143 P. 700 | Cal. | 1914
This is an original petition in mandate to compel the respondent, E.D. Roberts, as treasurer of the state of California, to accept the applications for registration of certain motor vehicles, the property of the petitioner, and to signify in proper form to the department of engineering of the state of California that no fees are chargeable to the petitioner in the matter of its applications, and further to compel the respondent, W.F. McClure, as state engineer of the state of California, to file these applications when so presented and alphabetically and numerically register the motor vehicles described in the applications, and do all other acts and things in this regard required of him by law, and in particular by sections 4 and 5 of the Motor Vehicle Act. (Stats. 1913, p. 641.)
The petitioner is a public service corporation, organized under the laws of the state of California, and engaged in the business of transmitting and selling gas and electricity in the state of California. It owns a number of motor vehicles, automobiles, and motorcycles, which are used exclusively in the operation of its public-service business in the state of California. The Motor Vehicle Act requires that motor vehicles shall be registered, and in registering shall pay a license fee or tax fixed under the terms of the act, and graduated in proportion to the horsepower of such vehicles. Respondents *422 contend that it is not their duty to register these vehicles excepting upon payment by petitioner of the license fees contemplated by the Motor Vehicle Act. Petitioner contends that it is entitled to have its vehicles registered without the payment of any fee, by force of section 14 of article XIII of the constitution of this state, which section has relation to the taxation of public service corporations. In support of this position petitioner argues either that the Motor Vehicle Act must be construed as excluding from its contemplation in the matter of the payment of the license fee vehicles so owned and exclusively used, as operating property of such public corporations, or, if the conclusion is necessary that such vehicles are included within the purview of the Motor Vehicle Act, it then follows that, at least to this extent, the Motor Vehicle Act is void as being in conflict with and in contravention of section 14 of article XIII of our constitution.
The question is presented on demurrer to the petition, so that over the facts there is no controversy. The proposition is one strictly of law.
Article XIII of section 14 of the constitution declares as follows:
"Taxes levied, assessed and collected as hereinafter provided upon . . . telegraph companies; telephone companies; companies engaged in the transmission or sale of gas or electricity . . .; and taxes upon all franchises of every kind and nature, shall be entirely and exclusively for state purposes, and shall be levied, assessed and collected in the manner hereinafter provided. The word `companies' as used in this section shall include persons, partnerships, joint-stock associations, companies, and corporations.
"(a) . . . all telegraph and telephone companies; and all companies engaged in the transmission or sale of gas or electricity shall annually pay to the state a tax upon their franchises, roadways, roadbeds, rails, rolling stock, poles, wires, pipes, canals, conduits, rights of way, and other property, or any part thereof, used exclusively in the operation of their business in this state, computed as follows: Said tax shall be equal to the percentages hereinafter fixed upon the gross receipts from operation of such companies and each thereof within this state. . . .
"The percentages above mentioned shall be as follows: . . . on all telegraph and telephone companies, three and one-half *423 per cent; on all companies engaged in the transmission or sale of gas or electricity, four per cent. Such taxes shall be in lieu of all other taxes and licenses, state, county and municipal, upon the property above enumerated of such companies except as otherwise in this section provided; provided, that nothing herein shall be construed to release any such company from the payment of any amount agreed to be paid or required by law to be paid for any special privilege or franchise granted by any of the municipal authorities of this state."
The vital point in controversy centers upon the construction of the sentence "Such taxes shall be in lieu of all other taxes and licenses, state, county, and municipal, upon the property above enumerated." But before entering into a discussion of the meaning of this language, which meaning must of course be determined from its reading in connection with the whole constitutional provision of which it is a part, a few words may be said as to the history of the change in our fiscal system touching the taxation of public utilities. Under the system formerly in vogue an attempt was made to place an ad valorem tax upon the properties of these utilities, including therein their franchises. In addition to this privilege taxes of various kinds and amounts were imposed by the different authorities. As a necessary result many of these utilities, such as the petitioner herein, owning property in many counties of the state and supplying its utility to many municipalities, were subjected: 1. To assessments by county assessors; 2. To assessments by municipal assessors; and 3. To privilege taxes by such municipalities as saw fit to impose them. The method was crude and cumbersome, and it came to be believed that it was unequal and unjust. It was recognized that a small amount in value of real and personal property could, by use in business, bring in returns by way of revenue greatly in excess of the separate values of the properties employed. This earning capacity it was felt had a value which should be taxed, and no better method of taxing it was apparent than that which levied a percentage upon the gross revenue returns. This we find set forth in the "Report of the Commission on Revenue and Taxation of the State of California" (1906), pp. 193 and 194, in the following language: "The inadequacy of the property taxed when applied to express companies has been strikingly pointed out by the supreme court of the United States. In the so-called Ohio *424
express company cases (see Adams Express Co. v. Ohio,
So much for the justness and reasonableness and legality of the new method. Further, it was believed that the income of the state could be largely drawn from these sources with great advantage both to the state and to the public service utilities, in that the method would be simple, direct, and inexpensive as compared with the existing method, necessitating the action of many assessors and numerous appeals to boards of equalization, and, also, that the new method would remove all temptation to such utilities to engage in political activity. Having subjected public utilities to this revised form of taxation, it was for the people under their constitution to say whether these new taxes should be all of the taxes and charges imposed upon such corporations, and if not all then for what purposes could they or their properties be further taxed. For manifestly it was competent for the constitution to declare that this commutated tax should be in lieu of all taxes, should be in lieu only of advalorem taxes, or that it should not forbid the right to levy privilege taxes. What the constitution did say in this regard is found in the sentence expressly quoted and adverted to, and it is to the construction of this sentence we are thus brought. *426
The interpretation put on it by petitioner has been outlined. It contends that the license fee sought to be exacted from it is a charge expressly prohibited in the very language of the constitution; that this license fee is a privilege tax sought to be imposed upon the personal property of the corporation, which personal property is exclusively used in its business and necessary to the unified use of its operative property. Or in other words that the demand of respondents is that petitioner shall pay this excise tax or privilege tax as a condition of its right to devote its operative properties to the remunerative use in the conduct of its business, for which remunerative use it pays a tax upon its gross revenues, which the constitution itself declares shall be exclusive of all other taxes or license fees upon its property.
Respondents answer that the constitution means that the commutated tax upon gross revenue is a substitution only for previous existing ad valorem taxes upon physical properties and franchises; that the constitution does not include in its inhibition the right to levy a privilege or excise tax. But that if it does include this inhibition, then this is not a privilege tax but is in the nature of a rental charge or a toll exaction; or finally if no one of these positions is sustainable, it is a measure attributable to the legitimate exercise of the state's police power.
Certain of these arguments of respondents are disposed of by the case of In re Schuler,
The contention that the Motor Vehicle Act should be construed as imposing a rental charge for the use of highways owned or controlled by the state is based solely upon the decision of the supreme court in St. Louis v. Western Union Tel. Co.,
As little force can be given to the next contention, that the Motor Vehicle Act should be regarded as an act imposing a toll for the use of the highways. Support for this proposition is sought to be derived from the two cases of Huse v. Glover,
It being thus clear both upon principle and upon the adjudication of the Schuler case that this license charge is a privilege tax, established for purposes of revenue and forbidding *429
petitioner's automobiles to use the public highways until payment thereof, we come to the principal contention of respondents: That, conceding it to be such a tax, still it is not a tax the levying of which is forbidden by the constitution, and therefore it may justly be laid. Respondents' argument is the following: The new method of taxation was adopted solely as a substitute for the ad valorem taxes theretofore levied upon franchises and physical properties; it was not designed by the framers of this constitutional amendment to forbid the levying of any other kind of a tax either upon the corporations or upon their physical properties, and as the taxing power is of so vital importance that it is of the essence of the existence of a government, no intendment should be indulged in any case that the state has relinquished any part of this all important power. The principle of construction here declared is unimpeachable. In cases of doubt upon such questions the doubt will always be resolved in favor of the sovereignty. (Providence Bank v. Billings, 4 Pet. 514, [7 L. Ed. 939].) But it is to be noted here that the principle is wholly inapplicable, in that the state,so far from surrendering its taxing powers, has simply declared a method by which it will tax such corporations, coupled with the declaration that though the percentage upon incomes is fixed, the percentage may be increased by the legislature from time to time, as in fact the legislature has done. So far as goes the argument, that the people meant in this constitutional provision only to declare that the franchises and physical properties should no longer be subject to an ad valorem tax, the determination of this will depend solely and exclusively upon the meaning of the language which the people have employed. Some light has already been shed upon this meaning by two decisions of this court, that of Cityand County of San Francisco v. Pacific T. T. Co.,
With these distinctions in view, it is easy to be seen that the decisions above adverted to clearly declare that the privilege occupation tax is forbidden by the constitution. And yet certainly there is not so clear an inhibition against this tax as there is against the privilege tax upon the property exclusively used in the operation of the business. For in precise terms it is declared that the state tax shall be in lieu of all "other taxes and licenses . . . upon the property . . . of such companies." Respondents argue that this court in the telephone case, has placed a limitation and definition upon this constitutional provision which support their contention that at the utmost only that form of privilege tax known as occupation tax is prohibited, and that therefore this particular *431 form of privilege tax, not laid directly upon the business but only upon certain operative properties of the business, is valid. The language relied on is the following: "Every word in the clause under discussion can be given a reasonable and legitimate effect by reading the term `licenses' as including revenue charges of any character upon the exercise of the franchises which are declared to be taxable for state purposes only. In this way the phrase `upon the property above enumerated' is made fully effective as qualifying both `taxes' and `licenses' preceding it, while no word is either ignored or distorted from its fair meaning." But respondents entirely mistake its meaning and import. The argument which this court was there called upon to meet was the direct opposite of the one here presented. The city and county of San Francisco was there advancing a contention utterly destructive of respondents' position here. It was contending that the language of the constitution in terms forbade the imposition of a tax upon the operative properties such as this, but did not in terms deny, and therefore should not by inference be held to deny, the right of the municipality to impose an occupation tax. A few extracts form the brief of the appellant city and county of San Francisco will establish this beyond question. We quote:
"A tax, such as the tax provided for by this ordinance, is not a property tax at all. It is not a tax imposed upon any of the property of the person taxed. It is an occupation or business tax.
"The intention of the legislature was clearly to prevent the levy of taxes of any sort (whether levied openly as property taxes or disguised as licenses) upon certain specified property of certain corporations. In an endeavor to carry out the legislative intent and in order to cover all taxes upon said property the word `licenses' was used.
"In conclusion of this part of our argument we submit that the legislature did not use the words `upon the property' without intent. The intent clearly was to relieve the property assessed from all taxes other than state taxes levied upon it under the constitutional amendment."
It was in answer to this argument that this court used the language relied on by respondents. It is too plain for discussion, therefore, that this court did not hold that taxes could be levied upon operative property, but that it did hold *432 that the language of the constitution forbidding taxes upon operative property "included revenue charges of any character upon the exercise of the franchise." Wherefore it must be concluded that this decision, if not directly against the respondents' contention here made, at least lends no aid nor support to that contention.
But it is only in deference to the arguments of the fiscal and legal officers of the state that so much has been said upon a proposition which, to the mind of the layman as well as of the lawyer, is not debatable, under the plain and unambiguous language of the constitution itself. We repeat, "Such taxes shall be in lieu of all other taxes and licenses, state, county and municipal, upon the property above enumerated." Where is there room for the play of construction upon language so plain as this, addressed to the facts of this case? With the argument of respondents, that the framers of this article were intelligent men and must be presumed to know what they meant to say, we are in perfect accord. What they said is so plain, so clear, so free from ambiguity and the possibility of construction as to forbid debate. They declared that the state tax should be in lieu of all other taxes and licenses. If they meant that it should be in lieu of but some of those taxes they would have said so. If they meant that it should be in lieu only of ad valorem taxes they could easily and would undoubtedly have said so. What they did say was that this state tax, with the state's ability to increase it at will, should be in lieu of all other taxes and licenses. If argument is required upon the meaning of plain words so clearly expressing an obvious idea, it can only be because of an utter breakdown in our written language in its ability to convey thought. Additionally, it may be said, that the purpose of the constitution to exclude all other taxes and licenses is emphasized and accentuated by the one exception which that instrument itself declares when it provides that this inhibition against the levying of any or all taxes and licenses shall not be construed to release these companies from pre-existing agreements to pay specified sums of money.
And as a last word upon the subject, it may be pointed out that if confirmation can be required upon so plain a proposition, it is found in Railroad Co. v. Harris,
Let the mandate issue as prayed for.
Lorigan, J., Melvin, J., and Shaw, J., concurred.