Philadelphia Southern Mail Co v. Commonwealth of Pennsylvania

CourtUnited States Supreme Court
Citation122 U.S. 326,7 S.Ct. 1118,30 L.Ed. 1200
PartiesPHILADELPHIA & SOUTHERN MAIL S. S. CO. v. COMMONWEALTH OF PENNSYLVANIA
Decision Date27 May 1887

The question in this case is whether a state can constitutionally impose upon a steam-ship company, incorporated under its laws, a tax upon the gross receipts of such company derived from the transportation of persons and property by sea, between different states, and to and from foreign countries.

By an act of the legislature of Pennsylvania passed March 20, 1877, it was, among other things, enacted as follows, to-wit: 'That every railroad company, canal company, steam-boat company, slack-water navigation company, transportation company, street-passenger railway company, and every other company now or hereafter incorporated by or under and law of this commonwealth, or now or hereafter incorporated by any other state, and doing business in this commonwealth, and owning, operating, or leasing to or from another corporation or company any railroad, canal, slack-water navigation, or street-passenger railway, or other device for the transportation of freight or passengers, or in any way engaged in the business of transporting freight or passengers, and every telegraph company incorporated under the laws of this or any other state, and doing business in this commonwealth, and every express company, and any palace-car and sleeping-car company, incorporated or unincorporated, doing business in this commonwealth, shall pay to the state treasurer, for the use of the commonwealth, a tax of eight-tenths of one per centum upon the gross receipts of said company for tolls and transportation, telegraph business, or express business.' A similar act was passed by the same legislature on the seventh of June, 1879.

By the terms of these acts, returns of the gross receipts are required to be made every six months to the auditor general, upon which the tax is assessed by him, and charged against the company.

Under and by virtue of these acts, the auditor general of the state, in October, 1882, charged the appellant, the Philadelphia & Southern Mail Steam-Ship Company, taxes upon its gross receipts for the years 1877, 1878, 1879, 1880, and 1881, all ofw hich receipts were derived from freight and passage money between the ports of Philadelphia and Savannah, and in foreign trade from New Orleans, and a small amount for charter-parties in the like trade. The tax thus charged against the company for the five years in question amounted to about $6,500, and, with accumulated interest and penalties, to over $9,000. After serving the account upon the company, an action was brought for its recovery in the common pleas of Dauphin county, at Harrisburg. The defendant pleaded that it was a steam-ship company 'operating sea-going steam-ships engaged in the business of ocean transportation between different states of the United States, and between the United States and foreign countries, and that all the said steam-ships of the said defendant were duly enrolled or registered, under the laws of the United States, for the coasting or foreign trade of the United States, and that the gross receipts so returned to the auditor general, upon which a tax has been levied by the commonwealth of Pennsylvania, were received by defendants for freight and passengers carried in the said steam-ships on the ocean, and on the navigable waters of the United States, between the state of Pennsylvania and other states of the United States, and between the states of the United States and foreign countries, and for the charter and hire of the said steam-ships to other parties in such trade and business; and that no part of the said gross receipts was received for the transportation of freight and passengers between places within the state of Pennsylvania, or for the hire and use of the said steam-ships within the state of Pennsylvania.'

On the trial of the cause, the parties entered into an agreement as to the facts, showing the gross receipts for each year, in each branch of the company's trade, which facts supported the allegations of the plea. A trial by jury was dispensed with, and the court gave judgment for the commonwealth for the principal of the tax, and interest from the time of commencing suit. Exceptions were taken on the ground that the judgment was in conflict with the clause of the constitution of the United States giving to congress the power to regulate commerce with foreign nations and among the several states. The judgment, being removed by writ of error to the supreme court of Pennsylvania, was affirmed by that court; and its judgment is now before us for review.

Morton P. Henry, for plaintiff in error.

W. S. Kirkpatrick, Atty. Gen., and John F. Sanderson, for defendant in error.

[Argument of Counsel from pages 328-335 intentionally omitted]

BRADLEY, J.

The question which underlies the immediate question in the case is whether the imposition of the tax upon the steam-ship company's receipts amounted to a regulation of, or an interference with, interstate and foreign commerce, and was thus in conflict with the power granted by the constitution to congress. The tax was levied directly upon the receipts derived by the company from its fares and freights for the transportation of persons and goods between different states, and between the states and foreign countries, and from the charter of its vessels, which was for the same purpose. This transportation was an act of interstate and foreign commerce. It was the carrying on of such commerce. It was that, and nothing else. In view of the decisions of this court, it cannot be pretended that the state could constitutionally regulate or interfere with that commerce itself. But taxing is one of the forms of regulation. It is one of the principal forms. Taxing the transportation, either by its tonnage or its distance, or by the number of trips performed, or in any other way, would certainly be a regulation of the commerce, a restriction upon it, a burden upon it. Clearly, this could not be done by the state without interfering with the power of congress. Foreign commerce has been fully regulated by congress, and any regulations imposed by the states upon that branch of commerce would be a palpable interference. If congress has not made any express regulations with regard to interstate commerce, its inaction as we have often held, is equia lent to a declaration that it shall be free in all cases where its power is exclusive; and its power is necessarily exclusive whenever the subject-matter is national in its character, and properly admits of only one uniform system. See the cases collected in Robbins v. Shelby Taxing-Dist., 120 U. S. 489, 492, 493, ante, 592. Interstate commerce carried on by ships on the sea is surely of this character.

If, then, the commerce carried on by the plaintiff in error in this case could not be constitutionally taxed by the state, could the fares and freights received for transportation in carrying on that commerce be constitutionally taxed? If the state cannot tax the transportation, may it, nevertheless, tax the fares and freights received therefor? Where is the difference? Looking at the substance of things, and not at mere forms, it is very difficult to see any difference. The one thing seems to be tantamount to the other. It would seem to be rather metaphysics than plain logic for the state officials to say to the company: 'We will not tax you for the transportation you perform, but we will tax you for what you get for performing it.' Such a position can hardly be said to be based on a sound method of reasoning.

This court did not so reason in the case of Brown v. Maryland, 12 Wheat. 419. The state of Maryland required all importers of foreign goods and other persons selling the same by wholesale, bale, or package, to take out a license and pay $50 therefor, subject to a penalty and forfeiture for selling without such license. It was contended on the part of the state that this was a mere tax on the occupation of selling foreign goods, affecting only the person, and not the importation of the goods themselves, or the occupation of importing them. Chief Justice MARSHALL met this objection by showing that the attempt to regulate the sale of imported goods was as much in conflict with the power of congress to regulate commerce as a regulation of their importation itself would be. 'If this power,' said he, (referring to the power of congress,) 'reaches the interior of a state, and may be there exercised, it must be capable of authorizing the sale of those articles which it introduces. Commerce is intercourse. One of its most ordinary ingredients is traffic. It is inconceivable that the power to authorize this traffic, where given in the most comprehensive terms, with the intent that its efficacy should be complete, should cease at the point when its continuance is indispensable to its value. To what purpose should the power to allow importation be given, unaccompanied with the power to authorize a sale of the thing imported? Sale is the object of importation, and is an essential ingredient of that intercourse, of which importation constitutes a part. It is as essential an ingredient, as indispensable to the existence of the entire thing, then, as importation itself. It must be considered as a component part of the power to regulate commerce. Congress has a right, not only to authorize importation, but to authorize the importer to sell. * * * Any penalty inflicted on the importer for selling the article in his character of importer must be in opposition to the act of congress which authorizes importation. * * * The distinction between a tax on the thing imported, and on the person of the importer, can have no influence on this part of the subject. It is too obvious for controversy that they interfere equally with the power to regulate commerce.' Pages 446-448.

The application of this reasoning to the case in hand is obvious. Of what...

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