202 U.S. Argument for Plaintiff in Error. The situs of exercise of the franchise pertaining to transportation upon and over any railroad, is the situs of the railroad, and of the franchise relating thereto. The corporate franchises exercised within the State, by domestic surface steam railroad corporations, are those which the State has granted by charters authorizing the building and operation of railroads within the State. As it is the peculiar and sole province of the United States to prescribe what burdens the exercise of the business of interstate and foreign commerce shall be subject to, so also, for like reason and upon like principle, it is the peculiar and sole province of each State to prescribe what burdens the exercise of the business of its local commerce shall be subject to. Car movements, or the exercise of franchise thereby, cannot have an imputed situs. People ex rel. Manhattan R. Co. v. Barker, 152 N. Y. 417. Taxation of exercise of franchise to do can only be imposed by the sovereignty in whose domain the work is done. Adams Express Co. v. Ohio, 165 U. S. 194; McCulloch v. Maryland, 4 Wheat. 316, 429; State Tax on Foreign Held Bonds, 15 Wall. 300; Morgan v. Parham, 16 Wall. 471; Delaware Railroad Tax, 18 Wall. 206; Gloucester Ferry Co. v. Pennsylvania, 114 U. S. 196; Phila. Steamship Co. v. Pennsylvania, 122 U. S. 326; Erie Railroad v. Pennsylvania, 153 U. S. 628; Leloup v. Mobile, 127 U. S. 640; Postal Tel. Cable Co. v. Adams, 155 U. S. 688. What is true of the franchise in this regard is true of the lease or license under authority of which relator's cars are employed in the use of the franchise. Louisville & Jeff. Ferry Co. v. Kentucky, 188 U. S. 385. Local commerce is subject to local tax by the State wherein it is conducted. New York ex rel. Penn. R. R. Co. v. Knight, 192 U. S. 21, aff'g 171 N. Y. 354. The effect of the holding of the state courts, that this statute authorizes taxation to be computed upon the basis of the capital employed in and by the average number of relator's Argument for Defendants in Error. 202 U. S. cars operated outside of this State, is to subject the statute to the rule announced by this court in Wabash &c. Ry. Co. v. Illinois, 118 U. S. 557. The effect of the statute, as adjudged by the New York courts, is to tax the corporate use and exercise in other States, of the occupation, privilege, and business, of the local commerce of those States. Louisville &c. Ferry Co. v. Kentucky, 188 U. S. 385; Delaware, L. & W. R. R. Co. v. Pennsylvania, 198 U. S. 341. Mr. Julius M. Mayer, Attorney General of the State of New York, with whom Mr. Horace McGuire was on the brief, for defendants in error: There was no evidence before the comptroller showing that any portion of the rolling stock of the relator was exclusively and continuously without the State of New York for the year ending October 31, 1900, or any of the other years under review. The policy of the courts has been not to disturb the findings of the assessing officers. No system of taxation can be perfect, and the courts have realized the practical difficulties with which assessing officers are so frequently confronted. The reasons which have led to a conclusion or the methods of computation have not been inquired into by appellate courts, unless that method offends some provision of the statute under consideration or of the state or Federal constitutions. Coulter v. Louisville & Nashville R. R. Co., 196 U. S. 599, 610; People ex rel. Metropolitan Street Ry. Co. v. State Board of Tax Commissioners, 199 U. S. 1. The statute under consideration does not offend against the commerce clause of the Federal Constitution, nor does it offend against the Fourteenth Amendment of the Federal Constitution. The term "capital stock" as used in the statute, means the property of the corporation as distinguished from its share capital. People ex rel. Commercial Cable Co. v. Morgan, 178 N. Y. 433. 202 U.S. Argument for Defendants in Error. As the relator did not pay six per cent upon its stock, it therefore became necessary for the comptroller to ascertain the value of the corporate property employed within the State, simply as a basis of determining the per cent of tax to be placed upon its franchise. People ex rel. Niagara River Hydraulic Company v. Roberts, 157 N. Y. 676; People ex rel. Fort George Realty Company v. Miller, 179 N. Y. 49, and People ex rel. Singer Mfg. Co. v. Wemple, 150 N. Y. 49, have been clearly distinguished in the last word on this subject, by the Court of Appeals of New York, in People ex rel. Wall & Hanover Street Realty Company v. Miller, 181 N. Y. 328. Although that case was decided by a bare majority of the Court of Appeals, it has been consistently followed by a unanimous court, which now regards that case as authority without further dissent in People ex rel. Nassau Co. v. Miller, 182 N. Y. 521; People ex rel. North American Co. v. Miller, 182 N. Y. 521; People ex rel. Fourteenth St. Realty Co. v. Kelsey, 110 App. Div. affirmed by Court of Appeals without opinion; People ex rel. Hubert Apartment Association v. Kelsey, 110 App. Div., affirmed by Court of Appeals without opinion. Even if the legislature of New York determined by section 182 of the Tax Law to tax the freight cars of the relator when temporarily outside of the State, its determination to do so and to determine the situs of that personal property was the exercise of a legislative function with which the Federal courts will not interfere. State Railroad Tax Cases, 92 U. S. 575. The mere fact that some portion of the property of a domestic corporation is employed in interstate or foreign commerce does not preclude the State from taxing such property within its borders and by proper legislative enactment to determine the situs of such property, provided, of course, that the rights and powers of the National Government are not interfered with. Atlantic and Pacific Telegraph Company v. Philadelphia, 190 U. S. 160; People ex rel. P. R. R. Co. v. Wemple, 138 N. Y. 1; Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 18. Argument for Defendants in Error. 202 U.S. There being no evidence before the comptroller upon which it could be found what the value was of the rolling stock of the relator which was claimed to be continuously employed without the State, his finding thereon is correct and was properly approved by the Appellate Division, and also by the Court of Appeals, as a finding of fact upon the evidence presented to the comptroller. Levis v. Monson, 151 U. S. 545. Such ruling presents no Federal question. This court will not interfere to review findings of fact or the conclusions of assessing officers as to the value of property sought to be assessed. Kelly v. Pittsburgh, 104 U. S. 78. In the case of a foreign corporation the basis of taxation is the actual and tangible property which it uses continuously within the borders of the State. New York ex rel. Pennsylvania R. R. Co. v. Knight, 192 U. S. 21; Delaware, L. & W. R. R. Co. v. Pennsylvania, 198 U. S. 341. See also Commonwealth v. American Dredging Co., 122 Pa. St. 386. No Federal question is presented in the several cases under review. This court will not interfere with a question of fact, however erroneously it may have been determined by the trial court. In this case the trial court was the comptroller of the State; the State makes no claim to tax any of the property of the plaintiff in error which is shown to have been permanently or continuously without the State during the tax period. The statute does not purport to take, nor has the determination of the comptroller of the State of New York taken, any of the property of the relator without due process of law. The plaintiff in error had opportunity to be heard upon the amount of the assessment before the comptroller; the plaintiff in error had the right to a writ of certiorari to review the determination of the comptroller, and pursued that right through the courts of the State of New York. The plaintiff in error has equal protection under the law for the reason that all corporations within the State of New York similarly situated to the plaintiff in error are required by the same section of the statute to share in the burdens of the State to the extent of the value of the property employed by it within the State of New York. MR. JUSTICE HOLMES delivered the opinion of the court. These cases arise upon writs of certiorari, issued under the state law and addressed to the state comptroller for the time being, to revise taxes imposed upon the relator for the years 1900, 1901, 1902, 1903 and 1904, respectively. The tax was levied under New York Laws of 1896, c. 908, § 182, which, so far as material, is as follows: "Franchise Tax on Corporations. Every corporation incorporated un der law in this State, shall pay to the state treasurer annually, an annual tax to be computed upon the basis of the amount of its capital stock employed within this State and upon each dollar of such amount," at a certain rate, if the dividends amount to six per cent or more upon the par value of such capital stock. "If such dividend or dividends amount to less than six per centum on the par value of the capital stock [as was the case with the relator], the tax shall be at the rate of one and one-half mills upon such portion of the capital stock at par as the amount of capital employed within this State bears to the entire capital of the corporation." It is provided further by the same section that every foreign corporation, etc., "shall pay a like tax for the privilege of exercising its corporate franchises or carrying on its business in such corporate or organized capacity in this State, to be computed upon the basis of the capital employed by it within this State." The relator is a New York corporation owning or hiring lines without as well as within the State, having arrangements with other carriers for through transportation, routing and rating, and sending its cars to points without as well as within the State, and over other lines as well as its own. The cars often are out of the relator's possession for some time, and may be transferred to many roads successively, and even may be used by other roads for their own independent business, before they VOL. CCII-38 |