People ex rel. Pennsylvania R. Co. v. Knight

• Decision Date: 10 June 1902
• Citation: 64 N.E. 152,171 N.Y. 354
• Parties: PEOPLE ex rel. PENNSYLVANIA R. CO. v. KNIGHT, Comptroller.
• Court: New York Court of Appeals Court of Appeals

171 N.Y. 354

64 N.E. 152

PEOPLE ex rel. PENNSYLVANIA R. CO.

v.KNIGHT, Comptroller.

Court of Appeals of New York.

June 10, 1902.

Appeal from supreme court, appellate division, Third department.

Certiorari by the people, on the relation of the Pennsylvania Railroad Company, against Erastus C. Knight, as comptroller of the state, to review the decision of the comptroller assessing a tax against relator. From a decree of the appellate division (73 N. Y. Supp. 790) confirming the decision of the comptroller, the relator appeals. Affirmed.

Bartlett, J., dissenting.

Henry Galbraith Ward, for appellant.

John C. Davies, Atty. Gen. (Henry B. Coman, of counsel), for respondent.

CULLEN, J.

I agree with Judge BARTLETT that the only question presented on this appeal is whether the business carried on by the relator, and for which a franchise tax has been imposed, is interstate commerce or not. For, though it may be that the state of New York could levy a franchise tax on the gross earnings of a foreign corporation for the privilege given it of running a cab line within this state, even for the purposes of interstate commerce (see Maine v. Grand Trunk R. Co., 142 U. S. 217, 12 Sup. Ct. 121, 35 L. Ed. 994, cited with approval in Refrigerator Transit Co. v. Hall, 174 U. S. 70, 19 Sup. Ct. 599, 43 L. Ed. 899),section 184 of our tax law excludes earnings derived from business of an interstate character from liability to the tax. I insist, however, that the transportation for which the relator has been taxed is not interstate commerce. It is not rendered under any contract for transportation from a point within the state to a point without the state, or vice versa, but is solely a carriage between two points within the state under a separate contract. As pointed out by the appellate division, the use of the relator's cabs is not restricted to those who have previously secured transportation to or from some point on its railroad, nor is such use confined to travelers upon the railroad. Such a traveler may be accompanied by a friend to or from the ferry only, and one intending to travel upon the railroad may change his intention when he reaches the ferry. It is first to be observed that the fact that the relator is a foreign corporation has no effect on the question whether its cab service is interstate commerce or not. A domestic corporation or an individual citizen of this state may engage in interstate commerce as well as any foreign corporation. Transportation from the city of New York to the town of Port Chester is domestic, not interstate, commerce, because both places are in this state, although the transportation is performed by a foreign corporation,-the New York & New Haven Railroad Company. Transportation from the city of New York to Paterson, N. J., is interstate commerce, although it is over the road of a New York corporation, the Erie Railway Company. Therefore it is the character of the service, not the character of the carrier, that determines whether the transportation is interstate commerce or not. If in the instance suggested by counsel, when a person intending to travel to Washington takes one of the relator's cabs to carry him from the Fifth Avenue Hotel to the relator's ferry station, that transportation is interstate commerce, it is necessarily equally so when he is carried by a cab called from the hack stand in Madison Square opposite. A carrier may engage in both interstate commerce and in domestic commerce, but that fact does not determine the character of the carrier's whole business, or change what would otherwise be domestic commerce into interstate commerce, or vice versa. The fact, therefore, that cabs from the ordinary stands take passengers to any part of the city, does not affect the character of their service when they carry passengers to railway or ferry stations within the state on journeys to points without the state. Nothing is better settled by the decisions of the supreme court of the United States than that in the case of interstate transportation the legislature cannot prescribe the charge to be made for even that part of the transportation which is to be performed within the state. Wabash, St. L. & P. R. Co. v. Illinois, 118 U. S. 557, 7 Sup. Ct. 4, 30 L. Ed. 244. Hence, if the doctrine contended for by the relator is correct, the city of New York has no right to prescribe the fares to be charged by public hacks or cabs for transporting travelers to the ferries on the North river except when the traveler intends to take passage to some point in the state of New York, nor for taking travelers to the Grand Central Station when such travelers are journeying to Boston or to the West.

If this cab service can in any way become part of interstate commerce (of which there may be some doubt, as I shall show by the authorities), I insist it can only be such when the service is rendered under an entire contract for continuous carriage to or from some point without the state. It may be that there is no case in the supreme court of the United States which directly decides this proposition. But there is no authority to the contrary, and there are a number of cases in that court which seem to recognize this as the true test of what transportation constitutes interstate commerce. The question has been presented in litigations arising under the interstate commerce act with reference to railroad companies whose roads lay entirely within a single state. Of such a case the supreme court said in Cincinnati, N. O. & T. P. R. Co. v. Interstate Commerce Com'n, 162 U. S. 184, 16 Sup. Ct. 700, 40 L. Ed. 935: ‘It may be true that the Georgia Railroad Company, as a corporation of the state of Georgia, and whose entire road is within that state, may not be legally compelled to submititself to the provisions of the act of congress, even when carrying, between points in Georgia, freight that has been brought from another state. It may be that if, in the present case, the goods of the James & Mayer Buggy Company had reached Atlanta, and there and then, for the first time, and independently of any existing arrangement with the railroad companies that had transported them thither, the Georgia Railroad Company was asked to transport them, whether to Augusta or to Social Circle, that company could undertake such transportation free from the control of any supervision except that of the state of Georgia. But when the Georgia Railroad Company enters into the carriage of foreign freight by agreeing to receive the goods by virtue of foreign through bills of lading, and to participate in through rates and charges, it thereby becomes part of a continuous line, not made by a consolidation with the foreign companies, but made by an arrangement for the continuous carriage or shipment from one state to another, and thus becomes amenable to the federal act in respect to such interstate commerce.’ So, in Railroad Co. v. Behlmer, 175 U. S. 648, 20 Sup. Ct. 209, 44 L. Ed. 309, it was held that the fact that ‘the several carriers transported hay from Memphis under through bills of lading, by continuous carriage, to Summerville and Charleston,’ rendered the traffic interstate commerce, even as to that part of it performed by a carrier furnishing transportation wholly within a single state. If this be the true doctrine as to the transportation of property, I do not see why it is not equally the true doctrine as to the transportation of persons.

I have suggested that there was some doubt whether, under the authorities, the relator's cab service could become a part of interstate commerce. In Munn v. Illinois, 94 U. S. 113, 24 L. Ed. 77 (Chicago elevator cases), in answer to the claim that the warehouses and elevators were instrumentalities of interstate commerce, it was said by the court: ‘The warehouses of these plaintiffs in error are situated and their business carried on exclusively within the limits of the state of Illinois. They are used as instruments by those engaged in state as well as those engaged in interstate commerce, but they are no more necessarily a part of commerce itself than the dray or the cart by which, but for them, grain would be transferred from one railroad station to another. Incidentally they may become connected with interstate commerce, but not necessarily so. Their regulation is a thing of domestic concern, and certainly, until congress acts in reference to their interstate relations, the state may exercise all the powers of government over them, even though in so doing it may indirectly operate upon commerce outside its immediate jurisdiction.’ In Coe v. Town of Errol, 116 U. S. 517, 6 Sup. Ct. 475, 29 L. Ed. 715, it was said: “Whenever a commodity has begun to move as an article of trade from one state to another, commerce in that commodity between the states has commenced. The Daniel Ball, 10 Wall. 565, 19 L. Ed. 999.' But this movement does not begin until the articles have been shipped or started for transportation from the one state to the other. The carrying of them in carts or other vehicles, or even floating them, to the depot where the journey is to commence, is no part of that journey. That is all preliminary work, performed for the purpose of putting the property in a state of preparation and readiness for transportation.' In the recent case of Detroit, G. H. & M. Ry. Co. v. Interstate Commerce Com'n, 43 U. S. App. 308, 21 C. C. A. 103, 74 Fed. 803, it was held that the cartage of goods by the railroad company to and from the station for shippers and consignees was not within the interstate commerce act. It is there said: ‘We cannot think that, under the circumstances, it was the intention of congress to confuse in our legislation the carting to and from the stations with the transportation on the rails, and, if the act can be interpreted to avoid that confusion, it should be done. We may suppose, since with us it is a business done almost exclusively by outsiders, and rarely...