State Ex Rel. v. City Bus Co., Inc.

This is an action at law in which the appellant seeks to recover privilege taxes claimed to be due it by the appellee under subsection 3 of section 5 of chapter 126 of the Laws of 1934, for the operation by the appellee of busses owned and used by it in transporting passengers for hire over public highways of the state. The appellee pleaded the general issue, gave notice thereunder of affirmative matter it would introduce in evidence, and the case was tried without a jury on an agreed statement of facts, from which it appears that "at all times between January 1, and October 1, 1934, the defendant owned and operated motor vehicles upon the public streets of Biloxi, Gulfport, Long Beach and Pass Christian, all municipal corporations of the state of Mississippi; and also upon the public highways of the state of Mississippi outside and between aforesaid incorporated municipalities; that the said defendant during said time operated twenty (20), motor vehicles over a regular route and on a regular schedule, and transported thereon passengers for hire; that the motor or serial number and seating capacity of each of said motor vehicles is as follows: (The statement of motor and serial numbers and seating capacity of each vehicle here omitted). The defendant prior to the beginning of the operation as aforesaid, registered each of its said motor vehicles with the auditor of public accounts and paid the flat annual privilege tax levied by subsection 1 (b) of section 2 and subsection 3 of section 4, of chapter 126 of the General Laws of Mississippi 1934. . . . Said motor vehicles have traveled on the public streets of the incorporated municipalities of Biloxi, Gulfport, Long Beach, Pass Christian and public highways of the state of Mississippi outside of said municipalities, the following designated number of miles each, in excess of six thousand miles. (Statement of excess mileage here omitted). The greater portion of the mileage traveled by each of said motor vehicles was upon the streets of the aforesaid incorporated municipalities. . . . Said motor vehicles are used in lieu of street cars in and between the incorporated municipalities of Biloxi, Gulfport, Long Beach and Pass Christian. Prior to the organization of the bus service conducted by the defendant, street car service was conducted in and between said municipalities which was abandoned because the road-bed and right-of-way over which said street cars ran were required for the construction of a seawall under the Seawall Act, chapter 165, Mississippi Code of 1930 [section 6916 et seq.]; that after said street car service was abandoned, motor vehicles as aforesaid were installed and are now being operated in lieu of said street cars; that said motor vehicles are and continuously have been operated in the exact manner as to routes, schedules and fares as were street cars, and upon streets on which street cars were formerly operated; that outside of and between the incorporated municipalities of Biloxi, Gulfport, Long Beach and Pass Christian the highways over which said motor vehicles are operated are immediately adjacent to and parallel with the tracks upon which the street cars formerly operated. . . . The defendant has also been assessed and has regularly paid in said municipalities of Gulfport and Biloxi municipal taxes in large amounts each year upon said property there located, just as any other municipal taxpayer and said municipalities have, with their own funds maintained the streets in the corporate limits therof, wherever said busses move in lieu of street cars. Said busses are operated with gasoline on which have been paid regularly the state gasoline tax and also the horse-power tax and the gross weight tax, as well as other license taxes. Said streets are for the most part paved and have been constructed and are maintained by said municipalities. . . . The defendant City Bus Company obtained a certificate of convenience and necessity from the State Railroad Commission prior to commencement of its operation of busses on aforesaid routes."

The pertinent provisions of chapter 126, Laws 1934, are: Section 1 defines certain words and terms used in the statute, among which are the words "bus" (subsection 3), and "operator" (subsection 5) and the term "common carrier by motor vehicle," within all of which the appellee is included, the last-named being defined by subsection 11 of section 1 as follows:

"The term ``common carrier by motor vehicle' includes any common carrier of persons and any common carrier of property operating one or more motor vehicles for compensation over fixed routes or between fixed termini."

Subsection 12 of section 1 is as follows:

"The term ``permit carrier by motor vehicle' includes any carrier of persons and any carrier of property operating motor vehicles for compensation, either directly or indirectly, and all trucks of two and one-half tons carrying capacity or more, other than those included in paragraph (11), and other than the following:

"(a) Motor vehicles engaged solely and exclusively in transporting school children and teachers to and from public schools.

"(b) Motor vehicles engaged exclusively in the transportation of agricultural, forest, and/or dairy products when such agricultural, forest, and/or dairy products are owned by the producer, or where the forest products are being transported not exceeding fifty miles in their raw or unmanufactured state or as lumber; and motor vehicles engaged in hauling sand, gravel, dirt, stone and/or aggregate for road building purposes only.

"(c) Motor vehicles used in lieu of street cars in or between municipalities, or by a hotel exclusively for its patrons and employees, operation not exceeding fifteen miles distant from such hotel, and taxicabs within the city limits of a municipality, or not exceeding three miles therefrom.

"(d) Motor vehicles used by employees of the United States on official business.

"(e) Motor vehicles owned and operated exclusively by the United States, the state of Mississippi, or any subdivision thereof."

"Sec. 3. Every operator using the public highways of the state (except as provided in section 1 hereof), shall pay as herein provided as a reasonable compensation for the use of its highways, a fair proportion or fair contributive share of the expenses of maintenance and repair of such highways and the expense of the administration and enforcement of the laws governing the use of such highways, including the expense of administering this act. . . . This act shall apply to operators of busses or trucks whether engaged in intrastate commerce or interstate commerce, or foreign commerce."

Subsection 3 of section 4 imposes a flat privilege tax on busses graded according to seating capacity. This tax is not involved here, but the pertinency of the section appears when subsection 3 of section 5 is read. This section and subsection are in part:

"There is hereby levied a mileage tax . . . [subsection 3] on each bus engaged in the business of transporting passengers for hire over the public highways of the state, whether loaded or empty, in addition to the weight and horsepower tax imposed, for each mile of public highway in the state traversed by such vehicle, the following amount shall be paid:

Cents per Mile 7 passengers, or less ........................... 1/4 More than 7 passengers and less than 14 ......... 1/2 14 passengers and less than 20 passengers ....... 3/4 20 passengers and less than 26 passengers ....... 1 26 and over passengers .......................... 1 1/2

"The flat privilege tax imposed in the preceding section shall be for the privilege of using the streets and highways to the extent of six thousand miles, except on busses it shall be for the privilege of using the streets and highways to the extent of 12,000 miles, or in the event of commencement of business during the year, pro rata for the number of months for which the privilege is paid."

"Sec. 15. Every operator operating as a permit carrier by motor vehicle shall provide each of his busses, and/or trucks, and/or trailer units of two and one-half tons carrying capacity or more, operated on the public highways of the state, with a speedometer which shall register the number of miles traversed by such vehicles, and the auditor of public accounts, or his representative or sheriff or deputy, shall have the right at any time to examine, inspect, and test such speedometer. . . . The mileage shown by such speedometer shall be evidence of the mileage traversed by such motor vehicle on the public highways of the state of Mississippi, but such mileage shall be subject to correction. . . . Each operator operating as a common carrier by motor vehicle under a certificate from the railroad commission over a fixed route or between fixed termini on a regular schedule shall take and return for the basis of taxation the mileage as determined by surveys, by the records or data supplied by the state highway commission, and shall not be required to provide speedometer records for the calculation of the tax herein imposed."

"Sec. 16. Every operator operating as a permit carrier by motor vehicle . . . shall keep a daily record of the actual miles of public highways of the state traversed by each such motor vehicle each day. Such daily record shall show the reading of the speedometer at the beginning of the month, the termini of each day's run, the mileage traversed each day. . . . After the expiration of the current month the daily record, or copy thereof, shall be filed with the auditor of public accounts with the monthly report herein required."

The appellee's contention are that:

(1) It is not within the class of operators of motor vehicles on which the statute imposes the tax here sought to be collected;

(2) If the statute should be construed to include the appellee, it would thereby be subjected to double taxation which the legislature did not intend to impose;

(3) If the appellee is subject to the tax at all it is only for the mileage of its busses when traversing that portion of its route that is outside of the municipalities through which its busses run; and

(4) If the statute is construed so as to include the appellee it would be void for the reasons, (a) it would thereby become a burden on interstate commerce, (b) it would violate the obligation of a contract, and (c) it would violate section 9 of the federal highway act (23 U.S.C.A., sec. 9), which is as follows:

"Sec. 9. Freedom from tolls. All highways constructed or reconstructed under the provisions of this chapter shall be free from tolls of all kinds."

1. In support of its contention that it is not within the class on which the tax here in question is imposed the appellee says, in substance, that it appears from the parenthetical clause of section 3 that the legislature intended to exclude some operators operating motor vehicles over public highways from the tax, and that this exclusion appears in paragraph (c) of subsection 12 of section 1, under which carriers by "motor vehicles used in lieu of street cars in or between municipalities" are not permit carriers. To which may be added that the appellee is a common carrier within the definition thereof in subsection 11 of section 1, and for that reason also is not a permit carrier under subsection 12 of section 1.

It seems from the parenthetical clause of section 3 — "except as provided in section 1 hereof" — that the draftsman of the act intended to exclude some carriers using the public highways from liability for the privilege tax which the act then proceeds to impose; but when we turn to section 1, to which the parenthetical clause refers, no words which therein appear, by themselves alone, suggest such an exception.

Subsection 12 of section 1 does not of itself alone designate what carriers are subject to the tax; it simply defines the term "permit carrier." The necessity for defining that term appears when we turn to sections 15 and 16, which provide the methods for ascertaining the mileage of motor vehicles for the purpose of collecting the tax thereon. We may safely assume, unless the contrary appears, that the Legislature intended for the tax to apply to all vehicles for which the act provides a method for ascertaining their mileage, on which the tax is to be paid.

Sections 15 and 16 provide for the ascertainment of the mileage of two classes of motor vehicles: (1) Such as are operated by permit carriers; and (2) such as are operated by common carriers under a certificate from the railroad commission, etc. Such common carriers are not permit carriers under subsection 12 of section 1, which excludes from that term carriers who are within the term "common carrier by motor vehicle," as defined in subsection 11 of section 1.

The mileage of a permit carrier is to be determined by the speedometers with which his (or its) vehicles are required to be equipped and of common carriers, of the type described in section 15, "by surveys, by the records or data supplied by the state highway commission." The appellee is not a permit carrier, and therefore the method for determining the mileage of its vehicles by means of speedometers does not apply to it, but it is a "common carrier by motor vehicle under a certificate from the railroad commission over a fixed route . . . on a regular schedule," and therefore is within the provision of the act that the mileage of motor vehicles of such carriers shall be determined "by surveys, by the records or data supplied by the state highway commission." Consequently, since nothing in the statute indicates the contrary, it is within the statute's requirement for the payment of mileage tax on its vehicles.

Chapter 126, Laws 1934, re-enacted, with amendments not here material, chapter 135, Laws 1932, as amended by chapter 384, Laws of Extraordinary Session of 1932, and the appellee says that this court held in Hudson v. Stuart 166 Miss. 339, 145 So. 611, where chapter 135, Laws 1932 was under consideration, that carriers who were not permit carriers under section 1 of that act were not subject to the tax imposed thereby, and again so decided when considering chapter 126, Laws 1934, in State v. Evans-Terry Company, 173 Miss. 526,159 So. 658. In this the appellee is in error. In the first of these cases (Hudson v. Stuart) Stuart filed a bill of complaint against Hudson, a sheriff and tax collector, and Price, auditor of public accounts, praying that they be enjoined from attempting to collect from him the privilege taxes imposed by chapter 135, Laws 1932, and alleging, among other things, that the act was void for the reason that it "set up an arbitrary and unreasonable classification that is discriminatory against the rights of this complainant." A demurrer to this bill was overruled, and the defendants having declined to plead further, a final decree awarding the injunction was rendered. This decree was reversed by this court, and the bill of complaint was dismissed. It appears from the court's opinion that one of the complainant's contentions was that the act exempted carriers who were not permit carriers under section 1 thereof from the payment of the tax, particular reference being made to carriers who operated "motor vehicles used in lieu of street cars in or between municipalities." Section 1, subsec. 12 (c). Two methods were there open for determining the validity of the act: Either to say (1) that the act did not exempt such carriers from the payment of the tax; or (2) that assuming that it did exempt them therefrom, the exemption was not arbitrary, but rested on a reasonable basis. The case was decided by the latter method, and therefore the court was not called on to say whether the alleged exemptions were in fact conferred by the act. Whether counsel for the tax collectors argued the first of these questions does not appear from the reported excerpt from his brief, but whether he did or not is of no consequence here.

To the same effect is State v. Evans-Terry Company, supra. It is true that there the report of the brief of counsel for the state seems to disclose that he assumed that carriers who were not permit carriers, including in his enumeration those operating "motor vehicles used in lieu of street cars in or between municipalities," were exempt from the tax. Nevertheless, the ratio decidendi of the case remains unaffected thereby. Moreover, in neither of those cases was the complaining carrier a common carrier, while the appellee here is such.

But, it is said that the state's tax collecting department construed chapter 135, Laws 1932, to exclude the appellee from the payment of this tax, which construction will be presumed to have been adopted by the legislature when reenacting it as chapter 126, Laws 1934. Assuming that such is the rule, it does not apply here for two reasons: (1) Chapter 135, Laws 1932, and chapter 126, Laws 1934, in so far as they deal with the matters here under consideration, are unambiguous, and the claimed departmental construction, if such there was, of chapter 135, Laws 1932, is plainly erroneous. When such is the case the rule invoked does not apply. 59 C.J. 1063; United States v. Missouri Pac. R. Co., 278 U.S. 269, 49 C. Ct. 133, 73 L.Ed. 322. And (2) no evidence of such a departmental construction is before us, unless it appears in the Stuart and Evans-Terry Company Cases, but there the claimed construction was put on the statute by taxpayers. It is true that in the Evans-Terry Company Case this construction seems to have been acquiesced in by counsel for the state, but that case arose not under chapter 135, Laws 1932, but under chapter 126, Laws 1934.

Nothing herein said must, or can reasonably, be construed as an intimation that carriers who are neither permit carriers nor common carriers within the provision of the second paragraph of section 15 are subject to the tax here imposed. What we have in effect said is that the statute provides no method of ascertaining the mileage of their vehicles, from which it may follow that the draftsman of the statute accomplished his purpose (set forth in the parenthetical clause of section 3) of excepting some carriers from the tax imposed, a question not now before us and on which we express no opinion.

2. As to its claim of double taxation, the appellee says that it is taxed by the municipalities for the support and maintenance of the streets thereof. This is true, as appears from the agreed statement of facts, but that tax is paid by the appellee "just as any other municipal taxpayer" of the municipalities pays it. The tax here is not the tax there, but is a privilege tax for a particular use of the streets and no reason appears why it cannot be exacted. State v. Evans-Terry Company, supra.

3. In support of its contention that if here taxed at all it should be taxed only on the mileage of its busses outside of the limits of the municipality, the appellee says that section 4 of the act imposes a flat privilege tax "for the purpose of using the public roads or streets," but that section 5 which imposes the mileage tax here sought to be collected omits the word "streets" and imposes a tax "on each bus engaged in the business of transporting passengers for hire over the public highways of the state," thereby indicating that the mileage tax is not imposed for the use of the streets of a municipality. One complete answer to this contention is that subsection 9 of section 1 of the act provides that "the term ``public highway' includes the public roads, highways, streets and bridges in this state." State v. Evans-Terry Company, supra.

4. It does not appear that the appellee is engaged in interstate commerce, but, on the contrary, all of its business seems to be intrastate, and under section 23 of the act, even if it should be held inoperative as to interstate commerce, it is still effective in so far as it applies to intrastate commerce, but that aside, no unlawful burden on interstate commerce is imposed by taxing the carriers thereof in the manner and for the purpose here provided. Interstate Transit v. Lindsey,283 U.S. 183, 185, 51 S.Ct. 380, 75 L.Ed. 953; Aero Mayflower Transit Co. v. Georgia Public Service Comm., 295 U.S. 285, 55 S.Ct. 709, 79 L.Ed. 1439.

5. The contract, the obligation of which the appellee says is here violated, is that arising from the grant by the municipalities to the appellee of the right to operate its busses over their streets. The ordinances granting this franchise are not before us, and the mere grant of such a franchise does not relieve the person to whom it is granted from the burden of taxation.

6. The appellee frankly admits, as to its claim that the statute violates section 9 of the Federal Highway Act (23 U.S.C.A.), sec. 9, "that so far as the decisions go very probably this point has been decided against us." This seems to be true, but the decisions aside, it seems clear that no violation of that act here appears.

The judgment of the court below will be reversed and the judgment it should have, will be here, rendered, i e., for the appellant, for the recovery of the tax on the mileage of each of the busses which the agreed statement of facts shows each of them traveled in excess of 6,000 miles.

On the face of subsection 3 of section 5, chapter 126, Laws 1934, the mileage of the appellee's busses on which this tax is to be imposed is that in excess of 12,000 miles, but this excess is, in fact, that over 6,000 miles; that comes about in this way: Subsection 3, section 5 of chapter 135, Laws 1932, regular session of the Legislature), taxed the mileage of all motor vehicles in excess of 12,000 miles. That section of that chapter was amended by section 3 of chapter 384, Laws the Extraordinary Session of 1932, by substituting 6,000 miles in lieu of 12,000 miles. Section 26, chapter 126, Laws 1934, approved April 4, 1934, which re-enacted, with amendments, the two acts, provides: "That this act shall take effect and be in force from and after its passage, except that portion making changes in rates, which shall take effect and be in force on and after December 1, 1934." Under this section the 6,000 miles excess provision of subsection 3, section 5, as amended by section 3, chapter 384, Laws Extraordinary Session of 1932, here applies.

So ordered.