State v. American Sugar Refining Co.

The opinion of the court was delivered by

Watkins, J.

This is a proceeding by rule on the part of the State 'Tax Collector of the Second District of the City of New Orleans, against the defendant, for the sum of twenty-one thousand dollars, as the aggregate amount of licenses due the State for the years 1892, 1893, 1894, 1895, 1896 and 1897, upon which interest and attorney’s fees are to be computed according to law.

It is alleged, that the defendant is conducting the business of refining sugar and molasses, and has been conducting said business during the various years aforesaid, without having obtained any license therefor from the State; and that the annual gross receipts of said defendant company is in excess of two million five hundred thousand dollars.

It is further alleged that all persons who conduct any business without obtaining a license from the State before the first day of March, are declared delinquents, and become liable to interest and penalties; and that the defendant having been a delinquent in each of the afore■said years, is liable for said licenses, interest and attorney’s fees.

To the rule taken, the respondent excepted, that the tax eollctor had -no authority to thus proceed, it never having been placed on the list *564of delinquent license payers, which the law requires him to furnish.

Reserving the benefit of said exception, it makes the following answer, viz.:

That the business of refining- sugar and molasses is exempt from the payment of a license tax for the years specified, because its said business is and always has been that of refining sugar and molasses* and none other, and as such, it is and always- has been, one of those manufacturers enumerated in Article 207 of the Constitution, as entitled to exemption from license taxes, etc.”

Its further answer is, that Act 150 of 1890,. on the authority of which the license sought to be collected is demanded, violates the Constitution of the United States, and is void, in so far as it attempts to impose a license tax upon defendant company because the said act denies to it the equal protection of the laws of the State, inasmuch as-said act does not impose equally a license tax on all persons engaged in the business of refining sugar and molasses; but, on the contrary,, discriminates in favor of planters who refine their own sugar and molasses, and in favor of planters who granulate syrups for other planters during the rolling season.

That for the foregoing reasons, said act conflicts with, and is violative of the provisions of the fourteenth amendment of the Constitution of the United States, which prohibits any State from depriving a person of his property without due process of law, and from denying any person within its jurisdiction the equal protection of the-laws.

On the trial of the exception, same was overruled, and on the trial of the rule same was discharged; and from that judgment, plaintiff in rule prosecutes this appeal.

I.

The exception suggests, that it is a condition precedent to proceedings by rule to collect delinquent licenses as contemplated by Act 1501 of 1890, that the tax collector shall first enter the names of all delinquents upon the tax register; and shall, also, include the names of such delinquents in a list to be furnished to the attorney of the tax collector.

In our opinion, that supposition is not supported by the terms of the statute cited.

Instead of the entry upon a license register being a condition prece*565dent to a proceeding by rule, it clearly appears from section twenty of the act, that the tax collector is required to keep a license register of every person, with the trade, profession, etc., pursued, the class and graduation of the same, and the amount of the license applied for.

Instead of that provision having any relation to delinquent licenses, it plainly specified the purpose of the legislature to have been to require tax-collectors to prepare and keep a book in which they shall record the statements of all persons, “who may apply for licenses to pursue any trade, profession, vocation, or selling, etc.” Certainly it can have no application to those persons who, like defendant, made no application at all. Section twenty-two of the act has exclusive reference to collected and not delinquent licenses.

The exception was properly overruled.

II.

We will take the last proposition of the defendant first. The contention of counsel is, that Act 150 of 1890, exempts planters who refine their own sugar, from the payment of a license, and imposes a license upon persons who, like defendant, are exclusively engaged in refining sugars — thus depriving them of the equal protection of the laws, in violation of the fourteenth amendment of the Constitution of the United States. On the other hand, the contention of the tax collector’s attorney is, that the sugar planter who produces as well as refines his own sugar, belongs to a wholly different class from that to which the refiner who purchases manufactured sugar, and thereafter refines it and sells it upon the market, after same has been refined, belongs.

That the planter is the real manufacturer of sugar, and the refining process carried on by him is merely one of cleansing and purifying it, and better fitting same for market, and only incidentally connected with his occupation of manufacturer; whilst, on the other hand, the business of the defendant is exclusively that of refining sugar — an in•dependent business.

Consequently, there can be no discrimination imputed to the statute, in favor of one and against another of the same class.

That the act clearly specifies two distinct and different classes, one •of whom purchases, refines and sells sugar, and the other of whom *566manufactures and refines his own product — the two classes of persons being dissimilarly situated.

The exemption clause of the statute is couched in the following terms, viz.:

“Provided nothing herein shall be construed to apply to the business-of grinding meal, ginning cotton, or making sugar by any farmer or planter.”

Proviso to paragraph 1, of Act 150 of 1890 — under the heading of “manufacturers” — same being the general license law. .

The objection to the foregoing provision of the statute appears to-be, that it is special in its character, and such legislation was held by the Supreme Court not to come within the provisions of the fourteenth amendment.

They say: “The objection that the law of 1874 deprives the railroad companies of the equal protection of the laws, is even less tenable than the one considered. It seems to rest upon the theory that legislation which is special in character is necessarily within the constitutional inhibition; but nothing can be further from the fact. The greater part of all legislation is special, either in the subjects sought to be attained by it, or in the extent of its application.”

After analysing the statute, the court made the observation, viz.:

“Such legislation is not obnoxious to the last clause of the Four- . teenth Amendment if all persons subject to it are treated alike under similar circumstances and conditions in respect to both of the privileges conferred and the liabilities imposed’’

Missouri Railway Co. vs. Hackey, 127 U. S. 305.

The same rule of interpretation was announced in Santa Clara County vs. Railroad Company, 118 U. S. 394; Milling Company vs. Pennsylvania, 125 U. S. 187; Wurtes vs. Holland, 114 U. S. 606; Railroad Company vs. Richmond, 96 U. S. 321.

The statute in question exempts alike all planters and farmers who-are engaged in “making sugar,” and makes no mention of those persons who are engaged in the business of refining sugar and molasses.

A very clear case is thus stated by the Supreme Court in Pacific Express Company vs. Seebert, 142 U. S. 339, in which Mr. Justice-Lamar, speaking for the court, said:

“The legislation in question cannot be considered as invidiously discriminating against the express companies defined by it in favor of other companies or persons that may carry express matter on cer*567tam other conditions, or under different circumstances. There is an-essential difference between express companies defined by this act, and-railroad and steamboat companies, or other companies that own their own means of transportation.

“The vital question is this: Railroad companies pay taxes on their road-beds, rolling stock, and other tangible property, etc. * * *

“This distinction clearly places express companies defined by this act in a separate class from, companies owning their own means of transportation. They do not do business under the same conditions, or, under similar circumstances. In the nature of things, and irrespective of the definitive legislation in question, they belong tb different classes. There can be no objection, therefore, to the discrimination made as between express companies defined by this act, and other companies or persons incidentally doing a similar business by different means and methods, in the manner in which they are taxed.”

In our conception, that decision is exactly applicable to this case, and puts the constitutionality of the act in question beyond doubt.

We think the judge a quo correctly overruled the defendant’s exception and maintained the constitutionality of the statute.

II.

Is the defendant a manufacturer in the sense and within the meaning of Article 207 of the Constitution of 1879, and entitled to exemption ?

The language of that article is, “that there shall also be exempt from taxation and license * * * the capital and machinery and other property employed in the manufacture of textile fabrics, leather, shoes, harness, saddlery, hats, flour, machinery, agricultural implements, and furniture and other articles of wood, marble, or stone; soap, stationery, ink and paper, boat building and chocolate; provided, not less than five hands are employed in any one factory.”

By a constitutional amendment, that article was so altered as to add thereto, the following, viz.: “the manufacture of ice, fertilizers and chemicals.” Act 32 of 1886.

In Shreveport Gas, Electric Light and Power Company vs. Assessor, 47th Ann. 65, we had this constitutional amendment under consideration, and in the course of our opinion, we said:

“The words and terms of a constitutional article, like those of a law, *568are to be understood in their most usual signification; and, in order to ascertain the true meaning of a statute, the reason and spirit of it should be considered, and also, the cause which superinduced its enactment.

“This is the accepted canon of construction of statutes, and equally so of the Constitution.”

Accepting this as the proper view to be taken of the constitutional article and its amendment, the claim of the defendant to exemption from the payment of the licenses demanded, is wholly groundless for the very plain reason, that the manufacturer of sugar and molasses— if indee'd it be such — is not mentioned in either; and, as it is the universal rule that questions of tax exemption must be strictly construed, judgment must go against the claim of the defendant.

There is, however, a doubt in our minds as to whether the law authorizes the State to recover on rule, licenses for any year anterior to 1897.

We will, therefore, give judgment for the sum of thirty-five hundred dollars, with two per cent per month interest from the 1st of March, 1897, and ten per cent, attorney’s fees on said amount, and interest, and enter a non-suit as to the remainder of the plaintiff’s claim.

It is therefore ordered and decreed that the judgment discharging the plaintiff’s rule be avoided and reversed; and, it is further ordered and decreed, that the plaintiff do have and recover from the defendant, the sum of thirty-five hundred dollars, with two per cent interest per month thereon from the 1st day of March, 1897 — ten per cent attorney’s fees on said amount and interest.

It is further ordered, that a non-suit be entered on the balance of the claim, and that all costs of both courts be taxed against the defendant and appellee.

Nicholls, 0. J., absent.