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STATE TONNAGE TAX CASES. COX v. THE COLLECTOR. TRADE COMPANY v. SAME.

December 1, 1870

STATE TONNAGE TAX CASES. COX
v.
THE COLLECTOR. TRADE COMPANY
v.
SAME.



ERROR to the Supreme Court of Alabama. These were two cases, which, though coming in different forms, involved one and the same point only; and at the bar–where the counsel directed attention to the principle involved, separated from the accidents of the case–were discussed together as presenting 'precisely the same question.' The matter was thus: The Constitution ordains that 'no State shall without the consent of Congress lay any duty of tonnage.' With this provision in force as superior law, the State of Alabama passed on the 22d of February, 1866, a revenue law. By this law, the rate of taxation for property generally was the one-half of one per cent; but 'on all steamboats, vessels, and other water crafts plying in the navigable waters of the State,' the act levied a tax at 'the rate of $1 per ton of the registered tonnage thereof,' which it declared should 'be assessed and collected at the port where such vessels are registered, if practicable; otherwise at any other port or landing within the State where such vessel may be.' The tax collector was directed by the act to demand, in each year, of the person in charge of the vessel, if the taxes had been paid. If a receipt for the same was not produced, he was to immediately assess the same according to tonnage, and if such tax was not paid on demand he was to seize the boat, &c., and, after notice, proceed and sell the same for payment of the tax, &c., and pay the surplus into the county treasury for the use of the owner. If the vessel could not be seized, the collector was to make the amount of the tax out of the real and personal estate of the owner, &c. Under this act, one Lott, tax collector of the State of Alabama, demanded of Cox, the owner of the Dorrance, a steamer of 321 tons, and valued at $5000, and of several other steamers, certain sums as taxes; and under an act of 1867, identical in language with the one of 1866, just quoted, demanded from the Trade Company of Mobile certain sums on like vessels owned by them; the tax in all the cases being proportioned to the registered tonnage of the vessel. The steamboats, the subject of the tax, were owned exclusively by citizens of the State of Alabama, and were engaged in the navigation of the Alabama, Bigbee, and Mobile Rivers, carrying freight and passengers between Mobile and other points of said rivers, altogether within the limits of that State. These waters were navigable from the sea for vessels of 'ten and more tons burden;' and it was not denied that there were ports of delivery on them above the highest points to which these boats plied. The owners of the boats were not assessed for any other tax on them than the one here claimed. The boats were enrolled and licensed for the coasting trade. Though running, therefore, between points altogether within the limits of the State of Alabama, the boats were, as it seemed,*fn1 of that sort on which Congress lays a tonnage duty. Cox, under compulsion and protest, paid the tax demanded of him, and then brought assumpsit in one of the inferior State courts of Alabama, to get back the money. The Trade Company refused to pay, and filed a bill in a like court, to enjoin the collector from proceeding to collect. The ground of resistance to the tax in each case was this, that being laid in proportion to the tonnage of the vessel, the tax was laid in a form and manner which the State was prohibited by the already quoted section of the Constitution from adopting. The right of the State to lay a tax on vessels according to their value and as property was not denied, but on the contrary conceded.*fn2 Judgment being given in each case against the validity of the tax, the matter was taken to the Supreme Court of Alabama, which decided that it was lawful. To review that judgment the case was now here.

The opinion of the court was delivered by: Mr. Justice Clifford delivered the judgment of the court, giving an opinion in each of the cases.

Messrs. J. A. Campbell and P. Hamilton, for the plaintiffs in error:

The right of the State to tax the property of the citizen is admitted by us; but we assert that the tax should be upon property as property, and not because it is in the shape of vessels or boats having a greater or less capacity.

'Tonnage duties,' as defined by the learned Bouvier,*fn3 are 'duties on vessels in proportion to their capacity.' Now Congress has imposed such duties from the 20th July, 1790*fn4 till the present time.*fn5 The duties are imposed upon vessels plying on the navigable waters of the United States for the purpose of traffic, according to the tonnage measurement of the vessel. The manner in which the vessel shall be admeasured is prescribed, and the time and place at which the duties shall be collected are determined by law. The same officer collects these duties who collects other duties.*fn6 The tax is collected yearly at the port where the vessel enters or clears for the first time.*fn7
The argument of Mr. Langdon*fn8 in the Convention of 1787, 'that the regulation of tonnage was an essential part of the regulation of trade, and that the States ought to have nothing to do with it,' has been practically applied in this legislation of Congress. But the Alabama statute is similar in what it does to the enactments of the General Government. The duty is assessed in the same manner, is a yearly tax, and is made for the same cause. We insist, therefore, that it is void.*fn9

The injustice of the tax in this instance, it may be added, is striking. The value of one of these boats, the Dorrance, is $5000; her tonnage, 321 tons. At the rate of taxation established by the Alabama revenue acts for property (the half of one per cent.), the tax on this vessel would be $25; but assessed on tonnage, it is $643.25; more than twelve per cent. on the value of the property.

Mr. P. Phillips, contra:

The vessels being owned by citizens of the State, and employed exclusively in commerce within the State, are like all other property within its jurisdiction, subject to taxation.*fn10 This being admitted, of what consequence can it be to the citizens of any other State, what form the State may adopt in which to impose the tax? Why should the consent of Congress be asked, to the imposition of a tonnage tax in a case, when it is admitted that the State has full power to tax. It is evident that this provision is of the category of prohibitions, in which we find that 'no preference shall be given in any regulation of commerce to the ports of one State over those of another;' and that 'vessels bound to or from one State, shall not be obliged to enter, clear, or pay duties in another.' These, like all other constitutional provisions, extend to cases where there is a general interest or concern. They do not deal with cases where the citizens of the State are alone interested. The Constitution does not deal with words, but with substance, and is to be construed accordingly. A tax which in reality operates as a 'tonnage' duty, though not in the form of such a duty, would, when the prohibition was intended to apply, be held invalid.*fn11 On the other hand, when the case is not within the intent of the prohibition, the form of the tax will be disregarded. Pilot fees in one case*fn12 were levied at so much per ton, and yet this court held, that to consider this as a tonnage duty, 'would be to confound things essentially different. It is the thing, and not the name which is to be considered.' The Constitution provides that 'no State shall levy any duty on imports or exports,' yet when the question was presented to this court, as to the power of the State to levy a tax on goods imported from another State, the court did not confine itself to the mere word 'import,' but proceeded to inquire into the true meaning and design of the prohibition, and held, that the word did not include imports from another State, but was applicable alone to goods brought from a foreign country.*fn13

That the tax may operate very unequally upon different sorts of property owned by the people of Alabama, is no argument against the constitutionality of the tax, though it may be so against its policy. But the policy of any State tax is a matter for the legislature of the State alone to decide on. It will be admitted by the other side, that the same inequality might be lawfully brought about if it were done in another form.

Nor, we may reply in passing, is the inequality produced by the Alabama statute, greater than that which Congress produces by its statutes laying a tonnage tax; for an old and decayed vessel, though it may be worth but quarter as much as a well-built, new, and sound one, must pay, under the act of Congress, if the tonnage capacity of the two vessels be the same, exactly the same amount of tax.

Reply: Though the vessels in this particular case are all owned by citizens of Alabama, the statute taxing them, applies to 'all' vessels plying in the navigable waters of the State by whomsoever owned. We say that the statute is void, and not simply that this particular tax is unlawful.

I. IN THE FIRST CASE.

Assumpsit for money had and received is an appropriate remedy to recover back moneys illegally exacted by a collector as taxes in all jurisdictions where no other remedy is given, unless the tax was voluntarily paid or some statutory conditions are annexed to the exercise of the right to sue, which were unknown at common law.

Where the party assessed voluntarily pays the tax he is without remedy in such an action, but if the tax is illegal or was erronecously assessed, and he paid it by compulsion of law, or under protest, or with notice that he intends to institute a suit to test the validity of the tax, he may recover it back in such an action, unless the legislative authority, in the jurisdiction where the tax was levied, has prescribed some other remedy or has annexed some other conditions to the exercise of the right to institute such a suit.*fn14

On the twenty-second of February, 1866, the legislature of Alabama passed a revenue act, and therein, among other things, levied a tax 'on all steamboats, vessels, and other water-crafts plying in the navigable waters of the State, at the rate of one dollar per ton of the registered tonnage thereof,' to 'be assessed and collected at the port where such vessels are registered, if practicable, otherwise at any other port or landing within the State where such vessel may be.'*fn15

Five steamboats were owned by the plaintiffs, who were citizens of that State, doing business at Mobile under the firm name set forth in the record. All of the steamboats were duly enrolled and licensed in conformity to the act of Congress entitled 'An act for enrolling and licensing ships and vessels to be employed in the coasting trade of the United States,' and the record shows that at the time the taxes, which are the subject of controversy, were imposed and collected, all those steamboats were engaged in the navigation of the Alabama, Bigbee, and Mobile Rivers, in the transportation of freight and passengers between the port of Mobile and other towns and landings on said rivers, within the limits of the State, the said rivers being 'waters navigable from the sea by vessels of ten or more tons burden.'*fn16

Such steamboats are deemed ships and vessels of the United States, and as such are entitled to the privileges secured to such ships and vessels by the act of Congress providing for enrolling and licensing ships and vessels to be employed in that trade.*fn17

Annexed to the agreed statement exhibited in the record is a schedule of the taxes imposed and collected, in which are also given the names of the respective steamboats, their tonnage and their value, and the proportion assessed by the county as well as that imposed by the State. Committed as the assessments were to the same person to collect, it is immaterial whether the taxes were assessed for the State or for the county, as the collector demanded the whole amount of the plaintiffs, and they paid the same under protest, the sums specified as county taxes including also a charge made by the collector for fees in collecting the money.

Separately stated the taxes were as follows: On the steamboat C. W. Dorrance, 321 tons burden, valued at five thousand dollars, taxed, state tax $321, county tax $322.25; Flirt, tonnage 214 tons, valued at two thousand five hundred dollars, taxed, state tax $214, county tax $215.25; Cherokee, tonnage 310 tons, valued as fifteen thousand five hundred dollars, taxed, state tax $310, county tax $311.25; Coquette, tonnage 245 tons, valued at four thousand dollars, taxed, state tax $245, county tax $246.25; St. Charles, tonnage 331 tons, valued at fifteen thousand dollars, taxed, state tax $331, county tax $332.25; showing that the county tax as well as the state tax is one dollar per ton of the registered tonnage of the steamboats, exclusive of the fees charged by the collector.

Demand of the taxes having been made by the collector, the plaintiffs protested that the same were illegal, but they ultimately paid the same to prevent the collector from seizing the steamboats and selling the same in case they refused to pay the amount. They paid the sum of two thousand eight hundred and forty-eight dollars and twenty-five cents as the amount of the taxes, fees, and expenses demanded by the defendant, and brought an action of assumpsit against the collector in the Circuit Court of the State for Mobile County to recover back the amount, upon the ground that the sum was illegally exacted. Judgment was rendered in that court for the plaintiffs, the court deciding that the facts disclosed in the agreed statement showed that the taxes were illegal, as having been levied in violation of the Federal Constitution. Appeal was taken by the defendant to the Supreme Court of the State, where the parties were again heard, but the ...


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