Postal Telegraph Cable Company v. State of Alabama

This was an action brought November 4, 1892, in the circuit court of Montgomery county, in the state of Alabama, by the state of Alabama against the Postal Telegraph Cable Company, a corporation organized under the laws of the state of New York, to recover taxes and penalties claimed by the state of Alabama under its statute of February 28, 1889, No. 103.

By that statute, it is enacted that 'all express and telegraph and sleeping-car companies, doing business between points wholly within this state, and without reference to their interstate business, shall pay in advance on the first day of January, in each year, to the auditor of the state of Alabama, a privilege tax of five hundred dollars, together with one dollar for each mile of telegraph line, or of railroad tracks, on or along which the lines of said companies operate or extend: and no express or telegraph company, which has paid the privilege tax hereby required, shall be liable to pay any other privilege or other tax in this state, except licenses required by cities and towns, and except upon their real estate, fixtures and other property, which shall be taxed at the same rate as is now levied and collected upon other property in this state: provided, that all express or telegraph companies, which have heretofore paid their taxes to the state under existing laws, for the year 1889, are hereby exempt from the provisions of this clause for said year: And provided further, that all telegraph companies, whose lines on which business is done wholly within the state do not exceed 150 miles, shall pay, at the same time and in the same manner and for the same purpose, a privilege tax at the rate of one dollar a mile for each mile of railroad along or upon which they operate or do business, and no more: And provided further, that said company, or some agent thereof, shall, when making payment of the tax hereinbefore mentioned, report under oath the mileage of railroad operated by them respectively; and, in default of the payment of said tax, or the making of said report, for sixty days after maturity of said tax, a penalty of double the amount of the same shall be imposed on such defaulting companies.' Acts Ala. 1888-89, p. 89.

The complaint consisted of three counts, the first of which was as follows:

'The plaintiff, the state of Alabama, claims of the defendant, the Postal Telegraph Company, a foreign corporation, the sum of fifteen hundred dollars; for that whereas heretofore, to wit, on the 1st day of January, 1890, and for more than sixty days thereafter, the defendant did engage in the business of a telegraph company between points wholly within the state of Alabama, and did run and operate its lines on or along two hundred and fifty miles of railroad track within the state of Alabama, whereby it became and was the duty of the defendant to pay in advance on the 1st day of January, 1890, to the auditor of the state of Alabama, a privilege tax of five hundred dollars, together with the further sum of one dollar for each mile of railroad track on or along which the lines of the defendant as such telegraph company did operate or extend, and at the same time to report under oath the mileage of railroad track operated by it within the state of Alabama; and the plaintiff avers that the defendant made default in the payment of said tax, and in the making of said report, for more than sixty days, whereby it became and was and is liable to pay to the plaintiff a penalty in double the amount of said tax,-that is to say, a penalty of fifteen hundred dollars, for which plaintiff here sues.'

The second and third counts were precisely like the first, except that the second substituted January 1, 1891, for January 1, 1890; and that the third substituted January 1, 1892, and alleged that the defendant operated its lines on or along 328 miles of railroad track, and became liable to pay to the plaintiff a penalty of $1,656.

In December, 1892, the case was removed into the circuit court of the United States for the middle district of Alabama, under the act of congress of March 3, 1887, c. 373 (24 Stat. 552), as corrected by the act of August 13, 1888, c. 866 (25 Stat. 433), upon the petition of the defendant, alleging that it was a corporation organized under the laws of the state of New York in 1886 for the purpose of constructing, owning, using, and operating electric telegraph lines within that state, and extending beyond its limits into and across other states and territories, for the purpose of commercial and interstate communication by telegraph lines for general public use; that it had its principal executive, financial, and accounting offices in the city of New York; that it was 'engaged in the general telegraph business of receiving and sending telegrams over its lines for commercial purposes for the public between citizens within the state of New York and other states, and across the same to and from other places within other states, and also in sending messages by telegraph communication between the several departments of the government of the United States and their officers and agents at a rate of charges designated and prescribed by the postmaster general of the United States under the laws of congress'; that on March 6, 1886, it accepted the provisions of the act of congress of July 24, 1866, c. 230 (now title 65 of the Revised Statutes), and in pursuance thereof the postmaster general of the United States had annually, from time to time, designated it as one of the telegraph companies to transmit government messages for the United States; that most of its lines were upon the post roads of the United States; that now and during all these times it was a citizen and resident of the state of New York; and 'that the said action is a suit of the civil nature at common law, in which the matter in dispute and the interests involved exceed, exclusive of the interests and costs, the sum or value of two thousand dollars; and that the controversy therein arises under the constitution and laws of the United States and laws of the state of Alabama, and is wholly between citizens of different states, to wit, between your said petitioner, who avers that it was at the time of the bringing of this suit and still is a citizen and resident of the said state of New York, and the said plaintiff, the said state of Alabama, who, your petitioner avers, was then and still is a citizen and resident of the state of Alabama.'

In May, 1893, the defendant filed in the circuit court of the United States an answer, setting up substantially the same facts as in its petition for removal.

In January, 1894, the plaintiff filed an amended complaint, claiming for each of the years 1890, 1891, and 1892 a privilege tax of $500, and a penalty of $1,816; and the defendant filed an answer, similar to its original answer, and admitting the number of miles of telegraph line owned by it within the state.

In February, 1894, the parties submitted the case to the judgment of the court upon an agreed statement of facts, in which the facts set up in the answer were admitted. The court thereupon gave judgment for the plaintiff for the sum of $3,846.20, and the defendant sued out this writ of error.

T. Moultrie Mordecai and P. H. Gadsden, for plaintiff in error.

Wm. L. Martin, Ala. Atty. Gen.

Mr. Justice GRAY, after stating the case, delivered the opinion of the court.