6 S.Ct. 475
116 U.S. 517
29 L.Ed. 715
TOWN OF ERROL.
Filed January 25, 1886.
In September, 1881, Edward S. Coe filed a petition in the supreme court of New Hampshire, for the county of Coos, against the town of Errol, for an abatement of taxes, and therein, among other things, alleged that on the first of April, 1880, he and others, residents of Maine and Massachusetts, owned a large number of spruce logs that had been drawn down the winter before from Wentworth's location, (in New Hampshire,) and placed in Clear stream, and on the banks thereof, in the town of Errol, county of Coos, New Hampshire, to be from thence floated down the Androscoggin river to the state of Maine, to be manufactured and sold; and that the selectmen of said Errol for that year appraised said logs for taxation at the price of $6,000, and assessed thereon state, county, town, and school taxes, in the whole to the amount of $120, and highway taxes to the amount of $60. A further allegation made the same complaint with regard to a lot of spruce logs belonging to Coe and another person, which had been cut in the state of Maine, and were on their way of being floated to Lewiston, Maine, to be manufactured, but were detained in the town of Errol by low water. Similar allegations were made with regard to logs cut the following year, 1880, and drawn from Wentworth's location, and part of them deposited on lands of John Akers, and part on lands of George C. Demeritt, in said town of Errol, to be from thence taken to the state of Maine; and also with regard to other logs cut in Maine, and floated down to Errol on their passage to Lewiston, in the state of Maine, and both which classes of logs were taxed by the selectmen of Errol in the year 1881. The petition also contained the following allegations, to-wit: 'Said Coe further says that said logs, of both years, so in the Androscoggin river, have each year been taxed as stock in trade in said Lewiston to said Coe and Pingree, and said Coe claims and represents that none of said logs were subject to taxation in said Errol, for the reason that they were in transit to market from one state to another, and also because they had all been in other ways taxed. That said Androscoggin river, from its source to the outlet of the Umbagog lake, in the state of New Hampshire, through said state and through the state of Maine, to said Lewiston, is now, and for a long time has been, to-wit, for more than twenty years last past, a public highway for the floatage of timber from said lakes and rivers in Maine, and from the upper waters of said Androscoggin river, and its tributaries in New Hampshire, down said river to said Lewiston, and has been thus used by the petioner and his associates in the lumber business for more than twenty years last past.'
Without further pleading, the parties made an agreed case, the important part of which is as follows, to-wit: 'It is agreed that the facts set forth in the petition are all true except what is stated as to the taxation of the logs as stock in trade in Lewiston, Maine; and, if that is regarded by the court as material, the case is to be discharged and stand for trial on that point. It is agreed that, upon this petition, the legality of the taxation is intended to be brought before the court for adjudication, and all formal objections to the proceedings in the town meeting, etc., and all other matters of form, are waived, and we submit the matter to the court for a legal adjudication as to whether or not any or all of the taxes shall be abated. And it is agreed that for many years the petitioner and his associates in the lumber business have cut large quantities of timber on their lands in Maine, and floated them down the said lakes and rivers in Maine, and down the Androscoggin river to the mills at said Lewiston; and timber thus cut has always lain over one season, being about a year, in the Androscoggin river, in this state, either in Errol, Dummer, or Milan; and the timber referred to in this petition as having been cut in Maine had lain over in Errol since the spring or summer before the taxation, according to the above custom.'
Upon this case the supreme court of New Hampshire, in September term, 1882, adjudged as follows, to-wit: 'Now, at this term, the said questions of law having been fully determined in said law term, and an order made that that portion of said tax assessed upon the logs cut as aforesaid in said state of Maine be abated, and that the tax assessed upon all of said logs cut in the state of New Hampshire be sustained, and said order having been fully made known to the parties of this case, and become a part of the record thereof, it is therefore ordered and decreed by the court that there be judgment in accordance with said order made at said law term, without costs to either party.'
The petitioner took a bill of exceptions, setting forth the agreed case, and stating, among other things, the points raised on the hearing before the supreme court of New Hampshire, and the decision of that court thereon, as follows: 'On said hearing the petitioner claimed that said taxes named in the petition, and the statutes of this state, under the provisions of which said taxes were assessed, were illegal and void, because said taxes were assessed in violation of, and said statutes of this state are in violation of and repugnant to, the general provisions of the constitution of the United States; because said taxes were assessed in violation of, and said statutes of this state are in violation of and repugnant to, that part of section 2, art. 4, of the constitution of the United States which provides that 'the citizens of each state shall be entitled to all the privileges and immunities of citizens of the several states;' because said taxes were assessed in violation of, and said statutes of this state are in violation of and repugnant to, those parts of section 8 of art. 1 of the constitution of the United States which provide that 'the congress shall have power * * * to regulate commerce with foreign nations, and among the several states,' and section 10 of said article 1, which provides 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."
Henry Heywood, for plaintiff in error.
[Argument of Counsel from pages 520-523 intentionally omitted]
S. R. Bond, for defendant in error.
The case is now before us for consideration upon writ of error to the supreme court of New Hampshire, and the same points that were urged before that court are set up here as grounds of error.
The question for us to consider, therefore, is whether the products of a state (in this case timber cut in its forests) are liable to be taxed like other property within the state, though intended for exportation to another state, and partially prepared for that purpose by being deposited at a place of shipment, such products being owned by persons residing in another state.
We have no difficulty in disposing of the last condition of the question, namely, the fact (if it be a fact) that the property was owned by persons residing in another state; for, if not exempt from taxation for other reasons, it cannot be exempt by reason of being owned by non-residents of the state. We take it to be a point settled beyond all contradiction or question that a state has jurisdiction of all persons and things within its territory which to not belong to some other jurisdiction, such as the representatives of foreign governments, with their houses and effects, and property belonging to or in the use of the government of the United States. If the owner of personal property within a state resides in another state, which taxes him for that property as part of his general estate attached to his person, this action of the latter state does not in the least affect the right of the state in which the property is situated to tax it also. It is hardly necessary to cite authorities on a point so elementary. The fact, therefore, that the owners of the logs in question were taxed for their value in Maine as a part of their general stock in trade, if such fact were proved, could have no influence in the decision of the case, and may be laid out of view.
We recur, then, to a consideration of the question freed from this limitation. Are the products of a state, though intended for exportation to another state, and partially prepared for that purpose by being deposited at a place or port of shipment within the state, liable to be taxed like other property within the state? Does the owner's state of mind in relation to the goods,—that is, his intent to export them, and his partial preparation to do so,—exempt them from taxation? This is the precise question for solution.
This question does not present the predicament of goods in course of transportation through a state, though detained for a time within the state by low water or other causes of delay, as was the case of the logs cut in the state of Maine, the tax on which was abated by the supreme court of New Hampshire. Such goods are already in the course of commercial transportation, and are clearly under the protection of the constitution. And so, we think, would the goods in question be when actually started in the course of transportation to another state, or delivered to a carrier for such transportation. There must be a point of time when they cease to be governed exclusively by the domestic law, and begin to be governed and protected by the national law of commercial regulation, and that moment seems to us to be a legitimate one for this purpose, in which they commence their final movement for transportation from the state of their origin to that of their destination. When the products of the farm or the forest are collected, and brought in from the surrounding country to a town or station serving as an entrepot for that particular region, whether on a river or a line of railroad, such products are not yet exports; nor are they in process of exportation; nor is exportation begun until they are committed to the common carrier for transportation out of the state to the state of their destination or have started on their ultimate passage to that state. Until then it is reasonable to regard them as not only within the state of their origin, but as a part of the general mass of property of that state, subject to its jurisdiction, and liable to taxation there, if not taxed by reason of their being intended for exportation, but taxed, without any discrimination, in the usual way and manner in which such property is taxed in the state. Of course they cannot be taxed as exports,—that is to say, they cannot be taxed by reason or because of their exportation or intended exportation,—for that would amount to laying a duty on exports, and would be a plain infraction of the constitution, which prohibits any state, without the consent of congress, from laying any imposts of duties on imports or exports; and, although it has been decided (Woodruff v. Parham, 8 Wall. 123) that this clause relates to imports from and exports to foreign countries, yet when such imposts or duties are laid on imports or exports from one state to another, it cannot be doubted that such an imposition would be a regulation of commerce among the states, and therefore void as an invasion of the exclusive power of congress. See Walling v. Michigan, 116 U. S. ——, S. C. ante, 454, (decided at the present term,) and cases cited in the opinion in that case.
But if such goods are not taxed as exports, nor by reason of their exportation, or intended exportation, but are taxed as part of the general mass of property in the state, at the regular period of assessment for such property and in the usual manner, they not being in course of transportation at the time, is there any valid reason why they should not be taxed? Though intended for exportation, they may never be exported,—the owner has a perfect right to change his mind,—and until actually put in motion for some place out of the state, or committed to the custody of a carrier for transportation to such place, why may they not be regarded as still remaining a part of the general mass of property in the state? If assessed in an exceptional time or manner because of their anticipated departure, they might well be considered as taxed by reason of their exportation or intended exportation; but if assessed in the usual way, when not under motion or shipment, we do not see why the assessment may not be valid and binding. The point of time when state jurisdiction over the commodities of commerce begins and ends is not an easy matter to designate or define, and yet it is highly important, both to the shipper and to the state, that it should be clearly defined so as to avoid all ambiguity or question. In regard to imports from foreign countries, it was settled in the case of Brown v. Maryland, 12 Wheat. 419, that the state cannot impose any tax or duty on such goods so long as they remain the property of the importer, and continue in the original form or packages in which they were imported; the right to sell without any restriction imposed by the state being a necessary incident of the right to import without such restriction. This rule was deemed to be the necessary result of the prohibitory clause of the constitution, which declares that no state shall lay any imposts or duties on imports or exports. The law of Maryland, which was held to be repugnant to this clause, required the payment of a license tax by all importers before they were permitted to sell their goods. This law was also considered to be an infringement of the clause which gives to congress the power to regulate commerce. This court, as before stated, has since held that goods transported from one state to another are not imports or exports within the meaning of the prohibitory clause before referred to; and it has also held that such goods, having arrived at their place of destination, may be taxed in the state to which they are carried, if taxed in the same manner as other goods are taxed, and not by reason of their being brought into the state from another state, nor subjected in any way to unfavorable discrimination. Woodruff v. Parham, 8 Wall. 123; Brown v. Houston, 114 U. S. 622; S. C. 5 Sup. Ct. Rep. 1091.
But no definite rule has been adopted with regard to the point of time at which the taxing power of the state ceases as to goods exported to a foreign country or to another state. What we have already said, however, in relation to the products of a state intended for exportation to another state will indicate the view which seems to us the sound one on that subject, namely, that such goods do not cease to be part of the general mass of property in the state, subject, as such, to its jurisdiction, and to taxation in the usual way, until they have been shipped, or entered with a common carrier for transportation, to another state, or have been started upon such transportation in a continuous route or journey. We think that this must be the true rule on the subject. It seems to us untenable to hold that a crop or a herd is exempt from taxation merely because it is, by its owner, intended for exportation. If such were the rule, in many states there would be nothing but the lands and real estate to bear the taxes. Some of the western states produce very little except wheat and corn, most of which is intended for export; and so of cotton in the southern states. Certainly, as long as these products are on the lands which produce them, they are part of the general property of the state. And so we think they continue to be until they have entered upon their final journey for leaving the state and going into another state. It is true, it was said in the case of The Daniel Ball, 10 Wall. 565: 'Whenever a commodity has begun to move as an article of trade from one state to another, commerce in that commodity between the states has commenced.' But this movement does not begin until the articles have been shipped or started for transportation from the one state to the other. The carrying of them in carts or other vehicles, or even floating them, to the depot where the journey is to commence, is no part of that journey. That is all preliminary work, performed for the purpose of putting the property in a state of preparation and readiness for transportation. Until actually launched on its way to another state, or committed to a common carrier for transportation to such state, its destination is not fixed and certain. It may be sold or other wise disposed of within the state, and never put in course of transportation out of the state. Carrying it from the farm or the forest to the depot is only an interior movement of the property, entirely within the state, for the purpose, it is true, but only for the purpose, of putting it into a course of exportation. It is no part of the exportation itself. Until shipped or started on its final journey out of the state its exportation is a matter altogether in fieri, and not at all a fixed and certain thing.
The application of these principles to the present case is obvious. The logs which were taxed, and the tax on which was not abated by the supreme court of New Hampshire, has not, when so taxed, been shipped or started on their final voyage or journey to the state of Maine. They had only been drawn down from Wentworth's location to Errol, the place from which they were to be transported to Lewiston, in the state of Maine. There they were to remain until it should be convenient to send them to their destination. They come precisely within the character of property which, according to the principles herein laid down, is taxable. But, granting all this, it may still be pertinently asked, how can property thus situated, to-wit, deposited or stored at the place of entrepot for future exportation, be taxed in the regular way as part of the property of the state? The answer is plain. It can be taxed, as all other property is taxed, in the place where it is found, if taxed, or assessed for taxation, in the usual manner in which such property is taxed, and not singled out to be assessed by itself in an unusual and exceptional manner because of its destination. If thus taxed, in the usual way that other similar property is taxed, and at the same rate, and subject to like conditions and regulations, the tax is valid. In other words, the right to tax the property being founded on the hypothesis that it is still a part of the general mass of property in the state, it must be treated in all respects as other property of the same kind is treated. These conditions we understand to have been complied with in the present case. At all events there is no evidence to show that the taxes were not imposed in the regular and ordinary way. As the presumption, so far as mode and manner are concerned, is always in favor of and not against official acts, the want of evidence to the contrary must be regarded as evidence in favor of the regularity of the assessment in this case.*
The judgment of the supreme court of New Hampshire is affirmed.
In the case of C. N. Nelson Lumber Co. v. Town of Loraine, 22 Fed. Rep. 54, the plaintiff was a Minnesota corporation, which owned large tracts of pine timber lands in northern Wisconsin, and was engaged in the lumber business, cutting pine logs from the timber of said lands during the winter season in each year, and hauling the same upon sleds to the different streams tributary to the St. Croix river, in Wisconsin, and placing them upon the banks of said streams, and upon the ice thereof, between the banks, and there awaiting high water in the spring to transport them down said streams into the St. Croix river,
and thence through the St. Croix lake, to the city of Still water, in Minnesota. where the logs were cut into lumber and marketed. While the logs in question were so lying piled upon the ice in a stream, waiting for the high waters of the spring to carry them to their destination, the assessor of the town of Loraine put them on his list, and entered them for valuation and assessment for the general state, county, and town taxes, and afterwards the said tax was duly extended against said logs, and, on default of payment, a warrant issued, etc. The court say: 'The first, and, in my judgment the graver, contention on the part of the plaintiff is that, at the time of their assessment, the logs were in commercial transit from one state to another, and were therefore exempt, upon conceded principles of law, and also that they had so become the subject of commerce as to render taxation by the state authorities an unwarrantable interference, in violation of the provisions of the United States constitution, which gives to congress the power to regulate commerce between the several states. * * * If the logs were in commercial transit, or their taxation was an interference with congressional authority, they were not taxable. The plaintiff contends that they became and were in transit from the time they were loaded upon sleds in the woods, and started on their destination towards the river, to be rolled down the banks thereof upon the ice. But I am unable to concur in this view, and am of opinion that the logs were in no actual or legal sense in transitu while awaiting shipment down the river, nor had they become the subject of commerce so as to make the usual and ordinary taxation by the state authorities an interference with the proper regulation of commerce by congress. * * * The mere intention, [of shipping or transporting to Stillwater,] in such a case, where there has been no sale or transfer, of shipping out of the state at some indefinite time, depending upon some circumstance so uncertain as the weather and the floods, would not amount to putting the property in actual or legal transit so as to bring them [the logs] within the principle recognized in the adjudicated cases. See State v. Carrigan, 39 N. J. Law, 35; Blount v. Munroe, 60 Ga. 61; People v. Niles, 35 Cal. 282; Carrier v. Gordon, 21 Ohio St. 605; State v. Engle, 34 N. J. Law, 425; Ogilvie v. Crawford Co., 7 Fed. Rep. 745; Passenger Cases, 7 How. 416; State Freight Tax Case, 15 Wall. 232; State Tax on Railway Gross Receipts, 15 Wall. 284; Conley v. Chedic, 7 Nev. 336; Hurley v. Texas, 20 Wis. 665; Erie Ry. Co. v. State, 31 N. J. Law, 531; Brown v. Maryland, 12 Wheat. 442; Crandall v. Nevada, 6 Wall. 35; Almy v. State, 24 How. 169.'
Where a tax is lawfully levied on property in one state, the constitutionality of such tax will not be affected by the fact that the same property is subject to taxation in another state. C. N. Nelson Lumber Co. v. Town of Loraine, 22 Fed. Rep. 54.
It was held in Bradley v. Bauder, 36 Ohio St. 28, that stock in a foreign corporation may lawfully be taxed to the resident owner, although the capital of such stock is taxed where it is located.