Lehigh Val Co v. Commonwealth of Pennsylvania

Decision Date02 May 1892
Docket NumberNo. 275,275
Citation12 S.Ct. 806,145 U.S. 192,36 L.Ed. 672
PartiesLEHIGH VAL. R. CO. v. COMMONWEALTH OF PENNSYLVANIA
CourtU.S. Supreme Court

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, Pa., 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 pransportation 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 Pennsylvania,

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 continuous carriage

from points in Pennsylvania to

points in other states...... 2,569,514 58

(6) Total receipts from transportation

by continuous 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 10th, 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 10th, 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 66 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 Com. v. Canal Co., 21 Wkly. Notes Cas. (Pa.) 406, and Com. v. New York, L. E. & W. R. Co., Id. 410, that the commonwealth could only recover taxes upon the two items of $1,353,441.50 and $207,660.42, (classes 1 and 2,) being the amount received for transportation between points both of which were in the state; and directed judgment accordingly, which, exceptions thereto having been over- ruled, 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 1, questions by its assignment of errors the validity of the tax as to the receipts in class 2.

M. E. Olmsted, for plaintiff in error.

[Argument of Counsel from pages 196-199 intentionally omitted] Jas. A. Stranahan and W. U. Hensel, for defendant in error.

Mr. Chief Justice FULLER, after stating the facts in the foregoing language, delivered the opinion of the court.

The Lehigh Valley Railroad Company is a Pennsylvania corporation, which owns and operates an extensive system of railroads in that state, but has no line of its own to Philadelphia. For the traffic from Mauch Chunk to Philadelphia it makes use of two routes,—one by the way of the Philadelphia & Reading road, being wholly within the state; and the other by its own line connecting with the lines of the Pennsylvania Railroad at Phillipsburg, N. J., and thence via Trenton, in that state, to Philadelphia. Detailed reports of its receipts show that the passenger traffic of the Lehigh Company to Philadelphia from Mauch Chunk is almost wholly taken over the Philadelphia & Reading, while its coal and general freight traffic reaches Philadelphia by the other road. Phillipsburg, N. J., lies across the Delaware river, opposite Easton, Pa. By the running...

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