§ 59. Taxation, Including License Taxes.-The states may not burden interstate commerce by taxing the business nor by taxing the receipts of such commerce.335 But the fact that a corporation is engaged in interstate commerce does not exempt its property located in a state from taxation by the state.336 "It is the commerce itself which must not be burdened by state exactions which interfere with the exclusive federal authority over it. A resort to the receipts of property or capital employed in part at least in interstate commerce, when such receipts or capital are not taxed as such but are taken as a mere measure of a tax of lawful authority within the state, has been sustained. ''337 States may not regulate interstate commerce, nor may they prohibit such commerce. They can, subject to this limitation, prohibit a foreign corporation from doing business in the state, although a state "may not say to a foreign corporation, you may do business within our borders if you permit your conflict with federal statutes, Carey v. South Dakota, 250 U. S. 118, 63 L. Ed. 886, 39 Sup. Ct. 403. Federal statute invalid, United States v. MeCullagh, 221 Fed. 288. 335 Galveston, H. & S. A. Ry. Co. v. Texas, 210 U. S. 217, 52 L. Ed. 1031, 28 Sup. Ct. 638; Western Union Tel. Co. v. Kansas, 216 U. S. 1, 54 L. Ed. 355, 30 Sup. Ct. 190; Pullman Co. v. Kansas, 216 U. S. 56, 54 L. Ed. 378, 30 Sup. Ct. 282; Minnesota Rate Cases, 230 U. S. 352, 400, 57 L. Ed. 1511, 33 Sup. Ct. 729, and previous cases therein cited. See also New Jersey Bell Tel. Co. v. State Board of Taxes, etc., 50 Sup. Ct. 111. 336 United States Express Co. v. Minnesota, 223 U. S. 335, 56 L. Ed. 459, 32 Sup. Ct. 211; Kansas City M. & B. R. Co. v. Stiles, 242 U. S. 111, 61 L. Ed. 176, 37 Sup. Ct. 58; International Paper Company v. Massachusetts, 246 U. S. 135, 62 L. Ed. 624, 38 Sup. Ct. 292; Cheney Bros. Co. v. Massachusetts, 246 U. S. 147, 62 L. Ed. 632, 38 Sup. Ct. 295; Locomobile Co. v. Massachusetts, 246 U. S. 146, 62 L. Ed. 631, 38 Sup. Ct. 298. 337 Baltic Mining Co. v. Massachusetts, 231 U. S. 68, 83, 58 L. Ed. 127, 34 Sup. Ct. 15, affirming Baltic Mining Co. v. Commonwealth, 207 Mass. 381, 93 N. E. 831, Am. Cas. 1913 C. 805; S. S. White Dental Mnfg. Co. v. Commonwealth, 212 Mass. 25, 98 N. E. 1056, 28 Am. & E. Ann. Cas. 805; Maine v. Grand Trunk Ry. Co., 142 U. S. 217, 35 L. Ed. 994, 12 Sup. Ct. 121; Provident Institution v. Massachusetts, 6 Wall., 73 U. S. 632, 18 L. Ed. 904; Flint v. Stone-Tracy Co., 220 U. S. 107, 162-5, 55 L. Ed. 389, 31 Sup. Ct. 342; United States Exp. Co. v. Minnesota, 233 U. S. 335, 56 L. Ed. 459, 32 Sup. Ct. 211. See also Ohio R. & W. R. Co. v. Dittey, 232 U. S. 576, 58 L. Ed. 737, 34 Sup. Ct. 372, affirming same styled case, 203 Fed. 537; Armour & Company v. Virginia, 246 U. S. 1, 62 L. Ed. 547, 38 Sup. Ct. 267. Compare New Jersey Bell Tel. Co. v. State Board of Taxes, etc., 50 Sup. Ct. 111. property to be taken without due process of law, or you may transact business in intrastate commerce subject to the regulatory power of the state. To allow a state to exercise such authority would permit it to deprive of fundamental rights those entitled to the protection of the Constitution in every part of the Union." These general principles are stated and cases cited by Mr. Justice Day in Baltic Mining Co. v. Massachusetts (Note 335, ante). Charging a license fee to automobiles using the roads of a state is analogous to levying a tax, and, in the absence of congressional action, it is legal to charge such fee, even as to automobiles moving in interstate commerce.338 A gross-receipts tax against corporations and not against natural persons engaged in the same character of business violates the equal-protection clause of the Fourteenth Amendment to the Constitution of the United States; but a state tax on oil graduated according to the specific gravity of the oil rather than quantity does not contravene this clause or the due-process clause.339 It has been held that a state statute levying a mileage tax on motor vehicles used in interstate commerce is not an unconstitutional burden on interstate commerce. For such a tax to put an unconstitutional burden on interstate commerce, it must be shown that, in actual practice, it falls with disproportionate economic weight upon those engaged in such commerce. More than one form of tax may also be imposed by a state for the use of its highways, if the aggregate charge bears a reasonable relation to the privilege granted.3 340 A statute of Missouri levied a franchise tax on a domestic railroad corporation equal to three-fortieths of one per cent. of its capital stock and surplus employed within the state. The statute also provided that for the purposes of the Act 338 See Sec. 58, ante, and notes, and Hendrick v. Maryland, 235 U. S. 610, 59 L. Ed. 385, 35 Sup. Ct. 140 and cases cited. 339 Quaker City Cab. Co. v. Commonwealth of Penn., 277 U. S. 389, 72 L. Ed. 927, 48 Sup. Ct. 553; Ohio Oil. Co. v. Conway, 280 U. S. 146, 74 L. Ed. 456, 50 Sup. Ct. 310. 340 Interstate Busses Corpn. V. Blodgett, 276 U. S. 245, 72 L. Ed. 551, 48 Sup. Ct. 230. such corporation should be deemed to have employed in the state such proportion of its entire capital and surplus as its property and assets in the state bore to all of its property and assets wherever located. It was held that this statute did not violate the commerce clause of the Constitution of the United States because the tax was derived partly from interstate commerce.341 Foreign corporations leasing refrigerator cars to railroads for freight transportation may be taxed by a state upon basis of a fixed percentage of their corporate earnings from their operations within the state, although part of such earnings are derived largely from interstate operations, where such tax is based upon the property employed within the state rather than upon earnings.342 An occupation tax assessed by a state against a dealer in oil which had been transported into the state and held for sale in original packages and subsequently sold within the state in such packages has been held to be not an unconstitutional regulation of, or burden upon, interstate commerce; but sales of oil in original packages before the oil to fulfill such sales reaches the state, and solicitation of such orders, were found by the court to be beyond the state's taxing power under the commerce clause of the Constitution of the United States.343 § 60. Procedure to Test the Validity of State Regulations. -Neither the act of a state legislature nor the order of a state administrative body can be final and conclusive as to what are equal and reasonable charges, rules and regulations. The carrier is entitled to have a judicial hearing as to the reasonableness of such rates, rules and regulations.344 Making rates and prescribing regulations for the government of carriers for the future is, however, a legislative act,345 and courts 341 St. Louis-San Francisco Ry. Co. v. Middlekamp, 256 U. S. 226, 65 L. Ed. 905, 41 Sup. Ct. 489. 342 Cudahy Packing Co. v. Minnesota, 246 U. S. 450, 62 L. Ed. 827, 38 Sup. Ct. 373. 343 Sonneborn Bros. v. Keeling, 262 U. S. 506, 67 L. Ed. 1095, 43 Sup. Ct. 643. Kane v. New Jersey, 242 U. 344 Chicago, M. & St. P. R. Co. v. Minnesota, 134 U. S. 418, 33 L. Ed. 970, 10 Sup. Ct. 462. 345 Prentis v. Atlantic C. L. R. Co., 211 U. S. 210, 53 L. Ed. 150, 29 Sup. Ct. 67. may not set aside such rates or regulations unless they violate the constitutional rights of the carrier.346 When it is sought to avoid a rate or other requirement made by a state or under its authority, in the absence of a prescribed method of procedure, the carrier affected may resort to a court of equity and ask for appropriate relief. The court resorted to may be a state court, or, when diverse citizenship exists or a federal question is involved, the United States District Court. On this subject, Mr. Justice Field said:347 "Nor can it be said in such a case that relief is obtainable only in the courts of the state. For it may be laid down as a general proposition that, whenever a citizen of a state can go into the courts of a state to defend his property against the illegal acts of its officers, a citizen of another state may invoke the jurisdiction of the federal courts to maintain a like defense. A state cannot tie up a citizen of another state, having property rights within its territory invaded by unauthorized acts of its own officers, to suits for redress in its own courts. Given a case where a suit can be maintained in the courts of the state to protect property rights, a citizen of another state may invoke the jurisdiction of the federal courts." If resort be had to a District Court of the United States, and application for an interlocutory injunction is presented, the hearing must be had before three Judges "of whom at least one shall be a Justice of the Supreme Court or a Cir 346 Sec. 47, ante; Trenton & M. C. Traction Co. v. New Jersey Public Utility Comr's., 229 Fed. 140; Ann Arbor R. Co. v. Fellows, 236 Fed. 387. 347 Reagan v. Farmers L. & T. Co., 154 U. S. 362, 391, 38 L. Ed. 1014, 14 Sup. Ct. 1047: Platt v. Lecocq, 158 Fed. 723, 85 C. C. A. 621, where Judge Sanborn says: "Rights created and remedies provided by the statutes of a state to be pursued in the state courts may be enforced and administered in the national courts, either at law or in equity as the nature of the rights and remedies may require. "A party by going into a national court does not lose any right or appropriate remedy of which he might have availed himself in the state courts of the same locality." Davis v. Gray, 16 Wall. 83 U. S. 203, 21 L. Ed. 447; Darragh v. H. Wetter Mnfg. Co., 23 C. C. A. 609, 617, 78 Fed. 7, 14; National Surety Co. v. State Bank, 56 C. C. A. 657, 667, 120 Fed. 593, 603, 61 L. R. A. 394; Barber Asphalt Co. v. Morris, 66 C. C. A. 55, 59, 132 Fed. 945, 949, 67 L. R. A. 761. cuit Judge," and a direct appeal may be taken to the Supreme Court of the United States from an order granting or denying, after notice and hearing, an interlocutory injunction.348 A state officer whose duty it is to enforce the statute or administrative regulation claimed to be invalid is a proper party to a proceeding for injunction.349 Some states provide for a review of the action of their Commissions, and, when there is such provision, a suit for injunction should not be commenced until the rate or regulation has been fixed by the body having the last word.350 Suit may be filed by the states for penalties, or mandamus may be brought to compel obedience to the orders of the state-regulating body.351 To such suits, defense may be made and, where a right claimed under the Constitution or laws of the United States is denied, "and the decision is against the title, right, privilege or immunity especially set up or claimed," ultimate appeal may be taken to the Supreme Court of the United States.352 348 Judicial Code, sec. 266, amended by Act. Mar. 4, 1913, Chap. 160, 37 Stat. 1013; Louisville & N. R. Co. v. R. R. Com. of Alabama, 208 Fed. 35; post, Sec. 647. 349 Ex parte Young, 209 U. S. 123, 52 L. Ed. 714, 28 Sup. Ct. 441; Cent. of Ga. Ry. Co. v. McLendon, 157 Fed. 961. 350 Prentis v. Atlantic C. L. R. Co., 211 U. S. 210, 53 L. Ed. 150, 29 Sup. Ct. 67. 351 Southern Ry. Co. v. Atlanta Stove Works, 128 Ga. 207, 57 S. E. 429. 352 Judicial Code, sec. 237. |