Opinion
No. 38965.
October 9, 1944.
TAXATION: Constitutional Law: Unemployment Compensation: Steamboat Company Subject to Unemployment Compensation Tax. The provisions of Art. I, Sec. 1, Missouri Constitution, that the Mississippi River and other navigable rivers shall be common highways without tax, duty, impost or toll were intended to preserve the rivers as highways equally open to all persons, and unobstructed by duties or tolls, and do not prevent the levy of an unemployment compensation tax which is imposed uniformly on employers throughout the state.
Appeal from Cole Circuit Court. — Hon. Edward T. Eversole, Special Judge.
REVERSED AND REMANDED ( with directions).
Edward D. Summers, Acting Chief Counsel, for appellants; George A. Rozier of counsel.
(1) The Supreme Court has jurisdiction of this cause, because the Members of the Unemployment Compensation Commission are parties hereto in their official capacities as state officers. Murphy v. Hurlbut Undertaking Embalming Co., 346 Mo. 405, 142 S.W.2d 449; Trianon Hotel Co. v. Keitel, 169 S.W.2d 891. (2) The Unemployment Compensation Law requires each employer as defined therein to pay taxes or contributions based upon the amount of wages paid with respect to "employment" as defined in the law. Sec. 9427, R.S. 1939. (3) The services of the employees of respondent, performed on board its boats, the Admiral and the Senator, constitute "employment" as defined in the Missouri Unemployment Compensation Law. Sec. 9423 (i) (1) (4), Laws 1941, l.c. 579; Kellogg v. Unemployment Comp. Comm., 349 Mo. 1165, 164 S.W.2d 285; Krisman v. Murphy, 171 S.W.2d 575. (4) Section 1, Article I, of the State Constitution does not prohibit the Legislature from including respondent's marine workers within the Unemployment Compensation Law. Sec. 1, Art. I, Const. of Mo.; Ordinance of the Government of the Northwest Territory, Art. IV, U.S.C.A. Const., Part 1, p. 23; Huse v. Glover, 119 U.S. 543, 30 L.Ed. 487, 7 S.Ct. 313; Williamette Iron Bridge Co. v. Hatch, 125 U.S. 1, 8 S.Ct. 811, 31 L.Ed. 629; Cardwell v. American Bridge Co., 113 U.S. 205; 5 S.Ct. 423, 28 Law Ed. 959; In re Los Angeles Products Co., 45 F. Supp. 77; Henneford v. Silas Mason Co., 300 U.S. 577, 57 S.Ct. 524, 81 L.Ed. 814; People v. Setunsky, 161 Mich. 624, 126 N.W. 844. (5) All statutes are presumed to be constitutional, and any doubts are to be resolved in favor of the constitutional validity of a statute. Graves v. Purcell, 337 Mo. 574, 85 S.W.2d 543. (6) The Unemployment Compensation Law, as applied to respondent, does not contravene the interstate commerce clause of the United States Constitution. Butter Brothers Shoe Co. v. United States Rubber Co., 156 F. 1; Welton v. State of Missouri, 91 U.S. 275, 23 L.Ed. 347, 28 U.S.C.A. 1606 (a); Pennsylvania v. Perkins, 342 Pa. 529, 21 A.2d 45; Perkins v. Pennsylvania, 314 U.S. 586, 62 S.Ct. 484, 86 L.Ed. 473; In the Matter of the Claim of Mike Cassaretakis, Freda S. Miller as Industrial Commissioner of the State of New York, app., Standard Dredging Corp., resp., 289 N.Y. 119, 44 N.E.2d 391; Standard Dredging Corp. v. Murphy; International Elevator Co. v. Murphy, 319 U.S. 306, 63 S.Ct. 1067, 87 L.Ed. Adv. Op. 1017; 26 U.S.C.A. 1606 (a).
William G. Marbury for respondent.
(1) The exaction of the Missouri Unemployment Compensation tax from respondent because of the employment of persons constituting the crews of respondent's steamboats, which crews are engaged in the operation and navigation of said steamboats on the Mississippi River would be repugnant to Article I, Section I, Constitution of Missouri. Ordinance of the Government of the Northwest Territory, Article IV, U.S.C.A., Constitution Part I, p. 23; Act of Admission of Missouri, Sec. II, R.S. 1939, Vol. I, p. 54-c; Art. I, Sec. I, Const. of Mo., R.S. 1939, Vol. I, p. 60c; Unemployment Comp. Comm. of Missouri v. Menke, 165 S.W.2d 653; Sanders v. St. Louis New Orleans Anchor Line, 97 Mo. 26. (2) The services performed by the members of the crews of respondent's steamboats Admiral and Senator does not constitute "employment" as defined by the Missouri Unemployment Compensation Law, Section 9423 (i) (1) (4), Laws 1941, l.c. 597. Hall v. DeCuir, 95 U.S. 485; State ex rel. Webster Groves Sanitary Dist. v. Smith, 342 Mo. 365, 115 S.W.2d 816; Kusmetzky v. Security Oil Co., 281 S.W. 475.
Streckfus Steamers, Inc., applied to the circuit court for a review of the decision of the Unemployment Compensation Commission holding that Streckfus is subject to the tax for unemployment compensation for the persons employed on its steamboats Admiral and Senator. The circuit court reversed the decision and the Commission appeals to this court. We find the Commission's decision was proper.
Streckfus is a Delaware corporation with its business office in St. Louis. It is engaged in the business of carrying passengers for hire on the Mississippi River and on other rivers. The Admiral operates out of St. Louis only. During the summer it makes excursion pleasure trips twice daily up and down the river from St. Louis. The Senator, having been released from the service of the United States Coast [588] Guard, is tied up at St. Louis in care of a small maintenance crew.
The only question for decision is whether Streckfus is exempt from the unemployment tax because of Article I, Section 1 of our Constitution which states: ". . . and the river Mississippi and the navigable rivers and waters leading to the same, shall be common highways, and forever free to the citizens of this State and of the United States, without any tax, duty, impost or toll therefor, imposed by this State."
A provision employing similar language is found in the Ordinance of 1787, "An ordinance for the government of the United States northwest of the river Ohio," adopted by Congress in July, 1787. 1 U.S.S.L. 51n. In paragraph IV we find: "The navigable waters leading into the Mississippi and St. Lawrence, and the carrying places between the same, shall be common highways, and forever free, as well to the inhabitants of the said territory as to the citizens of the United States, and those of any other states that may be admitted into the confederacy, without any tax, impost or duty therefor." Similar clauses applying to their navigable rivers are found in acts providing for the admission of a number of states into the Union. The United States Supreme Court has held the object of such a clause "was to preserve the rivers as highways equally open to all persons without preference to any, and unobstructed by duties or tolls, and thus prevent the use of the navigable streams by private parties to the exclusion of the public, and the exaction of toll for their navigation." Huse v. Glover, 119 U.S. 543. See also: Cardwell v. American Bridge Co., 113 U.S. 205; Willamette Iron Bridge Co. v. Hatch, 125 U.S. 1. Speaking of the effect of the clause in the Ordinance of 1787 Judge COOLEY said: ". . .the navigable waters of the [Northwest] territory were placed upon the same footing with the navigable waters of the United States, the use of which is forever free . . ." Attorney General ex rel. Benjamin v. The Manistee River Improvement Co., 42 Mich. 628, 4 N.W. 483.
The provision of our Constitution has the same object namely, the use of the Mississippi as a highway shall be free to all. No charge of any kind may be imposed for the use of the river in navigation.
Historical precedent supports this conclusion. In the Treaty of Peace between Great Britain and the United States of 1783 it was provided that "the navigation of the river Mississippi from its source to the ocean, shall remain forever free and open to the subjects of Great Britain and the citizens of the United States." But with Spain holding the west bank of the Mississippi and the territory on both sides at New Orleans, navigation on the Mississippi was not free. Houck tells us a port of entry was established at New Madrid and all boats were compelled to land there and excise duties were imposed and collected by the Spanish Governor on all commodities descending the river. 2 History of Missouri, 336. A custom house was also set up at Natchez. The right of free deposit at New Orleans was denied. This upset the agricultural economy of our new settlements causing much bitterness and friction. It was this condition that ultimately led to the Louisiana Purchase which brought with it free navigation on the Mississippi which right had been jealously preserved ever since. A provision similar to the constitutional one we are considering is found in the Act of Congress adopted in 1812 changing the name of the Louisiana Territory to Missouri Territory and providing for the government of the territory (2 U.S. Stat. 743, 28 Mo. R.S.A. 208) and in the act admitting Missouri into the Union. 3 U.S. Stat. 545, 28 Mo. R.S.A. 215.
The constitutional restriction is only against imposing a tax for the use of the river. It in no wise exempts those persons who happen to use the river from a tax imposed generally on all persons.
An unemployment compensation tax has been held to be "An excise upon the relation of employment." Steward Machine Co. v. Davis, 301 U.S. 548. The tax is imposed uniformly on employers throughout the state. Sec. 9421 et seq. R.S. 1939. It is assessed against Streckfus because Streckfus is an employer, not because it uses the river. The fact that Streckfus' employees work on boats that ply the Mississippi is incidental and does not convert the tax into one for the use of the river. Merely because the employees are engaged in navigating the [589] river does not make the tax an excise upon the use of the river. That is not the object or effect of the tax. Accordingly, we hold the constitutional provision does not exempt Streckfus from the unemployment compensation tax.
In People v. Setunsky, 161 Mich. 624, 126 N.W. 844, the court overruled the claim that a license tax imposed on boats used for commercial fishing violated the provisions of the Ordinance of 1787, forbidding a tax for the use of the river. And see In re Los Angeles Lumber Products Co., 45 F. Supp. 77.
The judgment of the circuit court is reversed and the cause remanded with directions to enter a judgment affirming the decision of the Commission. All concur.