City of Superior v. Allouez Bay Dock Co.

Tbe following opinion was filed May 15, 1911: WiNSLow, C. J. As indicatéd in tbe foregoing statement there are two fundamental questions in tbe case, viz.: (1) Was tbe tax in question a burden upon interstate commerce? and (2) Was tbe defendant’s property exempted from income taxation under tbe statutes of tbe state because it was railroad property ? 1. It must be admitted that tbe defendant’s income arose entirely from interstate commerce business. Tbe ore wbicb it bandied was all consigned from tbe Minnesota mines to lower lake ports and simply passed tbrougb tbe defendant’s docks in its transit, tbe defendant receiving a fixed charge for its part in facilitating tbe continuous interstate voyage, namely, tbe transferring of tbe ore from the land carrier to tbe water carrier. Is tbe levying of an income tax measured by tbe income so derived a burden upon interstate commerce ? Tbe question is not free from difficulty, but we think it must be answered in tbe negative. Income taxation is not taxation of property, but is more nearly akin to taxes levied upon privileges or occupations. Its amount may be measured by tbe receipts of a business, but it is not in any true sense a tax upon tbe business itself. Tbe subject is covered, as it seems to us, by tbe decisions of this court in the cases of United States G. Co. v. Oak Creek, 161 Wis. 211, 153 N. W. 241, and Northwestern Mut. L. Ins. Co. v. State, 163 Wis. 484, 155 N. W. 609, 158 N. W. 328, and the cases therein cited. 2. Sec. 1087™ — 5, Stats., provides for tbe exemption of certain incomes from income taxation; among wbicb are [81] named in sub. 3 of tbe section “Incomes derived from property and privileges by persons now required by law to pay taxes or license fees directly into tbe treasury of tbe state in lieu of taxes.5’ Eailroad companies are required by law to pay taxes directly into tbe state treasury, and tbe defendant claims and tbe trial court beld that it was to be considered a railroad company for tbe purposes of taxation and bence not subject to income taxation. We can see no escape from tbe argument. Tbe law governing tbe taxation of public utilities pro* vides (sub. (2), sec. 51.02, Stats.) that “Any person . . . or corporation owning and operating a railroad, ... or owning or operating any station, depot, track, terminal, or bridge, in tbis state, for railroad purposes . . . shall be deemed a railroad company.” Tbe ore dock under consideration here was unquestionably a terminal witbin the meaning of that section. Minneapolis, St. P. & S. S. M. R. Co. v. Douglas Co. 159 Wis. 408, 150 N. W. 422. It was used exclusively as a railroad terminal and bence should have been assessed and taxed as a railroad. It is said that it cannot be so taxed because tbe defendant corporation was not a railroad corporation, but a corporation organized for dock and warehousing purposes, and bence that it would be violating tbe law if it attempted to do a railroad business. Tbe argument is fallacious. When a railroad operates a terminal itself, or when a terminal is owned by a third person or corporation and operated solely as a terminal for tbe railroad, it’ is as truly a part of tbe railroad as its trains, and its business as truly a part of tbe railroad business as tbe operation of tbe trains. ISTo reason is perceived why, for tbe purposes of taxation, such property should not be classified as railroad property and subjected to tbe same methods of taxation. A warehousing or dock company which operates such a terminal does not thereby violate its charter or commit any act ultra viresj it does tbe business which its [82] charter authorizes it to do, but the state, perceiving that this business is, under such circumstances, simply a branch of the railroad business, directs that it be taxed in the same class with railroad companies. This was the conclusion of the trial court, and must be approved. The court limited the costs to the sum of $25 and disbursements under that clause of the statutes which provides that in actions at law on contract the costs, exclusive of disbursements, shall not exceed $25. The defendant appeals from this ruling on the ground that an action to recover unpaid taxes is not an action upon contract, or, in other words, that an unpaid tax is not a debt or a contract. This abstract proposition may be conceded, but we do not regard it as controlling. Our statute which authorizes the bringing of the action provides that it shall be “an action of debt.” Sec. 1107a, Stats. An action of debt at common law arose only to enforce contract rights. The legislative intention that any recovery in such an action should be a recovery as upon contract seems plain, and there seems no reason why effect should not be given to that intention. By the Oourt. — The judgment and order appealed from are affirmed, the defendant to recover one bill of costs. XeRwin and Viwje, JJ., dissent. A motion for a rehearing was denied, with $25 costs, on June 28, 1917.