77 Cal. 518 | Cal. | 1888
Lead Opinion
In view of the decisions of the supreme court of the United states in the cases of State
In the case referred to (State v. Southern Pacific R. R. Co., supra), it was held that the defendant therein (defendant herein), having been invested with certain franchises derived from the government of the United States, in connection with other railroad corporations, by certain acts of Congress, and having accepted all the terms and conditions of each of said acts, and fully complied therewith, “the state of California can neither take them away nor destroy nor abridge them, nor cripple them by onerous burdens.” The court in that case further said: “ It may undoubtedly tax outside, visible property of the company situated within the state. That is a different thing. But may it tax franchises which are the grant of the United States ? In our judgment it cannot.....No private person can establish a public highway, or a public ferry or railroad, or charge tolls for the use of the same, without authority from the legislature, direct or derived. These are franchises..... Corporate capacity is a franchise.....How can it be possible that a franchise granted by Congress can be subject to taxation by a state without the consent of
In Railroad Company v. Peniston, supra, the court, referring to McCulloch v. State of Maryland, supra, said: “ The tax, therefore, was not upon any property of the bank, but upon one of its operations,—in fact upon its right to exist as created. It was a direct impediment in the way of a govermental operation performed through the bank as an agent. It was a very different thing, both in its nature and effect, from a tax on the property of the bank. No wonder, then, that it was held illegal. 'It does not extend/ said the chief justice, 'to a tax paid by the real property of a bank in common with the other real property in the state, nor to a tax imposed on the interest which the citizens of Maryland may hold in the institution in common with the other property of the same description throughout the state. But this is a tax on the operations of the bank, and is consequently a tax on the operations of an instrument employed by the government of the Union to carry its powers into execution. Such a tax must be unconstitutional. Here is a clear distinction made between a tax upon the property of a government agent, and a tax upon the operations of the agent acting for the government. In Osborn v. Bank the tax held unconstitutional was a tax upon the existence of the bank, —upon its right to transact business within the state of Ohio. .... For this reason the power of the state to direct it was denied, but at the same time it was declared by the court that the local property of the bank might be taxed, and, as in McCulloch v. Maryland, a difference was pointed out between a tax upon its property and one upon its action.....A tax upon their operations is a direct obstruction to the exercise of federal powers.’”
It seems to us that the reasoning of the court in the above cases applies with as much force to the license tax upon the use of the franchise—the operations of the road and the conduct of its business—as to the tax upon the franchise as property, and that the supreme court of the United States would so hold. Holding this opinion, it is our duty, notwithstanding the opinions of this
It is so ordered.
Works, J., McFarland, J., and Sharpstein, J., concurred.
Concurrence Opinion
The rulings of the supreme court of the United States in the cases cited in the beginning of the foregoing opinion, on the question of the power of the state to tax the franchises granted by the United States government, must control our action in this case. The question is federal, and on such questions the settled law requires that the courts of the state shall conform to the decisions of the highest federal judicial tribunal.
The license tax in question herein is one that affects the franchises enjoyed by the defendant company under a grant or grants from the federal government. It is a tax on the right of this company to carry on its business under the federal grant, and comes within the judgments of the United States supreme court in the cases cited.
Under the constitution of this state, which requires all taxation to be equal and uniform throughout the state, it must be supposed that the legislature would not impose or authorize the imposition of any taxes by any county or other political subdivision of the state, whether in the nature of property or license taxes, which would destroy or render valueless the business of any railroad corporation, or cripple such corporations by onerous burdens. The guaranty of fai,r and just taxation is found in the constitution of the state. Taxation by a county must be equal and uniform, at least as to all persons engaged in the same business in the county, and such a guaranty will protect railroads in a county from unfair or unjust or oppressive taxation, which would tend to destroy their business or cripple it, or interfere with
The amount of the tax is so small in the case before us that it cannot be considered onerous.
But in the view taken by the supreme federal tribunal, the foregoing considerations are of no -weight. The power of the state to tax is held not to exist at all, without regard to the fact whether the tax is so trifling as not to in any decree be onerous, or equal, or uniform on all persons, whether natural or artificial, engaged in the business of carrying persons or freight for hire, or by means of railroad cars.
Following, then, the judgments of the supreme court of the United States in the cases above cited, we must hold that the license tax under consideration was levied without authority of law, and must bo held void.
- With the foregoing observations, I add that I concur in the foregoing opinion and judgment.