Section 6 of the act of the Legislature of Tennessee, passed
March 16, 1877, Laws of 1877, c. 16, p. 26, which imposes a
privilege tax of $50 per annum on every sleeping car or coach used
or run over a railroad in Tennessee and not owned by the railroad
on which it is run or used, is void so far as it applies to the
interstate transportation of passengers carried over railroads in
Tennessee, into or out of or across that state, in sleeping
cars
Page 117 U. S. 35
owned by a corporation of Kentucky and leased by it for
transportation purposes to Tennessee railroad corporations, the
latter receiving the transit fare and the former the compensation
for the sleeping accommodations.
Section 28 of Article II of the Constitution of Tennessee of
1870 contains these provisions:
"All property shall be taxed according to its value, that value
to be ascertained in such manner as the legislature shall direct,
so that taxes shall be equal and uniform throughout the state. No
one species of property from which a tax may be collected shall be
taxed higher than any other species of property of the same value.
But the legislature shall have power to tax merchants, peddlers,
and privileges in such manner as they may from time to time
direct."
On the 16th of March, 1877, the Legislature of Tennessee passed
an act entitled "An act declaring the mode and manner of valuing
the property of telegraph companies for taxation, and of taxing
sleeping cars," Laws 1877, c. 16, p. 26, the 6th section of which
provided as follows:
"That the running and using of sleeping cars or coaches on
railroads in Tennessee, not owned by the railroads upon which they
are run or used, is declared to be a privilege, and the companies
owning and running or using said cars or coaches are required to
report, on or before the 1st day of May of each year, to the
comptroller the number of cars so used by them in this state, and
they shall be required to pay to the comptroller by the 1st of July
following $50 for each and every of said cars or coaches used or as
run over said roads, and if the said privilege tax herein assessed
be not paid as aforesaid, the comptroller shall enforce the payment
of the same by distress warrant."
Under this act, the comptroller of the state claimed that there
was due from the Pullman Southern Car Company, a corporation of
Kentucky, to the state, for each of the years 1878, 1879, and 1880,
a privilege tax of $50 on each one of thirty-eight sleeping cars
run and used on railroads in Tennessee and not owned by the
railroad companies on whose roads they were used, but owned by the
Pullman Company. The aggregate amount of the taxes claimed was
$5,700, and the comptroller instituted proceedings to collect them
from that company, which, under the provisions of a statute of the
state, paid the
Page 117 U. S. 36
money under protest, and it was paid into the state treasury
with notice to the comptroller that it was paid under protest, and
the company, within the time prescribed by the statute and in
August, 1881, brought an action at law against the comptroller to
recover the $5,700, in the Circuit Court of the United States for
the Middle district of Tennessee.
The declaration alleges, among other things, that the sleeping
cars for the running or use of which the taxes were claimed and
collected were not run or used by the plaintiff during any one of
the years 1878, 1879, or 1880, but were run and used by certain
railroad companies in Tennessee, though they were owned during that
time by the plaintiff, which permitted those railroad companies to
run and use them under certain contract stipulations; that the
sleeping cars so run and used were, during the whole of the years
1878, 1879, and 1880, employed by them in interstate commerce,
being run into and through Tennessee from and into other states,
transporting passengers from other states into or across Tennessee
or from Tennessee into other states, and that therefore such taxes
and the collection thereof were illegal and contrary to the
Constitution of the United States. There was a demurrer to the
declaration raising, among other things, the question above stated,
but on a hearing the demurrer was overruled, the opinion of the
court being delivered by Mr. Justice Matthews. 22 F. 276. The
conclusion arrived at in the opinion, which accompanies the record,
was that the levying of a privilege tax on the running and using,
on railroads in Tennessee, of sleeping cars not owned by those
railroads was, as applied to such cars when employed in interstate
transportation, a regulation of commerce among the states and
contrary to the Constitution of the United States, and therefore
void. Leave being given to the defendant to plead over,
nil
debet was pleaded, and the issue was tried by the court
without a jury, by a written stipulation between the parties, which
embodied an agreed statement of facts, on which the cause was
heard. The agreed statement sets forth that the plaintiff is a
Kentucky corporation, having its chief office and place of business
at Louisville, and that, since 1872, it has been engaged at
Page 117 U. S. 37
Louisville in manufacturing railway cars, known as drawing room
cars and sleeping cars, and in hiring those cars to various
railroad companies in Tennessee and other states under the
following form of contract:
"This indenture, made this 19th day of June, A.D. 1872, between
the Louisville and Nashville Railroad Company, the party of the
first part, and the Pullman Southern Car Company, of the second
part:"
"Whereas the said party of the second part is now engaged in the
business of manufacturing railway cars, known as drawing room and
sleeping cars, under certain patents belonging to them, and of
hiring the same to railroad companies and receiving therefor income
and revenue by the sale to passengers of seats and berths and
accommodations therein, and whereas the said party of the first
part is desirous of availing itself of the use on and over its
lines of road of the cars constructed under the sleeping and
drawing room car patents now the property of said second party, and
also of connections by means of said cars with other lines of
railroad, whereon said cars are now operated by said second
party,"
"Now this contract witnesseth that the said party of the second
part, in consideration of the covenants and agreements of the party
of the first part, hereinafter mentioned to be by them kept and
performed, hereby agrees with the said party of the first part that
they will furnish drawing room cars and sleeping cars to be used by
said party for the transportation of passengers, sufficient to meet
the requirements of travel on and over their line of railroad, and
on and over all lines of railroad which they now control or may
hereafter control, by ownership, lease, or otherwise, the said cars
so furnished to be satisfactory to the general superintendent of
the first party."
"2d. The said party of the second part agrees that they will
keep the carpets, upholstery, and bedding of each of the said cars
in good order and repair, and renew and improve the same, when
necessary at their own expense excepting repairs and removals made
necessary by accident or casualty, it being understood that the
said first party shall repair all damages to said cars of every
kind occasioned by accident or casualty during the continuance of
this agreement. "
Page 117 U. S. 38
"3d. The said party of the second part hereby agrees at their
own expense and cost to furnish one or more employees, as may be
needful, upon each of said cars, whose duties shall be to collect
fares for the accommodations furnished in said cars, and generally
to wait upon passengers therein and provide for their comfort."
"4th. The said party of the first part hereby agrees that the
general officers of said second party and the employees named in
article third of this agreement shall be entitled to free passage
over the lines of the first party when they are on duty for the
second party."
"5th. The party of the second part hereby agrees that the
general officers of the first party shall be entitled to free
passes in any of the cars furnished by said second party under this
agreement."
"6th. It is hereby mutually agreed that the said employees of
the second party named in article third of this agreement shall be
governed by and subject to the rules and regulations of the said
first party, which are or may be adopted from time to time for the
government of their own employees and, in the event of any
liability arising against said first party for personal injury,
death, or otherwise of any employees of said second party, it is
hereby distinctly understood and agreed that the said first party
shall be liable only to the same extent they would be if the person
injured was an employee in fact of said first party, and for all
liability in excess thereof shall be indemnified and paid by said
second party."
"7th. The party of the first part, in consideration of the use
of the aforesaid cars, hereby agrees to haul the same on the
passenger trains on their line of road, and on all roads which they
now control or may hereafter control by ownership, lease, or
otherwise, and also on all passenger trains on which they may, by
virtue of contracts or running arrangements with other roads, have
the right to use such cars in such manner as will best accommodate
passengers desiring the use of said cars, and the said party of the
first part shall at their own expense, furnish fuel for the cars
and materials for the lights, shall wash and cleanse said cars, and
shall also keep said cars in good
Page 117 U. S. 39
order and repair, including renewals of worn-out parts, and all
things appertaining to said cars, necessary to keep them in
first-class condition, except such as are provided for in article
second of this agreement."
"8th. The party of the first part agrees to furnish said party
of the second part at convenient points room and conveniences for
airing and storing bedding."
"9th. The said party of the first part further agrees that the
said party of the second part shall be entitled to collect from
each and every person occupying said cars such sums for said
occupancy as may be usual on competing lines furnishing equal
accommodations, and that such rules and regulations shall be agreed
upon as will most favor the renting of seats and couches in said
cars."
"10th. The party of the first part hereby agrees to permit the
party of the second part to place their tickets for seats and
couches for sale in such of the railroad ticket offices as may be
desired by said second party, and such services shall be performed
by and as part of the general duties of the ticket agents, and
without charge to the party of the second part, proceeds of such
sales to be at the risk of said second party."
"11th. The party of the first part hereby agrees that said
second party shall have the exclusive right, for a term of fifteen
years from the date hereof, to furnish for the use of the first
party drawing room or parlor cars and sleeping cars, including
reclining chair cars, on all the passenger trains of said first
party, and over their entire lines of railroad, and on all
railroads which they may control, or may hereafter control, by
ownership, lease, or otherwise, and also on all passenger trains on
which they may, by virtue of contracts or running arrangements with
other roads, have the right to use such cars, and that they will
not contract with any other parties to run said class of cars on or
over said lines of road during said period of fifteen years."
"The said second party, for the consideration aforesaid, hereby
guarantees said first party against all damages of whatsoever kind
which may be by said first party incurred in consequence of any
infringement of patent rights in the construction and
Page 117 U. S. 40
use of any of said cars which may be used by said second party
upon the lines of said first party under this arrangement, it being
the meaning and intent of this article that the said second party
shall secure said first party against all manner of expenditures
which may be incurred by said first party in consequence of any
litigation connected with alleged infringements of patent rights
for the interior arrangements of said cars, and that they will pay
off and discharge all judgments obtained at any time against said
first party on account of such infringements."
"12th. It is mutually agreed between the parties hereto that in
case either of said parties shall at any time hereafter fail to
keep and perform any of the covenants herein contained to be by
them respectively kept and performed, then and in that case, after
written notice shall have been given to the defaulting party
thereto of the default complained of, if the said defaulting party
shall refuse or neglect to make good, keep, and perform such
unfulfilled covenants and conditions of this agreement within a
reasonable time after such notice, the other party shall be at
liberty to declare this contract ended, and no longer in
force."
The agreed statement further set forth that the plaintiff had
never had any branch office or establishment of any kind in
Tennessee, unless the fact that the plaintiff has placed its
tickets for sale with railway agents in that state constituted the
offices of such agents branch offices or establishments of the
plaintiff; that it had never had any ticket agents of its own in
Tennessee except insofar as the ticket agents of the railway
companies with whom the tickets of the plaintiff have been placed
for sale may be regarded as the agents of the plaintiff; that the
plaintiff had never had any other agents, officers or employees in
Tennessee except the conductors and porters which it furnished with
its cars under its contracts with the railroad companies; that the
cars furnished by the plaintiff under those contracts constituted
all the property owned by it in Tennessee, and the business done by
it under those contracts, such as it was, was the only business
done by it in Tennessee; that the cars furnished by it under those
contracts
Page 117 U. S. 41
(with the exception of two sleeping cars running between
Nashville and Memphis) were used in transporting passengers from
other states into or across Tennessee and from points in Tennessee
to points in other states; that the same cars also transported
passengers from points in Tennessee to other points in that state
whenever they properly applied for such transportation, but the
number of such passengers bore an inconsiderable proportion to the
other passengers transported in those cars; that those cars ran
into, out of, or across, Tennessee, making such stops as the trains
to which they are attached made; that in the case of passengers
traveling across Tennessee or from points out of it to points in
it, their sleeping car tickets were purchased and paid for before
they entered Tennessee, but in the case of passengers from points
in Tennessee to points in other states, or in Tennessee, the
tickets were purchased and paid for in Tennessee; that the railroad
companies of Tennessee with whom such contracts were made were duly
chartered by that state or organized or operated under its laws,
with power to transport passengers for hire; that they were taxed
by that state on the value of their roads, rolling stock, and other
tangible property, and also on the value of their franchises; that
from March 16, 1877, to the present time, the Memphis and
Charleston Railroad Company, and the East Tennessee, Virginia and
Georgia Railroad Company, both of them Tennessee corporations, have
owned sleeping cars which they have run and used during that time
as sleeping cars upon their respective roads, and they have not
been required by the state to pay any tax for running or using said
sleeping cars upon their roads except insofar as such a tax may
have been included in the tax assessed on the value of their
franchises, and that the thirty-eight cars before mentioned
included the two cars run between Nashville and Memphis.
The agreed statement set forth the other facts hereinbefore
contained necessary to a recovery, and on the 29th of December,
1884, a judgment was entered which stated that the cause was heard
on an agreed statement of facts, and that it was thereby made a
part of the record at large in the cause, and
Page 117 U. S. 42
that the court found the issue joined in favor of the plaintiff.
It then set forth the material facts contained in the agreed
statement, and awarded a judgment for $5,400, for the taxes on the
thirty-six cars, and for $1,089.90 interest, and for costs,
assigning as a reason that the state had no power to impose a
privilege tax on the plaintiff for running or using the thirty-six
cars in the state, the tax being a regulation of commerce between
the states, and therefore a violation of the Constitution of the
United States. To reverse this judgment the defendant has sued out
a writ of error.
Page 117 U. S. 43
MR. JUSTICE BLATCHFORD delivered the opinion of the Court. After
stating the case as above reported, he continued:
The point upon which the final judgment was rendered in the case
was the one considered and adjudged in the decision given on the
demurrer to the declaration. The tax was not a property tax,
because, under the Constitution of Tennessee, all property must be
taxed according to its value, and this tax was
Page 117 U. S. 44
not measured by value, but was an arbitrary charge. What was
done by the plaintiff was taxed as a privilege, it being assumed by
the state authorities that the legislature had the power, under the
Constitution of Tennessee, to enact the 6th section of the act of
1877, and that the plaintiff had done what that section declared to
be a privilege. By the decisions of the Supreme Court of Tennessee,
cited in the opinion of the circuit court on the demurrer, it is
held that the legislature may declare the right to carry on any
business or occupation to be a privilege, to be purchased from the
state on such conditions as the statute law may prescribe, and that
it is illegal to carry on such business without complying with
those conditions. In this case, the payment of the tax imposed was
a condition prescribed, without complying with which what was done
by the plaintiff was made illegal. The tax was imposed as a
condition precedent to the right of the plaintiff to run and use
the thirty-six sleeping cars owned by it, as it ran and used them
on railroads in Tennessee. The privilege tax is held by the Supreme
Court of Tennessee to be a license tax, for the privilege of doing
the thing for which the tax is imposed, it being unlawful to do the
thing without paying the tax. What was done by the plaintiff in
this case, in connection with the use of the thirty-six cars, if
wholly a branch of interstate commerce, was made by the State of
Tennessee unlawful unless the tax should be paid, and, to the
extent of the tax, a burden was placed on such commerce, and, upon
principle, the tax, if lawful, might equally well have been large
enough to practically stop altogether the particular species of
commerce.
What was that commerce? The plaintiff, by its contract,
furnished sleeping cars to the railroad company, to be used by the
latter "for the transportation of passengers," sufficient in number
to meet the requirements of travel on the road. The plaintiff kept
in order and renewed the carpets, upholstery, and renewed the
carpets, upholstery, and renewals made necessary by accident or
casualty, but all damages to the cars by accident or casualty were
repaired by the railroad company. The plaintiff furnished employees
on each car to collect fares for the accommodations furnished by
the car and to wait upon
Page 117 U. S. 45
passengers and provide for their comfort. Those employees were
governed by the rules adopted by the railroad company to govern its
own employees, and the railroad company was liable for personal
injury to, or the death of, any such employee of the plaintiff to
the same extent only as if such employee was in fact an employee of
the railroad company, and the latter was indemnified by the
plaintiff for all liability in excess thereof. The railroad company
carried free on its line such employees of the plaintiff and its
general officers when on duty for it, and the plaintiff carried
free in the cars it so furnished the general officers of the
railroad company. In consideration of the use of such cars, the
railroad company hauled them on the passenger trains on its line in
such manner as best accommodated passengers desiring to use the
cars, and furnished at its own expense fuel for them and materials
for the lights, and washed and cleaned them, and kept them in good
order and repair, including renewals of worn-out parts, and all
things appertaining to them necessary to keep them in first class
condition, with the exceptions before specified in regard to
carpets, upholstery and bedding, and furnished room and
conveniences for airing and storing bedding. The plaintiff
collected from every person occupying the car compensation for its
accommodations in seats and couches. The railroad company permitted
the plaintiff to place its tickets for seats and couches on sale in
the ticket offices of the railroad company, the sale to be a part
of the general duties of the ticket agents of the latter, and to be
without charge to the plaintiff, but the proceeds of sales to be at
its risk. The contract was made an exclusive on for fifteen years,
and the plaintiff agreed to protect the railroad company against
all liability for the infringement of any patent in the
construction and use of the cars, and there was a provision for the
termination of the contract by either party on a breach of it by
the other.
On these facts, the cars in question were cars for the
transportation of the passengers who occupied them in their transit
into or through or out of Tennessee. They were used by the railroad
company for such transportation, and it received the transit fare
or compensation. For purposes of transit, it dealt
Page 117 U. S. 46
with the cars as it would with cars owned by itself. It hauled
them, furnished fuel and materials for lights, washed and cleansed
them, kept them in repair, renewed worn-out parts, repaired all
damages to them by accident or casualty, and even repaired and
renewed carpets, upholstery, and bedding damaged or destroyed by
accident or casualty, all at its own expense and without charge to
the plaintiff, leaving to the plaintiff only to make good the
ordinary wear and tear of the sitting and sleeping conveniences,
and allowing it to have the compensation for such conveniences, and
furnishing it free of charge with all facilities for selling seats
and couches.
The tax was a unit with the privilege of the transit of the
passenger and all its accessories. No distinction was made in the
tax between the right of transit, as a branch of commerce between
the states, and the sleeping and other conveniences which
appertained to a transit in the car. The tax was really one on the
right of transit, though laid wholly on the owner of the car. So
too the service rendered to the passenger was a unit. The car was
equally a vehicle of transit as if it had been a car owned by the
railroad company and the special conveniences or comforts furnished
to the passenger had been furnished by the railroad company itself.
As such vehicle of transit, the car, so far as it was engaged in
interstate commerce, was not taxable by the State of Tennessee,
because the plaintiff had no domicile in Tennessee and was not
subject to its jurisdiction for purposes of taxation, and the cars
had no situs within the state for purposes of taxation, and the
plaintiff carried on no business within the state, in the sense in
which the carrying on of business in a state is taxable by way of
license or privilege.
The case of
Attorney General v. London and Northwestern
Railway Co., in the Court of Appeal, 6 Q.B.Div. 216, before
Lord Chief Justice Coleridge, and Lord Justices Baggallay and
Brett, affirming the judgment of the Exchequer Division, 5 Ex.Div.
247, is instructive in the above point of view as to the subject in
hand. There, the railway company attached to its night trains
sleeping carriages for the accommodation of such of its first-class
passengers as might choose to avail themselves
Page 117 U. S. 47
of it. For the use of these carriages they were charged an extra
sum in addition to the ordinary first-class fare. Besides couches
with pillows, sheets, and blankets, each carriage contained a
lavatory and other conveniences. Passengers using such carriage
were not disturbed during the night by demands for their tickets,
and of they arrived at their destination in the night, the
passengers were allowed to remain in their beds until the morning.
Under a statute imposing a percentage duty "upon all sums received
or charged for the hire, fare, or conveyance of passengers" on any
railway, the government claimed and was allowed the duty on the
extra sum charged for the use of the sleeping carriage. The Court
of Appeal, by Lord Coleridge, said:
"We regard the additional accommodation afforded by the sleeping
carriages as differing in no essential particular from the superior
accommodation afforded by a second-class carriage over a third, or
by a first-class carriage over both. If the company issued tickets
to all passengers alike at the price charged to passengers
traveling in third-class carriages, and then issued tickets at
corresponding prices to those desiring to travel in a higher class
of carriage, it could hardly be contended that duty would not be
payable upon the prices paid for such second ticket. The passenger
who is content to travel in a third-class or second-class carriage
in the day might well desire to travel in a carriage of a higher
class by night, and in like manner a passenger ordinarily traveling
by day in a first-class carriage might desire the additional
accommodation at night of a sleeping carriage. No separate charge
is made in the present case. The charge, though written on a
separate ticket, is, in our opinion, part of one charge for the
conveyance of the passenger in a particular way, and is therefore a
part of the charge for the conveyance of a passenger received and
charged for such conveyance."
That case is in harmony with the views before taken in regard to
the present case. The fare paid by the interstate passenger to the
railroad company, and that paid to the plaintiff, added together,
were merely a charge for his conveyance in a particular way, and
there was really but one charge for the transit, though the total
amount paid was divided among two recipients.
Page 117 U. S. 48
The service was a single one of interstate transit, with certain
accommodations for comfort, and what was paid to the plaintiff was
part of a charge for the conveyance of the passenger.
The views above expressed are in harmony with numerous decisions
which have been made by this Court on the subject to which they
relate. In
Almy v. State,
24 How. 169, a stamp tax had been imposed by the state on bills of
lading for the transportation of gold or silver from any point
within the state to any point without it, and was held by this
Court to be invalid, and in
Woodruff v.
Parham, 8 Wall. 123,
75 U. S. 138,
it was said by this Court, MR. JUSTICE MILLER delivering its
opinion, that that stamp tax
"was a regulation of commerce, a tax imposed upon the
transportation of goods from one state to another over the high
seas, in conflict with the freedom of transit of goods and persons
between one state and another which is within the rule laid down in
Crandall
v. Nevada, 6 Wall. 35, and with the authority of
Congress to regulate commerce among the states."
In the
State Freight Tax
Case, 15 Wall. 232,
82 U. S. 281,
it was said that a state cannot tax persons for passing through or
out of it; that interstate transportation of passengers is beyond
the reach of a state legislature, and that a tax upon it amounts to
a tax upon the passengers transported.
In
Railroad Co. v.
Maryland, 21 Wall. 456,
88 U. S. 472,
MR. JUSTICE BRADLEY, in speaking for the Court, said that a state
cannot impose a tax or duty on the movements or operations of
commerce between the states, because it would be a regulation of
such commerce "in a manner which is essential to the rights of all,
and therefore requiring the exclusive legislation of Congress,"
being "a tax because of the transportation," and "therefore
virtually a tax on the transportation."
The decisions in the various cases in this Court on the subject
of a tax by a state on the bringing in of passengers from foreign
countries, and which are collected and commented on by MR. JUSTICE
MILLER, in delivering the opinion of this Court in the
Head
Money Cases, 112 U. S. 580,
112 U. S. 591,
show it to be a settled matter that to tax the transit of
passengers from foreign countries or between the states is to
regulate commerce.
Page 117 U. S. 49
The principles which governed the decisions in
Welton v.
Missouri, 91 U. S. 275,
Guy v. Baltimore, 100 U. S. 434, and
Moran v. New Orleans, 112 U. S. 69,
holding unlawful the state taxes in those cases on interstate
commerce in merchandise, are equally applicable to the tax in this
case on the transit of passengers. The rule which governs the
subject is accurately and tersely stated by MR. JUSTICE FIELD in
delivering the opinion of the Court in
Gloucester Ferry Co. v.
Pennsylvania, 114 U. S. 196,
114 U. S.
211:
"While it is conceded that the property in a state belonging to
a foreign corporation engaged in foreign or interstate commerce may
be taxed equally with like property of a domestic corporation
engaged in that business, we are clear that a tax or other burden
imposed on the property of either corporation because it is used to
carry on that commerce, or upon the transportation of persons or
property, or for the navigation of the public waters over which the
transportation is made, is invalid and void as an interference with
and an obstruction of the power of Congress in the regulation of
such commerce."
The case of
Telegraph Co. v. Texas, 105 U.
S. 460, in regard to a state tax on telegraphic messages
sent out of a state, is a kindred case. The whole subject, in
reference to a state tax imposed for selling goods brought into a
state from other states, was recently fully considered by this
Court in
Walling v. Michigan, 116 U.
S. 446, and in that case MR. JUSTICE BRADLEY, speaking
for the Court, says:
"We have also repeatedly held that so long as Congress does not
pass any law to regulate commerce among the several states, it
thereby indicates its will that such commerce shall be free and
untrammeled."
See Welton v. Missouri, 91 U. S.
275,
91 U. S. 282;
Machine Co. v. Gage, 100 U. S. 676,
100 U. S. 678;
County of Mobile v. Kimball, 102 U.
S. 691,
102 U. S. 697;
Gloucester Ferry Co. v. Pennsylvania, 114 U.
S. 196,
114 U. S. 204;
Brown v. Houston, 114 U. S. 622,
114 U. S. 631,
where the cases on that point are collected.
It is urged that the decision of the circuit court in this case
was inconsistent with the rulings in
Osborne v.
Mobile, 16 Wall. 479, and in
Wiggins Ferry Co.
v. East St. Louis, 107 U. S. 365. It
becomes necessary, therefore, to examine those cases.
In
Osborne v. Mobile, Osborne was an agent at Mobile,
Alabama,
Page 117 U. S. 50
of a Georgia corporation, an express company, and as such
transacted at Mobile a general express business within and
extending beyond the limits of Alabama. An ordinance of the City of
Mobile required an annual license fee of $500 to be paid by every
express company doing business in Mobile, and having a business
extending beyond the limits of Alabama, while every express company
doing business within the limits of the state was required to pay a
license fee of only $100, and every such company doing business
within the city was required to pay a license fee of only $50. A
fine was prescribed for a violation of the ordinance. Osborne
violated it, and was fined. The legality of the tax was upheld.
Chief Justice Chase, in delivering the opinion of the Court, cited
the
State Freight Tax
Case, 15 Wall. 232, decided at the same term, as
holding
"that the state could not constitutionally impose and collect a
tax upon the tonnage of freight taken up within its limits and
carried beyond them, or taken up beyond its limits and brought
within them -- that is to say, in other words, upon interstate
transportation -- because it was in effect a restriction upon
interstate commerce, which by the Constitution was designed to be
entirely free."
The tax on the Georgia Express Company was upheld as a tax "upon
a business carried on within the City of Mobile." Osborne was a
local agent, personally subject to the taxing jurisdiction of the
state, as representing his principal, and the tax was on the
general business he carried on, and the subject of the tax was not,
as here, the act of interstate transportation. In
Osborne v.
Mobile, the court drew the distinction between the case before
it and the
State Freight Tax Case. The present case falls
within the latter.
In
Wiggins Ferry Co. v. East St. Louis, the decision
was that the state had power to impose a license fee upon a ferry
keeper living in the state for boats which he owned and used in
conveying from the state passengers and goods across a navigable
river to another state, and that the levying of a tax on such
boats, or the exaction of a license fee in respect of them, by the
state in which they had their situs, was not a regulation of
commerce within the meaning of the Constitution. In the case at
bar, the plaintiff was not a Tennessee corporation,
Page 117 U. S. 51
and had no domicile in Tennessee, and the sleeping cars in
question, as before said, had not any situs in Tennessee for the
purposes of taxation.
The question involved in this case was before the Court of
Chancery of Tennessee in
Pullman Southern Car Co. v.
Gaines, 3 Tenn.Ch. 587, on the same facts, as to the privilege
tax for 1877. That court held (and it is stated that the Supreme
Court of Tennessee, on appeal, affirmed its ruling) that this
privilege tax, as to such of the cars as passed and repassed
through the state and did not abide in it, was not amenable to the
objection that it interfered with interstate commerce. The view
taken was that the property of the foreign corporation used in
Tennessee could be taxed as property or by an excise on its use,
and that the tax in this case was not directly on the object of
commerce, or directly aimed at commerce. We have given to the views
set forth by the Tennessee Chancery Court the consideration due to
the judgments of that tribunal, but are unable to concur in its
conclusion.
Judgment affirmed.
