tion taxes shall be equal and uniform upon the same class of subjects within the limits of the authority levying the tax." 97 A statute requiring the state board of assessment and equalization to take into consideration intrastate gross earnings in assessing the property of an express company is invalid, under a constitutional provision requiring that taxes be uniform so that every person and corporation shall pay a tax in proportion to the value of his, her or its property and that the rule of valuation in the case of corporate property be, as near as possible, that employed in the case of individual property, when the state statutes other than those relating to railroad, telephone, telegraph, express and sleeping-car companies do not authorize a valuation which considers gross income and individuals and other corporations are taxed according to the value of their property without reference to the income derived therefrom.98 But while, under the equal protection clause, the state board of equalization cannot assess the franchise and other property of a traction company at a rate and by a method different from the rate and method employed by it in assessing, for the same year, other corporations of the same class where the result will be an enormous disparity between the assessment in the case of the traction company and the assessments in the case of such other corporations, and discrimination in favor of the latter.99 A state may, as far as the Federal Constitution is concerned, tax the franchises of do 97 Pullman Palace Car Co. v. State, 64 Tex. 274, 53 Am. Rep. 758. "If the things done," said the court in this case, "constitute in one person or corporation the taxed occupation, no one doing the same things can be omitted from the class taxed, without a violation of the constitutional provision; even though the omitted or excepted person or corporation may do more or other things than are necessary to constitute the taxed occupation, and though that done in excess may, within itself, constitute a distinct occupation subject to taxation, however kindred in nature the occupations may be. The legislature may classify subjects of taxation, and these classifications may, as they will, be more or less arbitrary; but when the classification is made, all must be subjected to the tax imposed, who, * by the existence of the facts on which the classification is based, fall within it, unless exempted under some constitutional provision. There is no act or fact entering into the occupation of running such cars as are mentioned in the statute over the road of another, which does not enter into the occupation of the road owner who runs over his own road the same kind of cars for the same uses and purposes, from which the road owner can be withdrawn from the class on which the statute imposes the tax." 98 Wells Fargo & Co. v. Johnson, 214 Fed. 180, aff'd 239 U. S. 234, 60 L. Ed. 243. 99 Raymond v. Chicago Union Traction Co., 207 U. S. 20, 52 L. Ed. 78, 12 Ann. Cas. 757. mestic corporations at a rate different from that applied in the case of tangible property,1 and it may also fix a different rate for the tax upon foreign corporations for the privilege of doing business within its borders than it fixes for the franchise-tax upon its own corporations. Again, the requirement of equality does not prevent a state from imposing an occupation tax upon all corporations and other persons engaged in one business, and not upon those engaged in other businesses.3 In other words, a state has the right to classify 1 Coulter v. Louisville & N. R. Co., 196 U. S. 599, 49 L. Ed. 615. 2 Cheney Bros. Co. v. Massachusetts, 246 U. S. 147, 157, 62 L. Ed. 632, quoting Kansas City, M. & B. R. Co. v. Stiles, 242 U. S. 111, 61 L. Ed. 176. No limitation on the state's power to exclude foreign corporations requires identical taxes upon domestic and foreign corporations in all cases. Baltic Min. Co. v. Massachusetts, 231 U. S. 68, 58 L. Ed. 127. nor A state does not surrender abridge its power to change and revise its tax system and tax rates by merely licensing or permitting foreign corporations to engage in local business and acquire property within its borders. Cheney Bros. Co. v. Massachusetts, 246 U. S. 147, 62 L. Ed. 632. A consolidated railroad company, composed of a domestic company operating a domestic line of road and of foreign companies operating roads in foreign states, may be required to pay an annual franchise tax computed on the basis of its entire capital stock without being thereby deprived of the equal protection of the laws when such is the basis of computation in the case of corporations organized under the laws of the state and the domestic statute under which, the consolidation was locally effected provides that the consolidated company shall be in all respects subject to the laws of the state domestic corporation,'' even though the basis of computation in the case of foreign corporations is the actual * * as a amount of capital employed in the state. Kansas City, M. & B. R. Co. v. Stiles, 242 U. S. 111, 61 L. Ed. 176, aff'g 192 Ala. 687, 68 So. 1018, and distinguishing Southern R. Co. v. Greene, 216 U. S. 400, 54 L. Ed. 536, 17 Ann. Cas. 1247. Where the only ground of attack upon the validity of that part of a statute which imposes a franchise tax on foreign corporations is the asserted invalidity of the part of the same statute which imposes a similar tax on domestic corporations, as a result of which, as is alleged, there arises, as to a foreign corporation, an impairment of contract obligations and a denial of the equal protection of the laws, and the validity of the tax on domestic corporations is sustained, the attack on the tax on foreign corporations will fail. Lusk v. Botkin, 240 U. S. 236, 60 L. Ed. 621, aff'g 95 Kan. 271, 147 Pac. 794. 3 Singer Mfg. Co. v. Wright, 33 Fed. 121. "A tax may be imposed only upon certain callings and trades; for when the state exerts its power to tax, it is not bound to tax all pursuits or all property that may be legitimately taxed for governmental purposes. It would be an intolerable burden if a state could not tax any property or calling, unless, at the same time, it taxed all property or all callings.' Armour Packing Co. v. Lacy, 200 U. S. 226, 50 L. Ed. 451, quoting Connolly v. Union Sewer Pipe Co., 184 U. S. 540, 46 L. Ed. 679. occupations for purposes of taxation. "In its discretion it may tax all, or it may tax one or some, taking care to accord to all in the same class equality of rights."5 In its application to taxes on occupations, a constitutional provision requiring all taxation to be equal and uniform means that the burden imposed shall fall alike on all persons who are in substantially the same situation, and discrimination as to those from whom annual license taxes shall be collected will be valid if based upon a reasonable distinction in principle." 6 So, the Texas statute imposing an occupation tax on wholesale dealers in coal oil, naphtha, benzine, mineral oils refined from petroleum and all other mineral oils is not invalid as to such dealers because of the fact that it fails to put any such tax on wholesale dealers in other articles of merchandise such as, for example, coal, iron, sugar and bacon.8 4 Southwestern Oil Co. v. Texas, 217 U. S. 114, 54 L. Ed. 688. See also Ohio River & W. R. Co. v. Dittey, 232 U. S. 576, 58 L. Ed. 737. "A very wide discretion must be conceded to the legislative power of the state in the classification of trades, callings, businesses, or occupations. which may be subjected to special forms of regulation or taxation through an excise or license tax. If the selection or classification is neither capricious nor arbitrary, and rests upon some reasonable consideration of difference or policy, there is no denial of the equal protection of the law." Brown-Forman Co. v. Kentucky, 217 U. S. 563, 54 L. Ed. 883. 5 Southwestern Oil Co. v. Texas, 217 U. S. 114, 54 L. Ed. 688. 6 In re Watson, 17 S. D. 486, 2 Ann. Cas. 321, 97 N. W. 463. Said the court: Within the boundaries of this limitation lie broad fields of legislative discretion, which should not be invaded by the court. In seeking to secure equality and uniformity, the legislature may tax some trades, and not others; it may-indeed, mustclassify occupations for the purpose of taxation; and the more exhaustive its system of arrangement, the more nearly similar will be the situation of all who are embraced within any designated class.'' 7 American Sugar Refining Co. v. Louisiana, 179 U. S. 89, 45 L. Ed. 102. 8 Southwestern Oil Co. v. Texas, 217 U. S. 114, 54 L. Ed. 688, aff'g 100 Tex. 647, 103 S. W. 489. "It is sufficient for the disposition of this case," declared the federal court, "to say that, except as restrained by its own constitution or by the Constitution of the United States, the state of Texas, by its legislature, has full power to prescribe any system of taxation which, in its judgment, is best or necessary for its people and government; that, so far as the power of the United States is concerned, the state has the right, by any rule it deems proper, to classify persons or businesses for the purposes of taxation, subject to the condition that such classification shall not be in violation of the Constitution of the United States; that the requirement by the state, that all wholesale dealers in specified articles shall pay a tax of a given amount on their occupation, without exacting a similar tax on the occupations of Meat-packing houses doing business in the state may be required. to pay a license tax although persons selling packing-house products but not engaged in the packing-house business are not subject to the tax and even though the same tax is not imposed upon houses packing vegetables and the like. Only recently, it was held that the Virginia statute which requires a merchant to pay a license tax based on the amount of his purchases. -goods, wares, and merchandise manufactured and offered for sale by the licensee to come within the meaning of the word "purchases" -and which excludes from its operation manufacturers selling their products at the place of the latter's manufacture is not invalid as to a foreign packing-house company merchandising its products at different agencies established by it within the state, since the statute is within the inherent power of the state, the classification made is reasonable and the operation of the statute is the same in the case of a domestic corporation as in the case of a corporation of foreign origin, and, therefore, the disadvantage, if any, resulting to the packing-house company is but the indirect result of our dual system 10 of government. But where a railroad company goes into a foreign state, acquires, under the authority of such state, a large amount of railroad property, and, aside from the license tax imposed by such state, pays taxes on this property, such state cannot, consistently with the equal protection clause, impose a privilege tax on the company because of its foreign origin, the same tax not being imposed on domestic companies doing precisely 11 the same business. wholesale dealers in other articles, cannot, on the face of the statute or by reason of any facts within the judicial knowledge of the court, be held, within the meaning of the 14th Amendment, to deprive the taxpayer of his property without due process of law, or to deny him the equal protection of the laws; and that the federal court cannot interfere with the enforcement of the statute simply because it may disapprove its terms, or question the wisdom of its enactment, or because it cannot be sure as to the precise reasons inducing the state to enact it." See also BrownForman Co. v. Kentucky, 217 U. S. 563, 54 L. Ed. 883, aff'g 125 Ky. 402, 101 S. W. 321, holding valid the Ken tucky license or occupation tax on 9 Armour Packing Co. v. Lacy, 200 10 Armour & Co. v. Virginia, 246 U. S. 1, 62 L. Ed. 547, aff'g 118 Va. 242, 87 S. E. 610. 11 Southern R. Co. v. Greene, 216 U. S. 400, 54 L. Ed. 536, 17 Ann. Cas. 1247 (rev'g 160 Ala. 396, 49 So. 404), distinguished in Cheney Bros. Co. v. Massachusetts, 246 U. S. 147, 62 L. Ed. 632, in Kansas City, M. & B. R. Co. v. Stiles, 242 U. S. 111, 61 L. Ed. 176, and in Baltic Min. Co. A violation of the equal protection clause, however, cannot be predicated on hypothetical discrimination. So a tax on sleeping-car and parlor-car companies will not be invalid because railroad companies operating their own sleeping cars and parlor cars are not taxed when it does not appear, and the attorney general of the state denies, that any railroad company in the state owns the cars of such character which it operates.12 § 4580. Due process of law-In general. The Fourteenth Amendment to the Constitution of the United States declares that no state shall "deprive any person of life, liberty, or property, without due process of law," 18 and there is a similar provision in many of the state constitutions.14 This provision of the Federal Constitution pro v. Massachusetts, 231 U. S. 68, 58 L. Ed. 127. 12 Pullman Co. v. Knott, 235 U. S. 23, 59 L. Ed. 105. 13 The prohibition in the Fifth Amendment against the deprivation of life, liberty, or property without due process of law operates on the federal government alone, and was not intended to restrict the powers of the states. McElvaine v. Brush, 142 U. S. 155, 158, 35 L. Ed. 971; Kelly v. Pittsburgh, 104 U. S. 78, 26 L. Ed. 658; Davidson v. New Orleans, 96 U. S. 97, 24 L. Ed. 616; Withers v. Buckley, 20 How. (U. S.) 84, 90, 15 L. Ed. 816, 819; Barron v. Baltimore, 7 Pet. (U. S.) 243, 247, 8 L. Ed. 672. 14"Looking at the clause of the [14th] Amendment prohibiting the deprivation of property without due process of law, it is to be remembered that the provision to that effect appeared in most of the state constitutions long before the Amendment was adopted, and that principle was accepted everywhere as vital in the American systems of government. But the Amendment, although negative in its words, had the effect to incorporate into the fundamental law of each state a rule theretofore prescribed by the Constitution of the United States for the general govern VII Priv. Corp.-40 ment and its agencies. So that, prior to the adoption of the 14th Amendment, the states were controlled, in imposing and collecting taxes, entirely by their own fundamental law; and if they departed from due process of law in matters involving the deprivation of property, the taxpayer injuriously affected by its action could not, for that reason, prior to the Amendment, invoke for his or its protection any provision of the Constitution of the United States. But upon the adoption of the 14th Amendment,-whatever their own constitutions may then, or have subsequently, declared, -the states became bound, as was the United States by the 5th Amendment, not to deprive any person of property without due process of law. Still it was never contemplated, when the Amendment was adopted, to restrain or cripple the taxing power of the states, whatever the methods they devised for the purposes of taxation, unless those methods, by their necessary operation, were inconsistent with the fundamental principles embraced by the requirements of due process of law and the equal protection of the laws in respect of rights of property." Southwestern Oil Co. v. Texas, 217 U. S. 114, 54 L. Ed. 688. |