Page images
PDF
EPUB

chise to exist and the franchise to occupy the
streets, which is measured in part by the gross
receipts, and therefore such franchise tax is
not a regulation of interstate commerce, and
the act under which it is levied is not in con-
flict with the clause of the Constitution of the
United States giving to Congress power to
regulate commerce among the several states.
[Ed. Note.-For other cases, see Commerce,
Dec. Dig. § 70.*]

Pennsylvania; that it operates the track located on the Delaware bridge under a lease, paying rent therefor; and that the tracks from the western end of the Delaware bridge to Centre Square are operated by the prosecutor under an agreement with the Easton Transit Company, under which the prosecutor pays an annual sum to the latter comCertiorari prosecuted by the Phillipsburg pany. This agreement contains a clause reHorse Car Railroad Company to review an quiring the prosecutor to honor transfers isHorse Car Railroad Company to review an sued by the Easton Company, and an agreeassessment of franchise taxes by the statement by the Easton Company to accept over

board of assessors. Tax affirmed.

Argued November term, 1911, before GARRISON and TRENCHARD, JJ.

W. H. Walters, Gilbert Collins, and Henry J. Steele, for prosecutor. Josiah Stryker and Edmund Wilson, Atty. Gen., for State Board of Assessors. J. I. B. Reiley, for Town of Phillipsburg. S. C. Smith, for Township of Pohatcong.

a portion of its line transfers issued by the prosecutor. These transfers in no way affect the gross receipts, as the transfers honored by each company are considered as offsetting those issued by it. It also appears that the prosecutor is a corporation of this state.

By stipulation it appears in effect that 70 per cent. of the cash fares received by the prosecutor were received for the carriage of passengers either from New Jersey to Pennsylvania or from Pennsylvania to New Jersey, and that 30 per cent. of such cash fares were received for the carriage of passengers wholly within the state of New Jersey.

[1] The sole question raised by the reasons for reversal is whether prosecutor can be required to pay a franchise tax of 4 per cent. on such proportion of its gross receipts as the length its line on the streets, highways, etc., in this state bears to the length of its whole line, or whether, before such proportion is taken, the amount of gross receipts received from interstate traffic must first be deducted from the total of gross receipts. Sections 4 and 5 of the act of 1906 (P. L. pp. 645, 646), under which the tax was assessed, are as follows:

TRENCHARD, J. This writ of certiorari brings up for review the assessment of franchise taxes in the year 1910 on the prosecutor, the Phillipsburg Horse Car Railroad Company, under chapter 290 of the Laws of 1906. P. L. p. 644. The return shows that, pursuant to section 4 of that act, the prosecutor sent to the state board of assessors a statement showing (1) the gross receipts from its business in this state for the year ending December 31, 1909; (2) the entire mileage of prosecutor's railroad in this state; and-(3) the mileage of such road upon the streets, highways, roads, lanes, or other public places in this state. It further shows that the tax in question was determined as required by section 5 of the act by calculating 4 per cent. upon such proportion of its gross receipts as the length of the line upon the streets, highways, roads, lanes, and other public places in this state bears to the length of the whole line. It appears that the prosecutor in its report to the state board attempted to apportion the receipts between intrastate and interstate traffic, and insisted that the franchise tax in question should be ascertained by taking 4 per centum of the receipts derived from intrastate traffic only. It further appears that the only road owned by the prosecutor is located in the township of Pohatcong and the town of Phillipsburg in this state; that the two divisions of the line meet at Union Square in Phillipsburg, nearing the gross receipts on the whole line, tothe Delaware bridge; that cars from both divisions cross the Delaware bridge on tracks owned by the bridge company and then proceed on tracks owned by the Easton Transit Company to Centre Square in Easton, in the state of Pennsylvania; that the distance from the easterly end of the 'Delaware bridge to Centre Square is forty-nine hundredths of a mile.

It also appears that the prosecutor owns no franchises of any kind in the state of

"Sec. 4. Every street railroad corporation subject to taxation under the provisions of this act, shall, on or before the first Tuesday in May in each year, return to the state board of assessors a statement showing the gross receipts from its business in this state for the year ending December 31st, next preceding, and any such corporation having part of its road in this state and part thereof in another state or states, or having part of its road on private property and part on any public street, highway, road, lane or other public place shall make a report show

gether with a statement of the length of the whole line and the length of the line in this state upon any street, highway, road, lane or other public place, and the franchise tax of such corporation for the business done in this state shall be levied by the state board of assessors upon such proportion of its gross receipts as the length of the line in this state upon any street, highway, road, lane or other public place bears to the length of the whole line," etc.

N. J.)

PHILLIPSBURG HORSE CAR R. CO. v. STATE BOARD OF ASSESSORS 1123

"Sec. 5. An annual franchise tax upon the | from the business of the street railroad comannual gross receipts of every street rail-pany in the state of New Jersey, and containroad corporation or upon such proportion of ed no provision for apportionment as is consuch gross receipts as the length of its line tained in section 5 of the act of 1906. The in this state upon any street, highway, road, act of 1900 also provided that the taxes imlane or other public place, bears to the posed thereunder should be in lieu of all length of its whole line, shall be assessed other taxes. Prior to the enactment of the by the state board of assessors as follows: act of 1900, street railroad corporations were For the year nineteen hundred and six, two taxed under the general provisions of secand one-half per centum upon such gross re- tion 4 of chapter 59 of the Laws of 1884 (P. ceipts; for the year nineteen hundred and L. p. 235), which provided "that all other corseven, three per centum; for the year nine- porations incorporated under the laws of this teen hundred and eight, three and one-half per state, and not hereinbefore provided for, shall centum; for the year nineteen hundred and pay a yearly license fee or tax of one-tenth of nine, four per centum; for the year nine- one per cent. on the amount of the capital teen hundred and ten, four and one-half per stock of such corporations." That was a tax centum; for the year nineteen hundred and upon the franchise of the corporation to exist eleven, and annually thereafter, five per as a corporation. Marsden Co. v. Assessors, centum." 61 N. J. Law, 461, 39 Atl. 638. It appears, therefore, that the tax measured by gross receipts, which was first imposed on street railway companies under the act of 1900, and continued by the act of 1906, was imposed in lieu of the tax upon the franchise to exist as a corporation assessed under the act of 1884.

These sections plainly require the levying of the tax in the manner pursued by the state board. They require that the franchise tax shall be levied upon such proportion of the gross receipts as the length of the line in this state upon any street, highway, road, lane, or other public place bears to the length of the whole line.

[2] But the prosecutor contends that the act of 1906, as applied to the prosecutor, is a regulation of interstate commerce in conflict with the exclusive powers of Congress under the Constitution of the United States. Of course, the determination of this question depends upon the character of the tax imposed, and upon what such tax is levied.

What, then, is the character of the tax in question, and upon what is it levied? This question must be considered in the light of the following matters:

(a) The act of 1906, as will be seen by its title, applies only to street railroad corporations using or occupying public streets, etc., in this state. It contains a complete scheme for taxing all the property and franchises of such corporations. Section 2 provides that all property of such companies, whether located upon a street or highway or not, shall be assessed and taxed at local rates as now provided by law. This section evidently applies only to tangible property. Sections 4 and 5 provide, as above stated, for an annual franchise tax upon the annual gross receipts or upon such proportion of such gross receipts as the length of line upon the streets, etc., in this state bears to the length of the whole line. This tax is called a franchise tax wherever referred to in the act. Section 8 provides that the franchise tax, and the tax on real and personal property shall be in lieu of all other taxes.

(b) Prior to the passage of the act of 1906, such street railroad corporations were taxed under chapter 195 of the Laws of 1900 (P. L. p. 502). That act, so far as street railroads were concerned, provided for substantially the same system of taxation as is provided for by the act of 1906, except that the earlier act took the entire gross receipts

(c) The act of 1906 applies only to corporations which have a franchise to occupy the public streets, and the act of 1900 is similar to it in this respect. The fact that the tax is calculated upon the proportion of gross receipts which the mileage of the tracks of the corporation on public streets, etc., in this state bears to its entire mileage, thus excluding mileage on private rights of way, as well as mileage out of the state, shows that it was intended by the Legislature to consider in providing for this tax the value of the franchise of the company to occupy the streets, etc., with its tracks, and to impose a tax upon such franchise which should bear a relation to its value. This is indicated by section 7, which provides that money payable by a street railroad company to a taxing district, pursuant to any contract, "shall be paid notwithstanding this act," but that the amounts so paid shall be deducted from the tax assessed under the act and apportioned to such district under its provisions. Moneys paid under such contracts are usually agreed to be paid in consideration of the granting by the municipality of the franchise to occupy its streets. Such provision is tantamount to an expression that the privilege upon which this tax is levied and the privilege for which such moneys are paid under such contracts are to some extent at least similar.

(d) Section 6 of the act provides for an apportionment of the franchise taxes in proportion to the value of the tangible property of any such corporation located in or upon any public street, etc., and for the collection of such taxes by such taxing districts. It provides that this tax so assessed and certified shall be a first lien on the property and franchises of such corporations in such taxing district until paid, and that the proceed

ings available for the collection of other tax-| concurrent acts of the Legislatures of New es shall be "applicable to the collection of Jersey and Pennsylvania for the purpose of the franchise tax hereby authorized."

of interstate commerce into three general classes: (1) Those in which the state law has made discriminations adversely to other states. (2) Those in which the impost was upon the subject of transportation. (3) Those in which the state tax was in effect a tax upon the business engaged in interstate commerce, because imposed upon its agencies.

building and operating a toll bridge over the Since the tax in question was imposed in Delaware river between those two states. lieu of the prior tax under the act of 1884 In that case Mr. Justice Garrison classifies on the franchise to exist as a corporation, the cases in which state legislation has been and since it is imposed only on corporations set aside as an unwarrantable regulation that have a franchise to occupy the public streets, and, further, since its amount is made to depend upon the proceeds from the use of such streets and thus bears a relation to the value of the franchise, the conclusion is irresistible that this tax is levied on both the franchise to exist and the franchise to occupy the streets. It is the result of an effort by the Legislature to measure the value of the franchises of the corporation and to tax such value by a method fair at once to the corporation and to the state. The tangible property is taxed at a fair valuation without regard to the franchises and the tax on the franchises is measured by the gross receipts and the proportion of the road occupying public streets, etc. We hold, therefore, that the tax in question is not levied on the gross receipts of the corporation nor on the business of the corporation, but is merely an excise tax on the franchises of the corporation, viz., the franchise to exist and the franchise to occupy the streets, which is measured in part by the gross receipts. In Newark v. State Board of Taxation, 67 N. J. Law, 246, 51 Atl. 67, the Court of Errors held that, though the franchise of a street railroad company to maintain and occupy its road over the public highways was property and taxable as such, yet under legislation in force at that time, by which was undoubtedly meant the act of 1900, the right to tax it had been reserved by the state to itself, through its state board of assessors, and not delegated to the several municipalities through which the company's road passes. In North Jersey Street Railway Company v. Jersey City, 74 N. J. Law, 761, 67 Atl. 33, the Court of Errors, in speaking of the tax assessed under the act of 1900, said: "We agree with the Supreme Court that this tax on gross receipts is not a property tax, but a license fee imposed as a condition upon which the enjoyment of special privileges in the streets is made to depend." Since the tax levied upon the prosecutor is a tax upon the prosecutor's franchises, and not upon its business, nor upon its receipts therefrom, it in no way conflicts with the clause of the United States Constitution empowering Congress to regulate commerce among the states, and cannot be said to be in any sense a tax upon interstate commerce.

It was held by this court in Lumberville Bridge Company v. Assessors, 55 N. J. Law, 529, 26 Atl. 711, 25 L. R. A. 134, that a tax amounting to one-tenth of 1 per cent. on the entire capital stock of the company imposed upon the bridge company was not void as an interference with interstate commerce, al

Its

In the opinion a number of cases are cited in which state legislation has been sustained by the United States Supreme Court, although incidentally affecting interstate commerce. Among others are Maine v. Grand Trunk Railway Company, 142 U. S. 217, 12 Sup. Ct. 121, 163, 35 L. Ed. 994, and Ficklen v. Shelby County, 145 U. S. 1, 12 Sup. Ct. 810, 36 L. Ed. 601. In Tidewater Pipe Co. v. Assessors, 57 N. J. Law, 516, 31 Atl. 220, 27 L. R. A. 684, a question very similar to the question involved in the case at bar was decided by this court. The Tidewater Pipe Company, for the purpose of taxation, was considered a corporation within the meaning of our corporation tax act. entire business consisted of the transportation of oil from points without to points within New Jersey, and of matters incidental to such transportation, and was admitted to be engaged solely in interstate commerce. tax was levied on the corporation under section 4 of the act of 1884 (P. L. p. 234), and was designated by the statute as "an annual tax for the use of the state by way of a license for its corporate franchises," and consisted of eight-tenths of 1 per centum of the gross amount of its receipts from the transportation of oil in this state during the year preceding the levy. The gross amount was fixed by the statute as such proportion of its gross receipts for transportation of oil over its whole line as the length of its line in this state hears to the length of its whole line. It was insisted by the prosecutor that the imposition of the tax was an unconstitutional interference with interstate commerce. On this question the court said: "The question thus raised is one to be decided according to the views of the Supreme Court of the United States. Those views have been recently expressed in a case which appears to be on all fours with the present case. I refer to Maine v. Grand Trunk Railway Co., 142 U. S. 217 [12 Sup. Ct. 121, 163, 35 L. Ed. 994], which is so apposite for present purposes as to preclude the need or the utility of further investigation." This case was subsequently affirmed by the Court of Errors on the opinion in the court below. 59 N. J. Law, 269,

N. J.) PHILLIPSBURG HORSE CAR R. CO. v. STATE BOARD OF ASSESSORS 1125

tion." "

In Maine v. Grand Trunk Railway Co., | a line or system extending beyond the state, 142 U. S. 217, 12 Sup. Ct. 121, 163, 35 the tax should be equal to the proportion of L. Ed. 994, an act of the Legislature of the gross receipts in the state, to be ascertainthe state of Maine provided that the build- ed in the manner provided by the statute, did ings of every railroad corporation, whether not conflict with the Constitution of the within or without the located right of way, United States. It was held that the referand its lands and fixtures outside of the ence by the statute to the transportation relocated right of way, should be subject to ceipts and to a certain percentage of the taxation by the several cities and towns in same in determining the amount of the exwhich such buildings, lands, etc., were sit-cise tax was simply to ascertain the value uated, as other property therein was taxed, of the business done by the corporation, and and further provided that every corporation thus obtain a guide to a reasonable concluoperating any railroad in that state should sion as to the amount of the excise tax which pay for the use of the state an annual ex- should be levied. In this respect the tax cise tax for the privilege of exercising its was unlike that levied in Philadelphia Steamfranchise in that state, which with the tax ship Company v. Pennsylvania, 122 U. S. above mentioned should be in lieu of all 326 [7 Sup. Ct. 1118, 30 L. Ed. 1200], where taxes upon such railroad, its property and the specific gross receipts for transportastock. The amount of the franchise tax was tion were taxed as such, taxed 'not only beascertained by taking the gross transporta- cause they are money, or its value, but betion receipts for the year next preceding cause they were received for transportathe levy of the tax, and dividing such transIn Galveston, etc., Railroad Co. v. portation receipts by the number of miles Texas, 210 U. S. 224, 28 Sup. Ct. 638, 52 L. of the railroad operated. In the case of Ed. 1031, the decision in Philadelphia & railroads lying partly within and partly with-Southern Mail Steamship Company v. Pennout the state, or operated as a part of a sylvania, 122 U. S. 326, 7 Sup. Ct. 1118, 30 line or system extending beyond the state,. Ed. 1200, is followed, and the Maine case the entire gross receipts were divided by is distinguished. the entire number of miles of such line or system, and then multiplied by the number of miles of railroad operated within the state. It will be seen that this method was substantially the same as that followed in substantially the same as that followed in the statute now under consideration in the case at bar. The Grand Trunk Railway Company, the defendant in the case above mentioned, was a corporation created under the laws of Canada. Its railroad was constructed partly within and partly without the state of Maine. The opinion of the court delivered by Mr. Justice Field held that the tax in question was an excise tax upon the defendant corporation for the privilege of exercising its franchises within the state of Maine.

As has been stated, this case has been cited by this court in the cases of Lumberville Bridge Company v. Assessors, and Tidewater Pipe Company v. Assessors, and by the Supreme Court of the United States in many cases, among which are Ficklen v. Shelby County, 145 U. S. 23, 12 Sup. Ct. 810, 36 L. Ed. 601, and Galveston, etc., Railroad Company v. Texas, 210 U. S. 224, 28 Sup. Ct. 638, 52 L. Ed. 1031. In Ficklen v. Shelby County, 145 U. S. 1, 12 Sup. Ct. 810, 36 L. Ed. 601, Chief Justice Fuller said: "Again, in Maine v. Grand Trunk Railway Co., 142 U. S. 217 [12 Sup. Ct. 121, 163, 35 L. Ed. 994], we decided that a state statute which required every corporation, person, or association operating a railroad within the state to pay an annual tax for the privilege of exercising its franchise therein, to be determined by the amount of its gross transportation receipts, and further provided that when applied to a railroad lying partly within and partly without a state, or to one operated as a part of

The distinction drawn in this case rests

upon the character of the tax imposed. In

a review of the Maine case in the case last

cited, Mr. Justice Holmes, speaking of the cited, Mr. Justice Holmes, speaking of the Maine case, uses the following language: "In Maine v. Grand Trunk Ry. Co., 142 U. S. 217 [12 Sup. Ct. 121, 163, 35 L. Ed. 994], an annual excise tax for the privilege of exercising its franchise' was levied upon every one operating a railroad in the state, fixed by percentages, varying up to a certain limit, upon the average gross receipts per mile multiplied by the number of miles within the state when the road extended outside. This seems at first sight like a reaction from the Philadelphia & Southern Mail Steamship Company Case. But it may not have been. The estimated gross receipts per mile may be said to have been made a measure of the value of the property per mile. That the effort of the state was to reach that value, and not to fasten on the receipts from transportation as such, was shown by the fact that the scheme of the statute was to establish a system. The buildings of the railroad and its lands and fixtures outside of its right of way were to be taxed locally, as other property was taxed, and this excise with the local tax was to be in lieu of all taxes. The language shows that the local tax was not expected to include the additional value gained by the property being part of a going concern. That idea came in later. The excise was an attempt to reach that additional value. The two taxes together fairly may be called a commutation tax. See Ficklen v. Taxing District of Shelby County, 145 U. S. 1, 23 [12 Sup. Ct. 810, 36 L. Ed. 601]; Postal Telegraph Cable Co.

v. Adams, 155 U. S. 688, 697 [15 Sup. Ct. 268, | their marriage, which took place on April 30, 360, 39 L. Ed. 311]; McHenry v. Alford, 168 1885. For many years they and John E. U. S. 651, 670, 671 [18 Sup. Ct. 242, 42 L. Flannery, the co-respondent, boarded with Ed. 614]." Mrs. Mary Fisher, the petitioner's sister, in Plainfield. The defendant is charged with having committed adultery with Flannery on May 15 and June 25, 1909. Flannery applied under the statute to be admitted as a defendant to the suit. He filed an answer in which he denied the charge of adultery made against him. He appeared at the final hearing by counsel who were heard on his behalf. I do not find it necessary to decide whether the charge that the defendants committed adultery on May 15th is true or not.

We are of opinion that the provisions of the act of 1906 now under consideration bring the case at bar within the ruling of the United States Supreme Court in the case of Maine v. Grand Trunk Railway Company, supra. It is apparent from the provisions of the act that the tax in question is levied on the franchises of the corporation, and that the reference to the gross receipts is made for the purpose of estimating the value of such franchises, that the value of a franchise to occupy the public streets rests largely upon the extent to which such franchise is used, and that the gross receipts are an index to this user. Such franchise tax, therefore, is not a regulation of interstate commerce, and the act under which it is levied is not in conflict with the clause of the Constitution of the United States giving to Congress power to regulate commerce among the

several states.

The tax under review will be affirmed, with costs.

CLARK v. CLARK et al.

(Court of Errors and Appeals of New Jersey. March 6, 1911.)

1. DIVORCE (§ 49*) - ADULTERY-CONDONA

TION.

Divorce will not be granted for adultery, where, after commission of the offense, the offending wife is received by her husband, who lives with her for over a month.

[Ed. Note. For other cases, see Divorce, Cent. Dig. §§ 171-179; Dec. Dig. § 49.*] 2. DIVORCE (§ 129*)-ADULTERY-SUFFICIENCY OF EVIDENCE.

Evidence of adultery held sufficient to warrant a decree for divorce.

[Ed. Note. For other cases, see Divorce, Dec. Dig. § 129.*]

3. DIVORCE (§ 189*)-COSTS - LIABILITY OF Co-RESPONDENT.

Where a co-respondent in a divorce suit brought for adultery causes himself to be made a party, and the evidence establishes his guilt, he is liable for all the husband's costs and counsel fees under a statute providing that any one charged as particeps criminis shall be made a party upon application, subject to such terms as the court may prescribe.

[Ed. Note.-For other cases, see Divorce, Cent. Dig. § 577; Dec. Dig. § 189.*]

Appeal from Court of Chancery, Howell, Vice Chancellor.

Suit by George W. Clark against Maggie A. Clark and another for divorce. From a decree granting the divorce, defendants appeal. Affirmed.

[1] "If adultery was committed at that time, it was subsequently condoned, and whatever cause of action the petitioner is entitled to arising out of the circumstances which are in evidence as to the actions of the defendants on that day is lost because the petitioner received his wife again, and continued to live with her until June 25th of the same year. Yet I find that the events which took place on that occasion, while they are not sufficient to found a decree upon, are useful for the purpose of illustrating the character and the inclination of the defendant Mrs. Clark to commit the act which is really the substance of this action.

June 25, 1909, Mrs. Clark and Flannery com[2] "The real charge, therefore, is that on mitted adultery in Flannery's bedroom in Mrs. Fisher's house. This charge I think is sustained by the evidence. The event happened early in the morning. The petitioner says that he came downstairs rather early to go to work, as he was going out of town; that he asked his sister to put up his lunch for him, and, after breakfast, mistrusting his wife, he went quietly upstairs, and looked into Flannery's room; that he saw Mrs. Clark there, that Mr. Flannery had only his flannel shirt; that he had his arm around her neck, and their mouths and their stomachs were close together; that he immediately upbraided them, and that Flannery turned sideways, they both dropped their hands, and, as they did so, his wife's clothing dropped toward the floor. This event happened on Friday. On the following Sunday Mrs. Clark went home to her mother. The petitioner has refused all communication with

her since.

"On the following Sunday the petitioner had a conversation with Flannery, in which Flannery told him that he had done him (the petitioner) great wrong, that he had caught him dead in the act, and desired to know if money would straighten it out, to which Clark replied that nothing would straighten

The following is the opinion of Howell, V. it out. These facts are corroborated by Mr. C., in the Court of Chancery:

"The parties to this controversy are residents of New Jersey, and have been since

Bodine, Mrs. Bodine, Mr. Oliver, and Mrs. Fisher. Mr. Bodine saw Mr. Clark go upstairs and heard him upbraiding Mrs. Clark

« ՆախորդըՇարունակել »