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ment by the companies may be required by that State as a condition precedent to doing business in that State, but such payments partake more of the nature of a license fee than of a tax.

As regards a domestic corporation, a State may tax not only its property, and its franchise (valuing that franchise by net or gross receipts) but also may tax, as property, privileges or rights which it may have granted, as, for example, the use of the public streets. The fact that, at the time of the granting of this right or privilege, payment was made therefor by the company, either in the form of a lump sum or a continuing annual amount, does not exempt that right from taxation according to its pecuniary value, any more than does the purchase of a piece of land from the State and payment therefor exempt it from future taxation as property.


545. Taxation of Good-Will

That a franchise may be taxed as a piece of property, and that, in estimating the value of this property, the value of the goodwill of the company may be included, is clearly established in Adams Express Co. v. Ohio.65

64 People v. Roberts, 154 N. Y. 101; 159 N. Y. 70.

65 166 U. S. 185; 17 Sup. Ct. Rep. 604; 41 L. ed. 965.

In the complex civilization of to-day a large portion of the wealth of a community consists in intangible property, and there is nothing in the nature of things or in the limitations of the federal Constitution which restrains a State from taxing at its real value such intangible property. . . . It matters not in what this intangible property consists, whether privileges, corporate franchises, contracts, or obligations. It is enough that it is property which, though intangible, exists, which has value, produces income, and passes current in the markets of the world. To ignore this intangible property, or to hold that it is not subject to taxation at its accepted value, is to eliminate from the reach of the taxing power a large portion of the wealth of the country."

In State Railroad Tax Cases (92 U. S. 575, 603; 23 L. ed. 663, 669), is this language by Mr. Justice Miller, speaking for the court:


That the franchise, capital stock, business, and profits of all corporations are liable to taxation in the place where they do business, and by the State which creates them, admits of no dispute at this day. Nothing can be more certain in legal decisions,' says this court in Society for Savings v. Coite (6) Wall. 607; 18 L. ed. 903), than that the privileges and franchises of a private


In New York ex rel. Metropolitan Street Railway Co. v. Tax Commissioners it was held that a tax levied specially upon the franchise of the company as a piece of property of value was not a double tax, because a lump sum had been paid at the time the franchise was granted, and an annual payment of a fixed amount or fixed percentage of earnings, such payments not having been specifically declared to be in lieu of taxes. The fact that for many years the State had not attempted to levy such a special franchise tax was held not to be an estoppel upon the State.

§ 546. Tax Exemptions and the Obligation of Contracts. This subject has been considered in the preceding chapter.

§ 547. Double Taxation.

We have seen that the right of a State to tax depends upon its jurisdiction over the object taxed, and that this jurisdiction is obtained by either actual or constructive presence of the object within the State's territorial limits. This constructive presence applies to personal property and depends upon the principle mobilia sequuntur personam. As to personal property it is thus possible that it may actually be in one State and be there taxed, and constructively in another State and there also taxed. The fact that one State has exercised its jurisdiction with reference to a matter, whether of taxation or otherwise, clearly can impose no obligation upon another State not to exercise such jurisdiction as it may have. This the Supreme Court of the United States has repeatedly recognized. In Coe v. Errol the court say: "If the owner of personal property resides within a State which taxes him for that property as part of his general estate attached to his person, this action of the latter State does not in the least

corporation, and all trades and avocations by which the citizens acquire a livelihood, may be taxed by a state for the support of a state government.' State Freight Tax Case (Philadelphia & R. R. Co. v. Pennsylvania), 15 Wall. 232; 21 L. ed. 146; State Tax on Gross Receipts (Philadelphia & R. R. Co. v. Pennsylvania), 15 Wall. 284; 21 L. ed. 164,"

66 199 U. S. 1; 25 Sup. Ct. Rep. 705; 50 L. ed. 65.
67 116 U. S. 517; 6 Sup. Ct. Rep. 475; 29 L. ed. 715.

affect the right of the State in which the property is situated to tax it also." And in Blackstone v. Millers the court say: "No doubt this power on the part of two States to tax on different and more or less inconsistent principles leads to some hardship. It may be regretted, also, that one and the same State should be seen taxing on the one hand according to the fact of power, and on the other, at the same time, according to the fiction that, in successions after death, mobilia sequuntur personam and domicile governs the whole. But these inconsistencies infringe no rule of constitutional law."


The double taxation of a piece of property by the same State is, however, forbidden not only by the several constitutions of most of the States, but by the Fourteenth Amendment.

68 188 U. S. 189; 23 Sup. Ct. Rep. 277; 47 L. ed. 439.

69 Citing Coe v. Errol, 116 U. S. 517; 6 Sup. Ct. Rep. 475; 29 L. ed. 715; Knowlton v. Moore, 178 U. S. 41; 20 Sup. Ct. Rep. 747; 44 L. ed. 969. See also Kidd v, Alabama, 188 U. S. 730; 23 Sup. Ct. Rep. 401; 47 L. ed. 669.




548. Constitutional Provisions.

The Constitution provides that there shall be a Supreme Court of the United States, and such inferior courts as Congress may from time to time ordain and establish. It is also provided that "the judges both of the supreme and inferior courts shall hold their offices during good behavior, and shall, at stated times, receive for their services a compensation which shall not be diminished during their continuance in office;" and that the judges of the Supreme Court shall be nominated by the President and appointed by and with the advice and consent of the Senate. All the other federal justices are similarly appointed, but it is within the power of Congress to vest their appointment "in the President. alone, in the courts of law, or in the heads of departments." 2


With the exception then of the tenure of office,3 and the constitutional provision regarding appointment of the justices of the Supreme Court, the form of organization, the number of justices, etc., the federal courts, including the Supreme Court, are wholly within the control of Congress.

The practice and procedure to be followed in these courts is also within the control of Congress except as to certain mandatory provisions with reference to jury trial, second jeopardy, speedy and public trial, etc., contained principally in the first eight

1 Art. III, Sec. I.

2 Art. II, Sec. II, Cl. 2.

3 The exception does not apply to the territorial courts or the Courts of Private Land Claims, and such quasi-judicial bodies as the Interstate Commerce Commission as these are not considered, properly speaking, as parts of the federal judiciary but rather as agents of Congress. Clinton v. Englebrecht, 13 Wall. 434; 20 L. ed. 659. See section 161. The Court of Claims, however, and the courts of the District of Columbia are federal and not congressional courts.

Amendments to the Constitution.

These constitutional rights, immunities, and privileges guaranteed to the individual are considered elsewhere.

§ 549. Inferior Federal Courts.

By the original Judiciary Act of 1789 provision was made for inferior federal courts to be known as District and Circuit Courts. The territory of the Union was divided into districts composed of a State or portions of a State, for each of which a district and a Circuit Court was provided; and these districts were grouped into circuits to each of which a Justice of the Supreme Court was assigned as Circuit Judge. With the execption of minor changes, as for example, the creation of new districts and circuits and making provision for Circuit Judges in addition to the Justices of the Supreme Court, the system thus established remained undisturbed for over one hundred years. In 1891, Congress created a new class of federal tribunals known as the Circuit Courts of Appeals, one of these being assigned to each of the existing nine circuits.

As at present constituted, therefore, the federal judicial machinery consists of a Supreme Court, Circuit Courts of Appeal, Circuit Courts, and District Courts. In addition there are a Court of Claims, and the Judiciary of the District of Columbia.

§ 550. The Supreme Court: Its Organization.

The Supreme Court is at present composed of nine justices - eight associate justices and one chief justice. It sits at Washington, D. C., and holds annual terms beginning in October and lasting till the end of May.*

4 From 1789 to 1807 there were six Supreme Court Justices; from 1807 to 1837 seven; from 1837 to 1863 nine; from 1863 to 1866 ten; from 1866 to 1869 seven; since 1869 nine, the present number. For many years two terms annually were held. A chief justice is only impliedly provided for in the Constitution in that clause which declares that the chief justice of the United States shall preside in cases of impeachment of the President (Art. I, Sec. III, Cl. 6). According to Art. I, Sec. VI, Cl. 2, no member of either house of Congress may, at the same time be a federal judge, but no constitutional

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