199 U.S.

Argument for Defendant in Error.

it is located, in return for that protection there arises to that State the right of taxation. A State which can afford no protection to property, because the property is not within its limits, has, in reason, no right to exercise the power of taxation, for there is no consideration therefor. Ferry Co. v. Kentucky, 188 U. S. 394; D., L. & W. v. Pennsylvania, 198 U. S. 341.

Mr. Henry L. Stone, with whom Mr. Samuel B. Kirby and Mr. Robert W. Bingham were on the brief, for defendant in

error:

Plaintiff in error is liable to taxation in the place of its domicil, on all of its tangible personal property.

The general assembly of the State of Kentucky had power and jurisdiction to provide that the personal property of all residents of that State, or of corporations organized under the laws of that State, whether in or out of that State, should be taxed in that State. 1 Cooley on Taxation, 3d ed., 86; Commonwealth v. Hays, 2 B. Mon. 1; Barret v. Henderson, 4 Bush. 255; act of 1852, 2 Stant. Rev. Stat. Kentucky, 253; act of 1886, §§ 3, 12, art. I, Gen'l Stat. Kentucky, 1887, pp. 1035, 1038.

Where one is taxed for his personalty at the place of domicil, it is in general immaterial that some or even the whole of it is at the time out of the State. Cooley on Tax., 3d ed., 644, citing Boyd v. Selma, 96 Alabama, 150; Kirtland v. Hotchkiss, 100 U. S. 491; Goldgart v. People, 106 Illinois, 25; Foresman v. Byrns, 68 Indiana, 247; Lose v. State, 72 Indiana, 285; Griffith v. Watson, 19 Kansas, 23; Commonwealth v. Hays, 8 B. Mon. 1; Frothingham v. Snow, 175 Massachusetts, 59; Horne v. Green, 52 Mississippi, 452.

The proper place for the taxation of a corporation in respect to its personalty is the place of its principal office, unless some other rule is prescribed by statute. 25 Am. & Eng. Ency. of Law, 152, title "Taxation;" Burroughs on Tax., 186; Pullman Co. v. Pennsylvania, 141 U. S. 18, 36.

Double taxation in the same State not forbidden by the

Argument for Defendant in Error.

199 U. S.

state constitution may be valid, Bank v. Pierce Co., 20 Washington, 675; State v. Branin, 23 N, J. L. 484; People v. Roberts, 32 App. Div. N. Y. 113; Tennessee v. Whitworth, 117 U. S. 136; Bank v. Coleman, 135 N. Y. 231.

Taxation is not double unless it bears upon the same property, within the same jurisdiction. Bradley v. Bauder (Ohio), 19 Am. L. Reg. (N. S.) 774. It is not double taxation when the same property is taxed for the same year in two different States or taxing jurisdictions, where each has a right to lay taxes thereon. Grigsby Construction Co. v. Freeman, 108 Louisiana, 435.

The legislature, following the adoption of the present constitution of the State of Kentucky, by the enactment of the revenue law of November 11, 1892, which contained section 4020, endeavored to reach all property that could be lawfully made subject to taxation in that State.

In the absence of a statute a State cannot tax property such as that of the plaintiff in error, used as it is, passing into or through a State, and acquiring no permanent situs therein. Indiana v. Pullman Car Co., 16 Fed. Rep. 193; Pullman Co. v. Nolan, 22 Fed. Rep. 276; Irwin v. New Orleans, St. L. & C. R. Co., 94 Illinois, 105; Tax Court v. Pullman Co., 50 Maryland, 452. In some States statutes to that effect have been declared unconstitutional. State v. Stephens, 146 Missouri, 662.

It is only by virtue of a local statute that the taxation of a proportion of such property on the basis of mileage or gross earnings can be sustained in a State other' than that of the domicil of the owner. Pullman Co. v. Pennsylvania, 141 U. S. 18, 36; American Refrigerator Transit Co. v. Hall, 174 U. S. 70, 82; Union Refrigerator Transit Co. v. Lynch, 177 U. S. 149.

No such statute has been enacted in Kentucky. No method has been devised for the assessment of a portion of the tangible property, consisting of cars passing over railroad lines into and through that State and acquiring no permanent situs, on the

basis of mileage or gross earnings, either by the Railroad Commission, Board of Valuation and Assessment, or the county

assessor.

Plaintiff in error did not show that it had been taxed on cars in other States. It should not be allowed to shelter itself under the plea that it is in the power of other States and countries to tax its cars on the basis of mileage or gross earnings, without showing that power has been exercised by legislation in such States and countries, respectively, and that it has paid taxes thereunder,

The right to tax the movable personal or tangible property of the plaintiff in error is not based on the principle that the laws of the State of the domicil of plaintiff in error protect such property, but on the solid ground that the laws of that State protect such domestic corporation, the person of the owner of such property, and, as a consideration for such protection, that State is entitled to tax all of its personal property, because it is a creature of the laws of that State. Norfolk & Western v. Board of Public Works, 97 Virginia, 23; Commonwealth v. Dredging Co., 122 Pa. St. 386; Swift's Estate, 137 N. Y. 77; Leonard v. New Bedford, 16 Gray, 292; Baltimore v. Railroad Co., 50 Maryland, 274; Baltimore v. Northern Central, 50 Maryland, 417.

MR. JUSTICE BROWN, after making the foregoing statement, delivered the opinion of the court.

In this case the question is directly presented whether a corporation organized under the laws of Kentucky is subject to taxation upon its tangible personal property, permanently located in other States, and employed there in the prosecution of its business. Such taxation is charged to be a violation of the due process of law clause of the Fourteenth Amendment.

Section 4020 of the Kentucky statutes, under which this assessment was made, provides that "All real and personal estate within this State, and all personal estate of persons re

siding in this State, and of all corporations organized under the laws of this State, whether the property be in or out of this State, shall be subject to taxation, unless the same be exempt from taxation by the Constitution, and shall be assessed at its fair cash value, estimated at the price it would bring at a fair voluntary sale."

That the property taxed is within this description is beyond controversy. The constitutionality of the section was attacked not only upon the ground that it denied to the Transit Company due process of law, but also the equal protection of the laws, in the fact that railroad companies were only taxed upon the value of their rolling stock used within the State, which was determined by the proportion which the number of miles of the railroad in the State bears to the whole number of miles operated by the company.

The power of taxation, indispensable to the existence of every civilized government, is exercised upon the assumption of an equivalent rendered to the taxpayer in the protection of his person and property, in adding to the value of such property, or in the creation and maintenance of public conveniences in which he shares, such, for instance, as roads, bridges, sidewalks, pavements, and schools for the education of his children. If the taxing power be in no position to render these services, or otherwise to benefit the person or property taxed, and such property be wholly within the taxing power of another State, to which it may be said to owe an allegiance and to which it looks for protection, the taxation of such property within the domicil of the owner partakes rather of the nature of an extortion than a tax, and has been repeatedly held by this court to be beyond the power of the legislature and a taking of property without due process of law. Railroad Company v. Jackson, 7 Wall. 262; State Tax on Foreign-held Bonds, 15 Wall. 300; Tappan v. Merchants' National Bank, 19 Wall. 490, 499; Delaware &c. R. R. Co. v. Pennsylvania, 198 U. S. 341, 358. In Chicago &c. R. R. Co. v. Chicago, 166 U. S. 226, it was held, after full consideration, that the taking of private property

without compensation was a denial of due process within the Fourteenth Amendment. See also Davidson v. New Orleans, 96 U. S. 97, 102; Missouri Pacific Railway v. Nebraska, 164 U. S. 403, 417; Mount Hope Cemetery v. Boston, 158 Massachusetts, 509, 519.

Most modern legislation upon this subject has been directed (1) to the requirement that every citizen shall disclose the amount of his property subject to taxation and shall contribute in proportion to such amount; and (2) to the voidance of double taxation. As said by Adam Smith in his "Wealth of Nations," Book V., Ch. 2, Pt. 2, "the subjects of every State ought to contribute towards the support of the Government as nearly as possible in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the State. The expense of Government to the individuals of a great nation is like the expense of management to the joint tenants of a great estate, who are all obliged to contribute in proportion to their respective interest in the estate. In the observation or neglect of this maxim consists what is called equality or inequality of taxation."

But notwithstanding the rule of uniformity lying at the basis of every just system of taxation, there are doubtless many individual cases where the weight of a tax falls unequally upon the owners of the property taxed. This is almost unavoidable under every system of direct taxation. But the tax is not rendered illegal by such discrimination. Thus every citizen is bound to pay his proportion of a school tax, though he have no children; of a police tax, though he have no buildings or personal property to be guarded; or of a road tax, though he never use the road. In other words, a general tax cannot be dissected to show that, as to certain constituent parts, the taxpayer receives no benefit. Even in case of special assessments imposed for the improvement of property within certain limits, the fact that it is extremely doubtful whether a particular lot can receive any benefit from the improvement does not invalidate the tax with respect to such lot. Kelly v. Pitts