Palace Car Co. v. Commonwealth
| Decision Date | 06 October 1884 |
| Citation | 107 Pa. 156 |
| Parties | Pullman's Palace Car Company <I>versus</I> Commonwealth [No. 2]. |
| Court | Pennsylvania Supreme Court |
Before MERCUR, C. J., GORDON, PAXSON, TRUNKEY, STERRETT, GREEN and CLARK, JJ.
ERROR to the Court of Common Pleas of Dauphin county: Of May Term, 1883, No. 35.
M. E. Olmsted and O. A. Lochrane, for plaintiff in error.— The claim in this case is controlled by the decision in Com'th v. Standard Oil Co., 5 Out. 119, that a tax upon capital stock is a tax upon property and assets within the state. But the Pullman Car Company had no capital invested in Pennsylvania, aside from the inference sought to be drawn from its contract with the Central Transportation Company, a Pennsylvania corporation. For the convenience of the travelling public, by avoiding repeated changes of cars upon connecting lines and over long routes of railroad, and to avoid inconvenience incident to the maintenance of this business under two different managements, it was found expedient, in 1870, to enter into an agreement whereby Pullman's Palace Car Company became the lessee of the one hundred and nineteen cars of the Central Transportation Company, and undertook to perform the contracts of the latter company with the various railroads in Pennsylvania and elsewhere. By that contract the ownership of the cars remained in the Central Transportation Company, and that company has paid tax to the state on its entire capital stock, i.e. on its entire property, which includes tax on these cars. To tax these cars again in the name of the Pullman company is double taxation not contemplated by the Act of Assembly. The court found as a fact that no portion of the dividends of the Pullman company accrued from the operation of these cars in Pennsylvania, for the rental paid to the Central Company exceeded the gross receipts derived from the use of these cars in Pennsylvania.
But even if the Pullman company owned the cars it would not be subject to taxation in respect thereof, in Pennsylvania; the Pullman company is a foreign corporation, and its cars are only temporarily in Pennsylvania while in transit to or from points in other states; the cars have no situs here, and while being transported into, through and out of the state they are protected from taxation by the commercial clause of the Federal Constitution: State Tax on Foreign-held Bonds, 15 Wall. 319; Morgan v. Parham, 16 Wall. 471; St. Louis v. Ferry Co., 11 Wall. 423; Delaware Railroad Tax Case, 18 Wall. 229; Hays v. Pacific Mail S. S. Co. 17 How. 596; Com'th v....
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...60 L.R.A. 671; State v. Adams Exp. Co., 144 Ind. 549, 42 N.E. 483; State v. Jones, 51 Ohio St. 492, 37 N.E. 945; Pullman's Palace Car Co. v. Commonwealth, 107 Pa. 156. Indeed, the method outlined by Mr. Cooley seems to be the plan generally adopted by the states for the ascertainment of the......
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