CHAPTER IV.

SUBJECTS OVER WHICH REGULATION MAY BE EXERCISED

SECTION 1. AGENTS OF COMMERCE.

SHERLOCK v. ALLING (1876)

93 U. S. (3 Otto) 99, 103; 23 L. Ed. 819.

Congress has power to legislate with respect to (1) persons or agents engaged in interstate and foreign commerce; (2) the instruments or instrumentalities by which it is carried on; and (3) the subjects or things transported. Having jurisdiction over any one of these constituent parts of commerce, it may legislate as to all three.

The defendants were operating a line of passenger steamers on the Ohio river between Cincinnati, Ohio and Louisville, Ky. A collision occured in mid-stream opposite the mainland of Indiana and a passenger was killed; the administrator of his estate brought suit in a Court of Indiana to recover damages. By a statute of Indiana a cause of action for the wrongful act of another survives in case of death. The defendants claimed that the statute did not apply below the low water mark of the river and therefore did not cover this case. Part of the opinion is omitted.

Mr. Justice FIELD: It is true that the commercial power conferred by the Constitution is one without limitation. It authorizes legislation with respect to all the subjects of foreign and interstate commerce, the persons engaged in it, and the instruments by which it is carried on. And legislation has largely dealt, so far as commerce by water is concerned, with the instruments of that commerce. It has embraced the whole subject of navigation, prescribed what shall constitute American vessels, and by whom they shall be navigated; how they shall be registered or enrolled and licensed; to what tonnage, hospital and other dues they shall be subjected; what rules they shall obey in passing each other; and what provision their owners shall make for the health, safety, and comfort of their crews. Since steam has been applied to the propulsion of vessels, legislation has embraced an infinite variety of further details, to guard against accident and consequent loss of life.

The power to prescribe these and similar regulations necessarily involves the right to declare the liability which shall follow their infraction. Whatever, therefore, Congress determines, either as to a regulation or the liability for its infringement, is exclusive of State authority. But with reference to a great variety of matters touching the rights and liabilities of persons engaged in commerce, either as owners or navigators of vessels, the laws of Congress are silent, and the laws of the State govern. The rules for the acquisition of property by persons engaged in navigation, and for its transfer and descent, are, with some exceptions, those prescribed by the State to which the vessels belong; and it may be said, generally, that the legislation of a State, not directed against commerce or any of its regulations, but relating to the rights, duties and liabilities of citizens, and only indirectly and remotely affecting the operations of commerce, is of obligatory force upon citizens within its territorial jurisdiction, whether on land or water, or engaged in commerce, foreign or interstate, or in any other pursuit. In our judgment the statute of Indiana falls under this class. Until Congress, therefore, makes some regulation touching the liability of parties for marine torts resulting in the death of the persons injured, we are of opinion that the statute of Indiana applies, giving a right of action in such cases to the personal representatives of the deceased, and that, as thus applied, it constittues no encroachment upon the commercial power of Congress.

NORFOLK ETC. R. R. CO. v. PENNSYLVANIA (1890)

136 U. S. 114, 115; 34 L. Ed. 394.

A railroad or vessel forming a part of a through route over which freight and passengers are carried into and out of the state is engaged in interstate commerce and the owners or agents operating such railroads or vessels are subject to regulation by Congress.

Part of the opinion is omitted.

LAMAR, J.: The 16th section of an act of the legislature of the Commonwealth of Pennsylvania, approved June 7, 1879, provides as follows: "That from and after the first day of July, Anno Domini one thousand eight hundred and seventy-nine, no foreign corporation, except foreign insurance companies, which does not invest and use its capital in this Commonwealth, shall have an officer or offices in this Commonwealth for the use of

its officers, stockholders, agents or employes, unless it shall have first obtained from the auditor general an annual license so to do and for said license every such corporation shall pay into the State treasury, for the use of the Commonwealth, annually, onefourth of a mill on each dollar of capital stock which said company is authorized to have, and the auditor general shall not issue a license to any corporation until said license fee shall have been paid. The auditor general and State treasurer are hereby authorized to settle and have collected an account against any company violating the provisions of this section, for the amount of such license fee, together with a penalty of fifty per centum for failure to pay the same: provided, that no license fee shall be necessary for any corporation paying a tax under any previous section of this act, or whose capital stock or a majority thereof is owned or controlled by a corporation of this State which does pay a tax under any previous section of this act."

Under the authority vested in him by that statute, the auditor general of the state assessed a license tax against the Norfolk & Western Railroad Company, a corporation existing under the laws of Virginia and West Virginia, for each of the two years ending July 1, 1885, on its capital stock of $25,000,000, at the rate prescribed in the act, amounting to $6,250 a year, on account of its having an office for the use of its officers, stockholders, agents and employes, in the city of Philadelphia. The case now before this court involves the claim of the state for the year ending July 1, 1884, only. As permitted by the laws of Pennsylvania, the company appealed from the auditor general's settlement to the court of Common Pleas of Dauphin County, in that State. The case was tried in that court without the intervention of a jury, under an act of the State legislature approved April 22, 1874, and the court made the following findings of fact:

"1. The defendant is a railroad corporation existing under the laws of the States of Virginia and West Virginia, and its main line and branches lie wholly within these States.

"2. Its line of railroad connects at several points with the railroads of other corporations, and, by virtue of these connections, and certain traffic contracts and agreements, it has become a link in a through line of road, over which, as part of the business thereof, freight and passengers are carried into and out of this Commonwealth.

"3. Its authorized capital stock is twenty-five millions of dollars.

"4. From July 1, 1883, to July 1, 1885, it had an office in this Commonwealth for the use of its officers, stockholders, agents and employes. Its main office is at Roanoke, Va.

"5. During this period it expended a considerable amount of money in Pennsylvania in the purchase of materials and supplies. for the use of its road; but, with trifling exceptions, it owns no property and has no capital invested for corporate purposes within this Commonwealth.

"6. It has paid no office license fee for the years named, as required by section sixteen of the act of 1879 (P. L. 120). Upon this section these settlement are based." Judgment was rendered against the company on that finding, sustaining the settlement made by the auditor general of the State, for the sum of $7,503.12. That judgment having been affirmed by the Supreme Court of the State, this writ of error was sued out. The assignment of errors is to the effect that the court below erred in refusing to sustain the following points, urged by the company, both in the trial court and in the Supreme Court of the State, viz.:

"(1) Inasmuch as the sixteenth section of the act of June 7, 1879, denies to foreign corporations and to the officers, agents and employes of foreign corporations the right to have an office or place of meeting in the State of Pennsylvania, the said section is in conflict with clause one of section two of article IV of the Constitution of the United States, which provides that 'the citizens of each State shall be entitled to all privileges * of citizens

in the several States.'

"(2) The sixteenth section of the act of June 7, 1879, is an abridgment of the privileges and immunities of the citizens of the United States; it discriminates between corporations of the State of Pennsylvania and corporations of other States; it discriminates between corporations and natural persons having offices in Pennsylvania; it discriminates between foreign corporations; it denies to foreign corporations and to natural persons connected with such corporations, particularly this defendant and its officers, agents and employes, who were in the State maintaining an office and doing business at and before the passage of the said act, the equal protection of the laws, and is for these reasons void, because in conflict with article XIV of the amendments to the Constitution of the United States, and also because in conflict with the act of Congress -Revised Statutes, section 1977.

"(3) Inasmuch as the Norfolk & Western Railroad Company engaged in the business of transporting freight and passengers to

or from other States out or into the State of Pennsylvania, or from other States to other States, passing through the State of Pennsylvania, and for the successful carrying on of said interstate business it is necessary for the said company to maintain one or more offices in the State of Pennsylvania; therefore the sixteenth section of the act of June 7, 1879, if it requires that the said company cannot lawfully maintain an office in said State without first obtaining from the auditor general thereof a license so to do, and paying the fee prescribed by said section for said license, then the said section is unconstitutional and void, because in conflict with clause three of section eight of article 1 of the Constitution of the United States, which provides that 'Congress shall have power to regulate commerce with foreign nations and among the several States.''

The first two points are disposed of adversely to the company by the decision of this court in Pembina Mining Co. v. Pennsylvania, 125 U. S. 181. In that case we held, following Paul v. Virginia, 8 Wall, 168, that corporations are not citizens, within the meaning of clause 1, sec. 2, of art. IV of the Constitution of the United States, declaring that "the citizens of each State shall be entitled to all privileges and immunities of citizens in the several States." And we also held that section 1 of the Fourteenth Amendment to the Constitution declaring that no State shall "deny to any person within its jurisdiction the equal protection of the laws" does not prohibit a State from imposing such conditions upon foreign corporations as it may choose, as a condition of their admission within its limits. See, also, Philadelphia Fire Ass'n v. New York, 119 U. S. 110. The only question for consideration, therefore, arises under the third assignment of error, above set forth. It is well settled by numerous decisions of this Court, that a State cannot, under the guise of a license tax, exclude from its jurisdiction a foreign corporation engaged in interstate commerce, or impose any burdens upon such commerce within its limits. Some of the cases sustaining this proposition are collected in McCall v. California, just decided, 136 U. S. 104, and need not be repeated here.

The question before us is thus narrowed to the two following inquiries: (1) Was the business of this company in the State of Pennsylvania interstate commerce? (2) If so, was the tax assessed against it for keeping an office in Philadelphia, for the use of its officers, stockholders, agents and employes a tax upon such business? We have no difficulty in answering the first of these inquiries in the affirmative. Although the findings of fact are somewhat meagre on this question-much more so, indeed, than the