Yost v. Lake Erie Transp. Co.

• Decision Date: 16 December 1901
• Docket Number: 959.
• Citation: 112 F. 746
• Parties: YOST, County Treasurer, v. LAKE ERIE TRANSP. CO.
• Court: U.S. Court of Appeals — Sixth Circuit

112 F. 746

YOST, County Treasurer, v. LAKE ERIE TRANSP. CO.

No. 959.

United States Court of Appeals, Sixth Circuit.

December 16, 1901

Henry B. Thompson, for plaintiff in error.

Alexander L. Smith and Harvey D. Goulder, for defendant in error.

Before LURTON, DAY, and SEVERENS, Circuit Judges.

LURTON Circuit Judge.

This case involves the situs for purposes of local taxation of vessel property owned by a Michigan corporation. The action was brought under section 2781, Rev. St. Ohio, by the treasurer of Lucas county, Ohio, in a common pleas court of Lucas county, to recover a judgment for,33,961.33 alleged to be due for taxes assessed against the Lake Erie Transportation Company, a corporation organized under the law of Michigan, as the owner of four lake steamers. The taxes claimed were for the years 1893 to 1898, inclusive, and include a penalty of 50 per cent. The petition also sought to collect $1,698.07 as an additional collection fee due to the plaintiff. The suit was removed, upon diversity of citizenship, to the circuit court of the United States for the Western division of the Northern district of Ohio. The defendant denied its liability to be assessed in Ohio upon its said property. The issues were submitted to a jury, who by direction of the court, returned a verdict for the defendant. The effort of the Ohio taxing officers is not to tax the steamers owned by the Lake Erie Transportation Company through the owning corporation, for that is confessedly a corporation organized under the law of Michigan, and therefore domiciled in that state, but to tax the steamers themselves as tangible personal property which has acquired an actual situs at Toledo, in Ohio, a situs for purpose of taxation wholly independent of the domicile of the owning corporation. It is not denied that, unless either the property or its owner was within the state of Ohio, the state was without jurisdiction to tax either the one or the other. 'When there is jurisdiction neither as to person nor property, the imposition of a tax would be ultra vires and void. If the legislature of a state should enact that the citizens or property of another state or country should be taxed in the same manner as the persons and property within its own limits and subject to its authority, or in any other manner whatsoever, such a law would be as much a nullity as if in conflict with the most explicit constitutional inhibition. Jurisdiction is as necessary to valid legislative as to valid judicial action. ' City of St. Louis v. Wiggins Ferry Co., 11 Wall. 423, 430, 20 L.Ed. 192.

For many purposes tangible personal property is deemed to have no situs apart from its owner. But this fiction is always made to yield where the purposes of justice require that the actual status of the movable be regarded, as where dominion is asserted by the government of the place of actual situation of such property. Walker v. Jack, 31 C.C.A. 462, 88 F. 576; Green v. Van Buskirk, 7 Wall. 139, 19 L.Ed. 109; Pullman's palace Car Co. v Pennsylvania, 141 U.S. 18, 22, 11 Sup.Ct. 876, 878, 35 L.Ed. 613, 616. In the case last cited it was said:

'For purposes of taxation, as has been repeatedly held by this court, personal property may be separated from its owner, and he may be taxed on its account at the place where it is, although not the place of his own domicile, and even if he is not a citizen or resident of the state which imposes the tax.'

The vessels upon account of which the defendant is sought to be taxed are four lake steamers which have for many years been engaged in interstate commerce on the Great Lakes. They are all owned by the Erie Transportation Company, a duly-organized corporation of the state of Michigan. The general office of that corporation is stated in its certificate of incorporation, as required by the law of Michigan, to be Monroe, in said state. The vessels themselves hail from the port of Monroe, and their names and home port are painted on the stern, as required by sections 4178, 4334, Rev. St. U.S. The vessels are registered at Detroit, in the state of Michigan; Detroit being a place within the collection district which includes Monroe, the home port. Rev. St. U.S. Sec. 4141. The mere fact that property is employed in interstate commerce will not prevent a state from taxing it as other property within its dominion and jurisdiction. Sanford v. Poe, 16 C.C.A. 305, 69 F. 546; Delaware R. Tax, 18 Wall. 232, 21 L.Ed. 888; Western Union Tel. Co. v. Massachusetts, 125 U.S. 530, 539, 8 Sup.Ct. 961, 31 L.Ed. 790; Pullman's Palace Car Co. v. Pennsylvania, 141 U.S. 18, 23, 11 Sup.Ct. 876, 35 L.Ed. 613; Adams Express Co. v. Ohio, 165 U.S. 194, 17 Sup.Ct. 305, 41 L.Ed. 683.

But in the examination of the question as to whether movable property has acquired a situs at a place not the domicile of the owner a very obvious distinction must be recognized between vessel property engaged in the navigation of interstate waters and other tangible personal property having a permanent situs. Thus, apart from the rule that personal property follows its owner, congress has given to vessel property a situs or home port by the provisions of sections 4178, 4141, Rev. St. By section 4178 every registered vessel is required to have the name of her home port painted legibly on her stern; and by section 4141 the port to which such vessel belongs is defined as being that port 'at or nearest to which the owner, if there be but one, or, if more than one, the husband or acting and managing owner of such vessel, usually resides. ' These vessels had but one owner, the Erie Transportation Company. That corporation must reside within the state of Michigan. 'A corporation may do business elsewhere, but it must reside at home. ' By the local law of Michigan it is deemed, for the purposes of the state, to have its habitat or domicile at a place fixed by the articles of incorporation. That place was Monroe, and the port 'at or nearest to which the owner * * * usually resides' is the port of Monroe. Accordingly, the port of Monroe is by the act of congress the home port of these vessels and their situs as fixed by the act of congress.

But vessels intended for interstate or foreign commerce are not constructed or acquired for the purpose of remaining in their home or any other port. Their value consists in their use in actual navigation, and their presence in port is, in the very nature of the property, incidental and temporary. This distinction between vessel property and other movables is of controlling importance in determining the domicile of registered water craft engaged in interstate and foreign commerce for purposes of taxation, and the rule seems now settled in courts of the United States, and by the weight of opinion in the state courts, that registered water craft engaged actually in interstate or foreign commerce are only subject to property taxation at their home port, which, under the act of congress, is that port nearest to the domicile of the owner. Rev. St. U.S. Sec. 4141. Hays v. Steamship Co., 17 How. 596, 15 L.Ed. 254; City of St. Louis v. Wiggins Ferry Co., 11 Wall. 423, 20 L.Ed. 192; Morgan v. Parham, 16 Wall. 471, 21 L.Ed. 303; Transportation Co. v. Wheeling, 99 U.S. 273, 25 L.Ed. 412; Moran v. City of New Orleans, 112 U.S. 69, 5 Sup.Ct. 38, 28 L.Ed. 653; Gloucester Ferry Co. v. Pennsylvania, 114 U.S. 196, 5 Sup.Ct. 826, 29 L.Ed. 158; Pullman's Palace Car Co. v. Pennsylvania, 141 U.S. 18, 23, 11 Sup.Ct. 876, 35 L.Ed. 613; People v. Commissioners of Taxes and Assessments for City and County of New York, 58 N.Y. 242; Roberts v. Township of Charlevoix, 60 Mich. 197, 26 N.W. 878; Johnson Co. v. De Bary-Baya Merchants' Line (Fla.) 19 So. 640; Graham v. Township of St. Joseph, 67 Mich. 652, 35 N.W. 808.

The distinction between the nature of vessel property engaged in the navigation of the sea or interstate waters and the movable property of a railroad company employed in interstate commerce was pointed out by Mr. Justice Gray in Pullman's Palace Car Co. v. Pennsylvania, 141 U.S. 18, 23, 11 Sup.Ct. 876, 878, 35 L.Ed. 613, 616, where the justice said:

'Ships or vessels, indeed, engaged in interstate or foreign commerce upon the high seas, or other waters which are a common highway, and having their home port, at which they are registered under the laws of the United States, at the domicile of their owners in one state, are not subject to taxation in another state, at whose ports they incidentally and temporarily touch for the purpose of delivering or receiving passengers or freight. But that is because they are not, in any proper sense, abiding within its limits, and have no continuous presence or actual situs within its jurisdiction, and therefore can be taxed only at their legal situs, their home port and the domicile of their owners. Hays v. Steamship Co., 17 How. 596, 15 L.Ed. 254; City of St. Louis v. Wiggins Ferry Co., 11 Wall. 423, 20 L.Ed. 192; Morgan v. Louis, 107 U.S. 365, 2 Sup.Ct. 257, 27 L.Ed. 419; Gloucester Ferry Co. v. Pennsylvania, 114 U.S. 196, 5 Sup.Ct. 826, 29 L.Ed. 158. Between ships and vessels having their situs fixed by act of congress, and their course over navigable waters, and touching land only incidentally and temporarily, and cars or vehicles of any kind, having no situs so fixed, and traversing the land only, the distinction is obvious.'

In Moran v. City of New Orleans, 112 U.S. 69, 74, 5 Sup.Ct. 38, 40, 28 L.Ed. 653, Justice Matthews, having regard to this distinction and to the difference between a tax upon vessels as property and a burden otherwise imposed, said:

'And it is undoubtedly true, as it has often been judicially declared, that vessels engaged in foreign or interstate commerce, and duly enrolled and licensed under the acts of con

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