Opinion of the Court.

gence between them be not obstructed or unnecessarily incumbered by state legislation; and that the act of Congress passed July 24th, 1866, above referred to, so far as it declares that the erection of telegraph lines shall, as against state interference, be free to all who accept its terms and conditions, and that a telegraph company of one State shall not, after accepting them, be excluded by another State from prosecuting its business within her jurisdiction, is a legitimate regulation of commercial intercourse among the States, and is also appropriate legislation to execute the powers of Congress over the postal service. In Western Union Telegraph Company v. Texas, 105 U. S. 460, we decided that a State cannot lay a tax on the interstate business of a telegraph company, as it is interstate commerce, and that if the company accepts the provisions of the act of 1866, it becomes an agent of the United States, so far as the business of the government is concerned; and state laws are unconstitutional which impose a tax on messages sent in the service of the government, or sent by any persons from one State to another. In the present case, it is true, the tax is not laid upon individual messages, but it is laid on the occupation, or the business of sending such messages.

It comes plainly within the principle of the decisions lately made by this court in Robbins v. The Taxing District of Shelby County, 120 U. S. 489, and Philadelphia and Southern Steamship Co. v. Pennsylvania, 122 U. S. 326.

It is parallel with the case of Brown v. Maryland, 12 Wheat. 419. That was a tax on an occupation, and this court held that it was equivalent to a tax on the business carried on,(the importation of goods from foreign countries), and even equivalent to a tax on the imports themselves, and therefore contrary to the clause of the Constitution which prohibits the States from laying any duty on imports. The Maryland act which was under consideration in that case declared that "all importers of foreign articles or commodities, etc., and all other persons sclling the same by wholesale, etc., shall, before they are authorized to sell, take out a license, for which they shall pay fifty dollars," etc., subject to a penalty for neglect or refusal. Chief Justice Taney, referring to the

Opinion of the Court.

case of Brown v. Maryland in Almy v. State of California, 24 How. 169, 173, in which it was decided that a state stamp tax on bills of lading was void, said: "We think this case cannot be distinguished from that of Brown v. Maryland. That case was decided in 1827, and the decision has always been regarded and followed as the true construction of the clause of the Constitution now in question. The opinion of the court, delivered by Chief Justice Marshall, shows that it [the case] was carefully and fully considered by the court. And the court decided that this state law [the Mary. land law under consideration in Brown v. Maryland], was a tax on imports, and the mode of imposing it, by giving it the form of a tax on the occupation of the importer, merely varied the form in which the tax was imposed, without varying the substance."

But it is urged that a portion of the telegraph company's business is internal to the State of Alabama, and therefore taxable by the State. But that fact does not remove the difficulty. The tax affects the whole business without discrimination. There are sufficient modes in which the internal business, if not already taxed in some other way, may be subjected to taxation, without the imposition of a tax which covers the entire operations of the company.

The state court relies upon the case of Osborne v. Mobile, 16 Wall. 479, which brought up for consideration an ordinance of the city, requiring every express company, or railroad company doing business in that city, and having a business extending beyond the limits of the State, to pay an annual license of $500; if the business was confined within the limits of the State, the license fee was only $100; if confined within the city, it was $50; subject in each case to a penalty for neglect or refusal to pay the charge. This court held that the ordinance was not unconstitutional. This was in December term, 1872. In view of the course of decisions which have been made since that time, it is very certain that such an ordinance would now be regarded as repugnant to the power conferred upon Congress to regulate commerce among the several States.

Opinion of the Court.

A great number and variety of cases involving the commercial power of Congress have been brought to the attention of this court during the past fifteen years which have frequently made it necessary to reëxamine the whole subject with care; and the result has sometimes been that in order to give full and fair effect to the different clauses of the Constitution, the court has felt constrained to recur to the fundamental principles stated and illustrated with so much clearness and force by Chief Justice Marshall and other members of the court in former times, and to modify in some degree certain dicta and decisions that have occasionally been made in the intervening period. This is always done, however, with great caution, and an anxious desire to place the final conclusion reached upon the fairest and most just construction of the Constitution in all its parts.

In our opinion such a construction of the Constitution leads to the conclusion that no State has the right to lay a tax on interstate commerce in any form, whether by way of duties laid on the transportation of the subjects of that commerce, or on the receipts derived from that transportation, or on the occupation or business of carrying it on, and the reason is that such taxation is a burden on that commerce, and amounts to a regulation of it, which belongs solely to Congress. This is the result of so many recent cases that citation is hardly necessary. As a matter of convenient reference we give the following list: Case of State Freight Tax, 15 Wall. 232; Pensacola Telegraph Co. v. Western Union Telegraph Co., 96 U. S. 1; Mobile v. Kimball, 102 U. S. 691; Western Union Telegraph Co. v. Texas, 105 U. S. 460; Moran v. New Orleans, 112 U. S. 69; Gloucester Ferry Co. v. Pennsylvania, 114 U. S. 196; Brown v. Houston, 114 U. S. 622; Walling v. Michigan, 116 U. S. 446; Picard v. Pullman Southern Car Co., 117 U. S. 34; Wabash Railway Co. v. Illinois, 118 U. S. 557; Robbins v. Shelby County Taxing District, 120 U. S. 489; Philadelphia & Southern Steamship Co. v. Pennsylvania, 122 U. S. 326; Western Union Telegraph Co. v. Pendleton, 112 U. S. 347; Ratterman v. Western Union Telegraph Co., ante, 411.

We may here repeat, what we have so often said before,

Syllabus.

that this exemption of interstate and foreign commerce from state regulation does not prevent the State from taxing the property of those engaged in such commerce located within the State as the property of other citizens is taxed, nor from regulating matters of local concern which may incidentally affect commerce, such as wharfage, pilotage, and the like. We have recently had before us the question of taxing the property of a telegraph company, in the case of Western Union Telegraph Co. v. Massachusetts, 125 U. S. 530.

The result of the conclusion which we have reached is, that the judgment of the Supreme Court of Alabama must be

Reversed, and the cause remanded with instructions to reverse the judgment of the Mobile Circuit Court; and it is so ordered.

FARMERS' LOAN AND TRUST COMPANY v.

NEWMAN.

APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE WESTERN DISTRICT OF MISSOURI.

No. 253. Argued April 25, 26, 1888. -Decided May 14, 1888.

The receiver in a suit for the foreclosure of a railroad mortgage, being directed by the court to settle and adjust outstanding claims prior to the mortgage debt, and to purchase in outstanding adverse liens or titles, agreed with the holder of a debt, which constituted a paramount lien on a portion of the railroad, for the purchase of his lien and the payment of his debt out of any money coming into the receiver's hands from the part of the railroad covered by the lien, or from the sale of the receiver's certificates, or from the earnings of that portion of the road, or from the sale of it under the decree of the court; and this agreement was carried out on the part of the vendor. When it was made, a decree for a sale had already been made in the foreclosure suit; and afterwards the road was sold as an entirety, with nothing to show the price paid for the portion covered by the lien, and payment was made in mortgage bonds without any money passing. The vendor of the prior lien then intervened in the suit, asking the court to enforce his agreement with the receiver. Subsequently the court confirmed the sale, reserving to itself the power to make further orders respecting claims, rights, or interests in or liens on the property. At a subsequent term of court the

Statement of the Case.

court found that there was justly due the intervenor the sum claimed, and ordered the sale set aside unless the claim should be paid within ninety days. Held, that the intervenor was entitled to the protection of the court, but that the proper remedy was not the annulling of the sale, and confirmation, and master's deed, if the court had the power to do it, but an order for a resale of the entire property in satisfaction of the claim of the intervenor.

THE case as stated by the court was as follows:

This is an appeal from a final order setting aside a sale, made under a decree of foreclosure, of certain mortgaged railroad property, as well as the confirmation thereof, and requiring the receiver, appointed in the foreclosure proceedings, to regain possession of the property, unless the purchaser, before the expiration of a named period, paid a claim of the present appellee, for $17,750, with interest thereon at the rate of six per cent per annum from November 30, 1880.

The origin of that claim, and the circumstances under which it was asserted in this suit, are as follows:

The Lexington, Lake and Gulf Railroad Company was a Missouri corporation, with power to construct and operate a road from Lexington to the southern boundary line of that State. Having constructed the road-bed from Lexington to Butler, in Bates County, and procured ties sufficient for its line as far south as Pleasant Hill, and having also done some dredging, and being indebted to contractors for such work and materials — its liability therefor being evidenced by two notes, one held by Munroe & Co. for $10,682.74, and the other by Lawrence Dean for $2000, each dated October 12, 1871, and bearing interest at ten per cent per annum from date the company, January 16, 1872, conveyed its road, together with all its rights, privileges, and franchises, including its depotgrounds and other property, acquired and to be acquired, to Moses Chapman, in trust to secure the payment of said notes, and with authority in the trustee, upon default in paying the notes, principal and interest, on or before March 1, 1872, to sell the mortgaged property, at public auction, upon thirty days' notice of sale, for cash, and convey the same to the purchaser.