Lehigh Valley R. Co. v. Pennsylvania, 145 U.S. 192 (1892)
U.S. Supreme CourtLehigh Valley R. Co. v. Pennsylvania, 145 U.S. 192 (1892)
Lehigh Valley Railroad Company v. Pennsylvania
Argued April 5, 1892
Decided May 2, 1892
145 U.S. 192
A state tax against a railroad corporation, incorporated under its laws on account of transportation done by it from one point within the state to another point within it, but passing during the transportation without the state and through part of another state, is not a tax upon interstate commerce, and does not infringe the provisions of the Constitution of the United States.
The Court stated the case as follows:
April 28, 1887, the Auditor General of Pennsylvania settled an account with the Lehigh Valley Railroad Company, in accordance with the Act of June 7, 1879, of that commonwealth, for its taxes on gross receipts for the six months ending December 31, 1866, as follows:
Gross receipts. . . . . . . . . . . . . . . . . . . . $4,798,933.54
Proportion taxable in Pennsylvania, 26069/32661 . . . 3,835,926.60
Tax at rate of eight tenths of one percent. . . . . . 30,642.88
Due commonwealth. . . . . . . . . . . . . . . . . . $ 30,642.88
This settlement was approved by the state treasurer June 3, 1887. The Lehigh Company thereupon prayed an appeal to the Court of Common Pleas of Dauphin County, Pennsylvania, where a declaration and copy of account were filed and the case tried under stipulation by the court without a jury. Upon the trial, it appeared from the affidavit of the treasurer of the Lehigh Company, given November 10, 1887, that he had made to the Auditor General for the six months ending December 31, 1886, the report of gross receipts upon which the account for taxes had been settled, and further that
"the main line of railroad operated by the Lehigh Valley Railroad Company extends from Perth Amboy, in the State of New
Jersey, to Wilkes Barre, in the State of Pennsylvania, with numerous branches in Pennsylvania and New Jersey. The company has also running arrangements with other companies whereby it runs its own trains, both passenger and freight, on a through line from Jersey City, New Jersey, to Buffalo, New York. A very large portion of its business consists of the transportation of freight, passengers, etc., from points in Pennsylvania to points in other states, or from points in other states to points in Pennsylvania, or from points in other states to points in other states passing through the State of Pennsylvania, about one-half of its entire receipts being derived from the transportation of anthracite coal from Pennsylvania into other states."
The affidavit gave a detailed statement showing the several classes of transportation from which the receipts returned were derived, being from transportation of coal, freight other than coal, passengers, express, and mail, distributed as in a summary, with which the statement concluded, and which was as follows:
(1) Total receipts from transportation
from points in Pennsylvania to other
points in Pennsylvania, without passing
out of the state . . . . . . . . . . . . . . $1,353,441.50
(2) Total receipts from transportation by
continuous carriage from points in
Pennsylvania to other points in Penn-
sylvania, but over lines partly in
Pennsylvania, that is to say, passing
out of Pennsylvania into other states and
back again into Pennsylvania in course
of transportation. . . . . . . . . . . . . . 207,660.42
(3) Total receipts from transportation by
continuous carriage from points in a
foreign state to other points in the same
state, passing through the state of
Pennsylvania . . . . . . . . . . . . . . . . 50,494.25
(4) Total receipts from transportation
by continuous carriage from points in other
states to points in Pennsylvania . . . . . . 292,422.00
(5) Total receipts from transportation by contin-
uous carriage from points in Pennsylvania to
points in other states . . . . . . . . . . . 2,569,514.58
(6) Total receipts from transportation by contin-
uous carriage from points in a foreign state,
passing through Pennsylvania and ending in
a third state. . . . . . . . . . . . . . . . 267,868.59
(7) Total receipts from transportation from
points in foreign states to other points
in foreign states not touching
Pennsylvania . . . . . . . . . . . . . . . . 57,532.19
Total receipts . . . . . . . . . . . . . . $4,798,933.53
In another affidavit, under date January 20, 1888, the same official stated:
"Wherever in the said statement of November 10, 1887, I used the term 'continuous transportation' or 'continuous carriage,' the freight or passengers from the transportation of which the receipts were derived were carried between the points mentioned for a single sum or charge, and upon a single waybill or ticket, and were, when taken upon the cars of this company, destined to be carried, and were actually carried, from point to point as in said statement set forth. The Lehigh Valley Railroad Company has no railroad of its own reaching the City of Philadelphia, but transports coal and other merchandise, and sometimes passengers, from Mauch Chunk and other points in Pennsylvania over its own line to Phillipsburg, in the State of New Jersey, from which point it is carried upon the Belvidere and Delaware Railroad to Trenton, and thence by the Pennsylvania Railroad lines to the City of Philadelphia. So far as the Lehigh Valley Railroad line is concerned, the transportation is from Mauch Chunk, or the other points in Pennsylvania, to Phillipsburg, in New Jersey; but by arrangements between this company and the corporations owning the other roads, the transportation is continuous from Mauch Chunk and the other points in Pennsylvania to Philadelphia. The receipts
mentioned in my statement of November tenth, in the second paragraph, in each instance under the respective heads of 'coal,' 'freight other than coal,' and 'passenger, express, and mail,' and also in the second item in the summary, were derived in the manner above explained. Some of the trains, and in many instances the same cars, which carried the freight and passengers indicated between the points in Pennsylvania and the City of Philadelphia, carried also freight and passengers destined and carried from points in Pennsylvania to points in New Jersey and New York, and vice versa. The various items of receipts shown in my statement of November tenth, and classified in the third paragraph of the summary as"
"receipts from transportation by continuous carriage from points in a foreign state to other points in the same state, passing through the State of Pennsylvania,"
"were derived from transportation of freight and passengers billed or ticketed from the City of New York to other points in the State of New York, and vice versa. The same trains and the same cars which carried the said freight and passengers carried also freight and passengers destined and carried from points in Pennsylvania to points in other states, and from points in other states to points in Pennsylvania."
It was admitted that the Lehigh Company was originally incorporated by the State of Pennsylvania, and that it owned and operated, as part of its main line, about sixty-six miles of railroad in New Jersey.
The fraction of the entire gross receipts given in the settlement represented the Lehigh Company's mileage within the state.
The court of common pleas found the facts, and held, for the reasons given in Commonwealth v. Delaware & Hudson Canal Co., 21 Weekly Notes of Cases (Penn.) 406, and Commonwealth v. New York, Lake Erie & Western Railroad Company, ib., 410, that the commonwealth could only recover taxes upon the two items of $1,353,441.50 and $207,660.42 (classes one and two), being the amount received for transportation between points both of which were in the state, and directed judgment accordingly, which, exceptions thereto having been overruled,
was thereupon entered. The case was carried by writ of error to the Supreme Court of Pennsylvania, and the judgment affirmed upon the opinion of the court below. A writ of error was then sued out from this Court.
The company, conceding its liability to taxation in respect of the receipts contained in class one, questions by its assignment of errors the validity of the tax as to the receipts in class two.