Lehigh & Wilkes-Barre Coal Co. v. Borough of Junction

• Decision Date: 02 March 1908
• Citation: 75 N.J.L. 922,68 A. 806
• Parties: LEHIGH & WILKES-BARRE COAL CO. v. BOROUGH OF JUNCTION et al.
• Court: New Jersey Supreme Court

68 A. 806

75 N.J.L. 922

LEHIGH & WILKES-BARRE COAL CO.

v. BOROUGH OF JUNCTION et al.

Court of Errors and Appeals of New Jersey.

March 2, 1908.

(Syllabus by the Court.)

Error to Supreme Court

Certiorari by the Lehigh & Wilkes-Barre Coal Company against the borough of Junction and Peter S. Shurts, collector, to set aside an assessment. From a judgment of the Supreme Court (66 Atl. 923) affirming the assessment, the coal company brings error. Affirmed.

The prosecutor, the Lehigh & Wilkes-Barre Coal Company, a Pennsylvania corporation, is engaged in the business of mining coal in Pennsylvania and shipping it across the state of New Jersey to tide water, and thence to various markets in New York, New England, and elsewhere. The company established at Hampton Junction, N. J., a point about 20 miles over the Pennsylvania line and about 50 miles from tide water, a depot for the reception and storage of coal. To this depot the company from time to time ships large quantities of coal to its own order as consignee. The coal, upon arrival at Junction, is mechanically unloaded and assorted according to sizes, and is intermingled with other coal there stored en masse. The coal thus stored is owned and controlled by the company and, according to the testimony of Mr. Baer, the president of the plaintiff in error, "the particular coal that was dumped at Hampton was not intended for any designated purchaser." It otherwise appeared by testimony that no specific coal so deposited is shipped from the mines or held at the storage plant to fill any specific order, none of it, in point of fact, being sold or consigned to or intended for any particular party; but it remains there, at the will of the coal company, for an indeterminate period, longer or shorter, to meet future demands. It is only when orders are received for any designated kind and size of coal that it is taken from the common mass and shipped according to the terms of the order. In a general way, under the view most favorable to the plaintiff in error, the coal thus stored is held to facilitate transportation and to keep customers supplied with coal during the year; this place, among others, being provided to keep a supply on hand to meet such and other demands. When the mines are shut down, as they frequently are, or when there is a requirement for a particular size of coal, the company draws upon the deposit at Junction. For example, in the fall and winter there is said to be a heavy demand for small sizes of coal, and it is impracticable, from the normal production of the mines, to keep pace with and supply all demands. The facts are that the coal is accumulated at Hampton Junction to enable the coal company to regulate the supply. According to the testimony of the prosecutor, the freight from the mines to the ultimate market is charged to and paid by the customer; but the fact is that, when the coal is shipped from the mines to this entrepot at Junction, a freight of $1 per ton is charged to and paid by the company. When the coal is sold through the sales offices in New York or Philadelphia, the company adds to the price of the coal a freight charge from the mines to the point of ultimate delivery, and in this sense the freight from the mines to the market is paid by the customer. The collector of the borough of Junction assessed 100,000 tons of coal on deposit at the storage plant of the prosecutor for state, county, and borough taxes for the year 1905. The coal company brought a certiorari to set aside, reverse, and annul the assessment, and the Supreme Court affirmed the assessment. The prosecutor sued out a writ of error, and the question of the validity of the assessment is now presented for review.

George Holmes, for plaintiff in error. William C. Gebhardt, for defendants in error.

DILL, J. (after stating the facts as above). The court below found as a fact that this coal was not in transitu, and drew the legal conclusion that it could not be deemed to be coal moving from one state to another in interstate commerce; and hence was taxable as part of the movable property within the state. This court has no power to review the facts on certiorari. The act (P. L. 1906, p. 658) authorizing the court to determine questions of fact has no application to the Court of Errors and Appeals. This proposition has been repeatedly affirmed in cases where the statutes, of which the act in question is a revision, have been construed. Moran v. Jersey, 58 N. J. Law, 653, 35 Atl. 950; Morris v. Mayor, 62 N. J. Law, 385, 41 Atl. 924; Harris v. Atlantic City, 73 N. J. Law, 251, 62 Atl. 995. Granting as a matter of fact that at the time of the taxation the coal in question was (for the time being) at rest and not in the strict sense of the word in transitu, nevertheless the plaintiff in error claims that the stoppage or cessation of the transit was but temporary, and was merely an incident of an interstate commerce journey previously commenced at the mines in Pennsylvania; that the interruption was but momentary to facilitate the transportation already begun by preventing a congestion of cars at tide water, and enabling the company to more promptly meet the demands of its customers. On the other hand, it is contended that the journey of the coal from the mines of Pennsylvania to New York and New England was not one continuous journey with a temporary or incidental interruption, but the transportation of the coal was made by two journeys, the first from the mines to the junction in New Jersey, a mere interstate transportation for the convenience of the owner in massing the property for future distribution and future sale; the second occurring after parcels of the property were sold and thereupon shipped from the junction to the customer, this latter only being a transaction in interstate commerce. It is true that there was a movement of the coal from one state to another, and, if that movement was actually in the course of a continuous journey in interstate commerce, then the coal was not subject to local taxation. Therefore it seems to us that a question of law is to be determined whether the movement of the coal was, under the facts and circumstances disclosed in the record, and in view of the finding of the Supreme Court, such as to afford the plaintiff in error the protection of the commerce clause of the federal Constitution.

Commerce among the states has been defined in many cases in the United States Supreme Court beginning with the leading case of Gibbons v. Ogden, 9 Wheat. 1, 6 L. Ed. 23. In that case Chief Justice Marshall defined this phrase as follows: "Commerce undoubtedly is traffic, but it is something more. It is intercourse. * * * It has, we believe, been universally admitted that these words comprehend every species of commercial intercourse between the United States and foreign nations. No sort of trade can be carried on between this country and any other to which this power does not extend." In Mobile County v. Kimball, 102 U. S. 691, 702, 26 L. Ed. 238, interstate commerce was said to consist "in intercourse and traffic, including in these terms, navigation and the transportation and transit of persons and property as well as the purchase, sale, and exchange of commodities." Almost the same language is used in Gloucester Ferry Co. v. Pennsylvania, 114 U. S. 196, 203, 5 Sup. Ct. 826. 29 L. Ed. 158. In Kidd v. Pearson, 128 U. S. 1, 9 Sup. Ct. 6. 32 L. Ed. 346, it is said that buying and selling and the transportation incidental thereto constitutes commerce, and the regulation of commerce, in a constitutional sense, embraces the regulation at least of such transportation. What is intended by the phrase "commerce among the states" is interstate traffic, buying and selling of merchandise, transportation by common carriers of persons or property by land or by water from one state to another, and the use of navigable waters throughout the United States—all is comprehended.

While interstate commerce necessarily involves interstate transportation, the converse is not always true. A railroad or ferry company, for example, which transports persons or property from one state to another, is undoubtedly engaged in interstate commerce, and a tax by the state upon owners of vessels or common carriers so transporting persons or property has been held void as a regulation of commerce. Passenger cases: Smith v. Turner, 7 How. (U. S.) 283, 12 L. Ed. 702; Norris v. Boston, Id.; Pickard v. Pullman Southern Car Co., 117 U. S. 34, 6 Sup. Ct. 635, 29 L. Ed. 785. On the other hand, interstate transportation may be conducted without constituting commerce or traffic, which has been defined to be the exchange of merchandise between individuals, communities, or countries, whether direct in the form of barter or by the use of money or other medium of exchange. A manufacturer who sends his goods manufactured in Connecticut to his own entrepot or store in New York City transports the products from one state to another, but the transportation by such owner is not of itself, so far as the owner is concerned, interstate commerce in the sense that the city of New York has no power to tax the goods thus stored and awaiting sale in New York, although the merchandise may be intended for a foreign market. The transaction lacks the essential element of trade, namely, sale or exchange. American Steel & Wire Co. v. Speed, 192 U. S. 500, 24 Sup. Ct. 365, 48 L. Ed. 538.

In accordance with these principles, it is clear that the transportation of the coal in question by the prosecutor from the mines to the storage plant was simply an act of dominion exercised over the property by its owner, and, although the intention was that the coal should be ultimately sold and thereafter exported to other states, it cannot be justly said that there was, by that operation, any traffic in the coal or any business of selling or consignment, or that the transportation was incidental to any existing contract...