Blalock v. Georgia Ry. & Electric Co.

228 F. 296 | 5th Cir. | 1915

WALKER, Circuit Judge.

[1] The writ of error is not subject to be dismissed because of the failure of the plaintiff in error to assign as error the rendition of the final judgment for the review of which, and of other proceedings in the case made a part of the record, the writ of error was prayed for and allowed. It is apparent that what the plaintiff in error really relies on as calling for a reversal of the judgment is the action of the court in overruling the demurrer interposed to the petition as amended. This ruling is plainly pointed out in the assignment of errors. The object of the rule requiring an assignment of errors being to enable the court and opposing counsel to see on what points the counsel for the plaintiff in error intends to ask a reversal of the judgment, and to limit the dis.cussion to those points, it is a commendable practice to assign only such ruling or rulings as are complained of as reversible errors. Phillips, etc., ‘Const. Co. v. Seymour et al., 91 U. S. 646, 648, 23 L. Ed. 341; Texas & Pacific Railway v. Archibald, 170 U. S. 665, 668, 18 Sup. Ct. 777, 42 L. Ed. 1188. Besides, the writ of error presents the record for review by this court, and the court, at its option, may notice a plain error not assigned. Rule 11 (150 Fed. xxvii, 79 C. C. A. xxvii).

[2] It is apparent from the petition in the case, as it was amended, that the claim of the plaintiff was that the amount for which it was liable for the year 1912, under the statute providing that;

“Every corporation * * * organized for profit * * * and engaged in business in any state * * * shall be subject to pay annually a special excise tax with respect to the carrying on or doing business by such corporation * * * equivalent to one per centum upon the entire net income over and above five thousand dollars received by it from all sources during such year” (Comp. Stat. 1913, § 6300 et seq.)

*298—should have been computed on its income from January 1, 1912, to March 18, 1912, after which latter date, when an alleged lease went into effect, it was claimed that the plaintiff did not do business within the meaning of the statute. The petition ayerred that “the amount of the income from January 1, 1912, to March 18, 1912, on which tax should be assessed is $415,377.99, and the tax should be $4,153.78.” The averments of tire petition do not show the 'amount of the plaintiff’s income between March 18, 1912, and the end of that year, nor that it had no income during that period, nor that there was any mistake in the computation of the amount which the plaintiff had been required to pay if in making that computation it was permissible to take into account income received after, as well as up to and including, March 18, 1912. In an amendment to the petition it was averred:

“That there were no earnings of said Georgia Railway & Electric Company from March 18, 1912, to December 31, 1912, subject to tax under said act, on account of said lease aforesaid and on account of its property being turned over to said Georgia Railway & Power Company.”

This statement is a negative pregnant, from which it is to be implied that the plaintiff did receive an unnamed amount of income during the period from March 18, 1912, to the end .of that year, but that in the opinion of the pleader that amount should be excluded from consideration in computing the amount of the tax for which the plaintiff was liable.

The averments of the petition do not raise a question as to the liability of the plaintiff under the statute in question to pay a tax with respect to the carrying on or doing of business by it in the year 1912. It is distinctly shown that it did carry on business during part ,of that year, and it is admitted that part of the amount which had been paid was properly assessed. In this respect the case is unlike the one of McCoach v. Minehill Railway Co., 228 U. S. 295, 33 Sup. Ct. 419, 57 L. Ed. 842. The lease under consideration in that case, which was held to have had such an effect that the corporation was not to be regarded as doing business in such wise as to malee it subject to the tax imposed by lie act of 1909, was made and went into effect many years before that act was passed. The opinion rendered in that case, as the one rendered in the somewhat similar case of Zonne v. Minneapolis Syndicate, 220 U. S. 187, 31 Sup. Ct. 361, 55 L. Ed. 428, does not deal with the question raised in the instant case, namely, whether in computing the amount of the tax for which the defendant in error became liable by carrying on business in the year 1912, only its income for the part of the year when tire business was carried on is to be considered, leaving out of the computation its income during the remainder of the year.

[3-5] It is settled that the tax is valid as an excise bn the privilege of doing business in a corporate capacity. Flint v. Stone Tracy Company, 220 U. S. 108, 31 Sup. Ct. 342, 55 L. Ed. 389, Ann. Cas. 1912B, 1312; McCoach v. Minehill Railway Company, 228 U. S. 295, 33 Sup. Ct. 419, 57 L. Ed. 842; United States v. Whitridge, 231 U. S. 144, 34 Sup. Ct. 24, 58 L. Ed. 159; Anderson v. Forty-Two Broadway Company, 239 U. S. 69, 36 Sup. Ct. 17, 60 L. Ed.-, October *299term, 1915. Por this privilege a corporation subject to the act is required to pay “annually” an amount to be ascertained in a way specified. The provisions oí the act as to the returns required to be made by the corporation and as to the method to be pursued in ascertaining the amount payable (Comp. Stat. 1913, §§ 6301, 6302) show that the year which the lawmakers had in mind is the calendar year. It seems plain that a corporation subjects itself to the tax by exercising the privilege of carrying on or doing business for any time during the year. Billings v. United States, 232 U. S. 261, 280, 34 Sup. Ct. 421, 58 L. Ed. 596. The provisions of the act which prescribe the methods to be pursued in ascertaining the amount to be paid show that the amount is measured by the corporation’s income during the entire calendar year in which the taxed privilege was exercised, and not by its income while the privilege was being exercised if the corporation was not carrying on or doing, business during the entire year. The plain words of the act show that the measure of the amount to be paid by the corporation is “the entire net income over and above five thousand dollars received by it from all sources during such year.” No authority is conferred upon the Commissioner of Internal Revenue to assess against a corporation subject to the act any amount less than that ascertained in the way prescribed by the act, or to reduce the amount to be paid because of the fact that during part of the year the corporation was not carrying on or doing business. There is no provision for prorating or lessening the amount to be paid in such a case. The prescribed tax is a single and indivisible one, and there is but one way of measuring the amount to be paid, and that is by the corporation’s income during the calendar year in which the corporation subjected itself to the tax by carrying on or doing business within the meaning of the act. We find nothing in the act which indicates a purpose to confer the authority to assess and collect a less amount, or one computed in any other way, in the case of a corporation which ceased to carry on its business during a year in which it subjected itself to liability to pay the tax. The averments of the petition, as it was amended, show that the defendant in error so subjected itself by carrying on its business in the year 1912, and fail to show any noncompliance with the requirements of the act for the ascertainment of the amount it was requireci to pay.

It is suggested that the result of attributing such a meaning to the statute is to create an unjust inequality between corporations some of which are engaged in business during the entire calendar year and others during only a part of the year, while the amount to be paid by each is measured by its income during the entire yea'r. A similar suggestion was made in the case of Billings v. United' States, supra. That case involved the construction of section 37 of the Tariff Act of August 5, 1909 (36 Stat. 11, 112, c. 6), which provided in part as follows:

“Thfcre shall be levied and .collected annually on the first day of September by the collector of customs of the district nearest the residence of the managing owner, upon the use of every foreign-built yacht, pleasure boat or vessel, not used or intended to be used for trade, now or hereafter owned or *300chartered for more than sis months by any citizen or citizens of the United States, a sum equivalent to a tonnage tax of seven dollars per gross ton.”

That act went into effect on August 6, 1909. It was held that a tax in the amount ascertained in the way provided for in the act was leviable and due on the 1st day of September, 1909, for a use covering that time of such a vessel as the act described, though such use did not extend throughout the year. In reference to the suggestion of inequality, the court said:

“The contention that inequality must be the result from making the tax depend upon mere use without reference to the extent of its duration addresses itself not to the question of power, and is therefore beyond the scope of judicial cognizance.” Billings v. United States, 232 U. S. page 281, 31 Sup. Ct. page 424 [58 L. Ed. 596].

From the conclusions above stated it follows that there was a failure to show the existence of a right of the plaintiff to recover any part of the amount it had paid, and that tire demurrer to the petition as amended should have been sustained. Because of the error committed in overruling that demurrer, the judgment is reversed.