Marye v. Balt. & Ohio R.R. Co., 127 U.S. 117 (1888)

The material facts in the case were these: The Baltimore and Ohio Railroad Company is a corporation organized under the laws of Maryland, and a citizen thereof, by virtue of whose charter its rolling stock is exempt from taxation. The line of its road does not at any point lie in the State of Virginia. It, however, connects with certain roads belonging to corporations incorporated by various acts of the legislature of Virginia, to wit: the Winchester and Potomac Railroad, the Winchester and Strasburg Railroad, and the Strasburg and Harrisonburg Railroad, the last named being a part of the old Manassas Gap Railroad; and during a portion of the time embraced in the period for which the taxes in question were evied it worked the Valley Railroad from Harrisonburg to p. 118Staunton. All of these roads were operated by the Baltimore and Ohio Railroad Company by virtue of leases or contracts, which company for that purpose furnished and used its own rolling stock, consisting of engines and cars. None of the Virginia corporations owning either of these roads was the owner of any rolling stock. The manner in which this rolling stock was employed for this purpose was thus described: “ There is no such rolling stock assigned permanently to the four lines above named, or either of them, in the State of Virginia. The trains in which the rolling stock is used on the four lines above named now start from Lexington, Virginia, and pass through the State of Virginia, over the four lines of railroad above named, into the State of West Virginia, and thence into the State of Maryland to the city of Baltimore, or if any of the cars are destined to western points, thence from Harper’s Ferry to the West, but the trains in which the cars are hauled are run solid from Lexington, Virginia, (and formerly before the road was completed to Lexington from Staunton, Virginia,) to Baltimore. . None of the rolling stock is assigned permanently to service in the State of Virginia, nor is any of the rolling stock set apart to the four lines in that State, or to the four valley lines above mentioned at all; but such rolling stock is used interchangeably upon the main line and branches of the Baltimore and Ohio Railroad in the States of Maryland and Virginia, and indeed, also, upon the divisions of the Baltimore and Ohio Railroad in Pennsylvania, and in States west of the Ohio River, just as the necessities of the service of the company require. Sometimes this rolling stock will be found on the main line, sometimes on the Pittsburg division, and sometimes on the trans-Ohio divisions, and there is none of it that is permanently set apart for use upon the four valley lines in Virginia above described.”

The several Virginia corporations owning these four railroads, respectively, made their annual reports to the auditoi of public accounts as required by law, and were by the board of public works duly assessed on their roadways, tracks, depots, and other real estate owned by them. No tax was assesse or levied as against them on account of any rolling stock, p. 119because they were not reported to be the owners of any. In the month of June, 1883, the auditor of public accounts for the State of Virginia assessed the Baltimore and Ohio Railroad Company for taxes on its rolling stock used on these roads for the years from 1870 to 1881, inclusive, amounting in the aggregate for eleven years to the sum of $22,249.25, and placed the assessment in the hands of the treasurer of Augusta County, Virginia, for collection. This officer was proceeding to collect these taxes by a distraint of the rolling stock in question, the property of the complainant, when his proceedings were arrested by the injunction of the Circuit Court, afterward made perpetual by its final decree.

“Every such company shall report, on or before the first day of June of each year, the gross and net receipts of the road or canal for the twelve months preceding the first day of February of each year, and in all cases the report shall be so made as to give the data on which the same is made. If such road or canal is only in part within the Commonwealth, the report shall show what part is within the Commonwealth and what proportion the same bears to the entire length of the road or canal, and shall apportion the receipts accordingly. The reports herein required shall be verified by the oath of the president or other proper officer. Upon the receipt of every such report it shall be the duty of the auditor of public accounts to lay the same before the board of public works, who shall, after thirty days’ notice previously given to the president, treasurer, or other proper officer, proceed to ascertain and assess the value of the property so reported, upon the best and most reliable information that can be procured; and to this end shall be authorized and empowered to send for persons and papers should it be deemed necessary. A certified copy of the assessment, when made, shall be immediately forwarded by the secretary of the board to the president or other proper officer of every railroad or canal company so assessed, whose duty it shall be to pay into the treasury of the State, within sixty days after the receipt thereof, the tax which may be imposed thereon by law. A company failing to make such report, or to pay the tax assessed upon its property, shall be immediately assessed, under the direction of the auditor of the public accounts, by any person appointed by him for the purpose, rating their real estate and rolling stock at twenty thousand dollars per mile; and a tax shall at once be levied on such value at the annual rate levied upon the value of the other property for the year. Such tax so levied, as well as the sum required to be paid upon the report hereinbefore mentioned, if the same be not paid at the time provided herein, shall be collected by the treasurer of some county in which such company owns property, to whom the auditor may deliver the assessment or a copy thereof. The treasurer p. 121may distrain and sell any personal property of such company, and shall pay the taxes into the treasury within three months from the time of the assessment, or a copy as aforesaid may be delivered to him. The compensation of such treasurer to be the same as he receives for collecting other taxes in his county or corporation.”

The authorities are clear that in the absence of legislation to the contrary, the situs for taxation of the personal property of a corporation is at its domicile, which is the State of its creation, and within that State, in the town where it has its p. 123principal office or place of business. Burroughs on Taxation, 186; Orange de Alexandria Railroad Co. v. Alexandria, 17 Grattan, 176; Philadelphia, Wilmington, de Baltimore Railroad v. Appeal Tax Court, 50 Maryland, 397, 415; Appeal Tax Court v. Pullma/n Palace Car Co., 50 Maryland, 452; Appeal Tax Court v. Northern Cent/ral Railway Co., 50 Maryland, 417; St. Louis v. The Ferry Co., 11 Wall. 425; Hays v. Pacific Mail Stea/msMp Co., 17 How. 596 ; Pacific Railroad Co. v. Cass County, 53 Missouri, 17, 31, 32.

It is not denied, as it cannot be, that the State of Virginia has rightful power to levy and collect a tax upon such property used and found within its territorial limits, as this property was used and found, if and whenever it may choose, by apt legislation, to exert its authority over the subject. It is quite true, as the situs of the Baltimore and Ohio Railroad Company is in the State of Maryland, that also, upon general principles, is the situs of • all its personal property; but for purposes of taxation, as well as for other purposes, that sit/us may be fixed in whatever locality the property may be brought and used by its owner by the law of the place where it is found. If the Baltimore and Ohio Railroad Company is permitted by the State of Virginia to bring into its territory and there habitually to use and employ a portion of its movable personal property, and the railroad company chooses so to do, it would certainly be competent and legitimate for the State to impose upon such property, thus used and employed, its fair share of the burdens of taxation imposed upon other similar property used in the like way by its own citizens. And such a tax might be properly assessed and collected in cases like the present where the specific and individual items of property so used and employed were not continuously the same, but were constantly changing, according to the exigencies of the business. In such cases the tax might be fixed by an appraisement and valuation of the average amount of the p. 124.124 OCTOBER TERM, 1887.

But looking at the statute under which the proceeding in question has been taken for the taxation of this property, we think it quite clear that it has no application to the rolling stock owned by the Baltimore and Ohio Railroad Company employed by it in the manner described in the operation of other railroads in Virginia. The terms of the act, indeed, include “ every railroad and canal company not exempted from taxation by virtue of its charter,” but that language, according to a general rule of interpretation, must be confined to corporations deriving their authority from the laws of Virginia. It is apparent, also, from the other expressions contained in the law, as well as its whole purview, that it was intended to apply only to such domestic corporations, as in the case of railroad companies, were the owners of railroads and the property usually appurtenant thereto, lying and being within the State. According to the description of the act, the railroad company is supposed to own a roadway and track, and depots, depot grounds, station buildings and fixtures, and machine shops, together with real estate, rolling stock, and telegraph lines. Every such company is required to report its gross and net receipts, and a specific provision is made that if its road is only in part within the Commonwealth the report shall show what part is so, and what proportion the same bears to its entire length, apportioning the receipts accordingly. In case of a failure of the company to make such a report, or to pay the tax assessed upon its property, it is provided that it shall be immediately assessed under the direction of the auditor of public accounts by some person appointed by him for that purpose, rating its real estate and rolling stock at $20,000 per p. 125mile, on which a tax shall be levied at the annual rate levied upon the value of other property for the year. None of these provisions are applicable to the case of the Baltimore and Ohio Railroad Company in respect to its ownership of the rolling stock in question.

The facts in the two cases as found by the Court of Claims are substantially the same. The firm of J. C. Irwin and Company, at the time of the occurrences hereinafter set forth, were engaged in freighting across the plains by means of wagon trains, and in June, 1857, were under contract o p. 127transport from Atchison, Kansas, to Salt Lake City 75 wagon loads of merchandise, and late in the summer of that year started their trains on that journey. Charles A. Perry and Company, in August, 1857, were doing a general merchandise business at Salt Lake City, and in that month started three ox trains, two of 20 wagons each, and one of 18 wagons, with five wagons drawn by mules, from Fort Leavenworth, Kansas, to Salt Lake City. All the trains of both parties reached Rocky Ridge early in October, 1857, and were progressing successfully on their journey. The animals were in good condition, and making from 18 to 20 miles per day. At this point they were met by United States troops, under command of Lieutenant-Colonel Smith, who ordered the trains to proceed no further without his permission. Lieutenant-Colonel Smith was under command of Colonel Albert Sidney Johnston. The latter on joining the command issued an order addressed to the parties in interest, as follows:

upon their journey, arising from the mere detention and delay vol . cxxvn—9 p. 130occasioned thereby, they go beyond the intention of the act of Congress. It was the clear dictate of military duty on the part of Colonel Johnston to prevent information and supplies from going forward to the public enemy. To effect this, he issued his order “ that no goods or supplies of any kind will be permitted to pass this army for Salt Lake City or other points occupied by the Mormons so long as they maintain a hostile attitude to the government of the United States.” There is nothing in the terms of this order to require the plaintiffs to keep with the troops; they were only forbidden to pass them in advance. They might have remained at Rocky Ridge, or they might have retraced their steps and returned. This perhaps would also have involved loss in breaking up their venture, and perhaps damage to the property constituting the trains; but it would not have been taking and impressing the property into the service of the United States. So far as appears from the finding of facts, it was the choice of the plaintiffs to remain with Colonel Johnston’s column and proceed with it. In making this choice, they elected to submit to the necessary military orders governing the march and the camp, and to any inconveniences and losses necessarily resulting therefrom. The case in that respect does not differ from what it would be on the supposition of their having been ordered and compelled to remain at Rocky Ridge or to return. Even if it be a just inference of fact, that the plaintiffs were under compulsion in keeping with the column of Colonel Johnston, it by no means follows from that alone that their property was taken and impressed into the service of the United States in the sense of the act of Congress of July 8, 1886. However proper it might have been for the legislature to have provided indemnity for the losses occurring by reason simply of the detention thus occasioned, we cannot think it was the intention of the act to go beyond payment for property actually used and employed by the government in its service. To require the plaintiffs trains to remain with the military force, in order to insure the success of the expedition by preventing the enemy from obtaining information and supplies, cannot be construed as a seizure and impressment of their property into the public service.

In opposition to this conclusion we are referred to the opinion of Mr. Bates while Attorney General (10 Opinions Attorneys General, 21), upon the case of the Porters, mentioned in the statement of facts found by the Court of Claims. It seems their claim was embraced, with those of the plaintiffs in . these cases, in the original draft of the act of July 8, 1886, as it passed the Senate, but before final passage was struck out because their claim was pending before the Treasury Department. The accounting officers of the Treasury allowed their claim, presumably upon the strength of the opinion of the Attorney General, who held that they were entitled to an allowance and payment under the provisions of the act of March 3, 1849, providing for the payment for horses and other property lost or destroyed in. the military service of the United States. The Attorney General, it is true, expressed the opinion that the order of Colonel Johnston reduced the train of the claimants to military control, and thereby subjected it to the losses proved, for the purpose of depriving the Mormons of any benefit from it, and was therefore an impressment into the military service within the meaning of the act of March 3, 1849. But it is evident that he did not rest his recommendation for the payment of the claimants on that consideration, for the opinion proceeds as follows: “But whatever may have been the legal result of the order of General Johnston, the fact is well proved that the property of the claimants was afterwards actually reduced to military service. The loss of the army cattle compelled a resort to those of the trains, and several witnesses, servants of the government and of the claimants, state that the cattle of Messrs. Porter were used indiscriminately with the army cattle to haul the army wagons. In this service many of them died and many were abandoned, exhausted from overwork and want of forage: many were killed and eaten by the army, and for these I understand the claimants have been already paid under this uw. I am unable to see any distinction between the cattle t at were eaten and those that were worked in the army rams and lost, for both were certainly impressed within the meaning of the statute. Nor do I see how any distinction p. 132can be made between the cattle that actually died when in the army trains and those that may have been lost between South Pass and Fort Scott; for when they had been once used with the army cattle to haul the trains they were actually employed in the service of the United States, being under military control and liable to be applied to that work when needed. It is too rigid a construction to say that ‘actual service ’ means only the time employed in labor. Possession and the power to use the animal, Judge Black says in Oldham’s case (Man’s Opinions No. 59), is the test of employment within the meaning of the statute, and these General Johnston undoubtedly had.”

Neither does the conclusion of the Court of Claims derive support from anything said or decided by this court in the case of Mitchell v. Harmony, 13 How. 115. There the plaintiff was forced against his will to accompany the American troops with his wagons, mules, and goods in a hazardous expedition, and for the purpose of strengthening their military force. His wagons and mules were used in the public service in the battle of Sacramento, and on the march afterwards; when the place was evacuated they were left behind unavoidably, as nearly all of his mules had been lost in the march and the battle; and when the Mexican authorities regained possession of the place his goods were seized and confiscated and totally lost to him. The jury found from the evidence that there was an actual seizure of the plaintiff’s property by the officer; and in speaking to that point the court say (p- 136). “ We do not see any evidence in the record from which the jury could have found otherwise. From the moment they were taken possession of at San Elisario, they were under the control of Colonel Doniphan, and held subject to his order. They were no longer in the possession or control of the p. 133plaintiff, and the loss which happened was the immediate and necessary consequence of the coercion which compelled him to accompany the troops. It is true the plaintiff remained with his goods, and took care of them so far as he could during the march, but whatever he did in that respect was by the orders or permission of the military authorities. He had no independent control over them.”