31 N.J.L. 531 | N.J. | 1864
The important question to be decided in this case arises out of the provision of the tenth section of the act of the legislature of this state relating to taxes, passed in the year 1862.
As much of the section as is thus drawn in question, is in the words following, viz.: “That all corporations regularly doing business in this state, and not being corporations of this state, shall be assessed and taxed for and in respect of the business so by them done and transacted in this state, in manner following, that is to say: every such company so doing business shall pay a transit duty of three cents on every passenger, and two cents on every ton of goods, wares, and merchandise or other articles, carried or transported by or for such company on any railroad or canal in this state, for any distance exceeding ten miles, except passengers and freight transported exclusively within this state. And such transit duty for railroad or canal transportation, shall be paid to the treasurer of this state within the month of January in each year, for the transportation of the previous year; and it shall be the duty of the president or treasurer of every such company to furnish to the treasurer of the state, by or before the third Tuesday of January, annually, under oath or affirmation, a full and true account of the number of passengers, and of the number of tons of goods, wares, and merchandise and other articles, so carried or transported as aforesaid.”
It is sufficient for all the purposes of the following discussion to state, generally, that the plaintiffs in error are a corporation created by the laws of New York, and that the business which they habitually do in this state, and which is liable to the tax in dispute, is thus described in the state of the case agreed upon by the parties: “ Most of ■ the goods, wares, merchandise, and passengers, for the transportation of which by the Erie Railway Company, in the state of New Jersey, the said transit duty or tax is charged, have been, by that company and other railroads in connection with
From this statement of facts it appears that the ¡daintiffs are a foreign corporation, habitually transporting passengers .and commodities, in the course of commerce between the states, over the territory of New Jersey, and that the tax in question falls on this business in proportion to the number of passengers, and the weight of the commodities cransported.
That the state of New Jersey, in the plenitude of her original sovereignty as an independent government, had the right to impose the tax on the business in question, no one «an dispute. Did she relinquish such power in the formation of the general government? This inquiry obviously draws into the discussion that provision of the constitution of the United States which declares, that congress shall have power to regulate commerce with foreign nations and among the several states.
The precise question, then, to be considered and decided is, has the tax which has given rise to this controversy been laid within the meaning of the prohibitory clause just referred to, upon commerce between the states ?
The principal argument urged before this court, in support of the negative of the foregoing proposition, was that this law did not impose the duty on the goods, but on the business of the plaintiffs in error, and on this account was not within the constitutional prohibition.
It certainly is not to be denied that a state has the right to lay taxes which may incidentally affect commerce between the states. Indeed, it is perhaps impossible to imagine any tax which, in theory at least, may not be said to have, in the
The first observation that naturally occurs is that the tax imposed must, to avoid the taint of unconstitutionality, be indirect in substance and not merely so in form. Can it be. said that this is so in the present case ? This tax falls on. inter-state commerce alone. It reaches no further. The burthen is not on a general business, one branch of which is-the transportation of extra-territorial goods. On the contrary, the only business of the plaintiffs in error which is not taxed, is the business of such company done entirely in the state of New Jersey, and which does not consist of the transportation of merchandise from state to state. The law discriminates- and selects the transportation of commodities passing from-state to state, as the peculiar objects of the duty. It is also-laid upon an employment in which the citizens of the state imposing it, have no concern • it can, therefore, be increased to any extent without in the least degree affecting their interests. This tax, consequently, cannot be said to fall incidentally on the prohibited subject on account of its being s¡ general burthen on multiform matters, of which the conveyance of articles of traffic, in their passage from one state to another, happened to be one.
But this tax is not only thus specific and restrained to this one class of objects, but it is also graduated by the weight of the things carried. The business is charged a certain sum for the transportation of every ton of goods. The tax, therefore, is regulated, both as to its object and amount, by the articles transported. Now, it is impossible not to perceive that the effect of such a tax must be, so far as respects the owner of such articles, precisely and in all its results the
Nor does this matter, if we view it in its political effects, assume a more favorable aspect. The right to place this duty on this business of the plaintiffs in error would be equivalent, considered as a prerogative of state government, to the right to tax the commodities themselves. The political power and the political results would be in both cases identical. The exercise of the right to tax in either of these two
Nor would the evil consequences of this state prerogative which is now claimed, stop even here. Thus far it has been seen, that its effect would be to disturb the constitutional equilibrium of the states. But it would do more than this ; it would affect in a very material point the relation of the
The result of this reasoning is, that a recognition of the power claimed, would not only affect disastrously the harmonious intercourse of the states with each other, but would
A construction which would thus frustrate the operation of the federal constitution in two respects, each of which is of great political importance, could not, in my opinion, be justified, except upon the ground that the language of the instrument is so clear upon the subject, that it manifests that these results, so obvious and so hurtful, did not fall within the contemplation of the framers of the constitution, and consequently wore not provided against. When an opposite result would be so injurious, it is a relief to conclude that such clear language, evincive of such oversight, does not exist. Interpreting the words of the constitution in the light of the evident purpose of those who employed them, it does not seem to me that the point in question is left in any obscurity. The object was to pass articles of traffic from one point in this country to another, through intervening states, free of impost- or duty by such states. The -goods, the transportation of which is taxed under the present law, are such articles; nor has it been denied that such goods, while being thus transported, constitute a part of the commerce between the states. But it seems to have been overlooked, that the transportation is as much a part of sucli commerce as the goods themselves are. If there can be no commerce between the slates without goods, so there can be none without the transportation of the goods. The two must- he united to constitute interstate commerce. Is it not certain then that a duty on one of these two elements in commerce must, in the nature of things, operate as a tax upon the other? As commerce, the two things are indissoluble; are they divisible for the purpose of taxation ?, I think it may be laid down as a general rule, universally applicable to all cases arising under the clause of the constitution now considered, that whenever the taxation of a commodity would amount to a regulation of commerce, so will the taxation of an inseparable incident or a necessary concomitant of such commodity. The object being to protect
It was upon this doctrine that the case of Brown v. Maryland, 12 Wheat. 419, was decided. The facts were these. A state law required an importer to pay for and take out a license, as a prerequisite to a right to sell imported goods— and the court ruled that this requisition was in conflict with the provision of the constitution of the United States which prohibits a state from laying any impost or duty on exports or imports. The argument in support of the law was, that the tax was not on the articles imported, but that it was a tax on the privilege of the owner to sell the article after importation. It was said the state might lawfully tax occupations, and that this law did nothing more. But Chief Justice Marshall refuted the argument in the following clear and emphatic sentences: “It is impossible,” he says, “to conceal from ourselves, that this is varying the form without varying the substance. It is treating a prohibition which is general, as if it were confined to a particular mode of doing the forbidden thing. All must perceive that a tax on the sale of an imported article, imported only for sale, is a tax on the article itself. It is true that a state may tax occupations generally, but this tax must be paid by those who employ the individual, or it is a tax on his business. The lawyer, the physician, or the mechanic must either charge more on the article in which he deals, or the thing itself is taxed through his person. This the state has a right to do, because no constitutional prohibition extends to it. So a tax on the occupation of the importer is, in like manner, a tax on importation. It must add to tlie price of the article, and be paid by the consumer or by the importer himself, in like manner as a direct duty on the article itself would be. This the state has not a right to do, because it is prohibited by the constitution.”
This reasoning, the strength and justice of which it is
The case of Almy v. The People of California, 24 How. 169, rests upon analogous principles. The question was whether a stamp duty on bills of lading for gold or silver, transported to any part or place out of the state, was a tax on exports. The court held the affirmative, and declared the act unconstitutional. Chief Justice Taney, in delivering the opinion of the court, thus expresses his views: “ But a tax or duty on a bill of lading, although differing in form from a duty on the article shipped, is in substance, the same thing ; for a bill of lading, or some written instrument of the same import, is necessarily always associated with every shipment of articles of commerce from the ports of one country to those of another. The necessities of commerce require it. A bill of lading, therefore, or some equivalent instrument of writing, is invariably associated with every cargo of merchandise exported to a foreign country, and consequently a duty upon that is, in substance and effect, a duty on the article imported.”
As a bill of lading is not, in any point of view, as necessary to an export as transportation is to an article of interstate commerce, it would seem self-evident, on the assumption of the correctness of this decision, that the taxation of such transportation must, of necessity, be a regulation of commerce within the prohibitory clause of the constitution. It
It has been already observed that the tax in hand is specific, that is, it affects but a single interest, viz., the transportation of goods in the course of traffic from one part of the country to the other. This singleness in the object taxed must necessarily, as it would seem, make the tax a regulation of commerce. No other doctrine is practicable — because the right to tax in such form is an acknowledgment of the right to prohibit. Yielding the premises, the conclusion is unavoidable. The amount of the tax cannot affect its legality; if the present duty, which it is presumed the business of the plaintiffs can easily bear, is legal, so also would be a duty under which such business must necessarily languish and die. In other words, the nature of this species of taxation is such that a mere increase of sufficient magnitude of the duty in question, would put an end to the business of inter-state commerce, so far as the same is carried on by foreign corporations, over the soil of this state. Nor is it perceived that there is anything in principle, which would prevent an indefinite extension of such taxation. If the employment of these plaintiffs can be thus trammeled, why not impose the burthen on the entire business of transporting merchandise from other states over the soil of this state ? It is not forgotten that it was pressed by counsel on the argument in defence of this law, that, as at present framed, it applies solely to the business of corporations created by the laws of other states. Viewed in a merely practical light, this consideration is not of much weight, for it is evident that almost all the commerce between the states must always be in the hands of corporations of this description, and that, consequently, the power tp tax to the point of prohibition, the business of such companies, is, substantially, the power to interdict the entire commerce. But considering the question in a theoretical point of view, it would seem to be clear that a state cannot tax for the purpose of revenue, a foreign corporation, in a mode different in prin
Upon the argument before this court, it was rather suggested than insisted on, that the authority conferred by the constitution upon congress to regulate commerce among the several states, is not exclusive, but is concurrent with that of the states. The court, in illustration, were referred to the laws passed by the several states for the regulation of pilots and pilotage, and others of a like character, the constitutionality of which is not now at all questionable. But it is believed that since the decision of the case of Cooley v. Board of Wardens of Port of Philadelphia, 12 How. 299, this question, so far as it relates to a case similar to the one now before this court, is not open to discussion. Formerly, it must be confessed, the matter was perplexed to a great degree, by much contrariety of opinion among the several members of the Supreme Court of the United Slates, but tlie decision referred to lias placed the doctrine on more stable grounds. In that case it was resolved, that although in matters of mere local interest, such as a system of rules controlling pilotage in harbors, tlie power of congress was merely concurrent with that of the states; nevertheless, whatever subjects of the power to regulate commerce were in their nature national, or admitted of only one uniform plan of regulation, were of such a character as to require exclusive legislation by congress. It is plain that this could not be affirmed of laws for the regulation of pilots and pilotage — but is it not equally plain that it can be affirmed of the regulation now in question before this court? If the foregoing argument has been successful, it lias established the proposition that the tax created by the law of this state, is a taxation of inter-state commerce, and, certainly, admitting that postulate, all must concede that it is in its nature national, .and not local.
The result, then, to which my examination of this subject
This conclusion has not been reached without the exercise of that degree of reflection which the importance of the subject so eminently demanded. Not the slightest doubt has been entertained that the law under review was enacted with the fairest intention, and that its purpose was simply to subject foreign corporations doing business in this state to an equitable share of the business of maintaining that government, which extended its protection to them as well as over the business of its own citizens. Nor has it been forgotten-that it was one of the attributes of sovereignty, the taxing power of the state, which was to be passed upon. It is conceded that this prerogative is not only imperial in its character, but is absolutely necessary to the public welfare, and that a right, at once so elevated and so essential, is not to be diminished or impaired in the slightest degree, even on constitutional considerations, except on the surest grounds. But it is also to be remembered, that eveii more valuable than the revenues of a state, are those fundamental restrictions 'which, prevent each member of this confederacy from the exercise of those powers which, in the grand scheme of our national polity, have been prohibited. And being entirely satisfied,, from the reasons above stated, that the legislative act now before this court, in imposing the tax in controversy, infringes one of those restrictions, it seems to me, that, so far as its operation in this particular is concerned, it should, without hesitation, be declared by this court to be void.
In my opinion the judgment of the Supreme Court should-be reversed.
For reversed — Beasley, C. J., Clement, Cornelison,. Elmer, Green, Ch., Kennedy, Ogden, Wales. 8.
For affirmance — None.
Cited in State v. Corrigan, Collector, 10 Vroom 37; State v. Engle, Receiver, 5 Vroom 4.