporation which it itself has chosen and which it says precludes it from legally doing what it admits it in fact is doing with all the substance of a franchise or permission which can exist for such a company.
This contention, that the act of 1913 cannot apply because i he prosecutor-company has no legal franchise to do what it is doing, entirely loses sight, as it seems to me, of the fact (bat this tax is not a property tax but is a franchise tax. It is not a iax on the company’s property right to its franchise, but is essentially a, tax on the exercise of a franchise, quite apart from property in the franchise. It is, therefore, immaterial whether the company does or does not own the franchise. If it exercises the franchise, ihat is sufficient.
It is further said that the act of 1913 does not apply because the rails are a necessary part of a street railway system *234and the .rails in this case belong to another steam railroad company which leases them or their use to the company in this case. Suppose the trolley poles were also leased instead of purchased, or the cars were leased, would the whole as operated be any the less a street railway system ? I think not. That the legislature did not so regard it is obvious, for the act of 1913 provides for taxing a street railway system operated on the rails of a steam railroad company occupying the streets of a municipality.
•The tax is also criticised as being in fact a tax on the street railway “business” which the prosecutor-company is doing, for it is pointed out that the assessors computed the amount of the tax by separating the company’s street railway receipts from its other receipts, and levying the prescribed percentage on the former. This criticism loses its meaning when we remember that the method complained of is exactly that prescribed by the acts in question for ascertaining the amount of the franchise tax upon the exercise of this class of franchise. They provide for a tax of this percentage on the gross receipts from (this street railway “business.”
For these reasons I vote to,affirm the decision of the Supreme Court.
I am requested by Justices Garrison, Minturn and Kalisch, and by Judge Williams, to say that they concur in the views herein expressed.
For affirmance—Garrison, Minturn, Kalisch, White, Williams, JJ. 5.
For reversal—Chief Justice, Swayze, Parker, Vredenburgi-i, Terhune, Heppenheimer, Taylor, JJ. L