658

FEDERAL REPORTER.

that appears, none of them except Carrol county may be citizens or res' . . idents of any state." The sole question raised by t'his demurrer is whether, in this kind of nease, it is necessary, in order to give jurisdiction, the bill should show that plaintiff and defendants are citizens of different states. If so, the demurrer must be sUl'ltained; if not, it must be overruled. Froman examination of the decisions of the supreme court of the United States upon a similar question to the one raised by the demurrer in this case, it is well settled, in my opinion, that the court has jurisdiction, not only in a case where the parties to the ori¢.nal judgment come into court by a bill in equity to restrain or regulate the original judgment, also persons other than. those who were parties to the original suit in which judgment was rendered, may invoke the equity side of the court to do what it has jurisdiction to do for the parties to the original judgment. The court has jurisdiction without regard to the :residence of the parties. This is upon the principle that a suit to enjoin a judgment in the federal court is not an original suit, but that it is auxiliary to, and depElndentup9D, the. original regardless of his citizenship, who is entitled to any relief in connection with, or growing out of, the original suit, maycQme into. CO.urt by bill in equity, and have a remedy, regardless of his citizenship: . This right is based upon the the.co.urt rendel'ing ajudgr,nent has coptrol over such judg})rinciple IDent. Its .Jurisdiction extends to regulating; enf()rc\l1g,applying the to it that proceeds o.f jlldgruents, restraining the same,apg 9f they shall be eI;l,tered as satisfi,ep,}f paid. It iabut ahea,Ithy exercise of '!bis jurisdiction for the court. to' see to it that its Judgments .shall not be lll'ledfor a fraul1ulentp\ltpose. 'These views are by v. J[owe, 24 How. 460; .Minnesota 00. v. St. Paul 00., 2\\all. 609; Bauroad09. v: Cha",!-berlatp,,6 Wall. Jones v. A""drewlj, 10 Wall. 327; $rippendorfv. 110 U. S.. 276; S. C. 4 Sup. Ct. Rep..27; Pacific R.. v. M''t88ov,ri P(1.c. R. R. ,J 11 :U. S. 505; S. O. 4 Sup. Ct. Rep. 583. "The is pverruled. .

PuLLMAN's P,ALACECAR

Co.

11. TwOMBLY,

Treas.,eto.,and others.

(Oi'I'c'Uil 00'1111'1, B. ]).lowa.Janllary 14, 18S7.)

, . lIEReE.· . . Property is not exempted from liability to'an equal and uniform property . ,tax by the fact that it is used, either partially or exclusively, for interstate commerce. , t .. SAllE-VEHIcLEs OJ" 1'RANsPoRTATloN-DomOILlll. '. Vehicles Of transportation, used constantly and continuously upon a single run" acquire a· aitua, for purposes of taxation, independent and·irrespective of dOll1icile of .the owner.

t.

trSED FOR PURPOSES OF mTERSTATllICo)(-

PULLMAN'S PALACE CAR CO. 11. TWOMBLY.

659

8..

run.

4.

Such8itm is not destroyed by the fact that the owner, owning many vehicles of like character, and having lines in various parts of the United States. transfers from time to time such vehicles from one line to another, providing a constant and continuous use of such vehicles is preserved upon the single

OF VEHICLE'S USE IN DIFFEREN"T STATES.

SAME-CONFLICT BETWEEN

Two STATES. Where such vehicles are used upon a run extending through two states, there isa situs for taxation in each state to a fair ,proportion of the value of the property so used.
COLLECTION OR PAYMENT OF. A TAX.

5.

Where a state tax is assessed and levied against a railroad company owning and operating a line of road within the state, based upon the rolling stock used by i.t in the operation of such road, a third party cannot enjoin the state from collecting, or the railroad company from paying, a portion of such t8lx;on the ground that a part of such rolling stock included in sucb 'assessment is the property of such third party, and exempt from taxation.

In Equity. Motion for injunction. Alfred Ennis, for complainant. A.J. B(J.lcer, Atty. Gen., for defendants.
BREWER, J. This is, in substance, a bill brought by the complainant to restrain the state of Iowa from collecting from certain railroad com.paniesdoing business in that state a portion of the taxes levied upon them, on,the ground that the basis of the assessment upon which such portion of the taxes was levied was a number of sleeping, drawing-room, and parlor cars, belonging to complainant, and used only in interstate commerce. It appears that thc complainant is a foreign corporation, under the laws of the state of Illinois, and domiciled in Cook county, in that state. It is engaged in the of manufacturing, usi1;lg, and hiring to be used,sleeping, drawing-room, and parlor cars. It has certain contracts with the various railroads running through the state of Iowaj by which it furnishes to them such cars under contracts for their use and operation. In a general way, it may be said that the interior management of these cars remains with the complainant, the. exterior with the railroad companies, who receive also the full pay for the mere transportation of passengers. These· cars are all used in interstate commerce; that is, all of them run from points outside of the state of Iowa into or into and through the state of Iowa, or from points in the state <Jf Iowa to points outside the state. . Complainant, therefore, insists that, being instrumentalities \lsed exclusively for interstate commerce, and the domicile of the owner being outside ofthEi state, they are exempt from taxation by the state; and, further, that, as the complainant itself cannot be taxed upon such cars, the state ca:nnotdo indirectly what it cannot do directly, and cannot, therefore, subject them to'taxation by assessing them to the several railroad companies whom they are in fact used and operated. Obviously, it becomes iD:\portant to see exactly what the state of Iowa is attempting to do. The following. are the statutes under which the assessment and levy complained of were made: '

GOO

6ED]j;RAL REPORTER.

Sec. 1317. On the first Monday of March in each year the executive councilshall 88Sess all the property of each railway corporation in this state, excepting the lands, lots, and other real estate belonging thereto not used in the operation of any railway. Sec. 1318. The president, vice-president, or general superintendent, and such other officers as such council may designate, of any corporation operating any railway in this state, shall furnish said council, on or before the fifteenth day of February in each year, a statement, signed and sworn to by one of such officers, showing in detail, for the year ending on January the 1st preceding, (1) the whole number of miles owned, operated, or leased in the state by such corporation making the return, and the value thereof per mile, with a detailed statement of all property of every kind, and the value, located in each county in the state; (2) also a detailed statement of therium ber, and the value thereof, of engines, passenger, mail, express, baggage, freight, and other cars, or property used in operating or repairing such railway, in this state; and, on railways which are part of lines extending beyond the limits of this state, the returns shall show the actual amount·of rolling stock in use on the corporation's line in the state during the year for which return is made. The return shall show the amount of rolling stock, the gross earnings of the entire railway, and the gross earnings of the same in this state, and all property designated in the next section, and such other facts as such council may, in writing, require. If such officers fail to make such said council shall proceed to assess the property of the corporation so failing, adding 30 per cent. to the assessable value thereof. Sec. 1319. The· said property shall be valued at its true cash value, and such assessment shall be made upon the enti1'eratlway within thestate, and shall include the right of way, road-bed, bridges, culverts, rolling stock, depots, station grounds, shops, buildings, gravel beds, and all other property·; real and personal, exclusively used in the operation of such railway. In assessing said railway, and its equipments, said council shall into consideration the gross earnings per mile for the year ending January the 1st preceding, and any and all other matters necessary to enable said 'council to make a just and equitable assessment of said railway property. If a part of any railway is without this state, then, in estimating' the value of its rolling stock and movable property, they shaH take into consideration the proportion which the business of that part of the railway lying within the state bears to the business of the railway without the state. Such :valuation shall be in the same ratio as that of the property of individL'als. . Sec. 1320. On or before the twenty-fifth day of March, in each year, said council shall transmit to the county auditor of each county through which any railway may run a statement showing the length of the main track of such railway witQin the county, and the assessed value per mile of the same, as fixed by a pro rata distribution per mile of the assessed value of the whole property named in the preceding section. Said statement shall be entered 011 the proper recor(1 of the county. Sec. 1321. At the firstmeeting of the board of supervisors held after said statement is received by the county auditor they shall make, and cause the same to be entemd in the proper record, an order stating and declaring the length of the main track, and the assessed value of such railway lying in each city, town, township, or lesser taxing district in theJr county through Which said railway runs, as fixed by the executive coun.cil, which shall, constitute the taxable value of said property for taxable purposes; and the taxes on said propetty,when collected by the county treasurer, shall be paid over to the persons or corporations entitled thereto as other taxes, and the county shall transmit a copy of said order to the city council, or trustees of such city, incorporated town, or township.

PULLMAN'S PALACE' CAR CO. V. TWOMBLY.

661

Spc. 1322., All sucl1- railway, property shall be taxable upon said assessment at the same rates, by the same officers, and for the same purposes, as the property of individuals within such counties, cities, towns, townships, and lesser taxing districts. Sec. 1323. The provisions of this chapter in relation to transporting of passengers shall not apply to any railwayin this state until the gross earnings of the preceding year,reckoning from the first day of January of each year, shall equal or exceed the sum of $4,000 per mile average, for all the miles of road operated during the whole of that preceding year.
(OhaplN 114, Laws 1878.)

An act to tax sleeping and dining cars, amending section 1318, c. 5, tit. 10, of the Code: Section 1. it enacted 'by the general assembly of the state of Iowa, that, in addition t9 the matters required to be contained in the statement provided for, in section, 1318 of the Code, suCh statement shall show the number of sleeping and dining cars not ownpd by such corporation, but used by it in operatingitsi railway in this state during each month of the year for which the return is made, and also the number of miles each month that said cars have been rUJ;l or operated on such ,rlloilway within the, state, and the total number of miles that said cars have been run or operatede.ac,h month within and without the state. ' Se&; The executive council shall, at tlie time of the assessment of other railway'pful?erty for taxation, assess for taxation the average number of cars soused by such corporation each month, and the assessed valne of said cars shall bear the same proportion to the entire value thereof that the monthly average numRer of miles that such cars havebeen runOf operated within the state Shall bear to the mopthly average number of miles that such cars have been used' or Operated within and without. the state. Such valuaticm shall be' in "the same ratio ds thri,'t of the property of individuals. Sec. 3. The'executive council shall. as provided by sections 1318' and 1319 of the Code; first assess the value of ,the property of the corporation using sleepi\1g and ,dining cars not owned by such cotporation, and shall then add to such valuation the amount of the assessed valuation of said sleeping and dining cars, made as hereinbefore provided, and a,uch aggregate amount shall ,constitute and be considered, the assessed value of the property of such corporation for the purposes of taxation. Approved March 25, 1878.

2:

From these statutes itis obvious-First, that no tax is assessed against the a non-resident corporation, but only against corporations created by, or doing business and domiciled in, the state; 8econd, the tax is solely a property taX7' with rate or assessment and levy the same as obtains in respect to other personal property. It will also be noticed that, in orderto :be perfectly fair and just, where any rolling stock is used partly in and partly out of the state, only that proportion of value based 'upon the of use withi,n the state is considered as the basis of ,In other words, the state aims tax that property which it pTotects, and only to,the extent that it protection. If it ,noi-do this, it requires but a moment's reflection to see that the state will peshorn of much of what-every candid man must feel to be honest revel1u,e. Sleeping cars lj,re not the only vehicles used in interstate commerce. .A vast amount, of rolling stock used on the various, interstate belongs to car 'trust companies,and is simply leased by the

662'

'FEDERAl. REPORTER;

railroad bompallies. Is it ,taxable only in the eastern cities in which the cat trust companies are dOIpiciled? More than that! how many interstate railroads, traversing often several stateb, are owned and operated by a corporation created by and domiciled in a single state? Has 'that state alone the power of taxation? Now, as stated, the claim of complainant is that, because this property is used in interstate commerce, it is exempt from state taxation at any other place than the domicile of its owner. I deny the proposition, and affirm the law to be that personal property, continuously used in a state, acqtJ.iresa 8itU8 in that fltate for purposes of taxation, and may, at the option of the state, be subjected to an equal property tax, and that notwithstanding it be used exclusively in interstate commerce. The state is sovereign, except as Jimited by the federal constitution. A sovereign may,tax all property within its jurisdiction, and, unless there be found in the federal constitution some provision taking away this power, the state of Iowa may unquestionably tax this property used within its territorial limits. Lane Co. v. Oregon, 7 Wall. 77; Ward v. Maryland, 12 Wall. 427; Railroad Cd,' '\T. Peniston, 18 Wall. 5. The restriction on the power of the state is claimed alone by virtue of clause 3 of section 8 of article 1 of the constitu.tion of the United States, which grants.to congress the power "to regulate commerce with foreign nations, and amonK the several states." I insist that an equal and uniform propertytll.xisnot a regulation of congress, although it reaches to and affects property used ,in· interstate commerce. Such a tax is not similar to a license' or occupation tax. They are condiiipns of, or restrictions upon, . doing of the business: while the former is simply a subjection of the property employed in the business to the common burden of state support. A 'citizen of Canada, with' his only domicile there, may build in the city of Des Moines a sleeping car. It remains idle and -,The duty of the state to protect that property fOr its owner iseleat, and equally clear its correlative right to subject it to ordinary taxation. To provide protection costs money,and the tax is the owner's proper payment therefor. The car may be employed in commerce, and runcontinuonsly from Davenport to Council Bluffs. The duty of protection and the right of taxation confessedly remain NeJrt year it extends its run across the river, to Rock Island. The duty of protection remains. Has the right of taxation gone? Must both Iowa and illinois pay for furnishing this citizen ' ofCanada protection to his property,and neither have a right to exact any compenflation therefor?' Does the regulation of interstate commerce compel such an absurdity 'and wrong? ,If the imposition of an equal and uniform property tax upon me 'vehicles used in commerce be a regulatio,nof commerce, thed.omicile of the oWner ahd the situs of the The determines the exemption, and alllluch property is: released from every burden of state taxation. If itbea regulation ofcommerce tp impose such a tax in Iowa, where the property is found, it is equally so in. Illinois, where the owner is domiciled. Surely, such a sweeping exemption was never within the

PULT,MAN'S PALACE CAR CO. V. TWOMBLY.

663

'Contemplation of the framers of the federal constitution in granting the powc;r to congress to regulate commerce. If we turn to the decisions of the supreme court, we find an almost constant affirmation of the power of the state to levy a property tax upon the vehicles and instrumentalities of interstate commerce. Thus, in The Passenger (hse8,7 How. 283, is this language: "A state cannot regulate foreign commerce, but it may do many things whicll more or less affect it. It may tax a ship or other vessel used in commerce, the slime as other property owned by its citizens. A state may tax the stages in which the mail is transported, but this does not regulate the conveyance of the mail any more than taxing a ship regulates commerce; and yet, in both instances, tbe tax on the property in some degree affects its use.," ' In Mwgan v. Parham, 16 Wall. 471, the court snYEl: . ' "A steam-boat or a post-coach, engaged in a local bUlilineBs within a state, to local taxation, although it carry the mail of tbe United may Statelil. ,The commerCl;l between the states may not be interfered with by tax.ati9ll: or otherwise, but instruments and vehicles maY be., ,It is not, tbereupon this principle that we decide this case." . the late case of Gloucester Ferry, a>. v. Pen/naylvania,5 Sup. 'Ct. , Rep. &29, iUs , "It is the property of corporations engaged infQreilW Or as as property of coq)qrationsengaged in other business, is suoject'tb taxatibn, NoYided,always,it be Within the of the state.' ,As said by Chief Justice MARSHALL in McOulloch v.Maryland, 4,Wheat,'429: "All'subjects' over which the power of a, state' extendS 'are objects of taxation, but those over which it does llOt extend are, exempt from taxation. Tbis pr,opositionmay aJm(jst be " ' And further, (page 832:) "It issolely,therefore,forthe business of the company in landing and receivingpassengers at the wharf in Philadelphia that the tax is laid, and that business;;as. already said., is an essential part of the transportation between the states of NewJerseyalld Pennsylvania, which is itself interstate commerce. While it is con?eded that the property in a state belonging to a foreign corporation, engaged in 'foreign or i.nterstatecommerce, may be taxed equally with like property of ,a domestic corporation engaged in that business, we are,cl'e,ar that a tax or other burden imposed on the property of either corporation'because it is uS,ad to carryon that colllmerce, etc., is invalid,"-etc. can be found in which the supreme court have declared a No mere property tax void, on the ground thatthe property upon which it was employed in interstate commerce. Strong support of thevlew'S 'above expressed is found in the rulinga of the supreme court upoh state taxation' of the agencies of the federal government. I,n. tip-eease of McQulloch v. Maryland, 4 Wheat. 310, a state ta.xupon 'of ,the United States Bank was declaredunoonstitutional, and in Osborn. v" Bank oj U. 8., 9 Wheat. 738, a similar tax upon the right of theDttt;lk 'to do busineSs in the state of Ohio was also held illegal. the ground that, the taxes were an impediThese ,decisions were ment l;lP9Ij. the fr:ee of the agencies. of the' federal . ;. .

llPon

"','.

-

.

.

.

'

664

FEDERAL REPORTER,

In Railroad Co. v. Peniston, 18 Wall. 5, an attempt was made to carry the doctrine of these cases further, and to the extent of exempting the Union Pacific Railroad Company from liability for any state taxes upon its real and personal. property. But the court refused to sanction this extension of the doctrine, and held that the railroad company, although a corporation created by an act of congress, the recipient of large bounty from thegenel'al government, and subject to the obligation of carrying its troops, ;mails, etc.· was not exempt from state taxation. on its real and perilonlll property. The firstl\ylIa:bus in the follows: ,. The. exempt:ion of agencies of the federal government from taxation by tAe state is d;ependent, not upon the nature of the agents, nor upon the mod'll of their constitution, nor upon the fact· that they are agents, but upon the effect of the tax; that is, upon the question the tax does in truth deprive them of power to the government as they were intended to serve it, or hinder theelllcient exercise'of their power. A tax upon their property merely, having no such necessary and leaving them free to discharge the duties therhave undertaken to perform, may be rightfully laid by the states. A tat upOn their opera tiona, being a direct obstruction to the exercise of federal powers, may not be." . And in the course of the opinion the court uses this language to illustrate the distinction between this case and the prior ones, and to point out the extent to which those former cases went: I "McOullockv.lJIaryland and Qsborn v.Bank of U. S. are nluch relied by the' app",llants, but an examination of 'what was decided in those cases they are in fi!U harmony with the doctrine that the property will reveal of an agent of the general government may be subjected to state taxation. In the former of those cases the tax held unconstitutional was laid upon the notes of the bank. The institution was prohibited fr{lm issuing notes· all, except upon stamped paper furnished by the state. and to be paid for on delivery; the stamp upon each note being proportioned to its denomination. The tax, therefore, was not upon any property of. the bank, but upon ont:! of its operations; in fact, upon its right to exist as created. It was a direct impediment in the way of a governmental performed through the bank as an agent. It was a very different thing, ,both in its nature and, effect, from a tax on the property of the bank. No wonder, then, that it was held illegal. But even in that case the court. parefullyUmited the effect of the It does not. extend,saidthe chief justice, to a ,tax paid by the real property.of the bank, in common with the other real property in the state, nor to a tax imp08edon the interest which. the ciM,zeIUlofMarylandmay hold in .the.institution, in common with the other property of the same description throughout the state. But this is a tax on· the operations of the bank, and is,consequently, a tax on the operations of an·instrument employed by the government of the Union to ca11'Y its powers into ,execution.: Such a tax must. qe unconstitutional. Heteisa clear distinction made between a tax upontlle property of a government agent and a tax upon the operations of the agent acting for the government. ' ... , , ' .'. . ' "In Osborn v. Bank the tax held unconstitutional was a tax upon the exist· its right to transact business within the state of Ohio. ence of the It was, as it was intended to be, a liirect iIp.pediment in the way of those acts 'YlliCh.. con.gresS'.f.or nati.op.al purposes, ha4: authorizedth.e .to Perlo.rm. For this reason tl1e power of the state to di;rect it WflS denied, but, at the same the bank might be time, it was declared by the court that the local taxed ;and,lls in McCulloch v.Maryland, a difference was pointed out between

PULLMAN'S PALACE CAB ,CO. V.TWOMBLY.

665

a tax upon its property al\d, one upon its action. In noticing an all,eged resemblance between the bank iind a government contractor, Chiei; .Justice }{ARSHALL said: 'Can a contractor for supplying a military post with provisions be restrained from making purchases within a state, or fromtransporting the provisions to the place at which the troops were stationed? Or could he be fined or taxed for doing so? We have not heard these questions answered in the affirmative. It is true the property of the contractor may be taxed, and so may the local property of the bank. But we do not admit that the act of purchasing" or of,conveying the articles purchased. can be under state control. This distinction, so clearly drawn in the earlier decisions, between a tax on the property of a governmental agentaIid a upon the action of such agent, or upon' his riglJt to be, has ever since been recognized. All state taxation' which does not impair' the agent's efficiency in the discharge of his duties to the gOvernment has been sustained when challenged, and a tax upon his property generally bas not been regarded' as beyond the power of a state to impose.'" . It to.meclear, .from these considerations, that the mere use of property in interstate commerce dops not exempt it from the burdens of an equal and uniform property tax. Neither does the domicile of the owner furnish, in the present case, 1l.uybasis,of exemption. It is true that the domicile of the owner (the complainimt)is in the state of and that for many purposes the situ80fpersonal property is the domicile of the owner. Mobilia 8equ;untur persim.ami. But, for purposes of taxation, tangible property- has a situs whereverit is found. Railroad Co. v. Pennsylvania, 15 Wall. 300. Now, these cars-tangible property-are found, ann found continuously, in the state of Iowa. This is not the case of a car owned ill another state rIuikil1g a single trip thl"ough the state ofIowa, and then returned to the state where it belongs. Such temporary transit, it may be conceded, would not change the sit'U8of the property. It is also true, according to the allegations of the bill, that the complainant, being the owner of a thousand or more sleeping cars in use throughout the United States, frequentlychanges 'cars from one run to another, so that identically the same cars may not be continuously in use in the state of Iowa.. But this interchange does not abridge the statement that there is a continuous and constant use in the state of Iowa of the sleeping cars belonging to the complainant, and, being thus continuously and constantly used in that state, they acquire a sit'U8 there for the purposes of taxation. As to other tangible property, it goes without saying that its continued presence in a state gives it a local situs for purposes of taxation. It is doubtless within the legislative power, by suitable enactment, to establish a $t'U8 for personal property elsewhere than at the place where it is found, aJ;ld this fact interprets several decisions of the supreme court. The place in which a vessel is registered is,by law, its home port. That is , considered its situs. In HaY8 v. Pacific Mail S. S. Co., 17 How. 596, the defendant, a corporation of New York, owned steam-vessels employed in the transportation of passengers and freight between New York and San Francisco, Whichwere registered ill, New York. The court held that place of registry the situs of the property for taxation, and that the mere fact that

666

FEDERAL REPORTER.

the vessels stopped temporarily in the ports of California to load and unload did not give the property a situs there for purposes of taxation. The same prpposition controlled the decision in Morgan v. Parham, 16 Wall. 471. That was an extreme case, for the vessel was engaged in the coasting 'trade between Mobile and New Orleans, and had been absent from New York city for )Tears, yet in its opinion the court uses this language: "The jurisdiction of this court over the present case, as in the case of Hays v. Paciftc Mail S. 8. Co., arises from" the .facts-First, that th!3 property had not becomeJ;llended with the business and commerce of Alabama, but remained legally of and as in New York; and, secondly, that the vessel was lawfully engaged in the interstate tl'adeover the public waters. It is in law port of Mobile, but, tOUChas if the vessethad never .before been within ing there on a single occasion, when engaged in the interstate trade, had been subjected to a tax as personal property of that city. Within the authorities it is ari iriterferencewith the commerce of the country not permitted, to the states. .. , An attempt.is ;made to place commerce by land in the same position as commerce .by water, and to make in the former case the domicile of the owner to the port of registry in the latter. But until there has be,eJlsome legislative declaration of equivalent import the obvious distinction between the two must be enforced, and the ordinary rule of the 9f tangible personal property for purposes of taxation be applied to in commerce on land. The distinction between thE! two modes of commerce is clearly recognized by the supreme court in Railroad Co. v. Maryland,21 Wall., where, , a.t.page470, ld1:. Justice BRADLEY says: "Commerce on land, between the different states, is so strikinglydissimHar in many respects from commerce on water that it is often difficult to ragardthem in the same ItSpect in reference to the respective constitutional powers and duties. of the state,and federal Maritime transportation requires no ,artificial roadway. Nature has' prepared to hand that portion of the instrumentality employed. The navigable waters of the earth are recognized public highways of trade and intercourse. No franchise is needed to enable the naVigator to use them. Again, the vehicles of commerce by water being instruments of intercommunication with other nations, the regulation of.them is assumed by the national legislatiQu, so that state interference by water is· clearly marked and distinctly discermble. But it is illfby land." ' I have thus fai'assumed that the property in question was used exclusively for interState commerce, but such is not the fact. It is alleged in the bill "that'the same cars also transport 'passengers from points in Iowa to other points in said state, whenever they properly apply fcir such transportation, but the number of such passengers is very small, compared with the nul'liber of other passengers transported in such cars." It' thus appears' that these cars are used· partly for commerce wholly within the stateoHowa. Can a vehicle, used partly for intrastate com· m.erce, escape entire state taxation on thegronnd that it is also used partly for interstate commerce?

PUf,LMAN'S PALACE CAR

co.

V. TWOMBI,Y.

667

;The case of,Wabaah" St·. L.· &: Pac. R. Oo.v. Illinois, '1 Sup. Ct. (d'eciCied at the October, 1886, term of the United States suRep. .preme court,) while holdhlg that the state might not regulate the tariff on transported interstate, conceded that it could so regulate the intrastate 'tariff. If the same car carried freight from a place within the state to one also within, and still other freight to a place without the state, would the two transportations in the same car destroy the state's power to regulate the tariff on either? I think this, however, is a minor matt:er. .1.bave thus endeavored to show that, if this tax had been ass,essed and levied directly against the complainant upon its property conin the state of Iowa, it would have to be sustained as a tinuously valid exerdse of power on the part of the state; but the fact is that no tax has been attempted to be collected from complainant. As the bill discloses, t4e state has simply assessed and levied the. ordinary property tax against certain railroad corporations, some its own creations, and all owning. and. operating lines of railroad within its territory, the basis of the assessment being only. the property used by them in the operation of th;eir lines within the state. May not the state enforce such a tax? Can a third party challenge the basis of that assessment? May it enjoin those. corporat10ns from.payment on the ground that they have not a complete tItle to all the property they use? Suppose the tax be illegal, may! not the railroad companies pay it, if. they choose? They may prefer to pay, rather than forfeit the good-wiJ,l. of the people of Iowa, or provoke them to the imposition of severer burdens. A stockholder in those would not be heard, unless he showed that he had used aU reasonable efforts to compel the themselves to act. Has a third party, with no interest in the corporations, a better right? If the tax .is illegal, and the companies nevertl\eless pay it, they cannot recover it from the complainant. It would not be estopped by their actionto challenge its viUidity. Coullselfor complainant say that while there may be no legal obligation on complainant's part to reimburse the railroad corporations this tax, yet it must keep on good terms with them, and will therefore feel obliged tQ reimburse them. It seems strange to me to ask a court of equity to enjoin a state from receiving a tax which the party against whom it is assessed is willing to pay, simply for the sake of keeping two corporations on good terms. I think it more important to permit the willing tax-payer to keep on good terms with the people of the state. Suppose the railroad corporations do not pay, and the tax is sought to be collected by warrant. That will run against the corporations, and not against the complainant. If any of its property is seized, replevin an .action a,t law will furnish adequate relief, and there is no need of the interposition of a court of equity. So, for thi$ reason also. I think the comrlainant must fail. It now remains for me to notice the cases presented by counsel for complainant in support of their bill. First, the case of OrandaU v. Nevada, 6 Wall. 35, in which a capitation, tax of one dollar, attempted to be levied by the state of Nevada for through the state by stage-coach or railroad, to be

668

FEDERAL REPORTER.

paid by tbe carrier, was dealaredillegal, and beyond tbe power of tbe state. Tbat was no property tax; but, in effect, a tax on the business of transportation. Yet even tbat decision was not placed on the ground of conflict with said section· 8, but mainly rested on the proposition that such a tax tended to prevent the free passage of the citizen to and from the federal capital. St. Louia v. Ferry 00., 11 Wall. 423. In this case 1t appeared that an Illinois corporation owned a ferry privilege across the Mississippi, at St. Louis. When not in use, its boats were laid up on the Illinois shore, and forbidden to remain at the wharf in St. Louis. It paid a ferry license and wharfage tax to the city of St. Louis. In addition, the city authorities assessed a tax on the company for the value of the boats as property within the city. Similar in its facts is the case of Glouceste:r Ferry 00. v. Penwylvania, 114 U. S. 196; S.C. 5 Sup. Ct. Rep. 826. In both cases the tax was held illegal. Wbile called a tax on the property, the court regarded it as a tax on the business, because the boats, by simply touching the "barf for the purposes of loading and unloading, did not become a part of the property within the city. In the latter case, as we have already seen, the right to tax the instrumentalities of interstate commerce was expressly conceded. Carlisle v. Pullman P. O. 00.,8 Colo. 320; S. C. 7 Pac. Rep.· Hl4. In this case the only was as to the mode of assessment and taxation. The power of the state was affirmed. Tennessee v. PullmanS. Car 00.; decided in the circuit by Mr. Justice MATTHEWS, 22 Fed. Rep. 276; opinion ofthe supreme coul't byMr. J ustice BLATCHFORD, 117 U. S. 34; S. C. 6 Sup. Ct. Rep. 635. In that case it was decided that the levying of a· privilege tax by the state ofTennes. see was a regulation of commerce. The legislation of the state required tce payment of $50 per car for the privilege of running through the state. That this was an attempt to regulate the business is apparent, and, as such, was declared beyond the power of the state. It is true that in both opinions may be fonnd some general expressions which, taken by themselves, and disconnected from the precise question before the courts, go very strongly to sustain the general claim of exemption asserted by complainant. But it bas been well and often· said that the true' way to construe the language of an opinion is to take it as applied simply to the facts and the question under consideration. Especially is that true in a case like this, where, unless so limited, it contradicts the oft-repeated prior declarations of that court. The same comment may be made upon the opinion in the case of Wabash R. Co. v. Illinois, supra, in which the only question ,was as to the power of a state to prescribe the terms of interstate . These are the c;1ses relied on by complainant, and in them r find nothing which I deem sufficient to overthrow the reasoning and authority heretofore presented. My conclusion, therefore, is (1) that property is not exempted from liability to an equal and uniform property tax by the fact that it is used, either partially or exclusively, for interstate commerce; (2) that vehiC1es

BLAND 11. FLEEMAN.

669

of transportation, used constantly and continuously upon a single run, acquire a situs. for purposes of taxation, independent and irrespective of the domicile of the owner; (3) such situs is not destroyed by the fact that the owner, owning many vehicles of like character, and having lines in various parts of the United States, transfers from time to time such vehicles from one line to another, providing a constant and continuous use of such vehicles is preserved upon the single run; (4) where s\lch vehicles are used upon a run extending through two states, there isa situs for taxation in each state to a fair proportion of the value of the property so used; (5) where 9 state tax is assessed and levied against a railroad company owning afid operating a line of road within the state, based upon the rolling stock used by it in the operation of such road, a thirdpl,trty cannot enjoin the state from collecting, or the railroad company from paying, a portion of such tax, on the ground that a part of such rolling stock included in such assessment is the property of such third party, and exempt from taxation. Entertaining views, the restraining order heretofore granted will be set aside, and the application for a temporary injunction denied.

BLAND

and others v.

FJ,EEMAN

and others.

(Diatrict Court, W. D. Arkansaa. January 20,1887.)
1.

EQillTY-NECESSARY PARTIES.

All persons who are necessary parties to a suit must be made parties.

B.

SAME-PARTIES INTERESTED IN RESULT.

All parties whose interests are affected by the suit, or whose concurrence is necessary to a complete determination of the suit. or who have a substantial interest in the subject-matter of the suit. are necessary parties to it; .and it proceed without their being made parties. ' The law is that those whose interests are in harmony should be joined as plaintiffs or defendants, as the case may be.

8.

4.

BAME-PLAINTIFFS-DEFENDANTS.

COURTS:--JURISDICTION, HOW CONFERRED.

Togiv6 jurisdiction, there must be subject-matter upon which the court has a right to pass, place over which it can exercise its powers, and all the proper and necessary parties. All of these requisites must exist; and in this suit the interests of all the heirs are in harmony, as against the defendant, and all of such heirs must be made parties plaintiff.

G.

SAME-FEDERAL COURTS-PARTIES.

To give a federal court jurisdiction, on the ground of a dispute or controversy between citizens of different states. it must appear that all the necessary plaintiffs are citizens of states different from all the necessary defendants. If this state of facts does not exist, there is a failure of jurisdiction. They must exist, before the court, under the law, can exercise the power of hearing and. determining a controversy. Proper and necessary parties are as much an element of jurisdiction as any of the other elements of it. If there is a faihue of either one of these elements, there is a failure of jurisdiction.

EQillTY-PARTIES-HEIRS.

411. the heirs to an estate of a decedent, in a suit against an administrator of such estate charging him with having fraudulently converted the assets of the estate, are necessary parties to such suit.