Philadelphia Southern Mail Company v. Commonwealth of Pennsylvania

The question in this case is whether a state can constitutionally impose upon a steam-ship company, incorporated under its laws, a tax upon the gross receipts of such company derived from the transportation of persons and property by sea, between different states, and to and from foreign countries.

By an act of the legislature of Pennsylvania passed March 20, 1877, it was, among other things, enacted as follows, to-wit: 'That every railroad company, canal company, steam-boat company, slack-water navigation company, transportation company, street-passenger railway company, and every other company now or hereafter incorporated by or under and law of this commonwealth, or now or hereafter incorporated by any other state, and doing business in this commonwealth, and owning, operating, or leasing to or from another corporation or company any railroad, canal, slack-water navigation, or street-passenger railway, or other device for the transportation of freight or passengers, or in any way engaged in the business of transporting freight or passengers, and every telegraph company incorporated under the laws of this or any other state, and doing business in this commonwealth, and every express company, and any palace-car and sleeping-car company, incorporated or unincorporated, doing business in this commonwealth, shall pay to the state treasurer, for the use of the commonwealth, a tax of eight-tenths of one per centum upon the gross receipts of said company for tolls and transportation, telegraph business, or express business.' A similar act was passed by the same legislature on the seventh of June, 1879.

By the terms of these acts, returns of the gross receipts are required to be made every six months to the auditor general, upon which the tax is assessed by him, and charged against the company.

Under and by virtue of these acts, the auditor general of the state, in October, 1882, charged the appellant, the Philadelphia & Southern Mail Steam-Ship Company, taxes upon its gross receipts for the years 1877, 1878, 1879, 1880, and 1881, all ofw hich receipts were derived from freight and passage money between the ports of Philadelphia and Savannah, and in foreign trade from New Orleans, and a small amount for charter-parties in the like trade. The tax thus charged against the company for the five years in question amounted to about $6,500, and, with accumulated interest and penalties, to over $9,000. After serving the account upon the company, an action was brought for its recovery in the common pleas of Dauphin county, at Harrisburg. The defendant pleaded that it was a steam-ship company 'operating sea-going steam-ships engaged in the business of ocean transportation between different states of the United States, and between the United States and foreign countries, and that all the said steam-ships of the said defendant were duly enrolled or registered, under the laws of the United States, for the coasting or foreign trade of the United States, and that the gross receipts so returned to the auditor general, upon which a tax has been levied by the commonwealth of Pennsylvania, were received by defendants for freight and passengers carried in the said steam-ships on the ocean, and on the navigable waters of the United States, between the state of Pennsylvania and other states of the United States, and between the states of the United States and foreign countries, and for the charter and hire of the said steam-ships to other parties in such trade and business; and that no part of the said gross receipts was received for the transportation of freight and passengers between places within the state of Pennsylvania, or for the hire and use of the said steam-ships within the state of Pennsylvania.'

On the trial of the cause, the parties entered into an agreement as to the facts, showing the gross receipts for each year, in each branch of the company's trade, which facts supported the allegations of the plea. A trial by jury was dispensed with, and the court gave judgment for the commonwealth for the principal of the tax, and interest from the time of commencing suit. Exceptions were taken on the ground that the judgment was in conflict with the clause of the constitution of the United States giving to congress the power to regulate commerce with foreign nations and among the several states. The judgment, being removed by writ of error to the supreme court of Pennsylvania, was affirmed by that court; and its judgment is now before us for review.

Morton P. Henry, for plaintiff in error.

W. S. Kirkpatrick, Atty. Gen., and John F. Sanderson, for defendant in error.

[Argument of Counsel from pages 328-335 intentionally omitted]

BRADLEY, J.