State v. American Ry. Express Co.

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] This is a summary proceeding instituted, under section 6 of Act 127 of 1898 as amended by Act 19 of 1900 and Act 276 of 1908, by the state of Louisiana, through its tax collector for the parish of Orleans, against the defendant, a foreign express company doing business in the state, for an additional license for the year 1922 with interest and penalties.

The defense set up in the answer is, first, that the defendant has paid its license for the year 1922 on the same basis that domestic corporations are licensed; and, second, that Act 127 of 1898 and the acts amendatory thereof had been repealed by the Constitution of 1921, and because said acts were in conflict with section 1 of article 10 of said Constitution.

The court below dismissed the proceeding, and the state tax collector has appealed.

The transcript of appeal was lodged in this court on July 30, 1923, and on March 8, 1924, defendant appeared and filed an exception of no cause of action wherein, for the first time, it attacked the constitutionality of Act 127 of 1898 and its amendments, on the ground that under the provisions of said statutes defendant is denied the equal protection of the laws and is deprived of its property without due process of law, in violation of the Fourteenth Amendment to the Constitution of the United States.

The Constitution of 1898, by article 242, empowered the Legislature to license foreign corporations differently from domestic corporations. This article was omitted from the Constitution of 1921. Plaintiff's contention, as measured by its original pleadings, is that by reason of this omission, and the requirement of section 1 of article 10 of the Constitution that "all taxes shall be uniform on the same class of subjects," the statute has become ineffective, and there is now no constitutional authority for the taxing of foreign corporations differently from domestic corporations.

If this was a suit to collect a property tax, there would be considerable merit in plaintiff's contention. The provisions of section 1 of article 10 of the Constitution clearly refer only to property taxes. A license tax, not being a tax on property, is not affected by the limitation on the power of the taxing authority to impose taxes on property. Walters v. Duke, 31 La. Ann. 668. The present proceeding is essentially one to enforce a license for the privilege of doing business within the state. There is no constitutional inhibition of the right of the Legislature to impose such license. On the contrary, the Legislature, subject to certain restrictions which are set forth, is expressly authorized by section 8 of article 10 to levy such license taxes as it "may deem proper." The business conducted by the plaintiff company is not one of those mentioned in the excepted classes.

The imposition of a license is particularly a legislative function, not to be interfered with except in cases of clear illegality. State v. Hammond Packing Co., 110 La. 180, 34 So. 368, 98 Am. St. Rep. 459. Hence, even without the authority of article 242 of the Constitution of 1898 or of section 8 of article 10 of the Constitution of 1921, the power resides within the Legislature of imposing licenses, whether for the purpose of regulation or of raising revenue or for any other of the objects for which licenses are usually levied.

While article 242 was embodied in the organic law, it was legislative in character purely and simply, and for that reason doubtlessly was omitted from the Constitution of 1921 in obedience to the popular demand for a short Constitution.

It is plain, therefore, that the prior action of the Legislature in imposing a license on foreign corporations by a different mode from that provided for domestic corporations has not been abrogated or modified by the Constitution of 1921. Besides, it is expressly provided by article 22, par. 1, of said Constitution, that all existing laws "not inconsistent therewith, and constitutional when enacted, shall remain in full force and effect until altered or repealed by the Legislature, or until they expire by their own limitations."

The cases of Southern R. Co. v. Greene, 216 U.S. 400, 30 S. Ct. 287, 54 L. Ed. 536, 17 Ann. Cas. 1247, and Bethlehem Motors Corp. v. Flynt, 256 U.S. 421, 41 S. Ct. 571, 65 L. Ed. 1029, are cited in behalf of respondent. Inasmuch as no federal question was raised by the original pleadings, which fact was recognized by the judge of the court below in his written reasons for judgment wherein he stated, "no point is made on the federal Constitution," it is unnecessary to consider the legal principles announced in the cited cases.

Counsel for respondent, evidently realizing the applicability of the rule and seeking to escape its effect, have attempted to raise the federal question suggested by the exception of no cause of action filed in this court.

Under Code of Prac. art. 902, a peremptory exception founded on law alone may be filed in this court by permission of the court. Such exception can only be considered and disposed of on the face of the record. And it is well settled that an exception of no cause of action must be disposed of on the face of the petition, irrespective of the averments of the answer. Lewy v. Wilkinson, 135 La. 108, 64 So. 1003; State v. Mayor, 130 La. 196, 57 So. 798; Lamorere v. Cox, 32 La. Ann. 1045; Nalle v. Baird, 30 La. Ann. 1148.

Applying these rules to the case in hand, the only portion of the record we are permitted to examine in connection with the exception of no cause of action is the original petition (rule) filed by plaintiff; and it requires nothing more than a mere inspection of this pleading to show that on its face it discloses a legal and valid cause of action.

Pretermitting consideration of the question of whether the legal principles announced in the cases of Bethlehem Motors Corp. v. Flynt and Southern Railway Co. v. Greene, cited supra, would have been controlling, or even applicable, if the defendant had specially averred on the merits in the district court that it was a foreign corporation doing business, either directly or through local agents authorized to be served with process, in the state prior to the adoption of Act 127 of 1898, and that the attempt to license it differently from domestic corporations was repugnant to the Fourteenth Amendment to the federal Constitution, the fact remains there is nothing in the petition (rule) filed by plaintiff which shows that the defendant company was in the state at the time of the enactment of the act of 1898. On the contrary, so far as that pleading is concerned, it merely alleges that the defendant company is a foreign express company, presently doing business within the state.

In order to consider the exception of no cause of action filed in this court by the defendant company in the light of the cited cases, we would have to judicially assume that the said company was doing business and had a resident agent within this state prior to the legislation of 1898. This we are unable to legally do.

It is our conclusion, therefore, that the respondent corporation is liable for the license to be enforced against it by this proceeding.

For the reasons assigned, the judgment appealed from is set aside, and it is now ordered that the rule herein taken by Peter J. McGoey, state tax collector for the parish of Orleans, against the American Railway Express Company, respondent, be made absolute; and accordingly that the said American Railway Express Company be, and it is hereby, condemned and adjudged to pay to the state of Louisiana, through its said tax collector, the sum of $14,820 as a proper license tax for the year 1922, together with 2 per cent. per month interest thereon from March 1, 1922, until paid and an additional sum of 10 per cent. on both principal and interest as attorney's fees, with first lien and privilege upon all the property, movable and immovable, of the said respondent company.

It is further ordered that the said respondent company be and is hereby enjoined from conducting its said business until the said amounts are paid.

All costs of this proceeding to be paid by the respondent company.

On Rehearing.