Case: ADAMS EXPRESS COMPANY v. OHIO STATE AUDITOR
Abbreviation: Adams Express Co. v. Ohio State Auditor
Decision Date: 1897-02-01
Docket Number: No. 337
Citation: 165 U.S. 194
Volume: 165
Reporter: United States Reports
Court: Supreme Court of the United States
Jurisdiction: United States
Parties: ADAMS EXPRESS COMPANY v. OHIO STATE AUDITOR.
Judges: 
Pages: 194–255

Head Matter:
ADAMS EXPRESS COMPANY v. OHIO STATE AUDITOR.
APPEAL FROM THE COURT OF APPEALS FOR THE SIXTH CIROTJrT.
No. 337.
Argued December 10, 11, 1896.
Decided February 1, 1897.
The decision of the Supreme Court of Ohio entertaining jurisdiction of this case,' and delivering a considered opinion, State v. Jones, 51 Ohio St. 492, adjudging the Nichols law to be valid under the constitution of that State, will not be reviewed by this court.
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.
The property of corporations engaged in interstate commerce, situated in the several States through which their lines or .business extends, may •be valued as a unit for the purposes of taxation, taking into consideration the uses to which it is put and all the elements making up aggregate value; and a proportion of the whole fairly and properly asoertained may be taxed by the particular State, without violating any Federal restriction.
While there is an undoubted distinction between the property of railroad and telegraph companies and that of express companies, there is the same unity in the use of the entire property for the specific purposes, and there are the same elements of value, arising from such use.
The classification of express companies with railroad and telegraph companies, as subject to the unit rule, does not deny the equal protection of the laws ;■ as 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, and was not intended to compel a State to adopt an iron rule.of equal taxation.
The statute of the State of Ohio of April 27, .1893, 90 Laws. Ohio, 330, (amended May 10, 1894, 91 Laws Ohio, 220,) created a board of appraisers and assessors, and required each telegraph, telephone and express company doing business within the State to make returns of • the number of shares of its capital, the par value and market value thereof, its entire real and personal property, and where located and the value thereof as assessed for taxation, its gross receipts for the . year of business wherever done and of the business done in the State of Ohio, giving the receipts of each office in the State, and the whole length of the line of rail and water routes over which it did business within and without the State. It required the board of assessors to “ proceed to ascertain and assess the value of the property of said express, telegraph and telephone companies in Ohio, and in determining the value of the property of said companies in this State, to be taxed within the State and assessed as herein provided, said board shall be guided by the value -of said property as determined by the value of the entire capital stock of said companies, and. such other evidence and rules as will enable said board to arrive at the true value in money of the entire property of said companies within the State of Ohio, in the proportion which the same bears to the entire property of said companies, as determined by the value of the capital stock thereof; and the. other evidence and rules as aforesaid.” field,
(1) That, assuming that the proportion of capital employed in each of the several States through which such a company conducts its operations has been fairly ascertained, while taxation thereon, or determined with reference thereto, may be said in some sense to fall on the business of the company, it does so only indirectly; and that the taxation is essentially a property tax, and, as such, not an' interference with interstate commerce;
(2) That the property so taxed has its actual situs in the,State and is, therefore, subject to its jurisdiction; and that the distribution among the several counties is a matter of regulation by the state legislature; .
.(3) That this was not taking of property without due process of law,, either by reason of its assessment as within the jurisdiction of the taxing authorities, or of its classification as subject to the unit rule.
(4) That the valuation by the assessors cannot be overthrown simply by showing that it was otherwise than as determined by them.
These are cases involving the constitutionality of certain laws of the State of Ohio providing for the taxation of telegraph, telephone and express companies, and the validity of-assessments of express companies thereunder.
The general assembly of Ohio passed, April 27, 1893, 90 Ohio Laws, 330>, an act- to amend and supplement §§ 2777, 2778, 2779 and 2780 of the Revised Statutes of that State (commonly styled “The Nichols Law”), which was amended May 10,. 1894. The law created a state board of appraisers and assessors, consisting of the auditor of State, treasurer of State and attorney general, which was charged with the duty of assessing the property in Ohio of telegraph, telephone and express companies. By the act as amended, between the first and thirty-first days of May annually each telegraph, telephone and express company, doing business in Ohio, was required to file a return with the auditor of State, setting forth 'among other things the number of shares of its capital stock; the par value and market value (or, if there be no market value, then the actual value) of its shares at the date 'of the return; a statement in detail of the entire real and personal property of said companies and where located, and the 'value thereof as assessed for taxation. Telegraph and telephone companies were required to return,' also, the whole length of their lines, and the length of so much of their lines as is without and is within the.State of Ohio, including the lines controlled and used, under lease or otherwise. Express 'companies ivere required to include in the return a statement of their entire gross receipts, from whatever source derived, for the year ending the first day of May, of business wherever done; and of the business done in the State of Ohio, giving the receipts of each office in the State; also the whole length of the lines of rail and water routes over which the'companies did business, within and without the State. Provision was made in the law for the organization of the board, for the appointing of one of its members as secretary and the keeping of full minutes of its proceedings. The board was required to meet in the month of June and assess the value of the prop-ertj^ of these companies in Ohio. The rule to be followed by the board in making the assessment was that “ in determining the value of the property of said companies in this State, to be ' taxed within the State and assessed as herein provided, said board shall be guided by the value of said property as determined by the value of the entire capital stock of said companies, and such other evidence and rules as will’enable said board to arrive at the true value in money of the entire property of said companies within the State of Ohio, in the proportion whicii the same bears to the entire property of said companies, as determined by the value of the capital stock thereof, and the other evidence and rules as aforesaid.”
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 the entire length in the State; in the case of express companies, the apportionment was to be made among the several counties in Avhich they did business, in the proportion that the gross receipts in each county bore to the gross receipts in the State.
The amount thus apportioned was to be certified to the county auditor, and placed by him on the duplicate “ to be assessed, ,and the taxes thereon collected the same as taxes assessed and collected on other personal property,” the rate of taxation to be the same as that on other property in the local taxing district.
The valuation of all the real estate of the companies, situated in Ohio, was required to be deducted from the total valuation, as fixed by the board.
Provisions were made for hearings and for the correction of erroneous and excessive valuations, as follows:
“ At any time, after the meeting of the board on the first Monday in June, and before the assessment of the property of any company is determined, any company or person interested shall have the right, on written application, to appear before the board and be heard in the matter of'the valuation of the property of any company for taxation. After the assessment of the property of any company for taxation by the board, and before the certification by the auditor of State of the apportioned valuation to the several counties,, as provided in section 2780, the board may, on the application of any interested person or company,, or on its own motion, correct the assessment or ■ valuation of the property of any company, in such manner as will, in its judgment; make the valuation thereof just and equal. ' The provisions of section 167 of the Revised Statutes shall apply to the correction of any error or over-valuation in the assessment of property for taxation by the state board of appraisers and assessors, and to the remission of. taxes and penalties illegally assessed thereon.”
Section 167 of the Revised Statutes, referred to, reads thus:
“SectioN 167. He [the auditor of State] may remit such taxes and penalties thereon as he ascertains to have been illegally assessed, and such penalties as have accrued or '■may accrue in consequence of the negligence or error of any officer required to do any duty relating to the assessment, of-property for taxation, or the levy or collection of taxes, and he may, from time to time, correct any error in aiiy assessment of property for taxation or in the duplicate of taxes in. any county; provided that when the amount to be remitted in any one case shall exceed one hundred dollars, he shall proceed to the office of the governor and take to his assistance the governor and attorney general, and in all such cases may remit no more than shall be agreed upon by a majority of the officers named.” . ■ c
Instead of distiuouting the valuation as under the act of 1893, the state board by the act of 1894 was to certify it to the' auditor of State, whose duty it was made to apportion' and certify the valuation among the counties.
In No. 337 the taxes for 1893 were involved; and in Nos. 338, 339 and 340, the taxes for 1894. These are appeals from the Circuit Court of Appeals for the Sixth Circuit. In Nos. 398, 399 and 400 the taxes for 1895 were involved. These are appeals from decrees of the Circuit Court for the Southern District of Ohio.
The original suits were brought in the Circuit Court to enjoin the certification of the apportioned valuations to the county auditors, as to 1893, against the state board; as to 1894 and 1895, against the auditor of State.
The Circuit Court, Taft, J., on April 23, 1894, after a preliminary opinion, filed opinions in the case of the Western TJnion Telegraph Company against the State Board, 61 Fed. Hep. 449, and in No. 337, Adams Express Co. v. Poe, 61 Fed. Rep. 470, holding the.Nichols law to be invalid under the constitution of Ohio. On the first of May following the Supreme Court of Ohio decided that the Nichols law was constitutional and valid. State v. Jones, 51 Ohio St. 492.
Thereupon the Circuit Court reversed its ruling, and accepted the decision of the Supreme Court o.f the State, and Judge Taft filed a further opinion holding that the assessments were valid. 64 Fed. Rep. 9. _
In all the cases the final decrees of the Circuit Court dis solved the temporary injunctions which had been granted, sustained demurrers and dismissed the bills.
The Circuit' Court of Appeals affirmed the cases taken to it on appeal. 37 U. S: App. 378, 399; 69 Fed. Eep. 546, 557.
The proceedings of the state'board in making the assessments for 1895 and certain correspondence are set forth in the records as if exhibits to the bills. The action' of the board, relative to express companies, is thus given :
“ The board having given each express company doing business in Ohio, whose property in Ohio is hereinafter assessed, opportunity to appear and be heard personally by the board, and'having heard all companies which desired .to be heard through their officers, agents or counsel, and having carefully considered the facts set out- in the returns, schedules and supplementary statements of such companies and all evidences of value and all matters bearing upon the question of the value of the property of the companies which, in the judgment of the board, would assist it- in arriving at the true value, in money, of the entire property of each of said companies within the State of Ohio, on motion, the state board of appraisers and assessors unanimously fix and 'determine the values of the property of express companies hereinafter named in Ohio to be taxed therein at the amounts set out in the following table:
The Adams Express Company. $533,095.80
The American Express Company. 499,373.60
The United States Express Company... . 488,264.70” -
This valuation was made July 24, 1895. On the second of August, 'counsel for the companies wrote the auditor requesting to be advised of the assessments when made, in order that they might apply for a correction. On the seventh of August the secretary of the board informed counsel of the assessments. On August 10, counsel wrote asking “ upon what calculation, if any, the apparently precise amounts of the assessments, especially in the case of express companies, are based and how the figures are arrived at.”
The auditor replied for the board that “ the method pursued by the state board of appraisers and assessors this year in assessing the property in Ohio of the Western Union Telegraph Company and the express companies yon represent is not different from that followed in former years, which has been sustained by the courts, and is set forth in the records of the board.”
Attention was called, to certain data lacking in the companies’' returns, and counsel were informed that opportunity would be afforded for a hearing on September 2 at 10 o’clock a.m. ; but the three bills involving these assessments were filed August 14,1895. Subsequently returns were filed as of May 1, 1895, showing : As to the Adams Express Company. Number of shares: 120,000. . Market value: $140 to $150. Taxable value of real estate owned in Ohio.: $25,170. Value of personal property, including moneys and credits, owned by company in Ohio: $42,065. Total value of real estate owned outside of Ohio: $3,005,157.52. Total value of personal property owned outside of Ohio: $1,117,426.05. Entire gross receipts from whatever source received within the State for the year: $282,181. Whole length of lines of rail and water routes over which the company was doing business: 29,647 miles. Length without the State: 27,518 miles. Within the State: 2129 miles.
As to the United States Express Company. Number of shares: 100,000. Par value: $100. Market value: $40. Taxable value of real estate owned in Ohio: $22,190. Value of personal property, including moneys and credits, owned in Ohio: $28,438. Entire gross receipts from whatever source derived within the State: $358,519. Length of lines within the'State over which the company was doing business: 3011 miles.
As to the American Express Company. Number of interests : 180,000. Par value: $100. Market value: $112. Taxable value of real estate in Ohio : $58,660. Value of personal property, including moneys and credits, in Ohio, $23,430. Total value real estate outside of Ohio: $4,891,259. Total value of personal property outside of- Ohio: $1,661,759. Gross receipts within the State: $275,446. Whole length of lines: 35,295 miles. Length within the State: 1731 miles.
The companies made no return of their entire gross receipts of business wherever done, nor of the terms of their contracts or arrangements for transportation.
. These returns stated and the bills, repeated that aside from the real estate mentioned the companies had no property in the State of Ohio “except certain horses, wagons,, harness, trucks,' safes and office fixtures located at different points,” and that their actual value was given. That “ the business of the company in the State consists in carrying packages on passenger and express trains, steamboats and stage's in the care and custody of its employés who accompany the packages. The express company has no ownership of nor interest in these •means of conveyance, and simply pays to the railroad companies and the owners of the steamboats and stage coaches for the passage of messengers and their accompanying packages. The horses, wagons and trucks are used by it in the collection and delivery of these packages. There is no peculiarity about this property; it is of an ordinary kind, whose trupvalue in money must be measured by the ordinary standards, and is easily ascertained and determined.”
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 valúe 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 valué 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 pack ages, 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 skilful 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 talcing 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 the 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.
Mr. Lawrence Maxwell, Jr., for the express companies. {Mr. Clarence A. Seward for the Adams Express Company ; Mr. James C. Carter for the American Express Company ; and Mr. Frank II. Platt for the United States Express Company were on his brief.)
It has been decided by this court that express companies “have no tangible property, of any consequence, subject to taxation under the general laws.” Pacific Express Co. v; Seibert, 142 U. S. 339, 354.
Plaintiffs assign for error that the Circuit- Court erred in sustaining the demurrers to the bills and in dismissing the bills, insisting especially .that the assessments complained of are not in fact assessments against the plaintiffs in respect of their property held or owned by them in the State of Ohio, or Avithin the taxing jurisdiction* of that State, but that the assessments are- really an attempt, under the guisé of taxing the plaintiffs’ property within the State,'to enforce against them the payment of a tax upon their business, which is largely interstate commerce, or for the privilege of doing such business in the State of Ohio, by placing a fictitious and artificial value upon their property; and- that the assessments, and the statute of Ohio purporting to authorize them, are therefore in contravention of the Constitution of the United-States, especially the interstate commerce clause.of Art. 1, Sec. 8, of Art. 4, Sec. 2 and of. Art. 14, Sec. 1.
"We do riot concede that the- assessments complained of in the bills are authorized by the Nichols law, or that the Su-prepie Court of Ohio would justify them if they Avere before that court. But the Circuit Court and the Circuit Court of- Appeals held that'the assessments complained of had been made in pursuance of a definite rule or principle of ap-praisement, recognized and-established by the Nichols law, as construed by the Supreme • Court of Ohio. ' Our argument, therefore, is addressed to the question' whether that rule is valid under the Federal Cohstitution.
I. The cases raise'a Federal question, viz., whether the rule of assessment prescribed by the Ohio statute,, and adopted by •the state board, for the taxation ^of express companies contravenes the Federal '.Constitution. ’ ,
Taking, the allegations of the bills in connection with the returns made by-the express-companies to the state board, •and .the transcript of the proceedings of the state board upon those returns', it is manifest that what the board did, and what the démurrers to the hills admit that they-did, was not to assess the defendants on the basis - of the market value of such of their tangible property as was found within the State of Ohio, and on their moneys and credits in the State, but to treat the companies as owning dividend producing plants,' whose valué is represented by the market value of their shares, and to assign a portion of that value to the State of Ohio, as being property subject to taxation in that State. The basis of the apportionment made by the board to Ohio is no't disclosed ; it was evidently hap-hazard and arbitrary ; but that is not material now. The point is that the state board deliberately and intentionally followed a certain rule and principle of assessment, being the rule prescribed by the statute of the State, as construed by its supreme court, and the validity of that rule is therefore raised by the record, and presents a Federal question.
II. If the Nichols law justifies the assessments complained of, it contravenes the interstate commerce clause of the Federal Constitution; because the assessments, while purporting to be upon the property of the plaintiffs within the State, are, in fact, levied upon the plaintiffs’ business (which is largely interstate commerce), by placing a fictitious and artificial value upon their property.
Under the interstate commerce clause of the Federal Constitution it is not competent for a State to tax a non-resident p'er-son or corporation engaged in interstate commerce, upon their occupation or business. The State’s power, of taxation, in such cases, is limited to a tax upon, such of the property of the person or corporation, as is found within the taxing jurisdiction of the State, and that property must be taxed without discrimination. It is just as much a violation of this rule of the Federal Constitution to levy a tax ostensibly on property, but really on business, by ascribing an artificial or fictitious value to the property, as to make the levy directly and in terms upon business.
III. The rule for the assessment of express companies, prescribed by the Nichols law, discriminates against the property of express, telegraph and telephone companies, on account of its mere. ownership, as compared with all other property in the State, and therefore denies to those comnanies the equal protection of the law, in contravention of the Fourteenth Amendment of the Federal Constitution.
I do not deny the power of the legislature to classify property. But the power to classify is not arbitrary. It must be classification in fact, and not discrimination. Property cannot be classified in respect to mere ownership.' The same kind and character of property devoted to the same uses,.-within-the same taxing districts,, cannot be taxed by one rule against one class of persons and by a different rule against another class. But that is precisely what the Nichols law attempts to do.
The classification of railroad and telegraph property as unit property is not a classification according to ownership, but according to intrinsic differences in the character, use and situation of such property, and the difficulty, attending the ascertainment of its value otherwise than ás a unit. These considerations make the separate classification of" such property not- merely convenient, but necessary, as well as natural and reasonable! But the property owned by express companies within the State of Ohio is- na| different in its character, uses or situations from other similar property within the State, nor is there any greater difficulty in. ascertaining its value for purposes of taxation.
IV. The Nichols law is in contravention of the Fourteenth Amendment,' for the further reason that it taxes property' not within the taxing juris«^iction of the State of Ohio.
It has beén held more than once in this court that the power, of .a State to tax the property of nonresidents is limited .to isuch-of their property as is' found w.ithin the State; in other .words., that a State"'cannot tax lands lying beyond its borders, nor personal property domiciled'in another State. Rays v. Pftcjfic Steamship - Co!, 17. Ho.w. 596, 599'; Railroad Go.. ,v. ■Jackson, -7 Wall. 262, 267, 268.; St. Rouisv. Ferry Co., 11 •Wall. 423, 430, 432; Railroad Co. v. Pennsylvania, 15 Wall. .300'; Gloucester. Ferry Co. v. Pennsylvania, 114 U. S. 196, .206, $10: ‘ ‘
The ground upon which this immunity is secured, under the Federal Constitution,- has ■ not been clearly ■ stated in all-the cases. The earlier ones arose prior to the adoption of the fourteenth Amendment, but we submit, that it is depriving a péfd* son of property without due process of law, in contravention of the Fourteenth Amendment, for a State to tax property not within its jurisdiction.
Y. There is no necessary or proper relation between' the value of the property of an express company and the value of its capital shares.
YI. If the rule of assessment, applied by the state board against the plaintiffs, contravenes the Federal Constitution, it is immaterial whether that rule is prescribed by the statute, or whether It is adopted, independent of the. statute, - .by the board itself.
Mr. Tilomas Me Don gall for appellees.
-Mr. F. S. Monnett, Attorney General of the State of Ohio, was on his brief.
I. The constitutionality of this law under the Ohio constitution is settled by the decision of the Ohio Supreme Court. State ex r.el. v. Jones, Auditor, 51 Ohio St. 492.
II.. The only, question raised by. appellants which is before this court is whether the law violates the Federal Constitution.
If the law violates the Federal Constitution, then the demurrers were erroneously sustained. If- the law does not violate the Federal Constitution, then the only other question raised by the appellants is the difference of opinion between-them and the board of appraisers as to the value of their property. The appellants are not entitled to have this court, -consider any question of difference of opinion.as to the. value of their propert as assessed by the board for taxation merely by asserting that such -action violates the Federal Constitution, unless it appeal’s that the law under which the valuation was made does violate that Constitution. These cases-are to be heard on demurrer, and if this court decides that the ac~ tion complained of does not violate the Federal Constitution, it will thereby decide-that the .bills do not sufficiently 'allege such violation, that the facts set up in the. bills do not'-show such' -violation; in other words; that facts which would raise a Federal question are not alleged, and that there is no such Federal question in the cases.
III. ' The act does not deny to the appellants due process of law, nor equal protection of the laws.
The pleadings, together with the law itself, show the following facts with reference to this subject: .
1. The law itself states the times of'the'sessions of the. board. The returns made by the companies are the statements of their cases' to .the boards, and they may appear if they so desire to make oral statement. Upon application, any of the companies affected has the right to appear before the board prior to the determination of. the assessment,.to be heard on the question of the valuation of its property for taxation. It appears from the pleadings, as a matter of fact,.that the companies were present, and-were' heard in the matter of the valuation of their property for taxation. 1
2. After the valuation of the property of any company for taxation, and before the certification .by the auditor of State of the apportioned valuations to the several counties, the board may, upon the application of any interested person, or on its own motion, correct the assessment.
.3; If the boardrefuses'to correct the assessment regarded by the- company as erroneous, it may appeal,, under section 167, Eevised Statutes of Ohio,- to a board composed of the governor of the State, the auditor of State, and the attorney general.
4.- "By .section 5848, Eevised Statutes of. Ohio, the illegal .levy and collection of taxes may be enjoined; and further,-if compelled to pay the tax, complainants may sue to recover it back.
It canndt be questioned that .these provisions. and remedies, under the decisions of this court, and of the Ohio Supreme Court, constitute due process and equal protection of the laws. •State v. Jones, .51-Ohio' St. 492; Davidson v. New Orleans, 96 U. S...97; State Railroad Tax eases, 92 U. Sí-575 ; McMillen v.' .Anderson, 95-U. S. 37; Kentucky RailroadCFax cases, Í15 U. S. -321; Pittsburgh, Cincinnati- dec. Railway v. Backus, 154 U. S. 421; Pacific Express Oo. v. Seibert, 142 U. S. 339;' Missouri Pailway Co. v. Mackey, 127 U. S. 205.
IY. The law does not violate- the Constitution of the United States by'interfering with interstate commerce.
The law simply provides a method for the valuation of property for taxation, and the tax laid upon the valuation made is a tax on the.property of the' companies in Ohio, and is not a tax upon interstate commerce. The details of that method are all directed toward ascertaining the value in money .of the property in Ohio. ■ The tax imposed is not a license tax, nor a tax on a business or occupation, nor on transportation through the State, nor upon- receipts from business done outside of Ohio, nor upon property outside of Ohio. The tax imposed upon the valuation made under the law is simply a tax.on. .the property of the companies within the State of Ohio. Such a tax is not an interference, with interstate commerce iri the sense in which such an interference is prohibited by the Federal Constitution,. Stale Tax on Railway .Gross Receipts, 15 "Wall.'284; Cleveland, Cincinnati dec. Railway v. Backus.’ 154 U. S. 439, and cases cited."
[a) The property of a corporation -may be fairly valued as a unit for purposes of taxation.
This has been decided so often, and so definitely, that it would hardly seem - to need additionál argument.' -It is contended by counsel for appellants that the property Of the 6om-panies included under this law should be valued item by item, and that the aggregate of value of the different items, taken separately, is the value of the property of the companies for taxation. The State of Ohio claims, on the contrary,-that the-real value of the property of the corporations under discussion cannot be ascertained by simply valuing the items of real and personal property taken separately, and finding the total. The entire property of any one of these corporations as a unit, and used for a specific purpose, and in a certain place, has a value to the corporation, by reason of its. unity, and the use to which it is put, which is much greater than the value of the mere items of property taken separately. Taken together, it constitutes a plant, a machine, which has •a value by reason of the assembling of its parts, the place where it is located, and the use to which it is put. This is the basis of its selling value. This fixes the • selling value of its. stock. This evidences the actual money invested, and which if not so invested would be taxed as money.
. (5) How shall the amount of property in Ohio be apportioned ? .
In the case of a telegraph company, the proportion which the mileage in Ohio bears to the mileage of the whole company, represents a fair proportion of the capital used in Ohio ; and in the case of an express company, the proportionate length of the routes traversed by the company in Ohio to the entire routes traversed by the company, represents the fair proportion of the corporate capital or property used in Ohio. There may be exceptional circumstances, such as the existence of. a large amount of real estate or some other specified property at the home office, which increases the proportion of the entire property to' be found in that State, and decreases the proportion to be found in all other States. But this fact or facts should be brought to the attention of the board, and they are authorized to make due allowance for it, and it will be presumed that they did make full allowance for it.
It is thus seen that there is no tax laid on the property outside of the State, but such property is merely brought to the attention of the board for the purpose of aiding it in arriving at the value of the property as a whole in order to reach the value of the portion of the property used in the State. It is clear, also, that it is not the profits of the business that are being taxed; the profits of the business are not a subject of inquiry. The profitableness of the use of the property may contribute to the value of the property for taxation, but the profits' themselves are not taxed; they are not even known to the board.
Jt has been decided by the courts over dhd over again, that this method of valuing property is a fair one; that it constitutes a bona fide valuation of property for taxation ; that it ’s, in effect as well as in name, a property tax; that it is not a tax on the business, or the earnings, or the profits of .the. companies, but on their property; that the property of these corporations may be valued as a unit upon the basis of the value of their capital stock, and other evidence, and that the •proportion of the entire valuation' thus made, belonging to any one State, may be estimated on the mileage basis as above described. State v. Jones, 51 Ohio St. 492; State Railroad Tax cases, 92 U. S. 575; Western Un. Tel. Go. v. Massachusetts, 125 U. S. 530; Pullman’s Palace Car Go. v. Pennsylvania, 141 U. S.-18 ; Marye v. Baltimore cfe Ohio Railroad, 127 U. S. 117; Cleveland, Cincinnati dec. Railway v. Backus, 154 IT. S. 439; Western Un. Tel. Co. v.. Taggart, 163 ITi S. 1.
Mr. John K. Richards for appellees.
Mr. F. S. Monnett, Attorney General of the State of Ohio, ¡and Mr. John L. Lott, Assistant Attorney General of that State, were on his brief.
I. "Where the constitutionality of a law is involved, every possible presumption is in favor of its validity, and this continues until the contrary is shown beyond a reasonable doubt.
II. The Nichols law is based upon the essential difference existing between the property of telegraph, telephone and express companies, and other property. The property of these companies is in nature and use a unit, and to be justly valued, so that the companies may bear their fair share of the public burdens, must be treated for assessment purposes as a unit.
An express company owns horses, wagons, pouches, office furniture, safes and other implements for carrying on the transportation business; but it also owns leases of transportation facilities and capital and money to operate lines extending throughout the country. A part of this property has a situs in the towns where there are offices, a part is carried to and fro throughout the State on the lines over which the express company operates. The property is used together in one business, that of transportation, and is valuable because it is so used. An express company is akin to a railroad company. It operates over a large territory, or its property would not have the value it does. To operate lines extending over a large territory requires a considerable capital, and this capital i$. of such a character that it can only be ascertained and valued as a unit and cannot be reached and assessed by local officers.
III. Because of these inherent differences, it is not only, proper, but wise for the State to classify the property of these companies for taxation. Such classification does not violate the constitution of Ohio and is in accord with the legislative policy of the State. There are separate provisions for the valuation of the property of individuals, of merchants, of manufacturers, of unincorporated banks, of incorporated banks, of corporations in general, of railroads, of insurance companies. The end of the law is equality of burdens, which can only be reached through classification.
IY. The property of an express company constitutes a plant for transportation purpose -. The assessment of the Ohio property did not exceed a fair proportion of the value of this plant, taking into consideration the value of the capital stock and other facts, whatever basis of apportionment may be taken. In fact, no rule of appraisement aside from that .laid down in the Nichols law was adopted; the result presents the best judgment of the board, in the light of the law and all the facts before it. If the assessment be erroneous, it is in consequence of a mistake of judgment, which the court will neither review nor correct.
Y. There is no denial of the equal protection of the law. The Federal cases recognize the right of a State’ to classify property for taxation, and use such methods of valuation as, in the judgment of the legislature, will result in an equality of burdens. Barbier v. Connolly, 113 .II- S. 27; BelVs Cap Railroad v. Pennsylvania, 134' U. S. 232; Home Ins. Co. v. New York, 134 U. S. 594; Pacific "Express Co. v. Seibert, 142 U. S. 339; Charlotte, Columbia cfee. Railroad v. Cibbes, 142 U. S. 386; Missouri Pacific Railway v.- Mackey, 127 U. S. 205; State Railroad Tax; .cases, 92 U. S. 575; Kentucky Railroad Tax cases, 115 U.- S.-321.
YI. Due process of law is provided by the Nichols act, both' in itself and when taken in connection 'with other stat utes. There are provisions.'for notice, for statements, for hearings, for review and correction of erroneous and excessive valuations, and for contesting assessments. Davidson v. New Orleans, 96 U. S. 97 ; Eagar v. Reclamation District, • 111 U. S. 701; State Railroad Tax cases, ubi sup.; McMillen v. Anderson, 95 U-. S. 37; Kentucky Railroad Tax cases, ubi sup.; Spencer v. Merchant,, 125 U. S. 345; Palmer v. McMahon, 133 U. S. 660.
VII. In the absence of an allegation of fraud, the action of the board in fixing the valuation is conclusive, and the court will not review its judgment to determine whether its valuation'is or is not excessive. Courts do.not constitute themselves taxing ^authorities to determine on evidence the value of property for taxation.
Mr. James 0. Carter for the American. Express. Company, appellant.
Inasmuch as the State, of Ohio had the rightful power to impose a tax upon the property of the express companies actually situated within its territory, if there is any invalidity in the assessments under notice it must be found.in the manner in which they were laid.
What the State of Ohio assumed to do was to tax property, not because of its ownership by citizens of the State, but irrespective of citizenship and on account of its situs within the State. Nor did it assume to impose a specific tax, but a tax determinable by value. This property of the express companies was ordinary movable personal property, the actual value of whiclj. in money was easily determinable in the ordinary way. The method actually employed was this: The board required from the companies, and received (at least from the American Express. Company) statements' showing the value of its whole property, of that part actually situated in Ohio, the nominal amount of its capital stock, and its actual value as determined by the selling price of its shares. If the board had taken the actual value ,of the property in Ohio, it would have assessed it, the personalty (for the year 1895, and the difference between that and the other years is not material) at $23,430. The omissions to return some small items might slightly swell the amount. It utterly dismissed the actual value thus ascertained by the ordinary method, and proceeded with an attempt to ascertain what the value of it would be if it were treated as a certain fractional part of a supposed “ unit profit-producing plant ”; and to this end it assumed that the real value of the whole of this plant was determined by the value of the whole capital stock according to its selling price. Having thus ascertained the value of the whole unit plant, the problem remained to ascertain how-much of that unit plant was in Ohio, and this was solved by the assumption that, as the actual value in Ohio of the specific personal. property therein situated, valued according to the ordinary method, was to the value of the whole property of the company valued in like manner, so was the value of the part of the unit plant in Ohio to the whole value of the unit plant as determined by the whole value of the capital stock.
In this way property really of the value of $23,400 was valued and assessed for taxation for the year 1895 at $499,-377.60!
The case, as thus stated, hardly leaves room for argument, for' argument would assume that the error is not obvious and flagrant, whereas it is so obvious and flagrant that it scarcely seems worth while to.inquire into the nature of the error. The valuations declared by the board of assessors are — must be — either purely capricious and'arbitrary, in which case the error is plain, or the résult' of applying some test of valuation which has no just or reasonáblé relation to value, "in which case the error is equally plain.
I. The laws under which the assessments were made required this mode of valuation, and we„are entitled — -indeed bound in the absence of evidence to the contrary — to assume that the officers followed the law. But, whatever the Supreme Court of Ohio of the Circuit Court of Appeals may have thought' as to whether the board was bound to regard the value of the entire capital stock as alone 'determining the value of the entire property; neither pretends'that it was not the principal test prescribed by the statute; and a law which makes a wholly erroneous test in the valuation of property the, principal one, is just as invalid as if it made it the only one.
II. These proceedings were in conflict with those provisions of the Federal Constitution which forbid the taking of property without due process of' law. The property to be assessed was wholly, or chiefly, personal chattels, such as horses, wagons, etc. They were specific things belonging to the company having an actual situs in Ohio and taxable by that State. The State proposed to value them, not as specific things, but as á part of a distinct whole, embracing these and many other things with them. Their value was easily ascertainable, in the ordinary method, by finding their market value, or the cost at which they could be produced and reproduced. The law required this ordinary mode to be ignored and a value to be placed upon them which should be determined by the value of the capital stock, a thing which had no relation whatever to their value; for nothing is more certain than that the value of this property would bo precisely the same — could be bought for the same price — be sold for the same price- — -be produced arid reproduced for the same price — w’hether the capital stock of the company was 50 per cent below, or 100 per cent above par.
Under this method of valuation, whether the horses were lame or sound, or old or young, whether the wagons and harness were old or new, was of little consequence; but any valuable franchises which the company might possess which increased the profits of its business in other States, however remote, every favorable contract with railroad companies which increased the profits of its business, immediately added to the value of every horse, wagon and harness in' Ohio. And if a debt due to the company from a debtor in Ohio of $1000 was included in its' property there it became subject to' valuation for the purposes of taxation at more than $15,000 !
Is this “a taking of property” without due’process of law? Certainly it is, unless the requirement of “ due process of law ” can iu all instances be satisfied by a more statutory enactment. ¥e are not called upon at the present stage of constitutional jurisprudence to go into argument to show that this cannot be done. The safeguard which forbids the taking of property without due process of law is a protection against legislation. It cannot be met and overcome by' a mere exercise of "the power which it was erected to control.
Exact equality aud justice is not possible in any system of taxation and no one . expects it. There are many methods which may be employed and opinions differ concerning which is the best, and among these the legislature has an uncontrolled discretion. But one thing is essential to any method, and this is that it should have an eye to equality and uniformity. Without this, statutory enactments to'compel the payment by the citizen of money in the name of taxes are mere arbitrary exac-tions ; indeed their proper, name is robbery, and they are none the less robbery because clothed with the exterior form of law.
The opinion seems to have been entertained in the Circuit Court of Appeal, and in the Supreme Court of Ohio, that the question whether the safeguard of due process of law was satisfied, amounted simply to the question whether the property owner had under the law opportunity to appear before the'assessing board and be heard. No greater error could be committed. Opportunity to appear and be heard is useful only when it.affords a means of correcting injustice. It is valuable only when the party can appeal effectively to truth and justice. But of what use is it when the so-called law itself commands the injustice to be donel An appeal to the legal enactment is to no purpose in such a case.
Where the legislative power is arbitrary and unlimited, there is, off course, no protection against it to be found in the constitutional safeguard of the- Fourteenth Amendment that no person shall be deprived of life, liberty and .property- without due process of law. But it has been more than once declared, with the approval of this court, that under our American systems there is no room for the exercise of arbitrary power.
The objection that men differ as to what these fundamental principles are cannot be listened to. It questions the existence of the principles, and thus utterly destroys constitutional gov- eminent. We have no other ground for sayin’g that a judicial proceeding, which denies to the defendant an opportunity to be heard, is unconstitutional, except that it violates the fundamental principles of.reason and justice. But it is not true that-civilized and enlightened men differ as to these principles.» Upon all material points they are agreed. Were they not thus agreed constitutional government would be impossible. They are' agreed, in the main, upon all the dictates of right reason, and so far as they are not agreed, so far our constitutional systems are imperfect, as all human institutions are.
In the application, indeed, of fundamental principles of reason and justice to legal enactments there are wide differences, of opinion, and the difficulty thus occasioned is sur-motmted, so far as it can be, by the rule that laws are not to be pronounced unconstitutional except when they are clearly violative of such principles.
III. The laws in question are very clearly in violation of the constitution of the State of Ohio, and for this reason invalid.
IY. The laws in question impose taxes on property beyond the.-territorial jurisdiction of Ohio and are invalid for this reason.
Y. The laws authorizing the assessments are invalid as an invasion of the constitutional guaranty of the equal protection of the laws.
‘YI. The laws under which these assessments were made are invalid also for the reason ■'that they impose a burden upon interstate commerce.
There is ho constitutional provision in terms forbidding the States to impose burdens by way of taxation upon interstate' commerce. The prohibition is a necessary implication arising. from the fact that the subject-matter is one placed exclusively under the -sovereign control of Congress, and the imposition of burdens upon it by the States, whether by taxation.or otherwise. would be a denial of that sovereignty and a false assumption by the States of a power over it, .which, if it existed,, might be so exercised as to destroy it.
There is one necessary exception to the rule that the States cannot tax interstate commerce. Inasmuch as the existence of the States is necessary to the existence of interstate commerce, that ordinary system of taxation which is necessary to the existence of the States, namely, taxation upon all the property within them, must be permitted, and the property employed in interstate commerce is not to be exempted. This exception is, indeed, rather apparent than real; for where no burden can be put upon property employed in interstate commerce without being at the same time put upon all other property, interstate commerce is not really burdened. Were it not subject to taxation in this form the effect would be to confer upon it an affirmative advantage equivalent to a pecuniary bounty equal to the amount of the tax from which it was exempted.
But a tax in any other form cannot be thus equalized over all private interests, and, if allowed, would be, or might easily be made to be, an especial burden.
The taxes levied by these Ohio laws are taxes directly depending upon the market value of the shares Of the stockholders. That market value depends directly upon the present profits of the business and the fair expectation concerning its permanency. It is, very precisely, a capitalization of all the property and every advantage whether by way of franchise, contract privilege or skill possessed by the companj. Among these advantages is the fact that the privilege of carrying it on is derived from and controlled by another sovereign government. A tax, therefore, upon a capitalization of all these elements is a tax upon the occupation itself, wdiich it is certain that'the States have no right to impose.
The practical test is conclusive. The,question is whether the taxes are a burden. Every one can see that if all the States should impose taxes similar to those we are dealing with (and if one State can do it all may), the business would be immediately destroyed.. No express company cbuld stand such an aggregate of taxation.
The docket title of this case is “Henry Sanford, President of the Adams Express Company, Appellant, v. Ebenezer W. Poe, Auditor of the State of Ohio, et al." The opinion of the court is entitled in this case and in No. 338, Henry Sanford, President of the Adams Express Company, Appellant, v. Ebenezer W. Poe, Auditor of the State of Ohio, et al. ; No. 339, James C. Fargo, President of the American Express Company, Appellant, v. Ebenezer W. Poe, Auditor, etc., et al. ; No. 340, Thomas C. Platt, President of the United States Express Company, Appellant, v. Ebenezer W. Poe, Auditor, etc., et al. ; Appeals from the United States Circuit Court of Appeals for the Sixth Circuit ; and in No. 398, Clarence A. Seward, Vice-President of the Adams Express Company, Appellant, v. Ebenezer W. Poe, Auditor of the State of Ohio; No. 399, James C. Fargo, President of the American Express. Company, Appellant, v. Ebenezer W. Poe, Auditor of the State of Ohio ; and No. 400, Thomas C. Platt, President of the United States Express Company, Appellant, v. Ebenezer W. Poe, Auditor of the State of Ohio ; Appeals from the Circuit Court of the United States for the Southern District of Ohio.

Opinion:
Mr. Chief Justice Fuller,
after stating the case, delivered. the opinion of the court.
No difference material to the determination of the controversy exists between the cases, and as matter of convenience the statement refers to the amended act and the records in Nos. 398, 399 and 400.
The contention that the act in question is invalid because repugnant to the constitution of the State of Ohio lias been disposed of by the decision of the highest tribunal of that State sustaining its validity. State v. Jones, 51 Ohio St. 492. These cases fall within no recognized exception to the general rule that the construction by the state courts of last resort of state constitutions and statutes will ordinarily be accepted by this court as controlling.
It is suggested that the decision of the Supreme Court of Ohio should not be followed because the case in which it was announced did not involve a genuine controversy but was prepared for the purpose of obtaining an adjudication, and, under the circumstances, ought not to have been considered by that court. But it was for that tribunal to pass on this question, and, as it entertained jurisdiction and delivered a considered opinion which appears in the official reports of the court as its judgment of the validity of the Nichols law under the constitution of the State of Ohio, it is not within our province to review its determination in that regard.
This brings us to the only inquiry which it concerns us to examine.
The legislation in question is claimed to be repugnant to the Constitution of the United States because in violation of the commerce clause of that instrument, and.because operating to deprive appellants of their property without due process of law, and of the equal protection of the laws.
We assume that the assessments complained of were made in pursuance of the definite rule or principle of appraisement recognized and established by the Nichols law, as construed by the Supreme Court of Ohio, and the question is whether the law prescribing that rule is valid under the Federal Constitution.
The nrincipal 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 vof 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, doés not affect interstate commerce otherwise than incidentally, as all business is affected by the necessity of contributing to the support of government, Postal Telegraph Cable Co. v. Adams, 155 U. S. 688.
As to railroad, telegraph and sleeping car, companies, engaged in interstate cbmmerce, 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 ules tó '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. Western Union Telegraph Co. v. Massachusetts, 125 U. S. 530; Massachusetts v. Western Union Telegraph Co., 141 U. S. 40 ; Maine v. Grand Trunk Railway, 142 U. S. 217 ; Pittsburgh, Cincinnati &c. Railway v. Backus, 154 U. S. 421; Cleveland, Cincinnati &c. Railway v. Backus, 154 U. S. 439 ; Western Union Telegraph Co. v. Taggart, 163 U. S. 1; Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 18. 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 partirf the"value of the entire road which is measured by the proportion of its length therein to the length of the whole, Pittsburgh &c. Railway v. Backus, 154 U. S. 421; 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; 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, Western Un. Tel. Co. v. Taggart, 163 U. S. 1.
Doubtless there is a distinction between the property of railroad and telegraph companies and that of express companies. The physical unity existing in the former is lacking in the latter; but there is the same unity in the use 6f the entire- property for the specific purpose, and there are the same elements of value arising from such use.
The cars of the Pullman Company did not constitute a physical' unity, and their value as separate cars did not bear a-direct relation to the valuation which was sustained in that case. The cars were moved by.railway carriers under contract, and the taxation of the corporation in Pennsylvania was - sustained on the theory that the whole propérty of the company might be regarded as a unit plant, with a unit value, a proportionate part of which value might be reached by the state authorities on the basis indicated:
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; 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 recognised 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.-
The same party may own a manufacturing establishment in one State and a store in another, and may make profit by operating the two, but the work of each is separate. The value of the factory in itself is not conditioned on thaf; of the store or vice versa, nor is the value of the goods manufactured and sold affected thereby. The connection between the two is merely accidental and growing out of the unity of ownership. But the property of an express Company distributed through different States is as an essential condition of the business united in a single specific use. It constitutes but a single plant, made so- by the very character and necessities of the business.
It is this which enabled the companies represented heredo charge and receive -within the State of Ohio for the year-ending -May 1, 1895, $2S2,L81, $358,519 and $275,4-46, 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 iiorse ; a wagon, a wagon ; a safe, a safe; a pouch, a poach ; but-liow is it that-$23,430 worth of horses, wagons, safes and pouches produces $275,416 in a single year? Or $2S,438 worth, $358,519? The answer is obvious.
Eeliance seems to be placed by counsel on the observation of Mr. Justice Lamar, in Pacific Express Company v. Seibert, 142 U. S. 339, 354, 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.
The method of asrpssment provided by the Nichols law was as follows: "The said board shall proceed to ascertain and assess the value of the property of said express, telegraph and telephone companies in Ohio, and in determining the value of the property of said companies in this State, to be taxed within the State and assessed as herein provided, said board shall be guided by the value of said property as determined by the valúe of. the entire capital stock of said companies, and such other evidence and rules as \vill enable said board to arrive at the true value in money of Tihe entire property of said companies within the State of Ohio, in the proportion which the same bears to the entire property of said companies, as determined by the value of the capital stock thereof, and the other evidence and rules as aforesaid."
And this provision was thus construed by- the Supreme Court of Ohio in State v. Jones:
"The board, in determining the value of the company's property in this State for taxation,. is not required to fix the value of such property, upon the principle that the value of the entire property of the company shall be deemed the same as the value of its entire capital stock, thus making the respective values equivalents of each other. But, taking the market value of the entire capital stock as a datum, the board is to be only guided thereby in ascertaining -the. true'value in money of the company's property in this State. The statute does not bind the bóard- to find the value of the entire property of the company equal to that of the entire capital stock."
The court further said:
" But the property of a corporation may. be regarded in the aggregate, as a unit, an entirety, as a plant designed for a specific object; and its value may be estimated not in parts, but taken as a whole. .If the market value — perhaps the closest approximation to the true value in money — of the corporate property as a whole, were inquired into, the market value of the capital stock would become a controlling factor in fixing the value of the property. Should all the stockholders unite to sell the corporate plant as ah entirety, they would not be inclined to sell it for less than the market value of the aggregate shares of the capital stock. Besides, while the amount of the capital stock may be limited by the charter and' the laws governing it, the real and personal property of the corporation may be constantly augmented, and may* keep pace with any increase in the value of the capital stock. The market value of the capital stock, it is urged, has no necessary relation to the. value 'of the tangible property of the corporation. But such is the well understood relation between the two that not only is the value of the capital stock an essential factor in fixing the market value of the corporate plant, but the corporate capital or property has a reflex action on the value of the capital stock. .
" 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 mai'ket 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 some- wbat to good will, franchise, skilful management of the property or any other 'legitimate agency.
"It will, wé think, be conceded that the earning capacity of real estate owned by the individuals may be considered in fixing its value for taxation. Take an office building on a prominent street in one of our large cities. It will not be doubted, that by care in the selection of tenants, and in the preservation of the reputation of the building, by superior elevator service, by vigilance in guarding and protecting the property, by the exercise of skill and knowledge in the general management of the premises, a good will of the establishment will be promoted, which will tend to an extra increase in the earning capacity and value of the building. For the purpose of taxation, it would be none the less the true value in money of the building, because contributed to by the operative causes that gave rise to the good will. We discover no satisfactory reason why the same rule should not apply to the valuation of corporate property — : why the selling value of the capital stock, as affected b}7 the good will of the business, should be excluded from the consideration of the board of appraisers and assessors under the Nichols law, charged with the valuation of corporate property in this 'State, especially as the capital stock, when paid up, practically represents at least an equal value of the corporate property."
Similar views were expressed by the Circuit Court of Appeals, Sanford v. Poe, 37 U. S. App. 378, 395, Judge Lurton, delivering the opinion, saying:
"The tax imposed is not a license tax, nor a tax on the business or occupation, nor on the transportation of property through.the State, nor from points within the State to points iri other States, nor from points in other States to points within the State. It purports to provide for a tax upon property within the State of Ohio. Though this property is employed very largely in the business of interstate commerce, yet that does not exempt it from the.same liability to taxation as all other property within the jurisdiction of Ohio. This proposition is too well settled to need argument. . . .
" Neither does the fact that the property of the express com panies was valued as a unit profit-producing plant violate any Federal restriction upon the taxing power of a State within which a part of that plant is found. The value of property depends in a large degree upon the use to which it .is put. If a railroad may be valued as a unit, rather than as a given number of acres of land, plus so many tons of rails and so many thousand ties and a certain number of depots, shops, etc., there is no sufficient reason why the property of an express company should not be treated as a unit plant. If the State of Ohio had a right to tax the property within the State, and to assess it at its true cash valúe, there is no Federal restriction which will prevent such property from being ' assessed at the value which it has, as used, and by reason of its use.' . . .
"That an express company owns no line of railway and operates no railroad does not prevent the value of its property from being affected by the relation of each part to every other part, and the use to which a part is put as a factor in a unit business."
The line of reasoning thus pursued is in accordance with the decisions of this court already cited. Assuming the proportion of capital employed in each of several States through which such a company conducts its operations has been fairly ascertained, while taxation thereon, or'determined with reference thereto, may be said in some sense to fall on the business of the company, it is only indirectly. The taxation is essentially a property tax, and, as such, not an interference with interstate commerce.
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 Gar Co. v. Pennsylvania, 141 U. S. 18, 22; State Railroad Tax cases, 92 U. S. 575; Delaware Railroad Tax, 18 Wall. 206 ; Erie Railroad v. Pennsylvania, 21 Wall. 492; Columbus Southern Railway v. Wright, 151 U. S. 470.
In Pullman's Palace Car Co. v. Pennsylvania, tbe rule is considered that person's! 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 domicil, 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.
There is here no attempt to tax property having a situs outside of.the State, but only to place a just value on that within. Presumptively all the property of the corporation or company is held and used for the purposes of its business, and the value of its capital stock and bonds is the value of only that property so held and used.
Special circumstances might exist, as indicated in Pittsburgh, Cincinnati &c. Railway v. Backus, 154 U. S. 421, 443, 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 propeity 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.
The States through which the companies operate ought not to -be compelled to content themselves with a valuation of separate pieces of-property disconnected from the plant as an entirety, to the proportionate part of which they extend protection, and to the dividends of whose owners their citizens contribute.
It is not contended that notice of the time and place of the meetings of the board was not afforded or that the companies were denied the opportunity to appear and submit such proofs, explanations, suggestions and arguments with reference to the assessment as they desired.
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 Railroad v. Pennsylvania, 134 U. S. 232.
In Pacific Express Co. v. Seibert, 142 U. S. 339, 351, in which a tax on gross receipts of 'express companies in the State of Missouri was sustained, Mr. Justice Lamar, speaking for the court, well says:
" This court has repeatedly laid down the -doctrine that diversity of taxation, both with respect to the amount imposed and the various species of property selected either for bearing its burdens or for being exempt from them, is not inconsistent with a perfect uniformity and equality of taxation in'the proper sense of those terms; and that a system which imposes the same tax upon every species of property, irrespective of its nature or condition or class, will be destructive of the principle of uniformity and equality in taxation and of a just adaptation of property to its bhrdens."
And see Kentucky Railroad Tax cases, 115 U. S. 321; Home Insurance Co. v. New York, 134 U. S. 594.
The policy pursued in Ohio is to classify property for taxation, when the nature of the property, or its use, or the nature of the business engaged in, requires classification, in the judgment of the legislature, in order to secure equality of burden; and property of different sorts is classified under various statutory provisions for the purposes of assessment and taxation. The state constitution requires all property to be taxed by a uniform rule and according to its true value in money, and it was held by the Supreme Court of Ohio in State v. Jones that the Nichols law did not violate that requirement.
In Wagoner v. Loomis, 37 Ohio St. 571, it was ruled that: " Statutory provisions, wdiereby different classes of property are listed and valued for taxation in and by different modes and agencies, are not necessarily in conflict with the provisions of the constitution which require all property- to be taxed by a uniform rule and according to its true value in money." And the court said': "A faithful execution of the different provisions of the statutes would place upon the duplicate'for taxation all the taxable property of the State, whether bank stocks or other personal property or real estate, according to its true value in money ; and the equality required by the constitution ha,s no other test."
The constitutional test was held to be complied with, whatever the mode, if the result of the assessment was that the property was assessed at its true value in money.
Considering, as we do, that the unit rule may be applied to express companies without disregarding any other Federal restriction, we think it necessarily follows that this law is not open to the objection of denying the equal protection of the laws.
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." Pittsburgh, Cincinnati &c. Railway v. Backus, 154 U. S. 434; Western Union Telegraph, Co. v. Taggart, 163 U. S. 1.
Decrees affirmed.