Source: https://www.law.cornell.edu/supremecourt/text/165/194
Timestamp: 2019-04-22 16:12:16+00:00

Document:
Nos. 337, 338, 339, 340, 398, 399, 400.
As to telegraph and telephone companies, the board was required to apportion the valuation among the several counties through which the lines ran, in the proportion that the length of the lines in the respective counties bore to theentire length in the state. In the case of express companies, the apportionment was to be made among the several counties in which they did business, in the proportion that the gross receipts in each county bore to the gross receipts in the state.
In all the cases the final decress of the circuit court dissolved the temporary injunctions which had been granted, sustained demurrers, and dismissed the bills.
The United States Express Company............ 488,264.70"
Each of the bills in Nos. 398, 399, and 400 alleged that the scheme of taxation contemplated by the act, 'while professing to provide for taxation of property in the state of Ohio, does not, in fact, do so, inasmuch as it directs the state board of appraisers, in determining the value of the property of express companies in said state for the purpose of taxation, to be 'guided by the value of said property as determined by the value of the entire capital stock of said company * * * in the proportion which the same viz. the property of the companies within the state bears to the entire property of said companies, as determined by the value of the capital stock thereof"; that 'the value of the capital stock or shares of said company, and of express companies generally, is determined, not so much by the value of the property and appliances which they use in carrying on their business, as by the skill, diligence, fidelity, and success with which they conduct their business. Said company employs many thousands of men, who are constantly engaged in carrying express packages, many of them of great value, from one part of the country to another, and its income and the value of its shares are largely the result of their efforts, fidelity, and integrity, and of skillful management and supervision of the business. Said company, furthermore, owns real and personal property of great value, aside from the appliances of its express business, which is not held or taxable in the state of Ohio, and some of which is not taxable at all, all of which, however, together with the business connections of the company, and the reputation and good will which it has earned in the course of more than fifty years of public service, enter largely into the value of its capital shares'; that the market price of the company's shares does not 'afford any fair, reasonable, or just method of estimating the value of its property, or fixing the basis of value for the purpose of taxation, because the market price is speculative and variable, depending upon financial conditions not at all connected with this company, its business, or its property; and your orator insists that said scheme of taxation is unfair, illegal, unjust, and unequal, and is a regulation of and a tax upon interstate commerce, and a taking of its property without due process of law'; that the act, and the assessments made thereunder, are in contravention of the constitution of the United States, because act provides for the assessment of, and the assessments embrace, property not situated within the jurisdiction of the state of Ohio, and the property of the companies is, therefore, taken without due process of law; and that the scheme, as a special one, imposes an illegal burden on interstate commerce, and denies the equal protection of the laws.
Argument of Counsel from pages 208-210 intentionally omitted J. K. Richards, for appellees.
James C. Carter, for appellants.
The principal contention is that the rule contravenes the commerce clause, because the assessments, while purporting to be on the property of complainants within the state, are in fact levied on their business, which is largely interstate commerce.
Although the transportation of the subjects of interstate commerce, or the receipts received therefrom, or the occupation or business of carrying it on, cannot be directly subjected to state taxation, yet property belonging to corporations or companies engaged in such commerce may be; and, whatever the particular form of the exaction, if it is essentially only property taxation, it will not be considered as falling within the inhibition of the constitution. Corporations and companies engaged in interstate commerce should bear their proper proportion of the burdens of the governments under whose protection they conduct their operations, and taxation on property, collectible by the ordinary means, does not affect interstate commerce otherwise than incidentally, as all business is affected by the necessity of contributing to the support of government. Cable Co. v. Adams, 155 U. S. 688, 15 Sup. Ct. 268, 360.
As to railroad, telegraph, and sleeping-car companies, engaged in interstate commerce, it has often been held by this court that their property, in the several states through which their lines or business extended, might be valued as a unit for the purposes of taxation, taking into consideration the uses to which it was put, and all the elements making up aggregate value, and that a proportion of the whole, fairly and properly ascertained, might be taxed by the particular state, without violating any federal restriction. W. U. Tel. Co. v. Attorney General of Massachusetts, 125 U. S. 530, 8 Sup. Ct. 961; Massachusetts v. W. U. Tel. Co., 141 U. S. 40, 11 Sup. Ct. 889; Maine v. Grand Trunk Ry. Co., 142 U. S. 217, 12 Sup. Ct. 121, 163; Railroad Co. v. Backus, 154 U. S. 421, 14 Sup. Ct. 1114; Railroad Co. v. Backus, 154 U. S. 439, 14 Sup. Ct. 1122; Telegraph Co. v. Taggart, 163 U. S. 1, 16 Sup. Ct. 1054; Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 18, 11 Sup. Ct. 876. The valuation was, thus, not confined to the wires, poles, and instruments of the telegraph company, or the roadbed, ties, rails, and spikes of the railroad company, or the cars of the sleeping-car company, but included the proportionate part of the value resulting from the combination of the means by which the business was carried on,a value existing to an appreciable extent throughout the entire domain of operation. And it has been decided that a proper mode of ascertaining the assessable value of so much of the whole property as is situated in a particular state is, in the case of railroads, to take that part of the value of the entire road which is measured by the proportion of its length therein to the length of the whole (Railroad Co. v. Backus, 154 U. S. 429, 14 Sup. Ct. 1114), or taking as the basis of assessment such proportion of the capital stock of a sleeping-car company as the number of miles of railroad over which its cars are run in a particular state bears to the whole number of miles traversed by them in that and other states (Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 18, 11 Sup. Ct. 876), or such a proportion of the whole value of the capital stock of a telegraph company as the length of its lines within a state bears to the length of all its lines everywhere, deducting a sum equal to the value of its real estate and machinery subject to local taxation within the state (Telegraph Co. v. Taggart, 163 U. S. 1, 16 Sup. Ct. 1054).
No more reason is perceived for limiting the valuation of the property of express companies to horses, wagons, and furniture, than that of railroad, telegraph, and sleeping-car companies, to roadbed, rails, and ties, poles and wires, or cars. The unit is a unit of use and management, and the horses, wagons, safes, pouches and furniture, the contracts for transportation facilities, and the capital necessary to carry on the business, whether represented in tangible or intangible property, in Ohio, possessed a value in combination, and from use in connection with the property and capital elsewhere, which could as rightfully be recognized in the assessment for taxation in the instance of these companies as the others.
We repeat that, while the unity which exists may not be a physical unity, it is something more than a mere unity of ownership. It is a unity of use, not simply for the convenience or pecuniary profit of the owner, but existing in the very necessities of the case,resulting from the very nature of the business.
It is this which enabled the companies represented here to charge and receive, within the state of Ohio, for the year ending May 1, 1895, $282,181, $358,519, and $275,446, respectively, on the basis, according to their respective returns, of $42,065, $28,438, and $23,430, of personal property owned in that state, returns which confessedly do not, however, take into account contracts for transportation and accompanying facilities.
Considered as distinct subjects of taxation, a horse is, indeed, a horse; a wagon, a wagon; a safe, a safe; a pouch, a pouch. But how is it that $23,430 worth of horses, wagons, safes, and pouches produces $275,446 in a single year? Or $28,438 worth, $358,519? The answer is obvious.
Reliance seems to be placed by counsel on the observation of Mr. Justice Lamar, in Express Co. v. Seibert, 142 U. S. 354, 12 Sup. Ct. 254, that 'express companies, such as are defined by this act, have no tangible property, of any consequence, subject to taxation under the general laws. There is, therefore, no way by which they can be taxed at all, unless by a tax upon their receipts for business transacted.' But the reference was to the legislation of the state of Missouri, and the scheme of taxation under consideration here was not involved in any manner.
'If by reason of the good will of the concern, or the skill, experience, and energy with which its business is conducted, the market value of the capital stock is largely increased, whereby the value of the tangible property of the corporation, considered as an entire plant, acquires a greater market value than it otherwise would have had, it cannot properly be said not to be its true value in money, within the meaning of the constitution, because good will and other elements indirectly entered into its value. The market value of property is what it will bring when sold as such property is ordinarily sold in the community where it is situated; and the fact that it is its market value cannot be questioned because attributed somewhat to good will, franchise, skillful management of the property, or any other legitimate agency.
Nor, in this view, is the assessment on property not within the jurisdiction of the taxing authorities of the state, and for that reason amounting to a taking of property without due process of law. The property taxed has its actual situs in the state, and is, therefore, subject to the jurisdiction, and the distribution among the several counties is a matter of regulation by the state legislature. Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 18, 22, 11 Sup. St. 876; State Railroad Tax Cases, 92 U. S. 575; Delaware Railroad Tax, 18 Wall. 206; Erie R. Co. v. Pennsylvania, 21 Wall. 492; Columbus Southern Ry. Co. v. Wright, 151 U. S. 470, 14 Sup. Ct. 396.
In Pullman's Palace Car Co. v. Pennsylvania the rule is considered that personal property may be separated from its owner, and he may be taxed, on its account, at the place where it is, although not the place of his own domicile, and even if he is not a citizen or a resident of the state which imposes the tax; and the distinction between ships and vessels and other personal property is pointed out. The authorities are largely examined, and need not be gone over again.
Special circumstances might exist, as indicated in Railway Co. v. Backus, 154 U. S. 421, 443, 14 Sup. Ct. 1122, which would require the value of a portion of the property of an express company to be deducted from the value of its plant, as expressed by the sum total of its stock and bonds, before any valuation by mileage could be properly arrived at; but the difficulty in the cases at bar is that there is no showing of any such separate and distinct property which should be deducted, and its existence is not to be assumed. It is for the companies to present any special circumstances which may exist, and, failing their doing so, the presumption is that all their property is directly devoted to their business, which being so, a fair distribution of its aggregate value would be upon the mileage basis.
We are also unable to conclude that the classification of express companies with railroad and telegraph companies, as subject to the unit rule, denies the equal protection of the laws. That provision in the fourteenth amendment 'was not intended to prevent a state from adjusting its system of taxation in all proper and reasonable ways,' nor was that amendment 'intended to compel a state to adopt an iron rule of equal taxation.' Bell's Gap R. Co. v. Pennsylvania, 134 U. S. 232, 10 Sup. Ct. 533.
And see Kentucky Railroad Tax Cases, 115 U. S. 321, 6 Sup. Ct. 57; Home Ins. Co. v. New York, 134 U. S. 594, 10 Sup. Ct. 593.
We have said nothing in relation to the contention that these valuations were excessive. The method of appraisement prescribed by the law was pursued, and there were no specific charges of fraud. The general rule is well settled that, 'whenever a question of fact is thus submitted to the determination of a special tribunal, its decision creates something more than a mere presumption of fact; and, if such determination comes into inquiry before the courts, it cannot be overthrown by evidence going only to show that the fact was otherwise than as so found and determined.' Indiana Railroad Tax Cases, 154 U. S. 434, 14 Sup. Ct. 1114; Telegraph Co. v. Taggart, 163 U. S. 1, 16 Sup. Ct. 1054.
Not being able to concur in the opinion and judgment of the court in the foregoing cases, I am impelled, by what I conceive to be the serious nature or the questions involved, to state the reasons for my dissent.
It is elementary that the taxing power of one government cannot be lawfully exerted over property not within its jurisdiction or territory, and within the territory and jurisdiction of another. The attempted exercise of such power would be a clear usurpation of authority, and involve a denial of the most obvious conceptions of government. This rule, common to all jurisdictions, is peculiarly applicable to the several states of the Union, as they are by the constitution confined within the orbit of their lawful authority, which they cannot transcend without destroying the legitimate powers of each other, and, therefore, without violating the constitution of the United States.
In Morgan v. Parham, 16 Wall. 471, it was adjudged, upon the authority of the Hays Case, supra, that the state of Alabama could not lawfully tax a vessel registered in New York, but employed in commerce between Mobile, in that state, and New Orleans, in Louisiana. The situs of the vessel was held to be at the home port, in New York, where its owner was liable to be taxed for its value.
In Gloucester Ferry Co. v. State of Pennsylvania, 114 U. S. 196, at pages 206-209, 5 Sup. Ct. 826, 829-831, Mr. Justice Field reviews the cases just cited. The Gloucester Ferry Company was a New Jersey corporation, and operated a ferry between Gloucester, N. J., and Philadelphia. The state of Pennsylvania laid a tax on the appraised value of the capital stock of the ferry company, which owned no property in Pennsylvania except the lease of a slip or dock, where its ferryboats put up in plying across the river between the two states.
Under the interstate commerce clause of the constitution, as held by this court, speaking through Mr. Justice Bradley, in Leloup v. Port of Mobile, 127 U. S. 648, 8 Sup. Ct. 1384, 'no state has the right to lay a tax on interstate commerce in any form, whether by way of duties laid on the transportation of the subjects of that commerce, or on the receipts derived from that transportation, or on the occupation or business of carrying it on, and the reason is that such taxation is a burden on that commerce, and amounts to a regulation of it, which belongs solely to congress.' The following cases were referred to as supporting the proposition thus enunciated: Case of State Freight Tax, 15 Wall. 232; Pensacola Tel. Co. v. W. U. Tel. Co., 96 U. S. 1; Mobile v. Kimball, 102 U. S. 691; W. U. Tel. Co. v. Texas, 105 U. S. 460; Moran v. New Orleans, 112 U. S. 69, 5 Sup. Ct. 38; Gloucester Ferry Co. v. State of Pennsylvania, 114 U. S. 196, 5 Sup. Ct. 826; Brown v. Houston, 114 U. S. 622, 5 Sup. Ct. 1091; Walling v. People of Michigan, 116 U. S. 446, 6 Sup. Ct. 454; Pickard v. Car Co., 117 U. S. 34, 6 Sup. Ct. 635; Wabash, St. L. & P. Ry. Co. v. People of Illinois, 118 U. S. 557, 7 Sup. Ct. 4; Robbins v. Taxing Dist., 120 U. S. 489, 7 Sup. Ct. 592; Philadelphia & Southern S. S. Co. v. Pennsylvania, 122 U. S. 336, 7 Sup. Ct. 1118; Telegraph Co. v. Pendleton, 122 U. S. 347, 7 Sup. Ct. 1126; Ratterman v. Telegraph Co., 127 U. S. 411, 8 Sup. Ct. 1127.
The following cases, since decided, enforce the same principle: Asher v. Texas, 128 U. S. 129, 9 Sup. Ct. 1; Stoutenburgh v. Hennick, 129 U. S. 141, 9 Sup. Ct. 256; Lyng v. Michigan, 135 U. S. 161, 10 Sup. Ct. 725; McCall v. California, 136 U. S. 104, 10 Sup. Ct. 881; and Crutcher v. Kentucky, 141 U. S. 47, 11 Sup. Ct. 851.
Under the law of Ohio express companies are taxed in three forms: First, their real estate is assessed, for state, county, and municipal purposes, in the same manner as is real estate within the state belonging to other companies and persons; second, such companies are also taxed upon their gross receipts derived from business done within the state (91 Ohio Laws, 237); and, third, they are additionally assessed by a state board (90 Ohio Laws, 330, as amended by 91 Ohio Laws, 220). It is the assessment resulting from the last of these provisions which is involved in the cases now under consideration.
In compliance with the law the companies returned to the state board a statement for the year 1893, showingFirst, the amount of capital stock, and its par and market value; second, a detailed account of the entire real and personal property of the companies, and its assessed value; and, third, their entire gross receipts during the taxing year for business done within the state of Ohio. For the years 1894 and 1895 the statements, under the requirements of the amendatory statute of May 10, 1894 (91 Ohio Laws, 220), exhibitedFirst, the number of shares of capital stock, and its par and market value; second, a detailed statement of the real estate owned in Ohio, and its assessed value; third, a full and correct inventory of the personal property, including moneys and credits owned in Ohio, and the value thereof; fourth, the total value of the real and personal property owned and situate outside of Ohio; fifth, the entire gross receipts of the company, from whatever source derived, of business wherever done for the taxing year; and, sixth, the gross receipts of each company in Ohio, from whatever source derived.
in the Bills. State Board.
It thus appears that for the year 1893 property possessing an actual value of but $106,698.74 was assessed as being worth $1,257,909.53; in 1894 property valued at $89,230.60 was assessed at $1,471,059; and for 1895 property worth but $93,933 was assessed at $1,520,734.10,a total valuation during three years of property worth only $289,862.34 at $4,249,702.63.
In addition to this enormous taxation, the real estate and the gross receipts of the companies have also been taxed for all state, county, and municipal purposes. It cannot, I submit, be asserted with reason that the nearly $4,000,000 of excess on the assessment of the tangible property laid by the state board resulted from assessing only the actual intrinsic value of such property, since to so contend would be not only beyond all reason, but would also be destructive of the admission by the demurrer that the companies possessed no other personal property within the state of Ohio but that returned by them, and that its actual and intrinsic value was correctly set forth. The assessment, therefore, must necessarily have taken into consideration some other property, or some element of value other than the real intrinsic worth of the property assessed.
The fact of the vast excess of the valuation over and above the admitted value of the property is not, however, the only mode by which it is conclusively demonstrated that the assessment resulted from the consideration and estimate by the state board of sources of value extrinsic to the property assessed. One of the assessments in controversy was made under the Ohio law of April 27, 1893, and the others under the law of May 10, 1894, and, although there is some difference between the two statutes, they both, as I have already said, substantially require express companies to make return of their real and personal property within the state, the value thereof, the number of shares of their capital stock, their market value, and a statement of the gross receipts for business done within the state of Ohio during the taxing year, from whatever source derived. Considering the obligation thus imposed to report the total value of the stock of the companies and all their gross earnings, as also the total routes over which their agents traveled, etc., and putting these things in connection with the extraordinary amount by which the valuation exceeds the actual value of the property assessed, it leaves no reasonable doubt that the sources of reported value, which were entirely outside of the territory and beyond the jurisdiction of the state of Ohio, were by some process of calculation added to the intrinsic value of the property within the state, thereby assessing not only the property within the state, but a proportion, also, of all the property situated without its territorial boundaries.
I submit that great principles of government rest upon solid foundations of truth and justice, and are not to be set at naught and evaded by the mere confusion of words. In considering a question of taxation in Postal Tel. Cable Co. v. Adams, 155 U. S. 688, 15 Sup. Ct. 268, 360, to which case I shall hereafter refer, this court said (page 698, 155 U. S., and page 270, 15 Sup. Ct.): 'The substance, and not the shadow, determines the validity of the exercise of the power.' It seems to me that, to maintain the tax levied by the state of Ohio, this ruling must be reversed, and the doctrine be announced that the shadow is of more consequence than the substance. Such result would appear to inevitably flow from the holding referred to, now affirmed by the court. Nothing, I submit, can be plainer than the fact that the value of the capital stock of a corporation represents all its property, franchises, good will,indeed, everything owned by it wherever situated. I reiterate, therefore, that the rule which recognizes that, for the purpose of assessing tangible property in one state, you may take its full worth, and then add to the value of such property a proportion of the total capital stock, is a rule whereby it is announced that the sum of all the property, or an arbitrary part thereof, situated in other states, may be joined to the valuation of property in one state for the purpose of increasing the taxation within that state. What difference can there be between an actual assessment by Ohio of property situated in New York, Pennsylvania, Massachusetts, or in any of the other states of the Union, and the taking by Ohio of an aliquot part of the value of all the property situated in such other states, and adding it, for the purpose of assessment, to the value of property in Ohio? The recognition of this method breaks down both of the well-settled and elementary rules to which I have in the outset adverted.
It seems to me that not only the illegality but the injustice of this taxation by the state of Ohio on these express companies, which is now upheld, is clear. Let me suppose that the bonds, stocks, other investments, and elements, which represent the capital of the companies, and therefore producing the resultant value of such capital stock, are situated in the states of New York, Pennsylvania, and Massachusetts. These items, thus making up the value of the capital stock, being so situated in such states, are, of course, entirely and wholly, at their full value, assessable in those states. The attribution of an aliquot share of the value of the capital stock to the state of Ohio, and the consequent right of that state to tax such value, in no way deprives the states of New York, Pennsylvania, and Massachusetts of their ders for its full value. But, as attributing right to assess the property within their borders for its full value. But, as attributing property gives that state the right to tax the proportion allotted, it follows, by an inevitable deduction, that the recognition of the right here claimed practically subjects the property in the states of New York, Pennsylvania, and Massachusetts to double taxation. unless those states voluntarily forego the inherent power of taxation vested in them to levy a tax upon all the property within their respective jurisdictions. Certainly the states of New York, Massachusetts, and Pennsylvania would, if they were independent sovereignties, removed from the jurisdiction of the constitution of the United States, be driven to protect, by retaliatory legislation, their citizens, as was the case between the states prior to the adoption of the constitution. But, having entered into the Union, these states are bereft of all such relief, and must thus look for the protection of their citizens to the remedies afforded by the constitution itself. The rule now announced allows Ohio to exercise an authority in violation of the constitution, and thereby strips, not only the citizens of the other states, but those states themselves, of all redress, by depriving them of the safeguards which it was the avowed purpose of the constitution to secure.
Second, as to the interstate commerce clause. It is clear that the recognition of a right to take an aliquot proportion of the value of property in one state, and add it to the intrinsic value of property in another state, and there assess it, is, in substance, an absolute denial and overthrow of all the great principles announced from the beginning, and enforced by the many decisions of this court, on the subject of interstate commerce. This results from the fact that the necessary consequence of the ruling in this case is this: that a corporationand there is no distinction, in principle, in the particular here considered, between a corporation and an individualcannot go from one state into another state of the Union, for the purpose of there engaging in interstate commerce business, without subjecting itself to the certainty of having a proportion of all its property situated in the other states added to the sum of property, however small, which it may carry into the state to which it goes, for the purposes of taxation therein. Under this system, not only is an appalling penalty imposed for going from one state into another state, but the carrying on of interstate commerce itself becomes hampered and loaded with a burden threatening its absolute destruction.
The contradiction involved in the proposition is well illustrated by the legislation and decisions of the state of Ohio. Thus, as I have said, in addition to the tax imposed on express companies, which is here considered, the law of the state of Ohio, besides assessing their real estate, also imposes a tax on the gross receipts of such companies for business done within the state. In order to save the tax here in question, the law by which this last tax is imposed is careful to provide that nothing in the imposition of the tax therein providedthat is, the tax on gross receiptsshall be construed as impairing the right to the tax on tangible property already provided for (the tax here in question) Now, in passing upon the validity of this tax on gross receipts, the supreme court of Ohio treats it as not a double tax, because the previous tax is considered as one on tangible property. Adams Exp. Co. v. State (Ohio Sup.) 44 N. E. 506. We have, therefore, both the legislature and the court of last resort of the state of Ohio upholding the enormous valuation put upon the personal property for the purposes of the tax now before us, on the theory that such valuation includes an aliquot part of the capital stock, and necessarily, therefore, also, an equal portion of all the property and earnings of the company, both in and out of the state, and yet we have the same legislature and the same tribunal upholding the tax on gross receipts on the ground that the tax first provided is purely a tax upon tangible property. Thus the departure from the pathway of principle is marked in this instance, as it is always marked, by confusion and injustice.
The wound which the ruling announced, if I correctly apprehend it, inflicts on the constitution is equally as severe upon the unquestioned rights of the states as it is upon the lawful authority of the United States, because, while submitting the states and their citizens to injustice and wrong committed by another state, it at the same time greatly weakens or destroys the efficacy of the interstate commerce clause of the constitution.
This construction of the previous cases decided by this court elucidates and makes plain the fact that they proceeded upon and were intended to enforce the rule that the validity of a state tax would be determined by the substantial results of the burden imposed, and not by the mere form which it assumed, and although the form of the imposition might seem to bring the tax within the reach of the inhibition against levying a charge upon property beyond the jurisdiction of the state, or within the prohibitions of the constitution of the United States forbidding the laying of burdens on interstate commerce, this court would not interfere therewith, provided the exaction, in substance, amounted to no more than the sum of the taxation which the state might lawfully impose upon the property actually within its jurisdiction, and provided that, in reality, the burden laid by the state was not an interference with interstate commerce. This explanation and this rule was the answer given to the question directly presented as to the significance and interpretation of the previous decisions now cited as authority for the proposition that it is within the power of a state not only to tax at will property beyond its jurisdiction, but also to substantially destroy interstate commerce by heaping direct and onerous burdens thereon. Such explanation and ruling were also reiterated in the recent decision in Telegraph Co. v. Taggart, 163 U. S. 1, 16 Sup. Ct. 1054, where, at page 18, 163 U. S., and page 1059, 16 Sup. Ct., it is clearly intimated that a taxing law could not be upheld which, in its necessary operation, was shown to be oppressive and unconstitutional.
Testing the tax in controversy by the rule laid down in the Postal Telegraph Case, it becomes, in reason, impossible to conclude otherwise than that it is, both in form and substance, taxation by the state of Ohio of property beyond its jurisdiction, and that it also is an imposition by that state of a burden on interstate commerce. It cannot with fairness be argued that the amount of the tax is only such sum as would have resulted from a levy upon the property actually in the state, when the record admits that the aggregate value of such property for the taxing years of 1893, 1894, and 1895, amounted only to two hundred and odd thousand dollars, while the assessment exceeds this amount by nearly four millions of dollars. It cannot be said that this vast excess does not embrace property situated outside of Ohio, when both the text of the statute of that state and such text as expounded by the supreme court of the state clearly show that the sum of the excess is arrived at by adding to the property in the state the value of property situated outside thereof. Nor can it be contended that the tax here involved is not a tax on interstate commerce, in view of the fact that, from the nature of the criteria of value adopted, an aliquot part of the avails and receipts of the company of every kind is added to the taxing value in the state of Ohio, although that state had also imposed a tax upon the gross receipts from business of a purely state nature.
But, dismissing absolutely from consideration the authoritative construction of all the prior decisions of this court, announced in Postal Tel. Cable Co. v. Adams, and conceding, for the sake of argument, that the previous adjudications now relied on are unexplained by that case, and that they substantially hold that there is a so-called 'unit rule' properly applicable to the assessment for taxation of the continuous lines of telegraph and railroad companies, such concession does not in reason admit the validity of the method adopted by the state of Ohio for assessing the tangible personal property of express companies. Before proceeding to discuss this proposition, however, I call attention to the fact that I intentionally refrain from placing a sleeping-car company in the same category with telegraph and railroad companies, because the decision in the case of Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 18, 11 Sup. Ct. 876, was not founded upon the theory, nor did it purport to assert that the property or plant of a sleeping-car company was a unit, and that, of necessity, a part of such property may be measured by a rule applicable to continuous lines of road. In that decision the court merely emphasized the holding that the tax was one laid upon 100 cars of the company, possessing an actual situs in Pennsylvania. In the statement of the case (page 20, 141 U. S., and page 877, 11 Sup. Ct.) the decision of the supreme court of Pennsylvania was quoted verbatim, in which it was declared that the tax on the capital stock of the Pullman Company was in reality but a tax on its property; that the coaches of the company were such property, and that the fact that the coaches might also be operated in other states would simply reduce the value of the property in Pennsylvania justly subject to taxation there. This court practically adopted the views so expressed by the state court. When, however, it was said (page 26, 141 U. S., and page 879, 11 Sup. Ct.) that the method of assessment, to wit, taking a proportion of the capital stock ascertained on the mileage basis, as the value of 100 sleeping cars, was a just and equitable method, such statement was made with reference to the facts held to exist in the case before the court. What were those facts? The taxes demanded covered a period of 11 years, and, excluding interest from the time when payable and the attorney general's commission for collecting, aggregated but $16,321.89. 107 Pa. St. 158. Surely, this court might well say that a rule of taxation which operated to assess on 100 sleeping cars a tax of less than $1,500 per annum was, in the absence of any showing to the contrary, just and equitable to the company. No such showing was made. The objection advanced by counsel to the method of taxation was, not that the results produced were inequitable, but that (theoretically, not practically) the method adopted was improper. Indeed, the facts of that case caused the ruling there made to be but an example of the principle subsequently explicitly announced in Postal Tel. Cable Co. v. Adams, ubi supra.
It is, I submit, undeniable that, if there be such a unit rule applicable to the continuous lines of telegraph and railroad companies, its existence pushes the power of state taxation, as to these particular kinds of property, at least to the confines of the constitution, and therefore, if, under the rule of stare decisis, the cases which announce it should be followed, they should not be extended. The mere ownership, however, by an express company, of personal property within a state, presents no case for the application of a unit rule. What unity can there be between the horses and wagons of an express company in Ohio with those belonging to the same company situated in the state of New York? The conception of the unity of railroad and telegraph lines is necessarily predicated upon the physical connection of such property. To apply a rule based upon this condition to the isolated ownership, by an express company, of movable property in many states, in reality declares that a mere metaphysical or intellectual relation between property situated in one state and property found in another creates, as between such property, a close relation for the purposes of taxation. But this theory, by an enormous stride, at once advances the unit rule beyond every constitutional barrier, and causes such rule or theory to embrace property between which there is, and cannot in the nature of things be, any real union or relation whatever. If mere intellectual union between property be thus adopted as a rule of taxation, then all the restrictions upon the power of a state to tax property arising from the fact that the situs of such property is beyond its jurisdiction, as well as of the restraints arising from the interstate commerce clause of the constitution, are destroyed. Certainly, the mere fact that the same owner has movable property in one state and movable property in another state, does not, from the fact of the one ownership, create a link of continuity between the property for the purpose of taxation. The fact that, if the movable property situated in one state earns profits, and the movable property in the other likewise so earns, and that these profits go to the common owner, does not create such unity for the purpose of taxation, so as to make the property assessable in each state. This court has effectually determined that, where a corporation is engaged in interstate business, no one of the states has the power to tax the receipts of such company derived from interstate commerce business, and that the power of the states as to taxation on earnings is limited to those derived from the business done within the state. This line of concluded authority is illustrated and referred to in the recent opinion in Osborne v. State of Florida (decided at this term) 17 Sup. Ct. 214. It is therefore manifest that, where property owned in common, belonging to the same person, and situated in different states, contributes to earnings, and the proceeds of these earnings go into the treasury of the owner, and lay side by side therein, the fact that there is a common owner, that there is a common business, and that all the results of the business are in immediate contact in the common treasury, gives no power to the state to tax the whole, but only to levy on that which comes from the state business alone. How, I submit, can it now be announced that there is an imaginary unity between personal property widely separated, because that property has a common owner, without, at the same time, reversing the settied adjudications of this court on the subject of the power of a state to tax the earnings from interstate commerce?
If the rule contended for by the state of Ohio be true, why would it not apply to a corporation, partnership, or individual engaged in the dry-goods business, or any other business, having branches in various states? Would it not be as proper to say of such agencies, as it is of the agencies of express companies, that there is an intellectual unity of earnings between the main establishment and all such agencies, and therefore a right to assess goods found in an agency with relation to the capital and wealth of the original house and all the other branches situated in other states? Take the case of a merchant carrying on a general commercial business in one state and having connections of confidence and credit with another merchant of great capital in another state. If this rule be true, can it not also be said that such merchant derives advantages in his business from the sum of the capital in other states which may be availed of to extend his credit and his capacity to do business, and that, therefore, his tangible property must be valued accordingly? Suppose bankers in Bostion, Philadelphia, and New York, of great wealth, owning stocks and bonds of various kinds, send representatives to New Orleans, with a limited sum of money, there to commence business. These representatives rent offices and buy office furniture. Is it not absolutely certain that the business of those individuals would be largely out of proportion to the actual capital possessed by them, because of the fact that, reflexly and indirectly, their business and credit is supported by the home offices? In this situation, the assessor comes for their tax return. He finds noted thereon only a limited sum of money and the value of the office furniture. What is to prevent that offical, under the rule of supposed metaphysical or intellectual unity between property, from saying: 'It is true you have but a small tangible capital, and your office furniture is only worth $250, but the value of property is in its use, and, as you have various elements of wealth situated in the cities named, I will assess your property, because of its use, at a million dollars'? Such conduct would be exactly in accord with the power of taxation which it is here claimed the state of Ohio possesses, and which, as I understand it, the court now upholds. To give the illustrations, I submit, is to point to the confusion, injustice, and impossibility of such a rule.
Nor, in conclusion, I submit, is there any force in the argument, advanced at bar, that we have entered a new era, requiring new and progressive adjudications, and that, unless this court admits the power of the state of Ohio to tax to be as claimed, it will enable aggregations of capital to escape just taxation by the several states. This assertion, at best, but suggests that, unless constitutional safeguards be overthrown, harm will Come, and wrong will be done. In its last analysis the claim is but a protestion that our institutions are a failure, that time has proven that the constitution should not have been adopted, and that this court should now recognize that fact, and shape its adjudications accordingly. The claim is as unsound as the fictitious assertion of expediency by which it is sought to be supported. If it be true that by the present enforcement of the constitution and laws property will escape taxation, the remedy must come, not from violating the constitution, but from upholding it.
Within the power lodged in congress to regulate commerce between the states, ample authority exists to enact the necessary legislation to prevent the just relations between the states, and the regulation of such commerce from becoming the pretext for avoiding the proper burdens of either state or national taxation. As the necessity arises, such apt powers will doubtless be brought into operation. The recognition of the right of taxation exerted by the state of Ohio in these cases must, if followed in other states, not only reproduce the illegality and injustice here shown, but greatly increase it, as every new imposition will be a new levy on property already taxed, and result in an additional burden on interstate commerce. If the principles by which such results are brought about be recognized as lawful under the constitution, not only will congress be deprived of all power to protect the citizens of the respective states, and the states themselves, from these conditions, but it will also be rendered impotent to devise, under the power to regulate commerce, any just and fair regulation to prevent the interstate commerce clause from being made a shield for avoiding taxation, and to cause property engaged in such commerce to be subjected to just and uniform taxation on the part of the several states. Thus, by holding that the states possess the power claimed in this case to exist, not only will a wrong be committed, but that wrong will be permanently and without remedy ingrafted into our constitutional system.
For opinion on rehearing, see 17 Sup. Ct. 604.
The italics here and elsewhere in this quotation are mine.
SPRECKELS SUGAR REFINING COMPANY, v. PENROSE A. McCLAIN, Collector of Internal Revenue for the First District of Pennsylvania.
UNION REFRIGERATOR TRANSIT COMPANY, v. STEPHEN H. LYNCH, Treasurer of Salt Lake County and Collector of Taxes therein.
SUNDAY LAKE IRON CO. v. WAKEFIELD TP.
BUTLER BROS. v. McCOLGAN, Franchise Tax Com'r of California.
CUDAHY PACKING CO. v. STATE OF MINNESOTA.
AMERICAN REFRIGERATOR TRANSIT CO. v. HALL, County Treasurer.
HENDERSON BRIDGE CO. v. COMMONWEALTH OF KENTUCKY.
ADAMS EXP. CO. v. OHIO STATE AUDITOR.
J. C. LEAGUE, v. STATE OF TEXAS.
WELLS FARGO & CO. v. STATE OF NEVADA.
UNDERWOOD TYPEWRITER CO. v. CHAMBERLAIN, Treasurer of the State of Connecticut.
FIDELITY & DEPOSIT CO. OF MARYLAND v. UNITED STATES.
BAKER et al. v. DRUESEDOW, Collector, et al.

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