While it is quite competent for the State of Virginia to impose
upon the movable personal property of the Baltimore and Ohio
Railroad Company (a corporation organized under the laws of
Maryland) which is brought within its territory and there
habitually used and employed the same rate of taxation which is
imposed upon similar property used in like way by its own citizens,
it has not done so in the taxing laws of the state which were in
force when the tax in controversy was imposed. The statutes of
Virginia relied upon by the plaintiff in error are not applicable
to the Baltimore and Ohio Railroad Company, but are confined to
corporations which derive their authority from the laws of
Virginia.
This is a bill in equity filed by the Baltimore and Ohio
Railroad Company against the taxing officer of the State of
Virginia for the purpose of enjoining him from selling certain
engines and cars, the property of the complainant, for the payment
of a tax alleged to have been illegally assessed thereon. There was
a decree in the circuit court granting the relief prayed for, from
which this appeal is prosecuted.
The material facts in the case are these:
The Baltimore and Ohio Railroad Company is a corporation
organized under the laws of Maryland, and a citizen thereof, by
virtue of whose charter its rolling stock is exempt from taxation.
The line of its road does not at any point lie in the State of
Virginia. It however connects with certain roads belonging to
corporations incorporated by various acts of the Legislature of
Virginia, to-wit, the Winchester and Potomac Railroad, the
Winchester and Strasburg Railroad, and the Strasburg and
Harrisonburg Railroad, the last named being a part of the old
Manassas Gap Railroad, and, during a portion of the time embraced
in the period for which the taxes in question were levied, it
worked the Valley Railroad from Harrisonburg to
Page 127 U. S. 118
Staunton. All of these roads were operated by the Baltimore and
Ohio Railroad Company by virtue of leases or contracts, which
company for that purpose furnished and used its own rolling stock,
consisting of engines and cars. None of the Virginia corporations
owning either of these roads was the owner of any rolling stock.
The manner in which this rolling stock was employed for this
purpose is thus described:
"There is no such rolling stock assigned permanently to the four
lines above named, or either of them, in the State of Virginia. The
trains in which the rolling stock is used on the four lines above
named now start from Lexington, Virginia, and pass through the
State of Virginia, over the four lines of railroad above named,
into the state of West Virginia, and thence into the State of
Maryland, to the City of Baltimore, or, if any of the cars are
destined to western points, thence from Harper's Ferry to the west,
but the trains in which the cars are hauled are run solid from
Lexington, Virginia (and formerly before the road was completed to
Lexington from Staunton, Virginia) to Baltimore. None of the
rolling stock is assigned permanently to service in the State of
Virginia, nor is any of the rolling stock set apart to the four
lines in that state, or to the four valley lines above mentioned at
all, but such rolling stock is used interchangeably upon the main
line and branches of the Baltimore and Ohio Railroad in the States
of Maryland and Virginia, and indeed also upon the divisions of the
Baltimore and Ohio Railroad in Pennsylvania, and in states west of
the Ohio River, just as the necessities of the service of the
company require. Sometimes this rolling stock will be found on the
main line, sometimes on the Pittsburgh division, and sometimes on
the trans-Ohio divisions, and there is none of it that is
permanently set apart for use upon the four Valley lines in
Virginia above described."
The several Virginia corporations owning these four railroads,
respectively, made their annual reports to the Auditor of Public
Accounts as required by law, and were by the Board of Public Works
duly assessed on their roadways, tracks, depots, and other real
estate owned by them. No tax was assessed or levied as against them
on account of any rolling stock,
Page 127 U. S. 119
because they were not reported to be the owners of any. In the
month of June, 1883, the Auditor of Public Accounts for the State
of Virginia assessed the Baltimore and Ohio Railroad Company for
taxes on its rolling stock used on these roads for the years from
1870 to 1881, inclusive, amounting in the aggregate, for eleven
years, to the sum of $22,249.25, and placed the assessment in the
hands of the Treasurer of Augusta County, Virginia for collection.
This officer was proceeding to collect these taxes by a distraint
of the rolling stock in question, the property of the complainant,
when his proceedings were arrested by the injunction of the circuit
court, afterwards made perpetual by its final decree.
The act of the general assembly of the State of Virginia under
which the assessment and collection of these taxes are sought to be
justified is contained in section 20, c. 119, of the Acts of the
Virginia Legislature, session of 1881-1882, being part of the
taxing laws of the state originally enacted in 1870 and 1871, and
continued, with amendments, to the present time. The material part
of the act applicable to this case is as follows:
"19. Every railroad and canal company not exempted from taxation
by virtue of its charter shall report annually, on the first day of
June, to the Auditor of Public Accounts, all of its real and
personal property of every description as of the 1st day of
February of each year, showing particularly in what county or
corporation such property is located, and classifying the same
under the following heads: first, roadway and track, or canal bed;
second, depots, depot grounds and lots, station buildings and
fixtures, and machine shops; third, real estate not included in
other classes; fourth, rolling stock, including passenger, freight,
cattle, or stock, baggage, mail, express, sleeping, palace, and all
other cars owned by or belonging to the company, boats, machinery,
and equipments, houses and appurtenances occupied by lock-gate
keepers and other employees; fifth, stores; sixth, telegraph
lines;
Page 127 U. S. 120
seventh, miscellaneous property."
"Every such company shall also report, on or before the first
day of June of each year, the gross and net receipts of the road or
canal for the twelve months preceding the first day of February of
each year, and in all cases the report shall be so made as to give
the data on which the same is made. If such road or canal is only
in part within the commonwealth, the report shall show what part is
within the commonwealth and what proportion the same bears to the
entire length of the road or canal, and shall apportion the
receipts accordingly. The report herein required shall be verified
by the oath of the president or other proper officer. Upon the
receipt of every such report, it shall be the duty of the Auditor
of Public Accounts to lay the same before the Board of Public
Works, who shall, after thirty days' notice previously given to the
president, treasurer, or other proper officer, proceed to ascertain
and assess the value of the property so reported, upon the best and
most reliable information that can be procured, and to this end
shall be authorized and empowered to send for persons and papers
should it be deemed necessary. A certified copy of the assessment,
when made, shall be immediately forwarded by the secretary of the
board to the president or other proper officer of every railroad or
canal company so assessed, whose duty it shall be to pay into the
treasury of the state, within sixty days after the receipt thereof,
the tax which may be imposed thereon by law. A company failing to
make such report or to pay the tax assessed upon its property shall
be immediately assessed, under the direction of the Auditor of
Public Accounts, by any person appointed by him for the purpose,
rating their real estate and rolling stock at twenty thousand
dollars per mile, and a tax shall at once be levied on such value
at the annual rate levied upon the value of the other property for
the year. Such tax, so levied, as well as the sum required to be
paid upon the report hereinbefore mentioned, if the same be not
paid at the time provided herein, shall be collected by the
treasurer of some county in which such company owns property, to
whom the auditor may deliver the assessment, or a copy thereof. The
treasurer
Page 127 U. S. 121
may distrain and sell any personal property of such company, and
shall pay the taxes into the treasury within three months from the
time of the assessment, or a copy as aforesaid may be delivered to
him. The compensation of such treasurer to be the same as he
receives for collecting other taxes in his county or
corporation."
It is admitted that this is the only legislation of the State of
Virginia under which the tax in question can be justified. If it
does not warrant the proceedings, there is no statute which does.
The single question presented in the case is whether the Baltimore
and Ohio Railroad Company, as to the property on account of which
it is sought to be taxed, is liable to taxation under the
provisions of this act.
Page 127 U. S. 123
MR. JUSTICE MATTHEWS delivered the opinion of the Court.
It is not denied, as it cannot be, that the State of Virginia
has rightful power to levy and collect a tax upon such property
used and found within its territorial limits, as this property was
used and found, if and whenever it may choose, by apt legislation
to exert its authority over the subject. It is quite true, as the
situs of the Baltimore and Ohio Railroad Company is in the state of
Maryland, that also, upon general principles, is the situs of all
its personal property; but for purposes of taxation as well as for
other purposes, that situs may be fixed in whatever locality the
property may be brought and used by its owner by the law of the
place where it is found. If the Baltimore and Ohio Railroad Company
is permitted by the State of Virginia to bring into its territory,
and there habitually to use and employ, a portion of its movable
personal property, and the railroad company chooses so to do, it
would certainly be competent and legitimate for the state to impose
upon such property, thus used and employed, its fair share of the
burdens of taxation imposed upon other similar property used in the
like way by its own citizens. And such a tax might be properly
assessed and collected in cases like the present, where the
specific and individual items of property so used and employed were
not continuously the same, but were constantly changing according
to the exigencies of the business. In such cases, the tax might be
fixed by an appraisement and valuation of the average amount of
the
Page 127 U. S. 124
property thus habitually used, and collected by distraint upon
any portion that might at any time be found. Of course, the
lawfulness of a tax upon vehicles of transportation used by common
carriers might have to be considered, in particular instances, with
reference to its operation as a regulation of commerce among the
states; but the mere fact that they were employed as vehicles of
transportation in the interchange of interstate commerce would not
render their taxation invalid. No question on that account arises
in this case.
But, looking at the statute under which the proceeding in
question has been taken for the taxation of this property, we think
it quite clear that it has no application to the rolling stock
owned by the Baltimore and Ohio Railroad Company employed by it, in
the manner described, in the operation of other railroads in
Virginia. The terms of the act, indeed, include "every railroad and
canal company not exempted from taxation by virtue of its charter,"
but that language, according to a general rule of interpretation,
must be confined to corporations deriving their authority from the
laws of Virginia. It is apparent also from the other expressions
contained in the law, as well as its whole purview, that it was
intended to apply only to such domestic corporations as, in the
case of railroad companies, were the owners of railroads and the
property usually appurtenant thereto lying and being within the
state. According to the description of the act, the railroad
company is supposed to own a roadway and track, depots and depot
grounds, station buildings and fixtures, and machine shops,
together with real estate, rolling stock, and telegraph lines.
Every such company is required to report its gross and net
receipts, and a specific provision is made that if its road is only
in part within the commonwealth, the report shall show what part is
so, and what proportion the same bears to its entire length,
apportioning the receipts accordingly. In case of a failure of the
company to make such a report or to pay the tax assessed upon its
property, it is provided that it shall be immediately assessed,
under the direction of the Auditor of Public Accounts, by some
person appointed by him for that purpose, rating its real estate
and rolling stock at $20,000 per
Page 127 U. S. 125
mile, on which a tax shall be levied at the annual rate levied
upon the value of other property for the year. None of these
provisions are applicable to the case of the Baltimore and Ohio
Railroad Company in respect to its ownership of the rolling stock
in question.
It follows from this that it was not liable for the payment of
the taxes, the collection of which was enjoined by the decree of
the circuit court. That decree is accordingly
Affirmed.