Vermont & Canada Railroad v. Vermont Central Railroad

63 Vt. 1 | Vt. | 1890

Lead Opinion

The opinion-of the Court was delivered by

POWERS, J.

Two questions have been argued before us:

1st. Whether the monthly payments of rent due under the modified lease draw interest from the last day of the month on which it ¡is claimed they mature, and

*172nd. Whether the petitionee is liable to the petitioner for the unpaid rents withheld to meet the taxes assessed upon the gross earnings of the Rutland Road.

By the terms of the original lease of the Rutland and Addison Railroads, made in 1870, the rent was payable semi-annually on the 20th days of January and July in . each year. As part of the arrangement between the parties and as security for the payment of the stipulated rent, the trustees and managers of the Central and Canada roads gave to the Rutland an order upon the Cheshire road to pay to the Rutland, for the year 1871, a sum not exceeding $10,000 per month from the balances due in traffic accounts : And after that year, the sum. of $20,000 per month from the same source : “ Such payments to be made monthly in the due course of settlement between the roads now in pratice.”

The due course of settlement then in practice between the Cheshire and Central and Canada roads was for the several roads constituting the line terminating in Boston to adjust and pay the monthly balances, as soon as practicable, at the end of each month’s business; under this practice the balance due from the Cheshire to the Canada and Central would not be struck until about the 25th of the succeeding month.

A clause in the original lease, after reciting the giving of the order aforesaid upon the Cheshire, provided that all moneys received by the Rutland upon such order should be applied to the payment of rent due under the lease, free from any claim for interest.

As the contract then stood between the parties to the lease, it is clear that the clause providing that the sums paid monthly by the Cheshire, which the Rutland was ‘to apply to the payment of its rent free from all claim for interest, was inserted for the benefit of the Rutland. The rent its due was only payable semiannually ; the balances due under the Cheshire order were to be *18received by the Rutland monthly. The balances were to be applied in payment of rent. Thus in fact a considerable part of each half-year’s rent would be received by the Rutland before such half-year’s rent was due. Nobody could thus be chargeable with interest except the Rutland, by reason of the advance payment of its rent.

On Reb. 25, 1876, the original lease in force between the parties was in certain respects modified. The rent, which under the original contract was payable semi-annually, was made payable in equal monthly instalments and on the last day of each month. The basis for ascertaining the amount of rent payable was fixed, and the Cheshire order was by the modified contract to “ stand as a continuing security for the payment of the rents herein stipulated to be paid.” A clause in the modified contract also provided in substance that the Cheshire order should be paid practically as it had been under the original lease,- and in fact the balances under it have been paid to the Rutland about the 25th of the month following the month in which such balances were earned.

The petitioner now seeks to recover interest upon these deferred payments.

As already seen, the rent under the modified contract was payable monthly and on the last day of the month. A day certain was fixed for its payment. If not paid when due it is clear that interest would be 'chargeable upon it until it was paid.

The Chesire order was not accepted as a payment of rent, but as collateral security for its payment. The lessees owed the month’s rent on the last day of each successive month without regard to the fact that anything was or was not to be realized from the “ continuing security ” afforded'by the Cheshire order.

Under the original contract, the Rutland, by way of the Cheshire order, received its rent before it was due, and had the right to apply the amount so received without accounting for interest. Under the modified contract the rent has not been paid *19when due and no clause in the modified contract says anything respecting interest upon payments made under said order or otherwise. The clause in the original contract providing for the application of the proceeds of the Cheshire order to the payment of rent, free from any claim for interest, related to the advance payments which the Rutland then received.

Under the modified contract the clause, which was insérted in the original contract for the purpose of protecting the Rutland from a liability, cannot now be used to protect the other contracting party from a like liability. Rut the modified contract making no reference to it at all, the clause has ceased to be operative for any purpose, and the basis upon which the rent is paya.-, ble has been so changed as to make it inapplicable.

The petitioner is entitled therefore to interest upon the- de^ ferred payments of monthly rent from the last day of each month when such payments respectively matured.

The defendants have retained a considerable sum from the. rents payable to the Rutland and paid the same to the State as, taxes assessed under the Acts of 1882 and 1884 upon the gross, earnings of the Rutland road while in defendants’ possession.

The Rutland company contends that the State law referred to, so far as it seeks to impose a tax upon the earnings derived from interstate commerce, and a very large proportion of the earnings referred to, were of this character, is unconstitutional, and that the defendants were not justified in paying the taxes assessed upon them. That all transportation of freights and persons from points without to points within the State, or from points within to points without the State, as well as from points without through the State to points without, is commerce between the States, is abundantly settled both upon principle and upon authority. Fargo v. Michigan, 121 U. S. 230.

All agree that interstate commerce is not the subject of State regulation, and the cases are uniform in holding that a tax upon such commerce is a regulation within the inhibition -of th§ *20Federal constitution. Fargo v. Michigan, supra; Philadelphia Steamship Co., v. Pennsylvania, 122 U. S. 326, and cases there cited. All agree that the decisions of the highest Federal Court are binding upon this Court when Federal questions are involved, and that the only enquiry open to us, touching the validity of the tax now in question, so far as it lays hand upon the earnings derived from interstate commerce, is, what is the declared doctrine of the United States Supreme Court upon the subject.

That the course of decision in that court upon this and analogous subjects has not been entirely uniform, the diligence of counsel in this case has fully demonstrated. But the case last above cited is the latest decision of that court which has come to' our attention, and so for the purposes of this case that decision must be accepted as the supreme law of the land.

Fortunately the facts of that case were quite like those of the case at bar. There, as here, the State of Pennsylvania had levied upon the gross receipts of a corporation chartered by itself, and there, as here, such receipts were the product of interstate commerce. The court reviews the authorities and, through Mr. Justice Bradley, held that the Pennsylvania law was unconstitutional. Jt would serve no useful end to trace the line of reasoning adopted in this case, nor to attempt a reconciliation of this decision with earlier ones of the same court, claimed to be variant from it. We, as judges of a State Court, are bound by the very language of the Federal Constitution to accept the construction of any part of that Constitution made by the Supreme Court; and in this case the reasoning of that court seems to us to be entirely unanswerable. We hold therefore that our corporation tax law, so far as it seeks to tax the earnings derived from interstate commerce is unconstitutional, as it interferes with that commerce, the regulation of which is within the exclusive control of Congress.

It is further contended that our law also violates another clause of the Federal Constitution, in that it impairs the obligation of the contract subsisting between the parties respecting the pay*21ment of rent, by requiring the lessee to pay the tax and deduct the same from the stipulated- rent, and the case of. Murray v. Charleston, 96 U. S. 432 is relied upon as supporting this contention.

It is quite true that some of the language of Justice Strong in the opinion in that case gives some color to the contention now made. But this language is to be construed with reference to the case then in hand. In that case the City of Charleston was owing a non-resident creditor a debt bearing interest. Under a law of the State, the City passed an ordinance directing its officers to deduct from the interest payable upon the debt a certain sum as a tax upon the debt. The question -was, could the City do this \ And the Court held that it could not, as it thereby would impair the obligation of a contract. It is to be noticed that the City had no right to tax the creditor at all. He was a non-resident, and the debt had its situs in the place of his domicile, and not in Charleston. If the creditor had resided in Charleston and thus had been within the jurisdiction for purposes of taxation,there could be no doubt that the City could have properly taxed him upon the indebtedness. The only question which could then arise would be as to the propriety of the method adopted for the collection of the tax. But in the case at bar both the Rutland and the Central, and the rent due from the Central to the Rutland are proper subject-matter for taxation under our law. The case then is clearly distinguishable in its facts from Murray v. Charleston, supra, and we think the method prescribed for the collection of the tax is no impairment of the contract to pay the rent due under the lease. In Osborn v. Nicholson, 13 Wall. 654, the court say: All .contracts-are inherently subject to the paramount power of the Sovereign, and the exercise of that power is never understood to involve their violation, and it is not within that provision of the National Constitution which forbids a State to pass laws impairing their obligation. The power acts upon the property which is the sub*22ject of the contract and not upon the contract itself. To the same effect see West River Bridge Co. v. Dix, 6 How. 532.

When therefore the parties made the lease whereby the Central undertook to pay a stipulated rent to the Rutland both made their contract with notice of, and in subordination to the right of the State to exact from the fruits of their contract by way of taxation such sum as it might properly collect for public purposes. Having then the right to levy the tax the method to be adopted for its collection is purely a question of legislative discretion with which the court has no power to interfere so long as no legal or constitutional rights are disturbed. The whole power of taxation under our system of government is lodged in the Legislature subject only to constitutional limitations. What subjects matter shall be selected, what amounts shall be assessed, and the methods of assessment and collection of taxes are solely questions for the Legislature to determine. If in any respect the constitutional rights of the taxpayer are involved, he has his remedy, but beyond this the legislative power cannot be questioned. In this cáse the law itself made the assessment. This has been held to be no impairment of the taxpayer’s rights. Sav. Bank v. U. S., 19 Wall. 227.

We have a statute by which a collector may collect a tax by the trustee process. In the case of non-residents taxes assessed upon national bank shares of stock are paid by the cashier and deducted from the dividends declared upon such shares. The same method is adopted in the case of other corporations. In the case St. Albans v. Nat. Car Co., 57 Vt. 68, our statute R. L. sec. 281'providing that taxes assessed upon the stock of non-resident stockholders in a corporation shall be paid by the corporation, and the corporation shall have a lien upon the stock and its dividends as security and may deduct the' taxes paid from dividends declared, is held constitutional. Taxes must necessarily be collected by summary methods, and we see no reason why the Legislature could not direct the Central to retain and pay over to the *23State from funds in its hands belonging to the Rutland, all taxes which might be assessed against the Rutland. The contract to pay rent is not impaired because it was made subject to just that kind of impairment, and so the Rutland gets all under it that it can legally claim.

We hold therefore that Sec. 14 of our corporation tax law is not unconstitutional in respect to the method prescribed for the collection of taxes assessed upon the earnings of railroads operated by lessees.

But it by no means follows because the defendant has’ paid to the State taxes under a law afterwards held to be void, by withholding the amount thereof from the rent that the Rutland can now claim the balance of its rent unpaid for this reason.

Down to May 27, 1887, the date on which the decision of the Court in the 122 D. S. above cited was promulgated, the doctrine of the cases decided by the Supreme Court upheld the constitutionality of the taxation in question. State Tax on Railway Gross Receipts, 15 Wall. 284; Minot v. P. W. & B. R. R. Co., 18 Wall. 206, and the numerous cases cited in the defendant’s brief. Accordingly all payments theretofore made were, so far as the validity of the tax was involved, payments made in obedience to law. It is an elementary ¡principle that a contract valid under an existing law and payments made upon it will not be invalidated by subsequent legislation or subsequent judicial interpretation of the law. The decision of a Court of competent jurisdiction upholding the validity of an existing law, validates everything done under it, so long as such adjudication remains unchanged. Gelpcke v. City of Dubuque, 1 Wall. 175 ; Havemeyer v. Iowa County, 3 Wall. 294; Cass Co. v. Johnston, 95 U. S. 360; Douglass v. Pike Co., 101 U. S. 679 ; 16 How. 432; 19 Wall. 677.

As said in Gelpcke v. Dubuque, 1 Wall. 175 : “ The sound and true rule is that if the contract when made was valid by the laws of the State as then expounded, by all departments of the *24government and administered in its Courts of justice, its validity and obligation cannot be impaired by any subsequent action of tbe legislature, or decision of its Courts altering the construction of the law.

The same principle applies where there is a 'change of judicial decision as to the constitutional power of the legislature to enact the law.”

Affirmed in Haveymer v. Iowa County, 3 Wall. 294.

And in Douglas v. Pike Co., 101 U. S. 677: The true rule is to give a change of judicial • construction in respect to a statute the same effect in its operation on contracts and existing contract rights that would be given to legislative amendment, that is to say, make it prospective, but not retro-active.

After a statue has been settled by judicial construction the construction becomes so far as contract rights acquired under it are concerned as much a part of the statute as the text itself, and a change of decision is to all intents and purposes the same in its effect on contracts as an amendment of the law by means of a legislative enactment.”

And in Lyon v. Richmond, 2 Johns. Chan. 51: “Every man is to be charged at his peril with a knowledge of the law. There is no other principle which is safe and practicable in the common intercourse of mankind, and to permit a subsequent judicial decision in any one given case, on a point of law, to open or annul everything that has been done in other cases of a like kind, for years before, under a different understanding of the law, would lead to the most mischievous consequences. Fortunately for the peace and happiness of society there is no such pernicious precedent to be found. This case therefore is to be decided according to the existing state of things when the settlement in question took place.”

Suppose this Court should hold to-day that our tax law is valid, and a year hence should reverse its decision, and hold it invalid ? would it be seriously claimed that rights gained and *25liabilities assumed meantime would be upset ? No such rule of law could be tolerated for a moment.

The Supreme Court of the United States is the Supreme arbiter when a federal question is involved. Down to 1887 that Court had ruled the federal question now under consideration in a way that upheld the legislation in question. Its decisions then promulgated were the supreme law of the land, absolutely binding upon both parties to this cause. Hence all payment of taxes made under our law, which down to that time must be treated as valid for present purposes, were made in strict conformity to law.

The subsequent change in the decisions of the U. S. Supreme Court is only operative prospectively, and all acts done 'in obedience to the former decisions are valid and cannot be disturbed.

Again, the taxes in question were taxes which, as between these parties it was the duty of the Rutland company to pay.

Under the original as well as the modified lease no provision for the payment of taxes was made. The lease being silent, the duty to pay, under the common law rested upon the lessor. Taylor’s Land. & Tenant, sec. 341, 395. Morever the precise question arose between these parties and was decided by this Court at the January term, 1878, in Rutland County. In that case certain taxes had been assessed upon the Rutland road under the provisions of the acts of 1874 and 1876, taxing the real estate of railroad corporations. The defendants then as now operating the road under the lease aforesaid, declined to pay these taxes. 'Whereupon the Rutland Co. brought its petition to the Court of Chancery, praying, among other things that the lease and the modification of the same in force between the parties “May be construed and the rights and liabilities of the parties thereunder may be determined touching their duty and obligation or the duty and obligation of either to pay said taxes so assessed as aforesaid, as well as all future taxes that may be *26assessed on the real estate of your orator and ' said trustees and managers.”

The case was fully argued and fell to Chief Justice Pier-point, who prepared no • ppinion, but the mandate declared that “ The defendant is not liable to pay taxes assessed upon the property of the Rutland Railroad Co.”

It is clear that if the taxes in question upon the gross earnings of the Rutland road are a tax upon the property of the Rutland Railroad Co.” the case just cited is applicable to the case in hand.

The tax is not a franchise tax, as it is levied indiscriminately upon the earnings of all railroads operated in the State, irrespective of the source of their chartered power. Phil. S. S. Co. v. Pennsylvania, supra. It is in terms a tax upon the earnings of railroads rated by the mile. It is not a tax upon the company which operates a railroad, nor upon the income received by such company, but upon the fares and freights which come from the operation of the particular road. The object of the legislature was to make each railroad in the State, as a railroad, contribute to the public treasury its proper share of the burdens of taxation. Under the act of 1874 the plan of treating railroads as real estate was adopted as the basis of a scheme of taxation. This act not proving acceptable, in 1882 the plan was adopted of graduating the taxation upon the basis of earnings. In both cases the tangible thing upon- which the State laid its hand was the railroad itself, and unless we substitute the ’ shadow for the substance, the thing taxed under the act of 1882 was “ the property of the Rutland R. R. Co.”

That the tax in question was a tax which the Rutland R. R. Co. should, pay is clearly seen by reference to the act itself. Sec. II provides that every corporation, person or persons owning or operating a railroad in this State, whether as owner, lessee, receiver, trustee, or otherwise, should pay a tax to the State on the entire gross earnings of such railroad, &c.

*27The thing taxed was, then, the gross earnings of somebody’s railroad. Who that somebody is oan be learned from the 14th section. When a railroad is operated in this State by a corporation, person, or persons, by virtue of a lease, or other contract, the aforesaid tax shall be paid by the lessee of such railroad or holder of such contract, as the case may be; and the said tax shall be charged against and deducted from any payment due, or to become due the lessor of such railroad * * * on account of such lease or contract.

Now, then, when the act directs the Central to pay the tax and charge it against and deduct it from the rent due the Rut-land, it makes the Rutland in fact the taxpayer instead of the Central. The Central is the mere collector of the tax, the Rut-land, the lessor, ún the lease of its road, is the party actually assessed, and if the Rutland is the taxpayer aimed at by the law, it must be the property of the Rutland that is assessed. The law reaches the property of the taxpayer it selects as the party liable for the tax.

It is not exactly sound to say that the Rutland has no gross earnings, because it has rented its road, and under the contract the earnings go to the defendants. Under the modified lease, the rent is made up. from gross earnings. The defendants agree to pay a rent ascertained in a specified manner from the gross earnings of the Rutland road upon a basis fixed in the contract.

The defendants stipulate that the gross earnings shall equal at least the sum of $250,000. It is true a hotch-pot. of the earnings of the Rutland, Addison, Canada, and Centi-al roads is made, still by contract between the parties 36¿ per cent of the aggregate earnings of all said roads is set apart as an arbitrary, fixed, liquidated share of the whole earnings properly belonging to the Rutland and Addison.roads.

These roads then have earnings within the purview of the tax law, as much so as the Canada and Central, and it wras the earnings, eo nomine that the legislature designated as the subject *28to be taxed, irrespective of tbe question whether A. or B. was entitled to pocket such earnings.

It being therefore the duty of the Rutland to pay the taxes in question, the defendants have been compelled by law to discharge an obligation belonging to another. In such case the law implies the request and the defendants would have ’an action to recover back such payments. But a court of equity will avoid a circuity of action wherever it is practicable to do so.

The notice given by Dr. Mead, the treasurer of the Rutland road, by letter dated Sept. 19, 1883, does not help the petitioner. The Rutlahd Col then knew that the defendants were paying these taxes and deducting the amount from the current rent. The Rutland company simply say, that it claims the tax 'to be invalid. No suggestion or hint is made as to the ground of the invalidity. Much less that the law-was unconstitutional. Indeed at that date, so far as any light had been thrown upon that question by the Supreme Court, the law stood as a valid law. If the defendant declined to pay the taxes, they subjected themselves to heavy penalties. The Rutland Co. made no offer to indemnify the defendants, and, as prudent men, the defendants could not do otherwise than pay.

They were under no duty to incur the expense and assume the perils of delay and of litigation to test the validity of a law passed by the legislature, and which they had the right to assume was constitutional.

The petitioner comes into a Court of Equity to obtain the relief prayed for. It must do equity. It can only do equity by leaving the defendants where for the greater part of the time the law has left them, and where for the whole time they have been doing what as between the parties, the petitioner should have done, and what by its own laches the petitioner has suffered them to do, professedly in its behalf.

Accordingly the defendants are not liable to pay as rent the *29amount paid by them as taxes upon the' earnings of the Rutland road.

The decree is reversed, and the cause remanded with mandate.

Ross, J., dissents.





Dissenting Opinion

Dissenting opinion by

ROSS, J.

I concur in the views of the majority of the Court on the question of interest, but disagree, with reference to the construction to be placed upon ss. 1,11,12, 13andl4ofNo. 1 of the Acts of 1882. These contain the entire provisions of the act relative to taxing railroads. In determining- upon the proper construction to be given to these sections, all their provision must be considered. If Sec. II, stood alone, I should say, that the tax is imposed upon the entire gross earnings received by a corporation or person, from the operation of a railroad within this State. Its language seems to demand such construction. The first part of the opinion of the majority of the court assumes that this is the construction to be placed upon the Act, and therefore holds, the tax, so far as derived from interstate commerce, void. On this construction, they justly hold that that part of the tax assessed upon the earnings derived from interstate commerce, is unconstitutional, and void in accordance with the decision of the United States Supreme Court in Steamship Co. v. Pennsylvania, 122 U. S. 326. If a tax upon the entire gross earnings, it must rest upon the party to whom such earnings belong. In that case, under the lease by the orator to the defendant, I think, the tax would clearly fall upon the defendant; and the payment of the tax by defendant,would only pay its debt to the State, and wordd pay no part of the rent due from it to the orator. Under the lease, I think, the defendant alone is entitled to, and owns the entire gross earnings derived by it from operating the railroad of the orator. I do not think the reference in *30the lease to the gross earnings for the purpose of fixing the amount of the rent, makes any part of the gross earnings, as such, the property of the orator. Such earnings were not made the property of the orator, nor was the defendant under obligation to turn such earnings over to the orator in payment of the rent due it. The rent was to be paid in part by the order on the Cheshire Railroad Co. What was not thus paid the defendant could pay out of any funds which it could control. The orator, I think, had no gross earnings. Its income derived from the rent fixed by the lease, was not gross earnings within the contemplation of the statute. While it owned the road, road-bed and rolling stpck, it did not operate them. Hence, if this section were the whole of the law applicable to the taxation of this class of property, I should hold that the tax, whether valid or invalid rested upon the defendant’s property, and such payment gave the defendant no relief from paying the full amount of the rent stipulated in the lease. But this section does not contain the whole law relating to this subject. Sections 12 and 13 of the act need not be considered. They relate to the mode of ascertaining the amount of the tax per mile of the road operated in this State, and to the times when the tax is required to be paid.

In ascertaining the intention of the legislature, section 14 of the act must be considered. That section provides that, when a railroad is operated under a lease or contract, by some party other than its owner, the tax shall be paid by such other party, but for the owner of the railroad. It proceeds upon the basis that the tax, in all cases, is upon the property of the railroad, and to be paid by its owner. When, therefore, the railroad and rolling stock of a company are operated by a lessee, or contractee, for his own benefit, and when the gross earnings derived from operating the property belong, by the terms of the lease, or contract, to the operator, the tax rests, not upon the gross earnings, in specie, but upon the railroad, rolling stock and right to operate them, valued upon the basis of the gross earnings per mile *31derived therefrom. By both sections 11 and 14 the tax is made to rest upon property. I do not think that the act should be so construed as to make the tax rest upon the property of the lessor or contractor, the railroad, rolling stock and right to operate them, when operated under a lease or contract, and upon the gross earnings derived therefrom when operated by the owner. The act should be so construed that the tax will rest uniformly upon all such property by whomsoever operated. This result can be reached only by construing the act as I have done.

Turning now to section one of the act, we find the same idea expressed. The tax there is denominated a tax upon the corporate franchise or business in this State of a railroad. The most valuable franchise, and pretty much the only ones of pecuniary value, are the rights conferred by the State on such corporations, to locate, build, maintain, own and operate a railroad with its rolling stock in this State-. Every railroad in the State holds these franchises from the State. Here it is declared that the tax is upon the franchise. When “ or business in this State ” is added, it suggests that the franchise is to be valued upon the basis of the earnings received from the operation of the property. On this construction section 11 of the act declares that the value of the railroad, rolling stock, and right to operate them, in this State, is, for the purpose of taxation, to be determined by the gross earnings derived from such operation thereof per mile, within this State. Section 12 rates the tax upon the property or franchise so valued, and section 13 declares when the tax shall be paid. This construction makes all the provisions of the act on this subject harmonious, renders the tax a tax uj>on the property, or franchise to be paid by the owner of the property or franchise, and avoids all constitutional objections. I do not find anything in Steamship Co. v. Pennsylvania, supra, nor in any of the decisions there referred to and commented upon, which militates against this construction of this act. In the State Freight Tax case, 15 Wall. 232 to 282 (L. C. 21,160) Justice *32Strong says : “ Before proceeding, however, to a consideration of the direct question whether the statute is in direct conflict with any provision of the Constitution of the United States, it is necessary to have a clear apprehension of the subject and nature of the tax imposed by it. It has repeatedly been held that the constitutionality or unconstitutionality of a State tax is to be determined, not by the form or agency through which it is to be collected, but by the subject upon which the burden is laid. This was decided in the cases of Bank of Commerce v. New York, 2 Black 620 ; in the Bank Tax case, 2 Wall. 200 ; Society for Savings v. Coite, 6 Wall. 594; and Providence I. Institution v. Mass., 6 Wall. 611. In all these cases it appeared that the bank was required by the statute to pay the tax, but the decision turned upon the questions : what was the subject of the tax; upon what did the burden really rest, not upon the question from whom the State exacted payment into its treasury. Hence, where it appeared that the ultimate burden rested upon the property of the bank invested in United States securities, it was held unconstitutional, but where it rested upon the franchise of the bank, it was sustained.” I understand the principle thus announced is unquestioned. Sly associates make this a tax upon the gross earnings, in the first part of the opinion, and then by some process of reasoning, of which I fail to see the force or conclusiveness, hold that it is a tax upon the orator, analogous to the tax imposed upon the orator’s road-bed, per mile, under the acts of 1874 and 1876, and decided by this court in Rutland County but unreported, and which method of taxtation this took the place of. They also hold, as I understand the opinion, that the gross earnings derived from the operation of the orator’s railroad and property by the defendant, belong to the defendant, and yet that the tax rests upon the orator. I am unable to understand in what way that result can come about, unless the tax rests uj)on the orator’s road-bed, rolling stock and right to operate them valued *33upon the basis of the gross earnings derived per mile from its operation in this State by the defendants. When the tax is made to rest upon the orator, -who has no gross earnings, within the meaning of the act, it falls within the principle announced and quoted from the opinion of Justice Strong, in the State Freight Tax case, and is not unconstitutional.' The burden of the tax, on the views of my associates, rests upon the orator. As the orator derives no gross earnings from its railroad, the • tax, it seems to me, must either rest upon the railroad property or franchises of the orator. It must rest upon what the orator has and enjoys, and not upon what it does not own and is not entitled to. While I agree in the result reached by the majority of the court, I dissent from the method of reaching it and from holding the act unconstitutional.

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