W. H. Heywood, for the petitioner. The questions for adjudication in
this case depend upon the right of a town to tax logs in transit to another state
to be there manufactured into lumber for market. Part of the logs were cut and drawn
from Wentworth's Location into the town of Errol, in the winter, and were placed
on the banks of streams which were public highways to float logs, and as soon as
the rivers opened in the spring they were run into the Androscoggin river and to
Maine, there to be manufactured for market. The other part of the logs were cut
in Maine, and were taken through the Rangeley Lakes into Lake Umbagog and into the
Androscoggin river, and reached the town of Errol so late in the spring as to be
detained by low water till the next spring, and so they were in Errol on the first
of April, when they were taxed.
The owners of the logs were residents of Maine. The legal situs of this personal
property for purpose of taxation was not where it happened to be on the first of
April. Conley v. Chedic, 7 Nev. 336 ; Parker Mills v. Tax Com., 23 N.Y. 245 ;
Ellsworth v. Brown, 53 Me. 519 ; Campbell v. Machias, 33 Me. 419 ; Bur. Tax., c.
4, ss. 48-50; Cool. Tax. 269. The cases cited from the Maine reports show that by
the statute of Maine the logs taxed in Errol were subject to taxation at Lewiston,
where the owners occupied a mill and one of them resided.
We contend that when the logs were taken from Wentworth's Location, in the winter,
to another town, and were placed in a position to be transported on a public highway,
the transit began at the time they were taken from the stump, and the waiting for
the streams to open was a detention that did not make them liable to taxation where
they happened to be. If the ice broke up on the last of March the logs would be
gone, but if it did not break up till the second of April, then they would be in
Errol on the first of April. Such accidents as to the place where property chances
to be cannot determine the place where it shall be taxed. The team of a traveller
cannot be taxed in Errol because a snowstorm detains him from the last day of March
till the second day of April. We contend that the logs that came from Wentworth's
Location were in transit the same as those that came from Maine. And as to those
that came from Maine, and were detained on their way, there can be no doubt that
they were illegally taxed.
By the U.S. Const., art. 1, s. 8, par. 3, power is given to congress "to regulate
commerce . . . among the several states;"
and by s. 10, par. 2, that "No state shall without the consent of congress lay any
imposts or duties on imports or exports, except what may be absolutely necessary
for executing its inspection laws." We claim that the tax in question on the logs
of the petitioner was a clear violation of these provisions of the federal constitution.
It has uniformly been held by the supreme court of the United States, that a tax
assessed under a state law, upon property being transported through the state, or
from a point in the state to another state, was in violation of these provisions
of the United states constitution. State Freight Tax, 15 Wall. 232; Almy v. California,
24 How. 169; Woodruff v. Parham, 8 Wall. 123; Steamship Co. v. Portwardens, 6 Wall.
31; Welton v. Missouri, 91 U.S. 275 ; Railroad Co. v. Husen, 95 U.S. 465 ; Cook
v. Pennsylvania, 97 U.S. 566 . Transportation of merchandise through a state, or
from one state to another, are matters of national legislation. State Freight Tax,
15 Wall. 232; Hall v. DeCuir, 95 U.S. 485 . "The power to regulate commerce among
the several states was vested in congress in order to secure equality and freedom
in commercial intercourse against discriminating state legislation." Field, J.,
in Railroad Co. v. Richmond, 19 Wall. 589; Welton v. Missouri, supra. The non-exercise
by congress of its power to regulate commerce among the states, is equivalent to
a declaration by that body that such commerce shall be free from any restriction.
Welton v. Missouri.
It will be said that this tax is no attempt to regulate the commerce upon the Androscoggin
river passing through this state, or from this state into Maine, but is a tax upon
property in fact located within the state, and legally taxable here. The answer
to this position is the practical effect of taxes assessed upon property thus situated.
Admit the power of the state to assess taxes upon property thus in transit between
the states, and interstate commerce will be regulated by state taxation irrespective
of any laws or regulations congress can devise for that purpose, under the power
given by the constitutional provision just cited. This position has always been
taken to sustain state taxation, and has been answered by the supreme court, in
the case of the State Freight Tax, 15 Wall. 272. "It has repeatedly been held that
the constitutionality or unconstitutionality of a state tax is to be determined,
not by the form or agency through which it is to be collected, but by the subject
upon which the burden is laid." This was decided in the cases of Bank v. New York
City, 2 Black 620; Bank Tax Case, 2 Wall. 200; Society v. Coite, 6 Wall. 594; Provident
Inst. v. Massachusetts, 6 Wall. 611; Brown v. Maryland, 12 Wheat. 419; Henderson
v. The Mayor of N. Y. City, 92 U.S. 259 .
The case of State v. Engle, 34 N. J. Law 425 , is in point upon this branch of
the case. Our statute, like the one there in question, intended to reach property
in transit through the state, for the
purpose of taxation in the state. The court in that case recognizes the powers of
the state to tax property which has not become the subject of commerce, as in Currier
v. Gordon, or which has been the subject of commerce and has become mingled with
the other property of the state. In relation to property in transit through the
state the court say, — "But that a tax on the property belonging to a citizen
of another state, in its transit to market in other states, which is delayed in
this state not for the purpose of sale but merely for separation and assortment
for convenience of shipment to its destination, is a tax on commerce among the states,
is too plain for argument."
Ladd Fletcher, for the defendants. "Wood, bark, timber, logs, and lumber, manufactured
or other, exceeding fifty dollars in value, shall be taxed at its full value in
the town where it is on the first day of April," etc. G. S., c. 54, s. 13. "When
such property is in any town, other than that in which it was cut, on the first
day of April, on its way to market, or temporarily delayed therein on its way to
market, if the owner, residing in the state, furnishes to one of the selectmen a
statement," etc., it shall be taxed in the town where the owner lives. G. S., c.
54, s. 15. Section 13 was passed in 1860, and s. 15 in 1868. It is not known that
the validity of these provisions has been before questioned, although they have
thus been in operation for about twenty years. The legislature have not left any
room for doubt as to their intention. The enactments need no exposition, and admit
of none. No assessor could mistake their meaning, and none probably has ever done
so.
The question is not what the law means, but whether it is law; or whether it is
of no effect by reason of some constitutional provision with which it conflicts.
The plaintiff claims that it is in conflict with both the constitution of this state
and the constitution of the United States.
I. As to the constitution of this state: The suggestion is that the law is unconstitutional
because the tax it authorizes is not "reasonable."
The provision of section 9 of the same chapter is, that animals shall be taxed in
the town in which they are "kept." Has the legislature constitutional power to say
that property shall be taxed in the town where it is kept, and not to say that it
shall be taxed in the town where it is on the first day of April? The law on its
face is simply a legislative declaration of the town in which this species of personal
property shall be taxed; and if we understand the plaintiff's argument, it goes
rather to the interpretation and application of the law in this particular case,
than to the question of its constitutionality. For the contention seems to be, —
1. That the owners reside outside this state, and so will derive no benefit from
the taxation.
2. That they may be required to pay another tax on the same property in Maine.
3. That the property was in transit from the timber lands of the plaintiff in one
part of Maine to his mills in another part of the same state, and therefore that
it had no situs in this state for purposes of taxation.
Neither of these propositions seems to go to the constitutionality of the law.
1. "It is competent for any state to provide that tangible personal property situate
within it may be taxed there irrespective of the residence of the owner." Cool.
Tax. 43. "The protection may be either to rights of person, or to rights of property,
and taxes may consequently be imposed when either person or property is within the
jurisdiction." Ib., 14.
2. If the owner of property so manages and deals with it that it is liable to be
taxed by the laws of two different states in the same year, it does not follow that
either state must yield to him the right which they thus assume to exercise; nor
does it follow that either must surrender to the other the right to enforce the
execution of her own laws. It would probably be a novel spectacle for the court
of this state to enter upon the inquiry whether these logs are taxed to the plaintiff
by the laws of Maine, with a view of giving the result of that inquiry any weight
in determining whether the legislature of this state have exceeded their power in
decreeing that they shall be taxed in this state. Cool. Tax. 158-163.
3. Much has been said as to the matter of situs; but in no case have we seen it
questioned but that the legislature of a state has power to say that the situs of
a thing for the purposes of taxation shall be its actual location on the day the
tax is laid. "Unless restrained by provisions of the federal constitution, the power
of the state as to the mode, form, and extent of taxation is unlimited, where the
subjects to which it applies are within her jurisdiction." State Tax on Foreign
Held Bonds, 16 Wall. 300, 319.
In Hoyt v. Commissioners, 23 N.Y. 224 , the statute was, — "All lands and
personal estate within this state shall be liable to taxation." Comstock, C.J.,
says, — "If we are willing to take this language, without attempting to obscure
it by introducing a legal fiction as to the situs of personal estate, its meaning
would seem to be plain." Again: "I find no room for interpretation, if we take the
words of the statute in their plain, ordinary sense." Again: "To me, it is evident
that the legislature were not enunciating a legal fiction, which, as we shall presently
see, expresses a rule of law in some circumstances and relations, but which in others
is not the law. They were speaking in plain words, and to the plain understanding
of men in general." "Although movables are for many purposes to be deemed to have
no situs except that of the domicile of the owner, yet, this being but a legal fiction,
it yields
whenever it is necessary for the purpose of justice that the actual situs of the
thing should be examined. A nation within whose territory any personal property
is actually situate, has as entire dominion over it while therein, in point of sovereignty
and jurisdiction, as it has over immovable property situate there." Sto. Con. Laws,
s. 550. Authorities might be greatly multiplied to the same effect. A number of
pertinent cases are referred to in Hoyt v. Commissioners, supra. But this is enough,
we think, to show that it was competent for the legislature to determine finally
and absolutely the question of situs so far as to say that any thing actually situated
within this state on the first day of April should be subject to taxation. The legislature
have undertaken to say, in words too plain to be misunderstood, where the "legal
situs" of this kind of property shall be for the purpose of taxation. Their voice
on that point is authoritative and final. What the power having supreme discretion
and supreme authority over the whole subject has said shall be the legal situs regardless
of any fiction, must be taken to be the legal situs. The legal situs and the actual
situs are thus made one and the same thing by positive enactment, and cannot be
separated.
The plaintiff claims that inasmuch as the land in Wentworth's Location, from which
part of these logs were taken, was taxed by the state and county, upon the valuation
of 1879, a further imposition upon the logs, when severed from the land and moved
into another town cannot be sustained, for the reason, as we infer, that the same
thing is thus subject to a double tax.
If this is the objection, it is very plain that it goes to the whole law; for in
the case of logs which on the first day of April are in the same town as the land
on which they were cut, the land from which they came is taxed for all purposes,
municipal as well as state and county, and then the logs are taxed also for the
same purpose according to the requirements of the law: what is the fault in this?
Obviously, that if the land has been substantially diminished in value by removing
the timber, that may be taxed for more than it is worth; and the remedy is plain,
namely, an abatement of that excessive tax on the land. The timber, being taxed
only at its true value as personal property, there is no legal grievance to the
owner in that part of the transaction. If he has a grievance at all, it must be
in the fact that the land is taxed too high.
To show how baseless this claim must be, we have only to suppose that the land from
which the timber is taken is the property of one man, and the timber, April 1, the
property of another — a very common situation. How is the owner of the timber
aggrieved by the fact that the owner of the land is taxed too much for it, by reason
of its diminished value?
II. The plaintiff claims that this law, as applied to the logs, which come from
his land in Maine, and which year by year he keeps
over in the river within the geographical limits of New Hampshire, is in conflict
with the constitution of the United States:
(1) With the provision that "The citizens of each state shall be entitled to all
the privileges and immunities of citizens in the several states."
(2) With the provision that "The congress shall have power to regulate commerce
with foreign nations and among the several states."
(3) With the provision that "No state shall, without the consent of the congress,
levy any imposts or duties on imports or exports, except," etc.
As to the first and third clauses above, we apprehend but little difficulty will
be found. The answer to the first point is, that the law makes no discrimination
whatever against citizens of other states. By no possibility can it be claimed that
the statute would not apply exactly the same if the owner of the logs were a citizen
of this state. The answer to the third is, that the tax complained of is not, in
form or substance, an impost or duty on imports or exports.
Is it an unlawful interference by the state with the power of congress to "regulate
commerce among the several states"? We maintain that it is not; and suggest, what
is so often said, that the court must be satisfied beyond a reasonable doubt that
it is, before they undo the work of the legislature by holding it unconstitutional.
Is the transportation of logs by the plaintiff from his land in one part of Maine
to his mill in another part of the same state "commerce among the several states"?
Suppose the plaintiff should adopt some other mode of conveyance in which the logs
should not pass outside the boundaries of Maine: would the transportation then be
a commerce among the several states? Certainly not. Then why should it be called
commerce among the several states when in transportation they pass within the limits
of New Hampshire, unless it be for the purpose of interposing the shield of the
constitution of the United States against some improper or unjust taxation on the
part of this state, — some unfair and inequitable advantage sought to be taken
by this state of the fact that they come within our territorial limits? The substance
of the thing is the same whether in transportation they go out of Maine or not.
It is simply the moving of a commodity by the owner from one part of the state to
another.
Suppose the Androscoggin river were wholly in Maine, and the plaintiff, in moving
his logs to his mill, found it convenient or necessary to allow them to lie over
a year, or nearly a year, within the limits of some town in that state: what right
of the plaintiff would be violated, what constitutional provision infringed, by
a statute of Maine authorizing and requiring the proper officers of
such town to levy a tax on them for state, county, and town purposes? Who would
think of setting up this provision respecting commerce among the states, or any
other constitutional provision, against the unquestionable prerogative of the Maine
legislature to levy a tax upon property thus within the jurisdiction of that state?
The matter of situs we have already considered, and that is a thing entirely separate
from this constitutional provision, and not to be confounded with it. The fact that
the logs are in transit is of no consequence. The legislature would have most unquestionable
power to say they should be taxed in the town where they had been kept by the plaintiff
for nine or ten or eleven months immediately preceding the taxing day, whether the
delay was for want of water or for any other cause. And it cannot be pretended that
it would make any difference with the validity of such law that the owner of the
logs was a citizen of New Hampshire.
Now, if this could lawfully and justly and properly be done by Maine, provided the
whole transit, as well as the year's delay, were within that state, why may it
not justly and properly be done by this state when the logs are kept for nearly
a year immediately before the taxing time stored within the limits of some town
in this state? Each year the plaintiff keeps a large quantity of mill logs within
the limits of this state. It is true they change every year: the old drive gives
place to the new one, and there is a space of a few weeks when there are none. But
the substantial fact of the business is, that he keeps, year by year, a large quantity
of logs within this state, entitled, like all other property within our limits,
to the protection of our laws. If they lay, under precisely the same circumstances,
just the other side of the line in Maine, the legislature of that state confessedly
might levy a tax upon them. What sound and just reason is there why New Hampshire
should be debarred of the same right? Why stretch the meaning of the words "commerce
among the states" so as to make it cover the case of a person moving his property
between two towns in the same state, when the only end to be gained is a denial
of power to another state through which he carries it to do exactly what his own
state might lawfully have done provided the property had not passed outside its
limits? Our point is, that the operation of conveying property from one town to
another in the same state cannot fairly be said to be commerce among the several
states, and that there is no equity and no comity to be subserved by engrafting
upon the language such a meaning by construction.
Suppose a citizen of New Hampshire owns a farm in Lancaster and another in Claremont,
and every year he has a large number of cattle which he finds it convenient and
profitable to drive from the former to the latter place; — in doing this he
finds it for his interest to cross the river into Vermont, and to keep each year's
drove for the space of nearly a whole year in some town on the road in that state,
thus in the ordinary course of his business keeping
almost constantly in Vermont a nearly uniform stock of cattle: could the prosecution
of such a business be fairly called commerce among the several states, so that the
constitutional provision could be invoked to forbid the legislature of Vermont from
calling upon the property thus kept within the state to contribute its just proportion
towards maintaining the government whose protection it enjoys? We contend that what
New Hampshire might lawfully do in the way of taxing the cattle, provided the owner
stopped his droves each year in Hanover, Vermont might do provided he stopped them
in Norwich.
No case like this has been found in the books. No case where a state tax or impost
of any kind laid by a state in any way upon the thing itself or upon the business
has been held to be an attempt to regulate commerce among the states where the business
was not an interchange of commodities between different states.
The case of State v. Engle, 34 N. J. Law 425 , seems to go as far as any case has
yet gone, and is claimed by the plaintiff to be in point in support of his position.
But that case is quite broadly distinguished from this by at least two important
facts: First, the coal was the property of citizens of Pennsylvania, sent across
New Jersey to market in other states; second, it was delayed no longer in New Jersey
than was necessary for the convenience of transshipment for transportation to its
destination. It was upon these two facts that the decision was most distinctly placed,
and neither of those facts exists in the present case. The other cases cited have
but a remote bearing at best, and most of them show a discrimination against the
citizens of other states which brings them within the ban of art. 4, s. 2, of the
federal constitution.
We think it may fairly be urged that the state court should not go beyond the decisions
of the federal court in cutting off sources of revenue which the legislature of
the state have solemnly decided to be fairly and justly open to the people of the
state, especially when, as in this case, it appears from an examination of the subject
that their judgment rests upon the broad and fundamental ground that all parties
who receive or are entitled to the protection of the government may be called upon
to render the equivalent in taxes. Cool. Tax. 14. And we submit that no case has
yet been decided by the supreme court of the United States which goes far enough
to uphold the plaintiff's contention here.