New York, Lake Erie & Western R. Co. v. Pennsylvania
158 U.S. 431 (1895)

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U.S. Supreme Court

New York, Lake Erie & Western R. Co. v. Pennsylvania, 158 U.S. 431 (1895)

New York, Lake Erie & Western

Railroad Company v. Pennsylvania

No. 263

Argued April 5, 1895

Decided May 22, 1895

158 U.S. 431

Syllabus

A statute of Pennsylvania imposing a tax upon the tolls received by the New York, Lake Erie and Western Railroad Company from other railroad companies, for the use by them respectively of so much of its railroad and tracks as lies in the State of Pennsylvania, for the passage over them of trains owned and hauled by such companies respectively, is a valid tax, and is not in conflict with the interstate commerce clause of the Constitution when applied to goods so transported from without the State of Pennsylvania.

The New York, Lake Erie and Western Railroad Company, a corporation of the State of New York doing business in the State of Pennsylvania, appealed from a settlement of account made by the auditor general of the latter state, assessing

Page 158 U. S. 432

certain taxes, to the Court of Common Pleas of Dauphin County, Pennsylvania. The case was heard by agreement without a jury, the court finding both the law and the facts.

The following were the finding of fact:

"1. The defendant is a corporation of the State of New York, engaged in the business of transporting freight and passengers. Its railroad runs through the County of Susquehanna in this state."

"2. It leases and operates as one of its branches a railroad, lying wholly within this state, known as the 'Jefferson Branch,' which extends from Carbondale to a connection with the defendant's main line in said County of Susquehanna. At Carbondale, the Jefferson Branch connects with the railroad of the Delaware and Hudson Canal Company, a corporation engaged in mining and transporting coal, and also in transporting freight and passengers."

"3. The canal company makes use of the Jefferson Branch in the manner, for the purposes, and upon the terms specified in an agreement made April 7, 1885. This agreement is made a part of this finding."

"4. Under the eighth clause of said agreement, the canal company paid to the defendant, for the transportation of coal and merchandise during the six months ending June 30, 1889, the sum of $69,462.11. Of this amount, $69,100 was in respect of coal and merchandise transported by the canal company over the said Jefferson Branch in transit to points in other states; the said coal and merchandise, when taken upon the cars and upon said Jefferson Branch, being destined and intended for shipment by continuous transportation upon a single waybill from points in Pennsylvania to points in other states, and having been actually so transported to, and delivered at, points in other states, and $362.11 was paid in respect of coal and merchandise taken up and put down within the State of Pennsylvania. The canal company has paid to the state a tax upon its gross receipts for the transportation of the coal and merchandise in respect of which it paid to the defendant the said sum of $362.11."

"5. Under the sixteenth clause of said agreement, the canal

Page 158 U. S. 433

company paid to the defendant the sum of $2,000, of which $1,000 was made up of half fares collected from local passengers taken up and put down within the State of Pennsylvania, and $1,000 was in respect of passengers carried interstate by continuous transportation into, out of, or through the State of Pennsylvania."

"6. The defendant also leases and operates as one of its branches a railroad known as the 'Buffalo, Bradford and Pittsburgh Branch,' extending from Buttsville or Gilesville, Pennsylvania, to a connection with defendant's main line at Carrollton, in the State of New York. At Crawford Junction, Pennsylvania, a point on this branch, the railroad of the Buffalo, Rochester and Pittsburgh Railway Company (formerly the Rochester and Pittsburgh Railroad Company) connects with said branch. This last-mentioned corporation is engaged in the transportation of freight and passengers."

"7. The Buffalo, Rochester and Pittsburgh Railway Company makes use of part of the Buffalo, Bradford and Pittsburgh Branch in the manner, for the purpose, and upon the terms specified in an agreement made October 20, 1882, which agreement is made a part of this finding. The part used lies partly in this state and partly in the State of New York."

"8. Under this agreement, the amount paid to the defendant by the Buffalo, Rochester and Pittsburgh Railway Company during the six months ending June 30, 1889, was $2,700, being one semiannual payment. For the same period, the Buffalo, Rochester and Pittsburgh Railway Company paid to the state a tax upon its gross receipts, so far as the same were derived from transportation between points both of which are within the State of Pennsylvania."

"9. This settlement taxes the entire gross receipts of the defendant from its business in Pennsylvania for the six months ending June 30, 1889, under § 7 of the act of 1879, and includes therein the sums paid by the canal company and by the Buffalo, Rochester and Pittsburgh Railway Company."

"10. On February 10, 1890, the defendant paid to the state the whole amount demanded, except the tax upon said sums of $71,402.11 and $2,700. "

Page 158 U. S. 434

The conclusions of law were as follows:

"1. The rentals paid to the defendant by the canal company and by the Buffalo, Rochester and Pittsburgh Railway Company are 'receipts for tolls,' within the meaning of section 7 of the act of 1879."

"2. The taxation of such receipts does not offend against article 9, section 1, of the Pennsylvania Constitution, or against the commerce clause of the federal Constitution."

"3. Such taxation is not, in the case before us, double taxation."

"4. The toll received by the defendant from the Buffalo, Rochester and Pittsburgh Railway Company should be apportioned, and only so much thereof be taxed as represents the sum paid for the use of that part of defendant's branch which lies within the state."

The sum due the commonwealth is as follows:

Tax eight-tenths of 1 percent upon

$71,402.11, paid by the Delaware and

Hudson Canal Company . . . . . . . . . . . . $571.69

And upon $1,350 paid by the Buffalo,

Rochester and Pittsburgh Railway Company . . 10.60

Interest . . . . . . . . . . . . . . . . . . . 31.63

Attorney general's commission. . . . . . . . . 29.11

-------

Total . . . . . . . . . . . . . . . . . . $643.03

For which amount judgment is directed to be entered.

Upon exception, the court made an additional finding as follows:

"That portion of defendant's railroad known as the 'Buffalo, Bradford and Pittsburgh Branch,' extending from Buttsville or Gilesville, Pennsylvania, to a connection with defendant's main line at Carrollton, in the State of New York, as shown in findings of fact No. 6, is used by the Buffalo, Rochester and Pittsburgh Railway Company for the purposes of interstate transportation exclusively."

Judgment was entered in pursuance of the findings of fact and law, from which an appeal was taken to the Supreme Court of Pennsylvania, and the judgment was by that court

Page 158 U. S. 435

affirmed, and to that judgment a writ of error was used out from the Supreme Court of the United States.

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