Summary
APPEALS FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF OHIO, WESTERN DIVISION.
The case, as stated by the court, .was as follows:
These are cross appeals from a decree of the Circuit Court for the Southern District of Ohio, W estern Division.
The suit was begun. by a bill of complaint, filed by the Western Union Telegraph Company against Frank Katterman, treasurer of Hamilton County, in the State of Ohio. As the bill is not very long, it is here presented in full:
“ To the judges of the Circuit Court of the United States for the Southern District of Ohio, Western Division :
“The Western Union Telegraph Company, a corporation duly organized and existing under the laws of the State of New York and a citizen of said State, brings this its bill against Frank Katterman, treasurer of Hamilton County, Ohio, and a citizen of the State of Ohio.
“And thereupon your orator complains and says:
“That its principal office is, and during the times hereinafter mentioned was, in the city of New York; that during said time it had been and now is engaged in the business of receiving and transmitting for hire telegraph messages be- ' tween different points in the United States, and in the carrying on of said business has offices in the city of Cincinnati and at other points in the county of Hamilton and in the State of Ohio, and'has been engaged in the transmission of messages between said offices and other points both within and without the State of Ohio.
“ That prior to 1869 your orator accepted in writing the provisions of the act of Congress of July 4,-1866, 14 Stat. 221; that your orator’s wires, poles, batteries, office furniture, and other property in the State' of Ohio have been and are taxed' like other property in said State; that your orator’s telegraph lines cross nearly all of the States of the Union and occupy portions of British America, and that a large amount of the commercial transactions, business, and' intercourse of the people is carried on by means of their wires.
“ That in the month of May, 1887, your orator, under protest, delivered to the auditor of said county a statement, as required by Revised Statutes Ohio, § 2778, showing the entire' receipts of your orator in said county for the year next preceding, which said gross receipts amounted to the sum of $175,210.88, and were principally for business between points in the State of Ohio and points outside the State of Ohio — that is to say, the receipts of your orator for messages and business pertaining to commerce between the States, and not for messages between different points within the State of Ohio; that thereupon said auditor' assessed a tax thereon amounting to five thousand two hundred and six and dollars.
“ Your orator says that said tax is illegal and void and in violation of the Constitution of the United States.
“ Your orator has offered to the defendant and is ready and willing to pay to him the taxes chargeable against its personal property within said county, but the defendant refuses to accept payment thereof unless your orator also at the same time pays said total assessment for all of said gross receipts; and, unless restrained, the defendant will impose and enforce the penalties for non-payment of said tax provided for by Revised Statutes of Ohio, § 2843, to the interference, stoppage, and destruction of your orator’s business.
“ Wherefore your orator prays that the defendant may be required to accept payment of so much of said tax assessment as covers the property of your orator in the said county, and that he may be. enjoined by preliminary injunction and by final decree from levying or collecting the balance of said assessment.
“Your orator prays that a writ of subpoena may issue against the defendant, and that your orator may have such other and further relief as it is in equity and good conscience entitled to.”
To this bill a general demurrer was filed, which was overruled by the court. The.record then proceeds as follows":
“And thereupon it was agreed by and between the complainant and the defendant that the cause be submitted to the court on the bill without further pleading to the same by the defendant, upon'the following facts:
“That of the entire receipts mentioned in the bill $142,-154.18 were for business done by the plaintiff between its offices in said county and points outside of the State of Ohio ■— that is, for messages and business pertaining to commerce between the States and not for messages between different points within the State of Ohio, and that the balance of said receipts, to wit, $33,056.70 was for business between the of-, fices of the plaintiff in said county and other points within the State of Ohio; and that if said receipts had been so separated and apportioned and said tax had been separately' assessed on the basis of such separation and apportionment the apaount of said total tax of $5206.90 apportionable to said receipts for interstate commercewould.be $3931.51, and the amount apportionable to said receipts for business between the offices of the complainant in said county and other points within the State of Ohio would have been $910.40, and that the remainder of said sum of $5206.90, viz., $364.99, was for tax assessed upon the personal property of the said complainant, within the said county of Hamilton aforesaid, namely, upon its instruments, wires, poles, and other chattel property which were returned by said complainant to the auditor of said county at a valuation of $18,059.
“ That Exhibit ‘ A,’ hereto annexed and made a part of this-stipulation, is a copy of the return made by complainant to. the auditor of said county in pursuance of the law of the State of Ohio, and that said complainant made no other return and furnished no other information to said auditor at. the time of said return, save what is contained in said return.
“ That Exhibit ‘ B,’ hereto annexed and made a part hereof,, is a copy of the return of the chattel property of said complainant made at the same time to said auditor.
“It is further agreed'that the auditor of said county placed on the tax duplicate of said county said sums of $175,210.88, and $18,059 ás the personal property of said complainant, to.' be assessed for taxation in said county of Hamilton, and that the rate of taxation assessed thereupon was the same as was assessed against the personal property listed for taxation by the citizens of said county.
“ It is further agreed that complainant, prior to December 20, 1887, offered to pay the tax properly assessable against said return of $18,059 for personal property, but the defendant refused to accept payment of said assessment of $5206.90 unless the whole were paid. The plaintiff did not disclose to said auditor at the time it made said return what portion, if any, of the gross receipts of its said offices in said county was for interstate commerce.
“ It is further agreed that neither said auditor nor said treasurer had any actual knowledge that any portion of the returns of said gross receipts was for interstate commerce business, but said officers knew that plaintiff’s said business included interstate commerce.
“ And the only knowledge said auditor and said treasurer had of the business of said company and what said receipts were derived from was from the returns hereto annexed, marked Exhibit ‘ A,’ and from their knowledge as aforesaid of the plaintiff’s business.
“ The cause being thus submitted to the court on the foregoing stipulation of facts and the argument of counsel, the court is .of the opinion that said receipts and tax may be separated and apportioned, and that said tax so far as so separated and apportioned to said receipts derived from the interstate commerce is unconstitutional and void, but valid apportionable to said receipts derived from state business.
“ It is thereupon ordered by the court, adjudged, and decreed that the defendant is hereby forever enjoined from collecting on said assessment of $5206.90 more than the sum of $1275.39, and an injunction is refused as to the balance of said tax. It is further ordered that the defendant pay the costs of this suit.”
The judges of the Circuit Court, upon this state of facts, made the following certificate of a difference of opinion :
“ This is to certify that at the hearing of the above entitled cause before Hon. Howell E. Jackson, circuit judge, and George R. Sage, district judge, said judges differed in opinion upon the following question of law, to wit:
“ Whether a single tax, assessed under the Revised Statutes of Ohio, § 2778, upon the receipts of a telegraph company, which receipts were derived partly from interstate commerce and partly'from commerce within the State, but which were returned and assessed in gross and without separation or apportionment, is wholly invalid, or invalid only in the proportion and to the extent that said receipts were derived from interstate commerce.
“ And the district judge being of the opinion that such a tax is wholly invalid, and the circuit judge being of the opinion that it is invalid only to the extent. and in the proportion that the receipts upon which it is based were derived from interstate commerce, said question is hereby certified to the Supreme Court of the United States for its opinion.
“Howell E. Jackson, Circuit Judge.
“ Geo. R. Sage, District Judge.”
Mr. William M. Ramsey, Mr. William Brown, and Mr. Charles W. Wells were with him on the brief. On the question whether the tax could be separated, and upheld in part and annulled in part, Mr. Maxwell said:
The questions are (1) whether the State of Ohio, although not at liberty to prevent the complainant from coming into the State to do interstate commerce, nor to tax it for that privilege, is nevertheless entitled to prohibit it from doing business between points within the State, and to tax it for that privilege? (2) whether the law, in its present form, can be used to enforce the collection of such a tax ? in other words whether, after striking out the provisions of the Statute which are unconstitutional, effect is given to legislative intent by permitting the statute, thus emasculated, to stand as one - authorizing and directing a tax upon the receipts derived from internal commerce ? ", -
The Entire Law Falls.
Telegraph Cornpemy v. Texas, 105 U. S. 460, was a suit brought by the State against the telegraph company to recover unpaid taxes under a statute of Texas which required every chartered telegraph company to pay a tax of one cent for every full rate message sent, and one half cent' for every message less than full rate. The state court rendered judgment for the tax on all messages that had been sent by the company, including those sent to places out of the State, and those sent by officers of the government of the United States on public business. The Supreme Court of Texas affirmed the judgment, and the case came into this court upon writ of error for review of the federal question, and the decision of this court was limited to the determination of that question, and was confined to a reversal of the judgment upon the ground that it included a tax' upon interstate and government messages. With respect to the question whether the statute being found to be unconstitutional in that respect could nevertheless be used to enforce the collection of a tax upon messages passing between points within the State, this court said: “ Whether the law of Texas in its present form can be used to enforce the collection of such a tax is a question entirely within the jurisdiction of the courts of the State, and as to which we have no power of review.” ■
But in the case at bar, which is not a writ of error to. a state court, but an appeal from the Circuit Court, sitting as a court of original jurisdiction to decide all questions arising in the case,- it is the right and duty of this court to declare upon its own judgment whether, in view of the unconstitutional features of this statute, it can be used to enforce the collection, not • of the tax -for which it was intended to provide,-but of a tax limited to receipts from internal business, even assuming the power of the State to tax such receipts.
In State v. Hipp, 38 Ohio St. 199,230, it is said:
“ Finally, it is urged’ that even if the section providing punishment for non-compliance with the requirements of the statute should be held to be unconstitutional, still that other parts of the act may stand. But, as Blackstone observes, ‘the main strength and. force of a law consists in the penalty annexed to it.’ 1 Bl. Com. 57. It is not to be supposed that the legislature would have enacted this statute without such clause; and hence, the whole act fails. The State v. Perry County, 5 Ohio St. 497.”
In State v. Commissioners of Perry County, 5 Ohio St. 497,506, our Supreme Court laid down the following rule: “As a general rule, one part of an act will not be held constitutional and another part unconstitutional, unless the respective parts are independent of each other,” and the following language of Shaw, C. J., in Warren v. Mayor and Aldermen of Charlestown, 2 Gray, 84, was quoted with approval: “ The same act of legislation may be unconstitutional in some of its provisions, and yet constitutional in others. . . . But this must be taken with this limitation, that the parts, so held respectively constitutional and unconstitutional, must be wholly independent of each other. But if they are so mutually connected with and dependent on each other as conditions, considerations or compensations for each other, as to warrant a belief that the legislature intended them as a whole, and that if all could not be carried into effect the legislature would not pass the' residue independently, and some parts are unconstitutional, all the provisions which are thus dependent, conditional or connected, must fall with them.”
The same language is quoted with approval by this court in Allen v. Louisiana, 103 U. S. 80, 84, the Chief Justice adding: “ The point to be determined in all such cases is whether the unconstitutional provisions are so connected with the general scope of the law as to make it impossible, if they are stricken out, to give effect to what appears to have been the intent of the legislature.”
Is it not clear that the unconstitutional provisions of the Ohio statute are so connected with the general scope of the law as to make it impossible, if they are stricken out, to give effect to what appears to have been the intent of the legislature ?
The intent of the. legislature, as declared by our own Supreme Court, in Western Union Telegraph Co. v. Mayer, 28 Ohio St. 521, was to impose a charge upon foreign telegraph companies for the privilege of exercising their franchises and powers within the State, graduated according to the amount of receipts. The execution of that intention, is now found to be impossible. The legislature cannot prevent these compar nies from exercising their powers and franchises with respect to the great bulk of their business. Can the court discover, nevertheless, an intent to charge them for the privilege of • doing business wholly.within the State based upon the amount of their receipts from such business. Did not the legislature intend the law as a whole ? Had it been advised that it could not tax the Western Union Telegraph Company for the privilege of coming into Ohio to do interstate commerce, nor with respect to that commerce, would it have passed the law at all ? Would it have laid a tax which, being confined to Ohio messages, must in the nature of things, be borne ultimately by the merchants of Ohio? Had it known that its power was confined to taxing the receipts of the company from internal business, would it not have increased the ráte ?
These are only a few of the questions which embarrass us in an attempt to give effect to the statute by upholding it, notwithstanding its unconstitutional provisions, as a law authorizing and directing a tax against foreign telegraph companies upon their receipts from internal commerce.
It may be that the legislature of Ohio has authority to pass a law taxing such receipts, but it will be time enough for the courts to enforce such a law when warranted thereunto by some clear declaration of legislative intent. It is not for the courts to enact or amend laws.
Mr. William A. Davidson, County Solicitor for Hamilton County, Ohio, was with them on .the brief. To the point that the- receipts were separable,' and that the court might apportion them, they said:
The certificate of division of opinion in this case presents this question. Take it for ■ granted,-for the purposes of argumerit, that the tax on the receipts from interstate commerce business is unconstitutional, does that vitiate the whole act so as to authorize the court to-enjoin the collection of the tax assessed on the receipts for business done wholly within the State, as well as the receipts for business done without the State ?
It must be admitted that the legislature of Ohio intended to tax the business done wholly within the • State. Its authority to tax the receipts from that business cannot be questioned in this court; but has been expressly upheld in numerous cases. Does the fact that the tax is levied, or, if you please, intended to be' levied, upon that which it. had no power to levy it on, destroy its right to collect a tax from that -which it had the right to tax ?
This court has held that the law may be valid as to one class of receipts, and invalid as to another. In the Philadelphia Steamship Co. v. Pennsylvania, 122 U. S., on page 339, the court say: “ The court, in its opinion, took notice of the fact that the law was general in its terms, making no distinction between freight transported wholly within the State and that which was destined to or came from another State. But it was held that this made no difference. The law might be valid as to one class, and unconstitutional as to the other.”
In the case of Fargo v. Michigan, 121 U. S., the court, speaking of the same law, (on page 241,) say: “ The Supreme Court of the State. of Pennsylvania decided that all the freight carried, without regard to its destination, was liable to the tax imposed by the statute. This court, however, held that freight carried entirely through the State from without, and the other class of freight brought into the State from without, or carried from within to points without, all came under the description of ‘commerce among the States,’ within the meaning of the Constitution of the United States; and it held also, that freight transported from and to points exclusively within the limits of the State was internal commerce, and not commerce among the States. The taxing law of the State was, therefore, valid as to the latter class of transportation, but with regard to the others it was invalid, because it was interstate commerce, and the State could lay no tax upon it.” •
In the case of the Telegraph Co. v. Texas, 105 U. S., on page 465, the court say: “ The present case, as it seems to us, comes within this principle. The tax is the same on every message sent, and because it is sent, without regard to the distance carried or the price charged. It is in no respect proportioned accQrding to the business done. If the message is sent, the tax must be paid, and the amount determined solely by the class to which it belongs. If it is full rate, the tax is one cent, and if less than full rate, one half- cent. Clearly,'if a fixed tax for every two thousand pounds of freight carried is a tax on the freight, or for every measured ton of a vessel a tax on tonnage, or for every passenger carried a tax on the passenger, of for the sale of goods a tax on the goods, this must be a tax on the messages. As such, so far as it operates on private messages sent out of the State, it is a regulation of foreign and interstate commerce, and beyond the power of the State. That is fully established by the cases already cited. As to the government messages, it is a tax by the State on the means employed by the government of the United States to execute its constitutional pówers, and therefore void. It was so decided in M ' Culloch v. Maryland, 4 Wheat. 316, and has never been doubted since. It follows that the' judgment, so far as it includes the tax on messages sent out of the State, or for the government, on public business, is erroneous.”
In that case a judgment was rendered by the state court against the telegraph company for the tax on the messages within the State, and for the messages which were wholly interstate commerce. And this court held that, so far as the judgment included the tax on messages sent out of the State, or for the government, it was erroneous, and reversed the-' judgment, and remanded the case for proceedings in accordance with the opinion. In the case at bar the court’s attention is called to what constituted the sum of $5206.Si), which-was the amount' of the tax sought to be enjoined by the ■ bill of the telegraph company. A part of that sum c onsisted of the tax levied on the personal property, the wires, batteries, and poles of the company within the county of Hamilton. The remainder of the tax was what was assessed, as we claim, on the moneys received froln the business, and treated as other personal property for taxation. There was no practical difficulty in the way • of separation. There was no- such intermingling of the receipts as made it impossible to separate the one class from the other. They were in fact separated by the court below. And yet it is claimed, though the separation is practicable, and'has been made by the court below, though the amount can be ascertained to a cent of what was received from each class of business, yet the telegraph company has a right to perpetually enjoin, and thereby be released from the tax on the whole gross receipts, notwithstanding the admitted fact that the State may tax the gross receipts for the business done within the State. We know of no rule of construction of a statute that • authorizes the'holding of the whole tax invalid, because it was levied.on property a part of. which'it is claimed the State had no right to tax' It will be remembered by this court that th.e tax laid on" railway gross receipts, held to be valid in 15. Wall, included the receipts of both classes, and that in that case, as in. the case of Fargo v. Michigan, 121 U. S., the receipts were separated} although the law in one of the cases was general in its terms, as. in the case at bar.
The rule applicable to the granting ■ of relief by way of injunction, which was what was sought in the case at bar, is to-be found in the case of Frazer v. Seibern, 16 Ohio St. 614. In .that case, on page 624, the court say, after finding that the act itself, to the extent that it.taxed banks in excess of the taxation levied on the state banks, was unconstitutional: It by no means follows, however, that the plaintiffs are entitled to an unconditional injunction against the collection of the tax. They ask equity, and must do equity. They invoke the exercise of an extraordinary power of the court for their relief, and the court, in its discretion, should refuse that relief, except upon conditions that are equitable and just. We think, therefore, that the injunction should only be granted, upon the condition that the plaintiffs, or their bank, shall first pay to the treasurer of Hamilton County a sum that will be a pro rata equivalent for the tax imposed upon the State and independent banks under the act of 1861; that is to say, such sum as might lawfully have been assessed .upon the plaintiffs, or their bank, under said act, had it been one of said state banks. If the parties cannot agree upon this sum, proceedings can be adopted to ascertain it by tlie courtand, if found necessary, the bank itself can be madé a party.”
We submit, therefore, that should this court hold the law of the State of Ohio unconstitutional, it can only do-so to the extent that it taxes the moneys received from the interstate commerce business of the Western Union Telegraph Company.
Syllabus and headnotes are prepared by the reporter or publisher, not the court, and are not part of the opinion.
