Interstate Busses Corp. v. Blodgett, 276 U.S. 245 (1928)

Case details
Citation
276 U.S. 245
Full caption
INTERSTATE BUSSES CORPORATION v. BLODGETT et al .
Country
United States
Jurisdiction
Federal
Court
Supreme Court of the United States
Decided
Feb. 20, 1928
Majority
Stone (Justice)
INTERSTATE BUSSES CORPORATION v. BLODGETT et al .
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF CONNECTICUT.
No. 197. Argued January 19, 20, 1928.—Decided February 20, 1928.
1. Where an application for an interlocutory injunction under Jud. Code, § 266, has been denied by a court of three judges and the bill is dismissed by that court on final hearing, the case is reviewable by direct appeal to this court. P. 249.
2. A state tax of one cent for each mile of highway traversed in the State by any motor bus used in interstate commerce, the proceeds of which are devoted to maintenance of public highways of the State, is not repugnant to the Commerce Clause of the Constitution, when not unreasonable in amount or discriminatory against interstate commerce. P. 249.
3. Such a charge, when reasonable in itself, is not to be deemed unreasonable because other taxes are imposed by the State on the same taxpayer for the use of its highways, if he fails to show that the aggregate charge is unreasonable. P. 251.
4. In addition to other taxes common to both classes, the owners of motor buses operated in interstate commerce pay in Connecticut, a tax of one cent for each mile of state highway traversed by each vehicle, but the owners of such vehicles engaged in intrastate commerce pay instead a tax on their gross receipts, the proceeds of both taxes being devoted to maintenance of highways. Held that a party complaining of the mileage tax does not establish discrimination against interstate commerce by the mere difference of the
Argument for Appellant. 276U.S.
taxes, but must prove that in actual practice the tax complained of falls with disproportionate economic weight upon him. P. 251. 5. Where relief from a state tax is sought upon the ground that it is unconstitutional, and it is held valid, it may be assumed that the complaining party will pay it, and the constitutional validity of the consequences imposed by the statute in case of non-payment need not be considered. P. 252. 19 F. (2d) 256, affirmed.
Appeal from a final decree of the District Court of three judges dismissing a bill to restrain tax officials of Connecticut from levying a tax on the appellant based on its use of the state highways for interstate transportation of passengers in motor buses.
Mr. Edward H. Kelly for appellant.
Interstate transportation by motor vehicle is singled out for the imposition of a tax of one cent a mile. On that ground alone, the statute must be held to be unconstitutional. Guy v. Baltimore, 100 U. S. 434; Brimmer v. Rebman, 138 U. S. 78; Voight v. Wright, 141 U. S. 62; Minnesota v. Barber, 136 U. S. 320; American Steel & Wire Co. v. Speed, 192 U. S. 90; Darnell v. Memphis, 208 U. S. 113.
The provision of Part II of Chapter 254 of the Laws of 1925, directing suspension of registration of a vehicle whose owner is subject to the provisions of Part II, also effects a discrimination against interstate operators by reason of the different remedies imposed for the collection of the tax. Chalker v. Birmingham, 249 U. S. 526.
The provision for suspension of registration is invalid for the reason that it is not permissible for the mere collection of a tax, to obstruct, embarrass or impede interstate commerce. Western Union v. Massachusetts, 125 U. S. 530; St. Louis & Southwestern R. R. n . Arkansas, 235 U. S. 350; Postal Telegraph Co. n . Adams, 155 U. S. 688; Leloup v. Mobile, 127 U. S. 640; Western Union v.
A State has no right to demand the waiver of any right or immunity guaranteed by the Constitution as a condition of itself granting a privilege, immunity or license. Frost v. California, 271 U. S. 583; Western Union n . Kansas, 216 U. S. 1.
In granting federal aid to the States in the construction of highways, Congress meant that such highways shall be open to interstate commerce. Bush & Sons v. Maloy, 267 U. S. 317. Hendrick n . Maryland, 235 U. S. 610; and Kane v. New Jersey, 242 U. S. 160, distinguished.
Messrs. Benjamin W. Alling and >8. Frederick Wetzler were on the brief for appellees.
The tax is a charge for the privilege of using the roads of the State; and when imposed upon those using the roads in interstate commerce, does not thereby offend the Commerce Clause. Clark v. Poor, 274 U. S. 554; Kane v. New Jersey, 242 U. S. 160; Hendrick v. Maryland, 235 U. S. 610.
The Connecticut registration statute, when read in its entirety, is, in its essence, a police measure; but since there is included the imposition of fees and charges, creating a money yield, which is contemplated as exceeding the cost of administration of the law, it partakes to that limited and incidental extent of a revenue measure. There is neither duplication nor superimposition of taxes. Opinion of the Justices, 250 Mass. 591.
The appellant has not sustained the burden of proving in this case the essential fact that the enforcement of the act actually operates to prejudice interstate commerce. Hendrick v. Maryland, supra; Interstate Busses Corp’n n . Holyoke St. Ry. Co., 273 U. S. 45.
Argument for Appellees. 276U.S.
The purpose of such legislation, now nation-wide, is to charge for the use and get reimbursement for damage, and the policy is to classify vehicles, and vary the tax, in accordance with the extent of such use and damage. Kane v. New Jersey, 81 N. J. L. 594; Camas Stage Co. v. Kozer, 104 Ore. 600; Ex parte Schuler, 167 Calif. 282; Re Hoffert, 34 S. D. 271; State v. Kozer, 242 Pac. 621; Dohs v. Holm, 152 Minn. 529; Westfalls etc. Co. v. Chicago, 280 Ill. 318; Opinion of the Justices, 250 Mass. 591; Fisher Bros. v. Brown, 111 Ohio St. 602; Raymond N. Holm, 206 N. W. 166; Jasnowski v. Dilworth, 191 Mich. 287.
The State may adjust its scheme of taxation to the possibilities of greater or lesser use; and may, though it is not obliged to, reduce the tax on the lesser use. Kane v. New Jersey, 242 U. S. 160.
The statute does not create an unconstitutional discrimination against interstate commerce, because of the difference in remedies for collection of the tax. Hess n . Pawloski, 274 U. S. 352; Kane v. New Jersey, supra.
There is no violation of the Commerce Clause on the ground that non-payment of the tax may result in suspension of registration of motor vehicles engaged in interstate commerce. Kane v. New Jersey, supra; Hendrick v. Maryland, supra.
Even though the suspension of registration provision of § 3, Part II, be regarded as violating the Commerce Clause, the rest of the statute is, nevertheless, unaffected. Dorchy v. Kansas, 264 U. S. 286.
The Connecticut statute is not invalidated as a violation of the Commerce Clause, because of the Federal Post Road and Highway Acts.
These laws do not take away from the State either its duty or its rights regarding the care and preservation of the highways. Morris v. Duby, 274 U. S. 135.
Mr . Justi ce Stone delivered the opinion of the Court.
The appellant, complainant below, is a Connecticut corporation engaged in the transportation of passengers in motor buses, exclusively in interstate commerce, between Connecticut and points in Massachusetts and Rhode Island. The present suit was brought in the district court for Connecticut to restrain appellees, tax officials of the state, from levying a tax on appellant under a Connecticut statute, Conn. Pub. Acts 1925, c. 254, on the ground that the tax is an unconstitutional burden on interstate commerce. Application to a court of three judges for an interlocutory injunction under Jud. Code § 266 was denied, 19 Fed. (2d) 256, and on final hearing the court dismissed the bill on the merits. The application for the preliminary injunction having been pressed to a determination before the court of three judges, the case is properly here on direct appeal from the final decree of that court. Jud. Code §§ 238, 266; Smith v. Wilson, 273 U. S. 388; Clark v. Poor, 274 U. S. 554.
The appellant has already complied with the general statutes of Connecticut requiring the registration of motor vehicles. Part II § 1 of the act in question imposes a tax of one cent for each mile of highway traversed by any motor vehicle used in interstate commerce “ as an excise on the use of such highway.” By Part II § 4 the proceeds of the tax are to be applied to the maintenance of public highways in the state.
Appellant objects to the tax as an infringement of the paramount power of Congress to regulate interstate commerce or at least as a discrimination against that commerce. It is not denied that a state may impose a registration or license fee on those using motor vehicles in the state, although engaged in interstate commerce, or that the state may impose a reasonable charge for the use of p. 250its highways by motor vehicles so employed, Hendrick n . Maryland, 235 U. S. 610; Kane v. New Jersey, 242 U. S. 160; Clark v. Poor, supra, and there is no evidence that the tax here is in itself an unreasonable charge for the privilege. But it is said that the particular scheme of taxation adopted by Connecticut imposes this tax in addition to statutory charges already made for the use of the highways in interstate commerce, and both in purpose and in effect discriminates against appellant and in favor of those operating motor vehicles in intrastate commerce.
The state has adopted a system of financing its highway construction and maintenance under which about 80% of the cost is collected from fees for the registration of motor vehicles and for operators’ licenses, from taxes on the sale of gasoline and from fines and penalties for violations of the motor vehicle laws. The balance of the cost is paid from general appropriations by the state legislature and a certain amount received under federal aid legislation. Appellant, it is conceded, pays certain taxes imposed alike on those engaged in intrastate and interstate commerce. These include a personal property tax upon its motor cars used in the state, a registration or license fee for each vehicle so used, and also, it is urged, a tax of two cents a gallon on the sale of gasoline within the state which in practice is absorbed by the consumer in the purchase price.
But no mileage tax like that imposed by Part II § 1 is levied upon those using motor vehicles in intrastate commerce. Instead, Part I, § § 2 and 3 of the act under discussion subject all companies engaged in intrastate motor bus transportation to an excise of 3% of their gross receipts less such taxes as they have paid locally on their “ real and tangible personal estate.” By Part I § 6 this excise is declared to be in lieu of all taxes on intangible personal property. Moreover, those who pay it are exempt p. 251from the income tax of 2% imposed generally on corporations, including, apparently, the appellant. Conn. Gen. Stat., c. 73, as amended. It, like the mileage tax, is devoted to the maintenance of highways.
To show that the mileage tax is discriminatory appellant first points out the obvious differences between it and the gross receipts tax and, secondly, relies on an uncontradicted allegation in the bill of complaint that, apart from the mileage tax, it already contributes to the maintenance of the highways of the state in the same manner and to the same extent as others in the payment of the personal property tax, the license tax on buses and the shifted gasoline tax.
The two statutes are complementary in the sense that while both levy a tax on those engaged in carrying passengers for hire over state highways in motor vehicles, to be expended for highway maintenance, one affects only interstate and the other only intrastate commerce. Appellant plainly does not establish discrimination by showing merely that the two statutes are different in form or adopt a different measure or method of assessment, or that it is subject to three kinds of taxes while intrastate carriers are subject only to two or to one. We cannot say from a mere inspection of the statutes that the mileage tax is a substantially greater burden on appellant’s interstate business than is its correlative, the gross receipts tax, on comparable intrastate businesses. To gain the relief for which it prays appellant is under the necessity of showing that in actual practice the tax of which it complains falls with disproportionate economic weight on it. General Tank Car Corp. v. Day, 270 U. S. 367; Hendrick v. Maryland, supra; Interstate Busses Corp. n . Holyoke Street Ry., 273 U. S. 45, 51. The record does not show that it made any attempt to do so.
That appellant is already contributing to highway maintenance is not in itself significant, for the state does
Syllabus. 276 U.S.
not exceed its constitutional power by imposing more than one form of tax as a charge for the use of its highways in interstate commerce. It is for appellant to show that the aggregate charge bears ho reasonable relation to the privilege granted.
It is further objected that the provision of the state statute, Part II § 3, authorizing the suspension of registration as a remedy for the nonpayment of the mileage tax, is invalid in any case, since payment of even a lawful tax may not be enforced by the exclusion of the taxpayer from interstate commerce. Western Union Telegraph Co. v. Massachusetts, 125 U. S. 530; St. Lduis & Southwestern R. R. v. Arkansas, 235 U. S. 350. And it is not denied that appellees have threatened to invoke § 3 against appellant. But we need not consider here whether the principle relied on goes so far as to prevent a state from excluding from its highways a motor carrier which refuses to pay a charge for their use. Compare Hendrick v. Maryland, supra; Kane n . New Jersey, supra; Clark v. Poor, supra. Here the relief sought presupposes that the tax is unconstitutional. That point being determined against appellant we shall not assume that it will persist in its refusal to pay the tax.
Objections of less moment, which we have considered, do not require comment.
Affirmed.
WESTERN UNION TELEGRAPH COMPANY v. PRIESTER.
CERTIORARI TO THE COURT OF APPEALS AND THE SUPREME COURT OF ALABAMA
Nos. 183 and 189. Argued January 17, 1928.—Decided February 20, 1928.
1. Where the supreme court of a State, in denying a petition for certiorari to an intermediate appellate court, on the face of the record did not pass upon the merits, the writ of certiorari from this court is properly directed to the intermediate court. P. 258.
2. A provision in the tariff filed by a telegraph company pursuant to the Interstate Commerce Act as amended June 15, 1910, fixing a lower rate for an unrepeated message and limiting the liability of the company for mistake in its transmission to the amount received for sending it, represents the entire liability of the company for a mistake of that kind. The liability being statutory, can not be enlarged by the courts upon the ground that the mistake was due to ‘'gross ” negligence. P. 258. 21 Ala. App. 587, reversed.
Certiorari , 274 U. S. 727, to a judgment of the Court of Appeals of the State of Alabama affirming a recovery in an action against the Telegraph Company for damages resulting from a mistake in the transmission of a telegram. The Supreme Court of the State had declined to review the judgment of the court below, 215 Ala. 435. For earlier proceedings in the same case, see 18 Ala. App. 531; 20 Id. 388; 212 Ala. 271.
Mr. Francis R. Stark, with whom Mr. Ray Rushton was on the brief, for petitioner.
There has been no independent expression of opinion by this Court in the case of Primrose n . Western Union, 154 U. S. 1, or in any other case, to the effect that there was any magic in the term “ gross ” negligence that would invalidate the message contract.
This Court has consistently refused to recognize that there was any legal distinction between the different degrees of negligence, and has apparently inclined to, if not definitely adopted, the view that gross negligence is nothing but negligence with the addition of a vituperative epithet. The degree of negligence is immaterial since the Act of 1910. Western Union n . Esteve Bros., 256 U. S. 566.
This case involves a simple error in an unrepeated message, and the applicable clause of the published tariffs is that which limited the company’s liability to the amount received for sending the message. Western Union v Czizek, 264 U. S. 281.
There was no evidence that the negligence was “ gross,” as distinguished from simple, if that question were at all material.
If it is said that the mere error in transmission makes a prima facie case of simple negligence, that may be granted; but it is not gross negligence unless all negligence is gross, and unless this Court erred in its carefully considered opinion in Postal Telegraph Co. v. Warren Godwin Lumber Co., 251 U. S. 27, and in its reversal, per curiam, of Western Union n . Southwick, 255 U. S. 565.
If the degree of negligence were at all material, it was fatal error to charge the jury that they might find the defendant liable if it failed to “ Bestow the care and skill which the situation demanded ”—i. e., if the defendant was guilty of nothing more than simple negligence.
In any event, the plaintiff could not possibly have been entitled to more than $50, the amount at which the message was valued. Western Union v. Czizek, 264 U. S. 281.
Mr. D. M. Powell for respondent.
The rules of the telegraph company relieving it from liability beyond the cost of sending the unrepeated message do not apply where the company is guilty of wilful wrong or gross negligence. Primrose v. Western Union, 154 U. S. 1; Western Union v. Esteve Bros., 256 U. S. 569; Milwaukee R. R. Co. v. Arms, 91 U. S. 495; Preston v. Prather, 137 U. S. 608.
Gross negligence was not defined in the Primrose case, but we assume the Court must have had in mind the definition given in the Arms and Preston cases, supra. Be that as it may, the doctrine of gross negligence has been applied by both state and federal courts to cases where the facts were similar to the facts in this case. Ex parte Priester, 212 Ala. 273; Strong v. Western Union, 18 Idaho 389; Postal Telegraph Co. v. Nichols, 159 Fed. 647; White v. Western Union, 14 Fed. 710; Redington v.
Pacific Postal Telegraph Co., 107 Calif. 317; 26 R. C. L., 552, 605.
The different rates, rules and regulations for sending messages as prescribed by the company were filed with the Interstate Commerce Commission and became effective with the federal statutes. Western Union v. Esteve Bros., 256 U. S. 569.
They were previously held to be reasonable by this Court in the case of Primrose N. Western Union, 154 U. S. 1, in the absence of wilful misconduct or gross negligence. The law declared in the Primrose case, is quoted with approval in Western Union v. Esteve Bros., supra. A fair interpretation of this decision, as well as the other decisions of the federal courts relied on by respondent, leads to the conclusion that the classification of rates and the limitations upon the telegraph company’s liability which were filed with the Interstate Commerce Commission, were accepted by the Commission subject to the interpretation placed upon them in the Primrose case. Being so received, these rates and rules and regulations measured the liability of the telegraph company in all cases where there was an absence of willful misconduct or gross negligence, as declared in the Primrose case.
The mere filing of the rates with the Interstate Commerce Commission did not give them any greater force than they had at the time of such filing and did not destroy the judicial interpretation placed upon them by this Court.
Statutes in derogation of the common law are to be strictly construed. 25 R. C. L., 1056. The judicial construction of the regulation in the Primrose case was embodied in and became a part of the statute enacted June 18, 1910.
In Western Union v. Czizek, 286 Fed. 478, the United States Circuit Court of Appeals held the telegraph com-
Opinion of the Court, 276_U. S.
pany under the facts was guilty of gross negligence. This Court held under the facts that it was not guilty of gross negligence and was therefore protected by the rules and regulations. No other question was decided. This case is not in point. The other expressions in the opinion relied on by petitioner were dicta.
From the very language of the statute, where the rules and regulations are unreasonable, they are, of course, not binding.
Mr . Justice Stone delivered the opinion of the Court.
Respondent delivered to petitioner a message for transmission over its telegraph lines from a point in Alabama to a point in Louisiana by which respondent offered to sell to the addressee a quantity of pecans at fifty cents per pound. In the message as transmitted the word “ fifteen ” was substituted for the word “ fifty.” Respondent, who in consequence of the error suffered damage in the sum of $352.10, brought suit in the Circuit Court of Butler County, Alabama, to recover for petitioner’s negligence in failing to transmit the message as given. The company pleaded that (a) as the message was not a repeated message its liability was limited to the amount received for sending it, by the terms of the tariffs and classifications filed with the Interstate Commerce Commission under Act of June 18, 1910, c. 309, 36 Stat. 539 § 1, and (b) as the message was not sent as a specially valued message the liability of the company was limited to $50 by the filed tariffs and classifications. Relevant parts of the tariff are printed in the margin.1
1
“ALL MESSAGES TAKEN BY THIS COMPANY ARE SUBJECT TO THE FOLLOWING TERMS. “ To guard against mistakes or delays, the sender of a message should order it repeated, that is telegraphed back to the originating office for comparison. For this one-half the unrepeated message- rate arising from unavoidable interruption in the working of its lines; nor for errors in cipher or obscure messages. “2. In any event the Company shall not be liable for damages for any mistakes or delays in the transmission or delivery, or for non-delivery of this message, whether caused by the negligence of its servants or otherwise, beyond the sum of Fifty Dollars, at which amount this message is hereby valued, unless a greater value is stated in writing hereon at the time the message is offered to the Company for transmission, and an additional sum paid or agreed to be paid based on such value equal to one-tenth of one per cent, thereof.” 318°—28------ 17
These defenses were overruled and judgment given for the plaintiff, the respondent here, which was reversed by the state Court of Appeals, 18 Ala. App. 531, on the authority of Western Union Telegraph Co. v. Esteve Bros. & Co., 256 U. S. 566. Upon an amended complaint charging gross negligence a trial was had resulting in a verdict and judgment for the plaintiff for nominal damages, which was affirmed by the Court of Appeals on the ground that the evidence did not establish gross negligence and that the trial court had rightly withdrawn that question from the jury. 20 Ala. App. 388. The Supreme Court of Alabama reversed the judgment of the Court of Appeals, ruling that although the filed tariff was a bar to the recovery of damages resulting from negligence, as decided in the Esteve case, it did not preclude a recovery for gross negligence and that on the evidence the jury should have been allowed to say whether the negli-
is charged in addition. Unless otherwise indicated on its face, THIS IS AN UNREPEATED MESSAGE AND PAID FOR AS SUCH, in consideration whereof it is agreed between the sender of the message and the Company as follows:
“ 1. The Company shall not be liable for mistakes or delays in the transmission or delivery, or for non-delivery, of an unrepeated message, beyond the amount received for sending the same; nor for mistakes or delays in the transmission or delivery, or for non-delivery, of any repeated message beyond fifty times the sum received for sending the same, unless specially valued; nor in any case for delays p. 258gence of the defendant was gross. Ex parte Priester, 212 Ala. 271. On a retrial, judgment was again given for the plaintiff for the full amount demanded. This was affirmed by the Court of Appeals which, following the previous opinion of the state Supreme Court, held that the tariff was not a defense to an action for damages resulting from gross negligence. 21 Ala. App. 587. The state Supreme Court denied certiorari, 215 Ala. 435. This Court granted certiorari. Jud. Code, 237 (b) ; 274 U. S. 727.
Through abundance of caution petitioner filed separate petitions here, which were granted, asking that wTrits of certiorari be directed respectively to the Court of Appeals and to the Supreme Court. But as the Supreme Court of Alabama, by denying the petition for certiorari, on the face of the record did not pass on the merits, the writ of this Court in number 183 was properly directed to the Court of Appeals, and that in number 189 is dismissed. Norfolk Turnpike, Co. v. Virginia, 225 U. S. 264, 269; JFesiem Union Telegraph Co. v. Crovo, 220 U. S. 364; compare Matthews v. Huwe, 269 U. S. 262.
In Primrose n . Western Union Telegraph Co., 154 U. S. 1, relied upon by the Supreme Court of Alabama in the earlier appeal as supporting its distinction between ordinary negligence and gross negligence, a contract between the telegraph company and its patron, limiting the liability of the company if the message was not repeated, was upheld as a defense to an action seeking recovery for the negligent transmission of the message. Although it is suggested in the opinion (pp. 17-19) that as a matter of public policy the company would not have been permitted to stipulate away its liability for gross negligence, the distinction was neither involved in the case nor applied by the Court, nor has it been so applied. See Philadelphia & Reading R. R. v. Derby, 14 How. 468, 485, 486;
Since the decision in the Primrose case the telegraph companies have been brought under the provisions of the Interstate Commerce Act and their tariffs for all interstate service made subject to the approval of the Interstate Commerce Commission. Interstate Commerce Act § 1, as amended by Act of June 18, 1910, c. 309, § 7, 36 Stat.
539. By § 1 of the Interstate Commerce Act it is provided that subject to the approval of the Commission messages received by telegraph companies for transmission may be classified into “ repeated, unrepeated . . . and such other classes as are just and reasonable, and different rates may be charged for the different classes of messages.” The established rates for unrepeated messages thus became the lawful rates and the attendant limitation of liability became the lawful condition upon which messages might be sent. Unrepeated Message Case, 44 I. C. C. 670; Western Union Telegraph Co. v. Esteve Bros. & Co., supra, 571; Postal Telegraph-Cable Co. v. Warren-Godwin Co., 251 U. S. 27; Western Union Telegraph Co. n . Boegli, 251 U. S. 315; Western Union Telegraph Co. N. Czizek, 264 U. S. 281. What had previously been a matter of common law liability, with such contractual restrictions as the states might permit, then became the subject of federal legislation to secure reasonable and just rates for all without undue preference or advantage to any. Since that end is attainable only by adherence to the approved rate, based upon an authorized classification, that rate “represents the whole duty and the whole liability of the company.” Western Union Telegraph Co. n . Esteve Bros. & Co., supra. Such being the basis of liability, we do not perceive any adequate ground upon which it may be enlarged merely by the application of a “ vituperative epithet ” to the admitted p. 260fault of the petitioner. Milwaukee & St. Paul Ry. v. Arms, supra, 494. For if it be assumed that we can weigh and measure degrees of negligence and that a public service company may not by contract alone limit its liability for gross negligence, so-called, nevertheless we may not disregard a lawful exercise of the regulatory power which has made no distinction between degrees of negligence, nor may we, upon any theory of public policy, annex to the rate as made conditions affecting its uniformity and equality.
The message here was unrepeated and the loss resulted from a mistake in transmission. The case thus comes within the express provision of clause 1 of the tariff, limiting the liability to the amount received for the service.
The cause will be reversed and remanded for further proceedings not inconsistent with this opinion.
Reversed.
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