Interstate commerce.- To Congress is given exclusive power by article I, section 8, United States Constitution, to regulate commerce, and interstate commerce cannot, therefore, be taxed by the state. State Freight Tax case, 15 Wall. 232 (1872). In New York state, a tax imposed on the property of a telegraph company is not in violation of the interstate commerce clause. People ex rel. Western Union Tel. Co. v. Assessors, 57 Hun, 357 (1890). The taxing of goods prepared for shipment and deposited in a place or port of shipment within the state is not a regulation of commerce. Coe v. Errol, 116 U. S. 517 (1886). If the tax discriminates against non-residents it has been held an interference with commerce. Ward v. Maryland, 12 Wall. 419.

14th amendment.-Under this clause of the United States Constitution "no state shall make or enforce any law which shall "abridge the privileges or immunities of citizens of the United "States; nor shall any state deprive any person of life, liberty "or property without due process of law; nor deny to any per"son within its jurisdiction the equal protection of the laws."

A limitation on the state's power of taxation is imposed by the term "equal protection of the laws," and it has been held that corporations are "persons" within the meaning of the Fourteenth Amendment. Santa Clara Co. v. Southern Pacific Ry. Co., 118 U. S. 394 (1886); San Bernardino Co. v. same, 118 U. S. 417 (1886); San Mateo Co. v. same, 13 Fed. Rep. 722; Pembina Mining Co. v. Pa, 125 U. S. 181; Gulf Colorado & S. F. R. R. v. Ellis, 165 U. S. 154; Waters Pierce Oil Co. v. Texas, 177 U. S. 28.

The United States Supreme Court does not, however, define what is "the equal protection of the laws." In Connolly v. Union Sewer Pipe Co., 184 U. S. 558, it says that "no person or class of persons shall be denied the same protection of the laws which is enjoyed by other persons or other classes in the same place and in like circumstances."

In the New York State Constitution there is (article 1, section 6) a provision similar to that contained in the last paragraph of the 14th amendment above quoted, and, in addition, section 37, article 1 of the General Construction Law of New York includes within the term "person" a corporation and a joint stock association. In conformity with this definition, the New York courts have protected corporations in their property rights under this limitation. Fire Dept. of N. Y. v. Stanton, 28 App. Div. 334 (1898); Rochester & C. T. R. Co. v. Joel, 41 App. Div. 43 (1899).

The state is not limited by the Fourteenth Amendment from properly and reasonably adjusting its system of taxation. It may exempt certain property, such as that of religious, educational and charitable corporations; it may tax different trades and professions. Real and personal property may be assessed differently. Bells Gap R. R. v. Pa., 134 U. S. 233.

"Due process of law" within the intent of the Fourteenth Amendment should provide for a hearing to the owner and opportunity to be heard. Santa Clara County v. So. Pacific R. R., supra. A hearing is required where valuation is to be fixed by assessors, who are quasi-judicial officers. Palmer v. McMahon, 133 U. S. 660. But the right of re-hearing or appeal is not essential. Pittsburgh R. R. Co. v. Backus, 154 U. S. 426 (1894).

The New York courts have held that due process of law requires an orderly proceeding adapted to the nature of the case, in which the citizen has an opportunity to be heard and to defend, enforce and protect his rights. A hearing or opportunity to be heard is absolutely essential. Stuart v. Palmer, 74 N. Y. 183 (1878); People ex rel. Witherbee v. Supervisors, 70 N. Y., 228 (1877).

The equal protection of the laws does not mean equality or uniformity in taxation. While some states have provisions in their constitutions for equality and uniformity in taxation, New York State is not limited in this respect, viz. The owner of per

sonal property is permitted by statute in this state to deduct a mortgage debt, but the owner of real estate cannot do so, even though it results in double taxation. Paddell v. City of New York, 50 Misc. 422 (1906); affirmed 114 App. Div. 911; affirmed 187 N. Y. 552.

III. PROPERTY OF STOCK CORPORATIONS EXEMPT FROM LOCAL TAXATION, BECAUSE NOT INCLUDED WITHIN THE DEFINITION OF REAL OR PERSONAL PROPERTY UNDER THE TAX LAW.

Corporate franchises.-Prior to the Special Franchise Tax Law (Ch. 712, L. 1899) corporate franchises were not assessable as personalty or realty. People ex rel. Coney Is. & Brooklyn R. R. v. Neff, 15 App. Div. 585 (1897); People ex rel. Union Trust Co. v. Com'rs, 146 N. Y. 304 (1895); People ex rel. Consol. Tel. &c. Co. v. Barker, 7 App. Div. 27 (1896); People ex rel. Brooklyn City R. R. v. Neff, 19 App Div. 590; aff'd 154 N. Y. 763 (1897); Same ex rel. Edison Co. v. same, 19 App. Div. 599 (1897); People ex rel. Consol. Gas Co. v. Feitner, 78 App. Div. 313 (1903).

But since the passage of that law the franchises of public service corporations are now included in the definition of real property. (See chapter on Special Franchise Tax Law, Part II, infra.)

Good will.-Good will is not included in the definition of personal property under the Tax Law, and is therefore not taxable as such for local purposes. People ex rel. Cornell Steamboat Co. v. Dederick, 161 N. Y. 195 (1900); People ex rel. Patterson, Gottfried & Hunter v. Wells, New York Law Journal, Dec. 5, 1903; People ex rel. Brokaw Bros. v. Feitner, 44 App. Div. 278 (1899).

Joint stock association not taxable as a corporation.—Joint stock associations are not liable to taxation under 1 R. S. title 4, ch. XIII, pt. 1, subjecting "all moneyed or stock corporations deriving an income or profit from their capital or otherwise" to such tax. A joint stock association is a partnership with some of the powers of a corporation. People ex rel. Winchester, as Treasurer, etc. v. Coleman, 133 N. Y. 279 (1892); (see, also, Bell v. Streeter, 1 N. Y. Transcript N. S. Jan. 26, 1872, p. 63, to same effect); per contra Sanford v. Board of Supervisors of N. Y., 15 How. Pr. 172 (1858). (The last named decision was at Special Term and does not appear to have been followed in any adjudicated case.)

Joint stock associations are liable for state tax.-See People ex rel. Platt v. Wemple, 117 N. Y. 136 (1889), under head of State Taxation.

There are various exemptions applicable to the individual taxpayer, or to the State, a municipality thereof, or to the Federal Government, which are not considered here, because not within the limits of a work on corporate taxation.

CHAPTER III.

PROPERTY OF CORPORATIONS SUBJECT TO TAXATION.

THE Consideration of corporate property subject to taxation and of the constitutional limitations and statutory exemptions that apply to corporate property necessarily involves to some extent the consideration of the statutory provisions and constitutional limitations controlling the taxation of property in general.

Statute as to property liable to taxation.-All real property within this state, and all personal property situated or owned within this state, is taxable, unless exempt from taxation by law. (Art. 1, sec. 3, of present and former Tax Law.)

Source: 1 R. S., ch. XIII, title 1, sec. 1, without change of substance.

This applies to all property, whether individual or corporate. McMahon v. Palmer, 102 N. Y. 176 (1886).

STATUTORY DEFINITIONS AS TO REAL AND PERSONAL

PROPERTY

Real property defined.-The terms "land," "real estate," and "real property," include the land itself above and under water, all buildings and other articles and structures, substructures and superstructures, erected upon, under or above, or affixed to the same; all wharves and piers, including the value of the right to collect wharfage, cranage or dockage thereon; all bridges, all telegraph lines, wires, poles and appurtenances; all supports and inclosures for electrical conductors and other appurtenances upon, above and under ground; all surface, under ground or elevated railroads, including the value of all franchises, rights or permission to construct, maintain or operate the same in, under, above, on or through, streets, highways, or public places; all railroad structures, substructures and superstructures, tracks and the iron thereon; branches, switches and other fixtures permitted or authorized to be made, laid or placed in, upon, above or under any public or private road, street or ground; all mains, pipes and tanks laid or placed in, upon, above or under any public or private street or place