The New York Times The New York Times Washington   

Powered by: FindLaw

Cases citing this case: Supreme Court
Cases citing this case: Circuit Courts

U.S. Supreme Court


188 U.S. 82

VILLAGE OF ONTONAGON and George Ducleau, Treasurer of Said Village.
No. 96.

Argued and Submitted December 1, 1902.
Decided January 19, 1903.

This is a bill in equity to restrain the collection of certain taxes levied under the following law of the state of Michigan:

It was contended that the taxes assessed were illegal and [188 U.S. 82, 84]   void, 'because said taxes were assessed in violation of and repugnant to the general provisions of the Constitution of the United States; and especially because said taxes were assessed in violation of, and said statutes of the state of Michigan are in violation of and repugnant to, those parts of 8 of article 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 10 of said article, which provides that 'no state shall, without the consent of the Congress, lay any imposts or duties on imports or exports, except what may be absolutely necessary for executing its inspection laws."

By stipulation the bill was dismissed as to the township of Ontonagon and the township of McMillan. As to the other defendants the bill was submitted on an agreed statement of facts and the pleadings. The court sustained the assessment and dismissed the bill. This appeal was then taken under 5 of the judiciary act of 1891 [26 Stat. at L. 826, chap. 517, U. S. Comp. Stat. 1901, p. 549.]

The following is the stipulation of facts:

The other stipulation of facts referred to is as follows:

Mr. Edwin Walker for appellant. [188 U.S. 82, 90]   Mr. T. L. Chadbourne for appellees.

Mr. Justice McKenna delivered the opinion of the court:

The contention of appellant is presented in three propositions: (1) That the village of Ontonagon had no power to assess the property under its charter; (2) that the legislature could not confer such power; (3) that the property was in the course of transportation within the meaning of the commerce clause of the Constitution of the United States.

1. This proposition is unimportant. If the charter did not, the statute of 1899 did, authorize the assessment.

2. To sustain this proposition would embarrass the power of the state,- indeed, make it impotent to deal with the conditions there existing. The statute, no doubt, was enacted as a means to subject property to taxation which had no definite or enduring locality, and because of the clash or confusion of jurisdictions. In such circumstances experience, probably, demonstrated that property escaped taxation or was difficult to tax, or that controversies arose. It was competent for the legislature to defeat either result by giving moving property a definite situs as of some day. Nor is that power impugned by the principle that protection is the consideration of taxation. There is protection during the transit through the municipalities of the state and at its termination in the state,- protection accommodated to the kind of property and as efficient as links are to the continuity of a chain.

There is nothing in the cases cited by appellant which sustains the opposite view. Trigg v. Glasgow, 2 Bush, 594, seems to have turned upon the interpretation of a state statute. Under a statute of the state the town of Glasgow was authorized to subscribe to the stock of a railroad, and by the charter of [188 U.S. 82, 91]   the town it was the duty of the trustees to 'levy an ad valorem tax on the property, both real and personal, within said town that is listed for state purposes, including the amount given in under the equalization law, sufficient,' etc.

By an amendatory act it was provided that 'all the taxable property in said town on the 10th of April shall be subject to taxation for the payment of said subscription;' and it also provided that the taxable property in said town which may have been removed without its limits between the 1st of January and the 10th of April, for the purpose of evading the tax, should be listed for taxation.

The court held, as we understand its opinion, that property to be subject to taxation under the statute must be in the town. If it had been taken out to avoid taxation, it was subject to taxation when brought back.

St. Louis v. Wiggins Ferry Co. 11 Wall. 423, 20 L. ed. 192, was also an interpretation of the state statute. The city of St. Louis had power to tax all property within the city. It was held under the circumstances of the case that the ferryboats of the ferry company had their situs in the state of Illinois. It was said:

In Wells v. Weston, 22 Mo. 384, 66 Am. Dec. 627, and Re Assessments of Lands, 60 N. Y. 398, the property taxed was real estate.

The purpose of the statute of Michigan is to assess the forest products of the state,-things which are a part of the general [188 U.S. 82, 92]   property of the state. Those 'in transit' are assessable according to their destination. If that be 'some place within the state,' the property is to be 'assessed in such place;' if that be 'some place without the state;' the property is to be assessed at the place in the state 'nearest to the last boom or sorting gap of the same in or bordering on the state in which said property will naturally be the last floated during the transit thereof.'

But it is also provided that 'in case the transit of any such property is to be other than through any watercourse in or bordering on this state, then such assessment shall be made at the point where such property will naturally leave the state in the ordinary course of its transit.'

We may assume for the present that the property was in transit and to some place without the state. Was the 'transit to be other than through any watercourse in or bordering on' the state? The appellant contends that it was, because it was to be by water and by rail; in other words, the transit was not to be exclusively 'through any watercourse.' But to give that meaning to the statute, words must be added to it. It must be made to read other than exclusively or wholly or entirely 'through any watercourse.' One of these words must be added to make the sense contended for. The word 'other' is used to express a difference,-the difference being between a transit which is and one which is not through any (the word is significant) watercourse.

The transit in controversy was to be through (by means of) the Ontonagon river, certainly a watercourse, and by the Chicago, Milwaukee, & St. Paul Railway, and therefore the property was properly assessed by the village of Ontonagon, that being the place in the state nearest to the last boom or sorting gap of the stream in or bordering on the state in which said property naturally would be and was intended to be last floated during the transit thereof.

3. Was the transit interstate commerce? We agree with counsel that it is unimportant in determining an answer whether the transit 'was by water or by railroad, or both water and railroad.' But no purpose to burden interstate commerce is [188 U.S. 82, 93]   evident in the statute, and the power of the state to tax everything which is part of what has been called 'the general property,' or 'the general mass of property,' of the state, is undoubted. But things which have been brought to a state may not have reached that condition. Things intended to be sent out of a state, but which have not left it, may not have ceased to be in that condition. The exact moment in either case may not be easy to point out,-may be confused by circumstances,-and the confident assignment of the property as subject or not subject to taxation is not easily made. Fortunately we are not without illustrations in prior cases, and in Kelley v. Rhoads, 188 U.S. 1 , ante, 259, 23 Sup. Ct. Rep. 259, decided concurrently with this, we express the principles of decision.

In Brown v. Houston, 114 U.S. 622 , 29 L. ed. 257, 5 Sup. Ct. Rep. 1091, the property (coal in barges) had reached the state, but was yet in the boats in which it had been brought into the state. While on the barges it was offered for sale. It was held it had become part of the property of the state and was subject to taxation. Pittsburg & S. Coal Co. v. Bates, 156 U.S. 577 , 39 L. ed. 538, 5 Inters. Com. Rep. 30, 15 Sup. Ct. Rep. 415, had facts assimilating it to the case at bar, and it was affirmed on the authority of Brown v. Houston. As in the latter case, the tax was on coal in barges shipped from the mines in Pennsylvania, and consigned to New Orleans, Louisiana. The coal, however, had not reached, as the coal in Brown v. Houston, its exact destination. To accommodate the exigencies of the owner's business, the barges, 'about one hundred in number, were stopped and moored in the Mississippi river, at a convenient mooring place about 9 miles above the port of Baton Rouge.' The coal was held subject to taxation.

In Coe v. Errol, 116 U.S. 517 , 29 L. ed. 715, 6 Sup. Ct. Rep. 475, logs which had been cut in the state of Maine, and others which had been cut in the state of New Hampshire, were floated in course of transit down a stream in New Hampshire to the two of Errol, in the latter state; thence to be floated down the Androscoggin river to the state of Maine. The town of Errol assessed upon the property a county, town, school, and highway tax. The tax was sustained by the supreme court of the state of New Hampshire as to the logs cut in that state, and abated as to [188 U.S. 82, 94]   those cut in Maine. The judgment was affirmed by this court.

Mr. Justice Bradley, delivering the opinion of the court, expressed the contentions of the parties in two questions:

It is obvious that like questions could be framed upon the facts of the case at bar to express the propositions presented. Mr. Justice Bradley's observations, therefore, become pertinent and decisive. He discussed every consideration. He clearly exhibited the extent of the power of the state over the property within it, whether in motion or at rest, though destined for points out of it. He said:

And further:

These cases are referred to in Kelley v. Rhoads 188 U.S. 1 , ante, 259, 23 Sup. Ct. Rep. 259, as defining the taxing power of a state. And their substance is declared to be 'that while the property is at rest for an indef- [188 U.S. 82, 96]   inite time awaiting transportation, or awaiting a sale at its place of destination, or at an intermediate point, it is subject to taxation. But if it be actually in transit to another state, it becomes the subject of interstate commerce, and is exempt from local assessment.'

In further specialization of these propositions we may say that the cases establish that there may be an interior movement of property which does not constitute interstate commerce, though property come from or be destined to another state. In the one case, though it have not reached its place of disembarkation or delivery it may be taxed. 114 U.S. 622 , 29 L. ed. 257, 5 Sup. Ct. Rep. 1091. In the other case, until it be shipped or started on its final journey it may be taxed. 116 U.S. 517 , 29 L. ed. 715, 6 Sup. Ct. Rep. 475.

The case at bar falls within this principle. It is alleged in the bill that during the winters of 1895 and 1896 the plaintiff cut, hauled, and put into the Ontonagon river and its tributaries 180,000,000 feet of logs for the purpose of saving, protecting, and preserving the same; that said lumber was more than plaintiff could utilize in any one season at its mills, and it was not, therefore, the intention at the opening of the streams to make a clean drive of the same, but only to take down the streams the following spring and summer, and each succeeding driving season, the number complainant could utilize; that complainant was, at the time the logs were cut and put in the streams, an owner of lumber mills situated at or near the corporate limits of the village of Ontonagon; that said mills were destroyed by fire in the fall of 1896, and were not rebuilt, and that after the destruction thereof plaintiff destined the logs for its mills at Green Bay, Wisconsin, but that it was not its intention to take to said mills during any one summer any more than sufficient for its purposes, and not to exceed generally 20,000,000 feet,- according to the stipulation 40,000,000 feet. The route of the logs from the forests to the mills is described as follows:

The number of the logs shipped by rail from Ontonagon to Green Bay before the levy of the tax complained of is given in the stipulation of facts, and it is stipulated that 'about 500,000 feet of complainant's said logs in said river have been (in said river of slough) constantly within said village since 1898, for the purpose of shipment by rail to the destination as aforesaid.'

The appellant's contention is that the movement of the logs commenced at the opening of navigation of the river (presumably in the spring or summer of 1896 and 1897), and from that date were in continuous transit as subjects of interstate commerce, and exempt from taxation. The contention is more extreme than that made and rejected in Coe v. Errol.

Decree affirmed.

Copyright © 2003 FindLaw