Opinion
No. 30434.
January 16, 1933. Suggestion of Error Overruled February 27. 1933.
1. HIGHWAYS.
Legislature may prohibit use on roads of vehicles and loads of such size as will destroy roads or break down bridges.
2. HIGHWAYS.
As regards vehicles and loads which do not destroy roads and bridges but severely wear them and impose additional burdens of maintenance thereon, state may demand compensation for special facilities provided.
3. HIGHWAYS.
State may regulate use of highways to promote public safety.
4. HIGHWAYS.
Amount charged by state for using highways with vehicles, and method of collection, are for Legislature to determine, so long as they are reasonable and conform to fair and practical standard.
5. AUTOMOBILES.
State may graduate compensation required to be paid for automobiles using highway according to weight of vehicle and load carried.
6. STATUTES.
Constitutionality of statute cannot be tested by isolated cases, but by its general application to classes affected.
7. CONSTITUTIONAL LAW.
Practical equality is constitutional "equality."
8. AUTOMOBILES. Constitutional law. Statute taxing motor carriers held not unreasonable or confiscatory as applied to farmer carrying others' forest products for hire, even if he could not make enough to pay tax ( Laws 1932, chapter 135).
Facts disclosed that complainant was a farmer, operator of a commercial truck, and utilized his spare time in hauling forest products belonging to himself and for others for hire. He contended that the annual privilege tax of three hundred dollars sought to be imposed on him for operation of his truck and trailer on which he habitually carried load of approximately six tons was unreasonable, prohibitive, and confiscatory as applied to him, because it was not possible for him to make in hauling such forest products more than three hundred dollars per year, and that imposition of such charge on him prohibited him from engaging in an honest and useful business.
9. AUTOMOBILES. Constitutional law. Statute taxing motor carriers held not arbitrary and discriminatory because of certain exemptions and partial exemptions ( Laws 1932, chapter 135).
The exemptions or partial exemptions which complainant claimed rendered statute unconstitutional were that steel-tired vehicles operated by animal power were entirely exempt; that passenger automobiles were required only to pay ordinary tag license tax; exemption, except for payment of ordinary tag license, of motor vehicles used in lieu of street cars in or between municipalities, taxicabs within limits of municipality and not exceeding three miles therefrom, motor vehicles engaged exclusively in transporting agricultural, forest, and dairy products owned by producer or where forest products are being transported not exceeding twenty-five miles in their raw or unmanufactured state or as lumber, and motor vehicles used by hotel exclusively for its patrons and employees, operating not exceeding fifteen miles from hotel.
10. AUTOMOBILES.
Statute taxing motor carriers may put in one class trucks below five thousand pounds' carrying capacity and in another class those above that carrying capacity (Laws 1932, chapter 135, section 2).
11. STATUTES.
Any invalidity in sliding scale of automatic partial exemptions based on reregistrations held not to render invalid entire act relating to taxation of motor carriers, since such provision could be stricken out without affecting remainder of act (Laws 1932, chapter 135, section 2).
APPEAL from the Chancery Court of Forrest County.
W.W. Pierce, Assistant Attorney-General, for the appellant.
The evident purpose of Senate Bill 201 of the Acts of the Legislature of 1932, being chapter 135 of the Laws of Mississippi, was to exact from those who operate motor vehicles over highways of Mississippi, a reasonable compensation for the use of such highways, by levying a privilege tax upon such motor vehicles.
The right and power of the state of Mississippi to tax property, persons, professions and businesses within its limits is limited only by section 112 of the state Constitution, which does not apply to the imposition of privilege taxes.
This section of the Constitution has been repeatedly construed by the Supreme Court of this state as not to apply to privilege, excise or occupation taxes.
Clarksdale Insurance Agency v. Cole, 87 Miss. 637, 40 So. 328; Coca Cola Company v. Skillman, 91 Miss. 677; Dale v. Swope, 47 Miss. 367; State v. G.M. N.R.R. Co., 104 So. 689.
There is no restriction upon the power of the Legislature to impose a privilege tax upon motor vehicles to raise funds to be expended in the maintenance and construction of roads and for the purpose of administering the act.
State v. Lawrence, 108 Miss. 291; Hagar v. Walker, 129 Amer. State Rep. 284; Terre Haute v. Kersley, 159 Ind. 300, 64 N.E. 469; Kersley v. Terre Haute, 161 Ind. 471, 76 N.E. 1027; Union Pacific R.R. Co. v. Penniston, 85 U.S. 5, 21 L.Ed. 787.
The state, under the sovereign taxing power, has the power by legislative enactment to exact compensation from those who use its highways, by levying a privilege tax on motor vehicles.
Carley Hamilton, Inc. et al. v. Snook, 281 S.W. 66, 74 L.Ed. 704; Clark v. Poor, 274 U.S. 554, 71 L.Ed. 1198, 47 Sup. Ct. Rep. 702; Red Ball Transit Co. v. Marshall, D.C. 8 r. 2d 635) (appeal dismissed in 1927), 273 U.S. 782, 71 L.Ed. 890, 47 Sup. Ct. Rep. 569; Camas State Co. v. Sam Kozer, Secretary of State, 104 Oregon, 600, 209 P. 95; M'Culloch v. Maryland, 4 Wheat. 316, 421, 4 L.Ed. 579, 605; Kane v. New Jersey, 242 U.S. 160, 61 L.Ed. 222, 37 Sup. Ct. Rep. 30; 81 N.J.L. 594; L.R.A. 1917, 553, 80 A. 453, Ann. Cas. 1912d 237; Northern Kentucky Transp. Co. v. Bellvue, 215 Ky. 514, 285 S.W. 241; Hendricks v. Maryland, 235 U.S. 611, 59 L.Ed. 385.
Senate Bill No. 201, being chapter 135 of the Laws of Mississippi, 1932 as amended by Senate Bill 528, being chapter —, Laws of Mississippi of 1932, is not violative of the due process and equal protection clauses of the state or federal Constitution or any other provision of the Constitution of the United States, because of the classifications and exemptions therein contained.
Jackson v. Neff, 64 Fla. 323, 60 So. 350; Re Kessler, 26 Idaho, 764; L.R.A. 1915D, 322, 146 P. 113, Ann. Cas. 1917A 228; Lillard v. Melton, 103 S.C. 10, 87 S.E. 421; Westfalls Storage Van Exp. Co. v. Chicago, 280 Ill. 318, 117 N.E. 439; Hudgens v. State, 15 Ala. App. 166, 72 So. 605, par. 2 of Local Acts 1915, p. 85; Jasnowski v. Board of Assessors, 191 Mich. 287; Com. v. Densmore, 29 Pa. Co. Ct. 217; Park v. Duluth, 134 Minn. 296, 159 N.W. 627; Kellaher v. Portland, 57 Or. 578, 110 P. 492, 112 P. 1076; Ray v. Hoffert, 34 S.D. 271, 52 L.R.A. (N.S.) 949, 148 N.W. 20; Com. v. Hawkins, 14 Pa. Dist. R. 592; Ayres v. Chicago, 239 Ill. 237, 87 N.E. 1073; Lillard v. Melton, 103 S.C. 10, 87 S.E. 421; Smith v. Com, 175 Ky. 286, 194 S.W. 367; Continental Baking Company v. Woodring (U.S.), 76 L.Ed. p. 816; State ex rel. Wisconsin Allied Truck Owner's Association et al. v. Public Service Commission of Wisconsin, 242 N.W. 868; Carley Hamilton and George T. Cottingham et al. v. Snook, 281 U.S. 66, 74 L.Ed. 704; Southern Transfer Co. v. Harrison, 171 Ga. 358; Sproles v. Binford, 76 L.Ed. 827.
J. Morgan Stevens and Harry M. Bryan, both of Jackson, Amici Curiae.
The demurrer in the case at bar, admitting as it does all allegations of the bill well pleaded, was probably overruled by the learned chancellor below, if for no other reason than that the act in question sought to be enforced, works absolute confiscation of the property and pursuit of appellee in hauling pine knots from the forest to market that on its face the demand of three hundred dollars of appellee for privilege taxes and license for his truck to engage in gainful labor of hauling pine knots, is confiscatory, unreasonable and void in direct contravention of both the "due process" and "equal protection of the laws" provisions of state and federal Constitutions.
Riley, State Auditor, v. Ayer Lord Tie Co., 147 Miss. 105, 113 So. 214; Cooley on Taxation (4 Ed.), page 3431.
Shot through and through the act under review are rates that are wholly confiscatory, and for that reason null and void, but this is only one serious phase of the matter. There is such patent and grievous discrimination within classes that the act must fail. What a reasonable classification may be, is of course, subject at all times to judicial inquiry.
Smith v. Cahoon, 283 U.S. 553, 51 S.Ct. 562, 75 L.Ed. 1264.
Another objection to the act which gets to the very heart of the matter is that the act seeks to impose an additional tax, irrespective of the fact that owners of motor vehicles had previously paid license fees good for the entire year 1932, as required by chapter 138 of the Code of 1930.
Under its police power the state has the undoubted right to regulate the use of its highways, included in which is the right to compel the registration and numbering of automobiles before they are permitted to be used on the highways. Such registration and numbering is necessary, in order that automobiles may be readily identified, so that speed and other regulations may be enforced, and the right of all parties using the highways may be protected. Under this power the expense incident to a valid police regulation may be imposed upon the owner of the property or thing out of which the necessity for the regulation arises, but the expense thus imposed must be a reasonable, proper, and fair exaction, when considered with reference to the object to be attained and surrounding facts.
McGehee, Due Process of Law, 341; State v. Lawrence, 61 So. 975, 105 Miss. 58.
As to the discriminatory features of the act hereinabove referred to, we direct the court's attention to Adams v. Standard Oil Co., 53 So. 692, 97 Miss. 879; Johnson v. Long Fur. Co., 74 So. 283, 113 Miss. 373; Adams v. Mississippi Lumber Co., 36 So. 68, 84 Miss. 23; City of Vicksburg v. Mullane, 106 Miss. 199, 63 So. 412, 40 L.R.A. (N.S.) 421.
In the act before the court in the case at bar, not only are taxes levied generally, and by proviso are certain motor vehicles exempted from full payments, but as stated above, section 19 of the act actually puts the said act into effect as to certain motor vehicles on one date, and as to others is inoperative until the end of the year.
Hannah Simrall, of Hattiesburg, for appellee.
Free very fundamental limitations on the right and power to levy and collect privilege taxes are:
First, the classification must not be arbitrary or discriminatory but must be based on some reasonable difference between the classes.
Second, the amount of the tax levied must be reasonable.
Third, the amount of the tax levied must not be prohibitory or confiscatory.
The principle that the state has a broad discretion in classification in the exercise of its power of regulation is constantly recognized by the decisions of this court. But the constitutional guaranty of equal protection of the laws if interposed against discriminations that are entirely arbitrary. In determining what is within the range of discretion and what is arbitrary, regard must be had to the particular subject of the state's action.
Smith v. Cahoon, 283 U.S. 552, 75 L.Ed. 1264.
We are not unmindful of the fact that the courts generally sustain the right of the Legislature to put a privilege tax on some vehicles and exempt others. However, we have not found any case where the validity or the legality of the act was upheld where the purpose of the tax was the fair contributive share or proportion of maintenance and upkeep of the highway, and where it was shown, as in the case at bar, that the exempted vehicles caused as much damage to the highways as those taxed.
What are the limits of the power of classification by the states under this constitutional provision? It is undoubted that the power of the states to make classification of persons and property for the purpose of taxation, as well as for other purposes, is broad: but it is equally true that the mere fact of classification is not sufficient to relieve a statute from the operation of the equality clause. The classification must be based on some reasonable ground, and some real difference which bears a just and proper relation to the object sought to be accomplished.
"Mere arbitrary selection can never be justified by calling it classification" and discriminations against persons and classes of an unusual character are obnoxious to the Constitution.
4 Encys. U.S. Sup. Ct. Rep. 362, 363; Adams v. Standard Oil Company, 97 Miss. 879, 53 So. 692; Chicago St. Paul Ry. Co. v. Westby, 178 Fed. 619, 102 C.C.A. 65; Southern Ry. Co. v. Greene, 216 U.S. 400, 30 Sup. Ct. 287; Ballard v. Oil Co., 81 Miss. 507, 34 So. 533; 62 L.R.A. 407, 95 Am. St. Rep. 478.
The law must be held invalid because of the unreasonableness of the tax it undertakes to impose.
Wiley v. State, 93 Miss. 767, 47 So. 465; Riley, State Auditor, v. Ayer Lord, 147 Miss. 105, 113 So. 214; Continental Baking Company v. Woodring, 286 U.S. 352, 76 L.Ed. 1155.
Appellee is a farmer and an operator of a commercial truck. He lives on and works his small farm, but utilizes all his spare time in hauling pine stumps, pine knots, and other pine light wood to the reduction plants in the city of Hattiesburg, and also in hauling cross-ties, pine poles, piling, etc., to a creosoting plant located in the same city. In doing so, he uses the public highways, and often for trips exceeding twenty-five miles. He operates a truck with a two-wheel semitrailer, and habitually carries a load of approximately six tons. He does not confine himself to carrying his own forest products, but does so for others for hire. Under the provisions of chapter 135, Laws 1932, appellee is made liable for an annual privilege tax of three hundred dollars for the operation on the public highways of his truck and trailer; and he filed his bill in the chancery court to enjoin the enforcement of said statute against him because of the alleged reasons which will appear in the subsequent course of this opinion. His bill was sustained, the collection of the tax was enjoined, and the tax collector appeals to this court.
The general situation to which the statute in question is addressed may be described by a paraphrase of the language used by the court in Continental Baking Co. v. Woodring (D.C.), 55 F.2d at page 350, and in the same case, 286 U.S. at page 364, 52 S.Ct. 595, 76 L.Ed. 1155: The state of Mississippi has constructed at great expense a system of improved highways. These have been built in part by special road districts, in part by general ad valorem county road taxes, and in part by a tax on gasoline sold in the state and by license fees exacted of all resident owners of automobiles. These public highways have become the roadbeds of transportation companies and of the operators of commercial trucks which are actively competing with railroads which provide their own roadbeds and which pay enormous annual taxes to the state and its subdivisions; and this competition has become so serious that, unless legislative intervention shall be made operative and effective, the time is to come when the railroads can no longer pay the enormous tax bills which are exacted of them, and indeed the day would eventually arrive when the railroads will either have to be abandoned or else operated in part by the aid of general taxation. The public highways are being pounded to pieces by these great trucks which combining weight with speed are making the problem of maintenance well-nigh insoluble. The highways are public property, and the Legislature but voiced the sentiment of the entire state in deciding that those who daily or more or less constantly use the highways for commercial purposes shall pay an additional tax. We are advised that all the states of the Union excepting five have passed statutes to regulate such special use of their highways and to exact special compensation therefor.
The Legislature, for the protection of the highways of the state and to prevent the wear and hazards due to excessive size of vehicles and weight of load, may altogether prohibit the use on the public roads of vehicles and loads of such size as will destroy the roads or break down the bridges, Sproles v. Binford, 286 U.S. 374, 52 S.Ct. 581, 76 L.Ed. 1167; and it is settled by numerous decisions that, as to vehicles and loads which do not destroy the roads and bridges but yet severely wear them and impose additional burdens of maintenance upon them, the state may demand compensation for the special facilities it has provided, in addition to the power of regulating the use of its highways to promote the public safety. The amount of the charges and the method of collection are for the Legislature to determine, so long as they are reasonable and conform to some fair and practical standard. Continental Baking Co. v. Woodring (D.C.), 55 F.2d 347; Id., 286 U.S. 352, 52 S.Ct. 595, 76 L.Ed. 1155. It follows that the state may graduate the compensation demanded according to the weight of the vehicle and the load carried. And the state may make the classifications and exemptions hereinafter mentioned, as well as others not here involved.
With the general problem stated, with which the Legislature had to deal, and with the foregoing general statement of the powers of the Legislature in the premises, we come in the light thereof now to examine the main contention of the appellee, to-wit, that the imposition of a three hundred dollar per annum tax on him for the use of the highways by his truck carrying a load of six tons is unreasonable, prohibitive, and confiscatory as applied to appellee, because it is not at present possible for him to make in hauling the wood products mentioned more than three hundred dollars per year, and that the imposition of this charge upon him prohibits him from engaging in an honest and useful business. The principle pertinent to this particular question is that "the constitutionality of a statute cannot be tested by isolated cases; . . . it must be tested by its general application to the classes affected, and not to certain individuals belonging to such classes. Exact equality is not possible. Practical equality is constitutional equality. The human mind has not yet been able to devise any scheme of taxation which will operate with unerring certainty and equality to all situations that may arise." Continental Co. v. Woodring (D.C.), 55 F.2d 347, 351. The constitutional validity of a charge made for the privilege of the use of public property obviously cannot be tested by the inquiry whether the particular individual or a number of individuals similarly engaged can in the particular business make enough to pay the compensation demanded. Let us suppose that appellee, instead of hauling waste pine wood, were engaged in hauling common soil, or worthless iron junk, or some other property which would be so nearly of no value upon delivery and at the place of delivery that it would not pay the costs of the gasoline used in the transportation, would it be said that a charge for the use of the public highways could not be imposed at all upon him and that so to attempt would be unconstitutional? The answer to this question must be in the negative, otherwise the power to demand compensation for the use of the public highways for commercial purposes would disappear or be seriously crippled, for always some person hauling some particular product or property would be found to be unable to make expenses in so doing, because of the worthlessness or low value of the property thus handled, not to mention other elements which enter into the result that some individual or individuals cannot profitably operate and pay the charges demanded. The citations, Wilby v. State, 93 Miss. 767, 47 So. 465, 23 L.R.A. (N.S.) 677, and Riley v. Ayer Lord Tie Co., 147 Miss. 105, 113 So. 214, relied on by appellee, deal with privilege taxes imposed upon persons who use no public property or facility, and hence are inapplicable here.
Appellee contends that the various exemptions or partial exemptions permitted to other users of the public highways make the statute unconstitutional, because arbitrary and discriminatory; and appellee calls particular attention to the following: That steel-tired vehicles operated by animal power are entirely exempt, and that passenger automobiles are required only to pay the ordinary or lower tag license tax, although the bill alleges, contrary to common knowledge, that the vehicles just mentioned actually do as much harm and cause as much wear upon the roads as do the class of trucks, one of which is operated by appellee. That there are exempted, except for the payment of the ordinary and lower tag license, "motor vehicles used in lieu of street cars in or between municipalities, and taxicabs within the limits of a municipality and not exceeding three miles therefrom," and "motor vehicles engaged exclusively in the transportation of agricultural, forest and dairy products when such products are owned by the producer or where the forest products are being transported not exceeding twenty-five miles in their raw or unmanufactured state or as lumber." That there are likewise partially exempt "motor vehicles used by a hotel exclusively for its patrons and employees, operating not exceeding fifteen miles distant from such hotel."
The above exemptions and partial exemptions are entirely permissible and valid, and are sustained in principle and in detail by the exhaustive opinions in Continental Baking Co. v. Woodring (D.C.), 55 F.2d 347; Id., 286 U.S. 352, 52 S.Ct. 595, 76 L.Ed. 1155; Sproles v. Binford, 286 U.S. 374, 52 S.Ct. 581, 76 L.Ed. 1167; Westfalls Storage, Van Express Co. v. Chicago, 280 Ill. 318, 117 N.E. 439; Kellaher v. Portland, 57 Or. 575, 110 P. 492, 112 P. 1076; State v. Public Service Commission, 207 Wis. 664, 242 N.W. 668; and the many authorities cited in those opinions; and because so thoroughly covered by those opinions and the cases therein cited, we deem it unnecessary to repeat the discussions or to pursue the several features at length.
The point is made also that the sliding scale of automatic partial exemptions based on re-registrations found in section 2 of said chapter 135 renders the entire chapter invalid, because of the alleged discriminatory provision that "this paragraph shall not apply to busses and to trucks of two and one-half tons carrying capacity, and over." There are two answers to this contention: First, it is competent for the Legislature to put in one class trucks below five thousand pounds' carrying capacity and into another class those above that carrying capacity. Second, the provision complained of is not so inseparably connected with the remaining portions of the act that, if the said provision were stricken down, the remainder of the act would also have to go down; and section 24 of the act expressly provides that the unconstitutionality of any portion shall not affect the remainder.
Other features of the statute are referred to as containing discriminatory provisions, but these references have been in the nature rather of suggestions than of definite argument supported by authorities in point. We do not think the suggestions are well founded, but that they are technical and fanciful rather than actual and substantial.
Reversed, and bill dismissed.