1.
Quaere, are the statutes of a state in violation of
the Constitution of the United States if they subject to taxation
the capital of her citizens,\ although, on the day to which the
assessment of it relates, it is invested in products on shipboard
in the course of exportation to foreign countries, or in transit
from one state to another for purposes of exportation.
2. If on that day it consisted of money, subsequent assessments
including it cannot be set aside on the ground that when they were
made, it was employed in the purchase of products for
exportation.
The facts are stated in the opinion of the Court.
MR. JUSTICE HARLAN delivered the opinion of the Court.
The only question presented upon the writ of error is whether an
assessment made by the Board of Tax Commissioners for the City and
County of New York of the personal estate of Hanemann, the relator
of the plaintiff in error, was in violation of the Constitution of
the United States. The statute under the authority of which it was
made provides that "all lands and all personal estate within this
[that] state, whether owned by individuals or by corporations,
shall be liable to taxation," subject to certain exemptions
thereinafter specified. 1 Rev.Stat.N.Y., c. 13, tit. 1, sec. 1. It
also declares that
"The terms 'personal estate' and 'personal property,' whenever
they occur in this chapter, shall be construed to include all
household furniture, moneys, goods, chattels, debts due from
solvent debtors, whether on account, contract, note, bond, or
mortgage, public stocks, and stocks in moneyed corporations. They
shall also be construed to include such portion of the capital of
incorporated companies, liable to taxation on their capital, as
shall not be invested in real estate."
Id., sec. 3.
Hanemann, being a resident of the City, County, and State
Page 104 U. S. 467
of New York, was assessed for taxation as of Jan. 1, 1876, upon
his personal estate, exclusive of bank stock, to the amount of
$60,000. He made application, supported by affidavit, for the
reduction or remission of such assessment upon these grounds: that
the value and amount of all his personal estate on the first day of
January, 1876, and during the period covered by the assessment, did
not exceed $125,000, of which $4,500 was invested in railroad bonds
and $1,000 in household furniture; that the remainder was
"continuously employed in the business of exporting cotton from
the United States of America to foreign countries through the
Customs Department of the United States aforesaid, and that said
employment consists in purchasing and paying for the cotton in
different states of the United States, and actually exported by
deponent in said business, and for the payment of all the expenses
of shipping the same as such exports,"
and that the only portion of his estate upon which he is liable
to be assessed and taxed is the sum of $5,500. In his examination
before the tax commissioners upon the occasion of his application
for reduction or remission, he further stated that
"his said capital is invested uniformly and continuously in
cotton, the product of, and having a situs in, various states
outside of New York, and in transit to the port of New York, and
other Atlantic ports, for the sole purpose of exportation, and no
portion of such cotton is intended to be, or is, sold in New York,
or any other United States market; that deponent purchases cotton
largely upon credit, and that of his capital as much as $115,000 is
continuously invested in cotton of the growth of the United States,
which has been cleared at a custom house, and is on shipboard in
course of exportation to some foreign state or country."
The reduction and remission were both denied. Upon writ of
certiorari, the proceedings of the tax commissioners were affirmed
in the supreme court of the state, and its judgment was affirmed by
the Court of Appeals.
The assessment in excess of $5,500, it is claimed by plaintiff
in error, was in violation as well of art. 1, sec. 10, and clause
2, as of art 1, sec. 8, clause 3, of the National Constitution. The
main propositions advanced by his counsel are that products of the
United States which have passed the Customs
Page 104 U. S. 468
Department, and are on shipboard in the course of exportation to
a foreign market, have become exports, and are no longer within the
taxing power of the state; that to tax money invested in such
products is, in effect, laying an impost or duty on exports; that a
tax on capital invested in the products of the United States, in
transit from one state to another for purposes of exportation, or
on money used and employed in exporting such products, is an
unauthorized interference by the state with the regulation of
commerce.
Although these propositions are deemed by counsel to be very
easy of solution, we do not feel obliged to determine them in this
case. The plaintiff in error was assessed, upon his personal
property, as of Jan. 1, 1876. If the capital, which he claims was
uniformly and continuously employed in the business of purchasing
cotton for exportation from the United States to foreign countries,
through the Customs Department, was in fact in money on the first
day of January, 1876, he could not escape a subsequent assessment
of that money upon the ground that, at the time the assessment was
made, it was invested in cotton for exportation to foreign
countries. Neither in his affidavit nor in his examination before
the tax commissioners does he distinctly claim (and, perhaps, could
not) that the capital which he thus employed in the business of
purchasing cotton for exportation was, in fact, so invested on the
first day of January, 1876. His capital may have been, in a
business or mercantile sense, continuously so employed, and yet it
may not have been in fact so invested at the date to which the
assessment, whenever made, relates. We have no occasion, therefore,
in the present case to consider or determine the questions of
constitutional law discussed by counsel. It will be time enough to
consider them when they come before us in such form as to require
their determination.
Judgment affirmed.
NOTE -- This cause was decided and the opinion delivered at the
last term.