Source: https://supreme.justia.com/cases/federal/us/136/114/
Timestamp: 2019-04-26 15:41:23+00:00

Document:
A railroad which is a link in a through line of road by which passengers and freight are carried into a state from other states and from that state to other states is engaged in the business of interstate commerce, and a tax imposed by such state upon the corporation owning such road for the privilege of keeping an office in the state for the use of its officers, stockholders, agents and employs (it being a corporation created by another state) is a tax upon commerce among the states, and as such is repugnant to the Constitution of the United States.
MR. CHIEF JUSTICE LAMAR delivered the opinion of the Court.
"That from and after the first day of July, Anno Domini one thousand eight hundred and seventy-nine, no foreign corporation, except foreign insurance companies, which does not invest and use its capital in this commonwealth, shall have an office or offices in this commonwealth for the use of its offices, stockholders, agents, or employees unless it shall have first obtained from the auditor general an annual license so to do, and for said license every such corporation shall pay into the state treasury, for the use of the commonwealth, annually, one-fourth of a mill on each dollar of capital stock which said company is authorized to have, and the auditor general shall not issue a license to any corporation until said license fee shall have been paid. The auditor general and state treasurer are hereby authorized to settle and have collected an account against any company violating the provisions of this section, for the amount of such license fee, together with a penalty of fifty percentum for failure to pay the same, provided that no license fee shall be necessary for any corporation paying a tax under any previous section of this act, or whose capital stock, or a majority thereof, is owned or controlled by a corporation of this state which does pay a tax under any previous section of this act."
"1. The defendant is a railroad corporation existing under the laws of the States of Virginia and West Virginia, and its main line and branches lie wholly within these states."
"2. Its line of railroad connects at several points with the railroads of other corporations, and by virtue of these connections, and certain traffic contracts and agreements, it has become a link in a through line of road, over which, as part of the business thereof, freight and passengers are carried into and out of this commonwealth."
"3. Its authorized capital stock is twenty-five millions of dollars."
"4. From July 1, 1883, to July 1, 1885, it had an office in this commonwealth for the use its officers, stockholders, agents, and employees. Its main office is at Roanoke, Virginia."
"5. During this period it expended a considerable amount of money in Pennsylvania in the purchase of materials and supplies for the use of its road; but, with trifling exceptions, it owns no property, and has no capital invested for corporate purposes within this commonwealth."
"6. It has paid no office license fee for the years named, as required by § sixteen of the act of 1879 (P.L. 120). Upon this section these settlements are based."
"(1) Inasmuch as the sixteenth section of the Act of June 7, 1879, denies to foreign corporations, and to the officers, agents, and employees of foreign corporations, the right to have an office or place of meeting in the State of Pennsylvania, the said section is in conflict with clause one of Section two of Article IV of the Constitution of the United States, which provides that 'the citizens of each state shall be entitled to all privileges . . . of citizens in the several states.'"
"(2) The sixteenth section of the Act of June 7, 1879, is an abridgment of the privileges and immunities of the citizens of the United States; it discriminates between corporations of the State of Pennsylvania and corporations of other states; it discriminates between corporations and natural persons having offices in Pennsylvania; it discriminates between foreign corporations; it denies to foreign corporations, and to natural persons connected with such corporations, particularly this defendant and its officers, agents, and employees, who were in the state maintaining an office and doing business at and before the passage of the said act, the equal protection of the laws, and is for these reasons void because in conflict with Article XIV of the amendments to the Constitution of the United States, and also because in conflict with the act of Congress -- Revised Statutes, section 1977."
clause three of Section eight of Article I of the Constitution of the United States, which provides that 'Congress shall have power to regulate commerce with foreign nations and among the several states.'"
The first two points are disposed of adversely to the company by the decision of this Court in Pembina Mining Co. v. Pennsylvania, 125 U. S. 181. In that case we held, following Paul v. Virginia, 8 Wall. 168, that corporations are not citizens, within the meaning of clause 1, Section 2, Art. IV, of the Constitution of the United States, declaring that "the citizens of each state shall be entitled to all privileges and immunities of citizens in the several states." And we also held that section 1 of the Fourteenth Amendment to the Constitution, declaring that no state shall "deny to any person within its jurisdiction the equal protection of the laws," does not prohibit a state from imposing such conditions upon foreign corporations as it may choose as a condition of their admission within its limits. See also Philadelphia Fire Association v. New York, 119 U. S. 110. The only question for consideration, therefore, arises under the third assignment of error, above set forth. It is well settled by numerous decisions of this Court that a state cannot, under the guise of a license tax, exclude from its jurisdiction a foreign corporation engaged in interstate commerce, or impose any burdens upon such commerce within its limits. Some of the cases sustaining this proposition are collected in McCall v. California, just decided, ante, 136 U. S. 104, and need not be repeated here.
"has become a link in a through line of road, over which, as part of the business thereof, freight and passengers are carried into and out of this commonwealth."
That is to say, the business of the through line of railroad, of which the plaintiff in error forms a part, or in which it is a link, consists, in a measure, of carrying passengers and freight into Pennsylvania from other states, and out of that state into other states. It certainly requires no citation of authorities to demonstrate that such business -- that is, the business of this through line of railroad -- is interstate commerce. That being true, it logically follows that any one of the roads forming a part of or constituting a link in that through line is engaged in interstate commerce, since the business of each one of those roads serves to increase the volume of business done by that through line.
in transporting the commodity, some acting entirely in one state and some acting through two or more states, does in no respect affect the character of the transaction. To the extent in which each agency acts in that transportation, it is subject to the regulation of Congress."
See also Wabash &c. Railway Co. v. Illinois, 118 U. S. 557, and cases cited.
"it shall be the duty of each initial road member of the line to solicit and procure traffic for the Great Southern Despatch [the name of said through line] at its own proper cost and expense."
Again, the plaintiff in error does not exercise or seek to exercise in Pennsylvania any privilege or franchise not immediately connected with interstate commerce and required for the purposes thereof. Before establishing its office in Philadelphia, it obtained from the secretary of the commonwealth the certificate required by the act of the state legislature of 1874 enabling it to maintain an office in the state. That office was maintained because of the necessities of the interstate business of the company, and for no other purpose. A tax upon it was therefore a tax upon one of the means or instrumentalities of the company's interstate commerce, and as such was in violation of the commercial clause of the Constitution of the United States. Gloucester Ferry Co. v. Pennsylvania, 114 U. S. 196; Philadelphia Steamship Co. v. Pennsylvania, 122 U. S. 326, and cases cited; McCall v. California, just decided ante, 136 U. S. 104.
For the foregoing reasons, the judgment of the court below is reversed, and the case is remanded to that court for further proceedings in conformity with this opinion.
MR. CHIEF JUSTICE FULLER, MR. JUSTICE GRAY, and MR. JUSTICE BREWER dissented.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.