Western Union Tel. Co. v. Indiana
165 U.S. 304 (1897)

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U.S. Supreme Court

Western Union Tel. Co. v. Indiana, 165 U.S. 304 (1897)

Western Union Telegraph Company v. Indiana

No. 649

Submitted December 11, 1896

Decided February 1, 1897

165 U.S. 304

Syllabus

The provision in § 11 of the Act of March 6, 1893, c. 171, of the Legislature of Indiana that, on the failure or refusal of a telegraph company

"to pay any tax assessed against it in any county or township in the state, in addition to other remedies provided by law for the collection of taxes, an action may be prosecuted in the name of the State of Indiana by the prosecuting attorneys of the different judicial circuits of the state, . . . and the judgment in said action shall include a penalty of fifty percent of the amount of taxes so assessed and unpaid,"

does not, as to the penalty clause, contravene the Constitution of the United States, and the question whether in this case that penalty was properly included in the judgment rendered against the telegraph company was for the determination of the state courts.

In enforcing the collection of taxes, one rule may be adopted in respect of the admitted use of one kind of property and another rule in respect of the admitted use of another, in order that all may be compelled to contribute their proper share to the burdens of government.

The amount of penalty to be enforced for nonpayment of taxes is a matter within legislative discretion.

Under an Act of the General Assembly of Indiana of March 6, 1891, in respect of the assessment and collection of taxes upon all property within the jurisdiction of the state, it was provided that payment of the taxes in the year succeeding their assessment might be made in two installments, and a penalty of ten percent was denounced for the first six months of delinquency and of an additional six percent for the second six months.

On March 6, 1893, an amendatory act was passed providing for the taxation of telegraph, telephone, palace car, sleeping car, drawing room car, dining car, express, fast-freight, and joint-stock associations, companies, co-partnerships, and corporations transacting business in the state, of which section 11 was as follows:

Page 165 U. S. 305

"In case any such association, co-partnership, or corporation as named in this supplemental and amendatory act shall fail or refuse to pay any taxes assessed against it in any county or township in the state, in addition to other remedies provided by law for the collection of taxes, an action may be prosecuted in the name of the State of Indiana by the prosecuting attorneys of the different judicial circuits of the state on the relation of the auditors of the different counties of this state, and the judgment in said action shall include a penalty of fifty percent of the amount of taxes so assessed and unpaid, together with reasonable attorney's fees for the prosecution of such action, which action may be prosecuted in any county into, through, over or across which the line or route of any such association, co-partnership, company or corporation shall extend, or in any county where such association, company, co-partnership, or corporation shall have an office or agent for the transaction of business. In case such association, company, co-partnership, or corporation shall have refused to pay the whole of the taxes assessed against the same by said state board of tax commissioners, or in case such association, company, co-partnership, or corporation shall have refused to pay the taxes or any portion thereof assessed to it in any particular county or counties, township, or townships, such action may include the whole or any portion of the taxes so unpaid in any county or counties, township, or townships, but the Attorney General may, at his option, unite in one action the entire amount of the tax due, or may bring separate actions in each separate county or township, or join counties and townships, as he may prefer. All collection of taxes for or on account of any particular county made in any such suit or suits shall be by said auditor of state, accounted for as a credit to the respective counties for or on account of which such collections were made by said auditor of state at the next ensuing settlement with such county, but the penalty so collected shall be credited to the general fund of the state, and upon such settlement's being made, the treasurers of the several counties shall, at their next settlements, enter credits upon the proper duplicates in their offices, and at the next settlement with such county, report the

Page 165 U. S. 306

amount so received by him in his settlement with the state, and proper entries shall be made with reference thereto, provided however that in any such action, the amount of the assessment fixed by said state board of tax commissioners and apportioned to such county, or apportioned by the county auditor to any particular township, shall not be controverted."

In December, 1893, the Western Union Telegraph Company brought suit against the auditors and treasurers of the various counties in the State of Indiana through or in which its lines extended to enjoin the collection of the taxes assessed for the year 1893 on the ground that the act of 1893 was unconstitutional. This cause was decided in favor of the validity of the law in the Circuit Court of Marion County, from which an appeal was taken to the Supreme Court of Indiana, where the judgment was affirmed. 141 Ind. 281. A writ of error was sued out from this Court to the Supreme Court of Indiana to review that decision, and the judgment of that court was affirmed. 163 U. S. 163 U.S. 1.

In August, 1894, the telegraph company filed a bill in the Circuit Court of the United States for the District of Indiana against the Auditor of the State of Indiana to enjoin him from certifying to the auditors of the various counties the assessments on its property made by the state board of tax commissioners for the year 1894, on the ground of the unconstitutionality of the act of 1893. A demurrer was sustained to the bill, and it was thereupon dismissed. 68 F. 588. From this decree of the circuit court, an appeal was taken to this Court, and the cause docketed February 17, 1896, which appeal was dismissed by appellant December 7, 1896.

On May 7, 1894, the State of Indiana brought suit against the company in the Circuit Court of Marion County to recover the taxes for 1893, and subsequently, on June 11, 1895, filed a supplemental complaint therein, seeking judgment for the delinquent taxes for the year 1894. The state recovered judgment for the amount of the taxes and penalties thereon for the years named, including the penalty of fifty percent, and the telegraph company appealed to the supreme court of the state, where the judgment was affirmed. 44 N.E.

Page 165 U. S. 307

793. The cause was then brought to this Court on writ of error.

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