that the homestead shall be for the exclusive benefit of the homesteader. Section 2290 of the Revised Statutes provides that a person applying for the entry of a homestead claim shall make affidavit that, among other things, 'such application is made for his ex strictly private business is not invalid be cause a portion of its business is the importation and sale of articles in original packages. [No. 21.] clusive use and benefit, and that his entry Argued April 20, 21, 1898. Decided Octo is made for the purpose of actual settlement and cultivation, and not either directly or indirectly for the use or benefit of any other person.' And section 2291, which prescribes the time and manner of final proof, requires that the applicant make 'affidavit that no part of such land has been alienated, except 58] as provided in section twenty-two hundred and eighty-eight, which section provides for alienation for church, cemetery, or school purposes, or for the right of way of railroads.' The law contemplates five years' continuous occupation by the homesteader, with no alienation except for the named purposes. It is true that the sections contain no express prohibition of alienation, and no forfeiture in case of alienation; yet under them the homestead right cannot be perfected in case of alienation, or contract for alienation, without perjury by the homesteader. There can be no question that this contract contemplated perjury on the part of Anderson, and was designed to thwart the policy of the government in the homestead laws, to secure for the benefit of the homesteader the exclusive benefit of his homestead right." ber 31, 1898. State of New York to review a judgment N ERROR to the Supreme Court of the of that court entered in pursuance of the decision of the Court of Appeals of that state quashing a writ of certiorari and confirming the comptroller's assessment of and tax upon the capital employed within the state, owned by Parke, Davis, & Company, a corporation of Michigan. Affirmed. See same case below, 91 Hun, 158, 149 N. Y. 608. Statement by Mr. Justice Shiras: *Parke, Davis, & Company in the name of[659] the state of Michigan for the manufacture and a corporation organized under the laws of sale of chemical and pharmaceutical preparations. The factory is situated in the city of Detroit. The corporation has a warehouse and depot in the city of New York, and there keeps on hand varying quantities of its manufactured products, which are there sold at wholesale in original packages. The concern is represented in New York by John Clay as manager, who is paid a salary. The busiIn the case at bar there was no statute carried on in all respects like the ordinary ness of selling the manufactured articles is which, in express terms, or by any fair im- sales of consigned goods. Clay, in his own plication, forbade the making of such a conname, but for the use of the company, imtract as that proceeded on here. Decree af-ports crude drugs from foreign countries at firmed. PEOPLE OF THE STATE OF NEW YORK. ex rel. PARKE, DAVIS, & COMPANY, Plff. in Err., v. the port of New York. Such crude drugs The corporation pays an annual rental for JAMES A. ROBERTS, Comptroller of the and expended for the New York branch an State of New York. (See S. C. Reporter's ed. 658–683.) Tax on capital of a corporation-Federal question question of fact-tax valid. 1. The equal protection of the laws is not denied to a foreign corporation which manufactures goods in other states and sends them into the state for sale, by a tax on the amount of capital employed by it within the state, because of an exemption of corporations which are wholly engaged in manufacturing within the state, when the statute makes no discrimination between foreign and domestic corporations. nually, for the years 1890 to 1894, inclusive, Upon this state of facts the comptroller of *At the time of the imposition of this tax[660] the provisions of the statute here drawn in 2 Error in the estimate of the amount of question were as follows (Laws 1880, chap. capital employed in a state and subject to 542, § 3, as amended by Laws 1881, chap. tax therein does not present a Federal ques-361; Laws 1885, chap. 359; Laws 1889, chaps. tion on writ of error to a state court. 8. The relation of a person to the business of a corporation is one of fact, which is not open to inquiry on writ of error to a state court. 4. A franchise or business tax on the amount of capital stock employed within the state by a foreign corporation organized to conduct 193, 353): "Every corporation, joint-stock company, or association whatever, now or hereafter incorporated, organized or formed under, by or pursuant to law in this state or in any other state or country, and doing business in this state, except only savings banks and in stitutions for savings, life insurance com- Then come provisions grading the tax ac- "The amount of capital stock which shall be the basis for tax under the provisions of section three (supra) in the case of every corporation, joint-stock company, and association liable to taxation thereunder, shall be the amount of capital stock employed within this state." Tiernan v. Rinker, 102 U. S. 123, 26 L. ed. 103: Walling v. Michigan, 116 U. S. 446, 29 L. ed. 691; Welton v. Missouri, 91 U. S. 275, 23 L. ed. 347; Minnesota v. Barber, 136 U. S. 313, 34 L. ed. 455, 3 Inters. Com. Rep. 185; Brimmer v. Rebman, 138 U. S. 78, 34 L. ed. 862, 3 Inters. Com. Rep. 485; Voight v. Wright, 141 U. S. 62, 35 L. ed. 638; Postal Teleg. Cable Co. v. Adams, 155 U. S. 689, 39 L. ed. 312, 5 Inters. Com. Rep. 1. Taxation upon the "franchises or business" of importing goods and once selling them is a power unequivocally surrendered by the states to the Federal government. Brown v. Maryland, 12 Wheat. 419, 6 L. ed. 678. The tax upon the franchise or business of selling their own goods in New York, imposed upon the relators, is unconstitutional in the absence of permission from Congress. Leisy v. Hardin, 135 U. S. 100, 34 L. ed. 128, 3 Inters. Com. Rep. 36; Robbins v. Shelby County Taxing Dist. 120 U. S. 489, 30 L. ed. 694, 1 Inters. Com. Rep. 45; Cooper Mfg. Co. v. Ferguson, 113 U. S. 727, 28 L. ed. 1137. The tax here in question cannot be maintained as one imposed to reimburse the state for any police supervision over foreign corporations there selling their own goods. Charlotte, C. & A. Ř. Co. v. Gibbes, 142 U. S. 386, 35 L. ed. 1051. Where exemptions are so incorporated in a tax law as to result in unconstitutional discrimination the whole law falls. Spraigue v. Thompson, 118 U. S. 90, 95, 30 L. ed. 115, 117; Yick Wo v. Hopkins, 118 U. S. 356, 30 L. ed. 220. Parke, Davis, & Company, through their said manager, filed a petition in the New York supreme court, praying for a writ of certiorari directed to the comptroller, in order to subject his assessment to correction. In the petition it was alleged that the only capital in any proper sense employed by the company within the state of New York in the sale of its products was its leasehold of the warehouse and the office furniture and fixtures, not exceeding in value $15,000; that said company, being a manufacturing corporation, was exempt from taxation under the laws of the state of New York; that the comptroller erred in deciding that goods [661]manufactured by said corporation and stored at its depot in New York are capital employed in said state within the meaning of question might have arisen or been applicathe statute; that if said statute was cor-ble to the case, unless it is further shown on rectly interpreted by the comptroller, then the record that it did arise and was applied said statute was unconstitutional and void by the state court to the case. as in contravention of the Constitution of the United States and the amendments thereof. To the certiorari granted upon said petition the comptroller duly made a return, alleging that his acts and proceedings were valid. The cause was heard at the December term, 1895, of said court, and judgment was entered quashing the writ of certiorari, and confirming the comptroller's assessment. From that judgment an appeal was taken to the court of appeals of the state of New York, and on June 9, 1896, the cause was heard, the order and judgment of the supreme court were affirmed, and the record remitted to the supreme court. 91 Hun, 158, 149 N. Y. 608. Whereupon the cause was brought to this court by a writ of error duly prayed for and allowed. Mr. James McKeen, for plaintiff in error: The New York statute imposes a discriminating tax upon these relators for selling in New York, in the original packages, their products made in Michigan. Messrs. Theodore E. Hancock, Attorney General of New York, and William Henry Dennis, for defendant in error: It is not sufficient to show that a Federal Hagar v. California, 154 U. S. 639, 24 L. ed. 1044; Crowell v. Randell, 10 Pet. 368, 9 L. ed. 458; Edwards v. Elliott, 21 Wall. 532, 22 L. ed. 487; Ocean Ins. Co. v. Polleys, 13 Pet. 157, 10 L. ed. 105; Walker v. Villavaso, 6 Wall. 124, 18 L. ed. 853; Rector v. Ashley, 6 Wall. 142, 18 L. ed. 733; Gibson v. Chouteau, 8 Wall. 314, 19 L. ed. 317; Phanis Ins. Co. v. The Treasurer, 11 Wall. 204, 20 L. ed. 112; Otis v. Oregon 8. 8. Co. 116 U. S. 548, 29 L. ed. 719. taken as conclusive as to the facts. People, Sims, v. New York Fire Comrs. 73 The tax, although upon the franchise or business of a corporation, is measured by the amount of its capital employed in the state. Horn Silver Min. Co. v. New York, 143 U. S. 305, 36 L. ed. 164, 4 Inters. Com. Rep. 57; Home Ins. Co. v. New York, 119 U. S. 129, 30 L. ed. 350. Taxation is measured by the amount of capital employed in the state. 1898. PEOPLE, ex rel. PARKE, DAVIS, & Co., v. ROBERTS. People, Seth Thomas Clock Co., v. Wemple, 133 N. Y. 323. The statute is not an infringement of the interstate commerce clause of the Federal Constitution. People, American Contracting & D. Co., v. Wemple, 129 N. Y. 558; Woodruff v. Parham, 8 Wall. 136, 19 L. ed. 386; Postal Teleg. Cable Co. v. Adams, 155 U. S. 688, 39 L. ed. 311, 5 Inters. Com. Rep. 1; Pembina Consol. Silver Min. & Mill. Co. v. Pennsylva nia, 125 U. S. 181, 31 L. ed. 650, 2 Inters. Com. Rep. 24; People, Southern Cotton Oil Co., v. Wemple, 131 N. Y. 64. crimination against this corporation, whose To sustain this contention the well-known other states. A corporation, whether domestic or foreign, cannot claim exemption because of doing a manufacturing business outside of the state of New York. People, Tiffany, v. Campbell, 144 N. Y. S. 446 [29: 691]; Robbins v. Shelby County 166; People, Western Electric Co., v. Camp-Taxing Dist. 120 U. S. 489 [30: 694]; Minbell, 145 N. Y. 587; Horn Silver Min. Co. v.nesota v. Barber, 136 U. S. 313 [34: 455, 3 New York, 143 U. S. 305, 36 L. ed. 164, 4 Inters. Com. Rep. 185]. Inters. Com. Rep. 57; Southern Cotton Oil Co. v. Wemple, 44 Fed. Rep. 24. A state may discriminate in favor of domestic as against foreign corporations, and may require a franchise or business tax from the latter as a condition of being allowed to do business within the state. Ducat v. Chicago, 10 Wall. 410, 19 L. ed. 972; Cooper Mfg. Co. v. Ferguson, 113 U. S. 727, 28 L. ed. 1137; People v. Formosa, 131 N. Y. 478; Demarest v. Flack, 128 N. Y. 205, 13 L. R. A. 854; Ashley v. Ryan, 153 U. S. 437, 38 L. ed. 774, 4 Inters. Com. Rep. 664; Lafayette Ins. Co. v. French, 18 How. 404, 21 L. ed. 451. [661] *Mr. Justice Shiras delivered the opinion of the court: The construction put upon the statute of the state of New York by its courts is, of course, binding upon this court, and that portion of the contention which questioned the action of the comptroller on the ground of a misinterpretation of the law is thus disposed of. It must be regarded as finally settled by frequent decisions of this court that, subject to certain limitations as respects interstate and foreign commerce, a state may impose such conditions upon permitting a foreign [662]corporation to do business within its limits as it may judge expedient; and that it may make the grant or privilege dependent upon the payment of a specific license tax, or a sum proportioned to the amount of its capital used within the state. Paul v. Virginia, 8 Wall. 168 [19: 357]; Horn Silver Mining Co. v. New York, 143 U. S. 305 [36:164, 4 Inters. Com. Rep. 57]. Accordingly the counsel for the plaintiff in error disavows in his brief any wish to bring those decisions into further review, but his contention is that this Michigan corporation, having come within the jurisdiction of New York by compliance with all the provisions of law imposing conditions for transacting business within the state, is denied the equal protection of the law when subjected to a tax from which are exempted other corporations, foreign and domestic, which wholly manufacture the same class of goods within If the object of the law in question was to It will be perceived that the tax is pre- amount of capital stock which shall be the 325 In the present case, indeed, complaint is ters. Com. Rep. 595]; Adams Express Co. v. made of the action of the comptroller in de- Ohio, 165 U. S. 194 [41: 683]. It is not termining the "amount of the capital stock necessary in this case to enter into a subject employed within the state," that the so difficult, but the cases are referred to as amount fixed by him was too large. The ac- showing the distinction between corporations tion of the comptroller was subject to revi- organized to carry on interstate commerce, sion, and the corporation's complaints in re- and having a quasi-public character, and spect thereto were heard and passed upon by corporations organized to conduct strictly the supreme court of New York. The esti-private business. mate of the comptroller, in determining the amount of capital employed in the state, [664] would not be judicially *interfered with unless it was clearly shown that the same was erroneous; ard, even then, such errors would not present a Federal question for our consideration. Nor can we consider the further contention that portions of the business which were made the basis of the assessment were improperly treated as business of the corporation, whereas they should have been regarded as pertaining to the personal transactions of Mr. Clay, the company's agent. The true relation of Mr. Clay to the corporation's business was one of fact, in respect to which a hearing was afforded to the corporation, and this court is in no position to enter into such an inquiry. The corporation concerned in the present litigation is of the latter character, and the case comes within the doetrine of Paul v. Virginia, 8 Wall. 168 [19: 357], and of subsequent cases affirming that one. Horn Silver Mining Co. v. New York, 143 U. S. 305 [36: 164, 4 Inters. Com. Rep. 57], may be specially mentioned, as it involved a similar question and the same statute which are before us in the present case. The Horn Silver Mining Company was a corporation of the territory of Utah, where it carried on a mining and manufacturing business. It also carried on business in the state of New York, and was there subjected to an annual tax upon its corporate franchise or business, as prescribed in the statute of the state of New York. The company refusing to pay the tax, proceedings to enforce its payment were resorted to, which resulted in the case being brought to this court, where some of the Again, it is said that, even assuming that the importation of crude drugs and their sale in the original packages constituted a por-questions raised in the present case were contion of the corporate business, no tax could be imposed by the state under the doctrine of Brown v. Maryland, 12 Wheat. 419 [6: 678]. But that case is inapplicable. Here no tax is sought to be imposed directly on imported articles or on their sale. This is a tax imposed on the business of a corporation, consisting in the storage and distribution of various kinds of goods, some products of their own manufacture and some imported articles. From the very nature of the tax, being laid as a tax upon the franchise of doing business as a corporation, it cannot be affected in any way by the character of the property in which its capital stock is invested. Society for Savings v. Coite, 6 Wall. 594 [18: 897]; Provident Institution for Savings v. Massachusetts, 6 Wall. 611 [18: 907]; Pembina Consol. Silver Mining & Mill. Co. v. Pennsylvania, 125 U. S. 181 [31:650, 2 Iuters. Com. Kep. 24]; Home Insurance Co. v. New York, 134 U. S. 594 [33: 1025]. When a corporation of one state, whose business is that of a common carrier, transacts part of that business in other states, difficult questions have arisen, and this court has been called upon to decide whether certain taxing laws of the respective states infringe upon the freedom of interstate commerce. It has been found difficult to prescribe a satisfactory rule whereby the public burdens of taxation can be justly apportioned between the business and agencies of such a corporation in different states and the [665]subject has been much discussed in several recent cases. Western U. Teleg. Co. v. Atty. Gen. of Massachusetts, 125 U. S. 530 [31: 790]; Pittsburgh, Cincinnati, C. & St. L. R. W. Co. v. Backus, 154 U. S. 421 [38: 1031]; Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 18 [35: 613, 3 In sidered and determined. The conclusions reached were that the law in question did not tax property not within the state, nor regulate interstate commerce, nor deny to the corporation the equal protection of the laws, nor impose a tax beyond the constitutional power of the state. It is said that the operation of that portion of this taxing law, which exempts from a business tax corporations which are wholly engaged in manufacturing within the state of New York, is to encourage manufacturing corporations which seek to do business in that state to bring their plants into New York. Such may be the tendency of the legislation, but so long as the privilege is not restricted to New York corporations, it is[666] not perceived that thereby any ground is af forded to justify the intervention of the Federal courts. The judgment of the Supreme Court of the State of New York is accordingly affirmed. Mr. Justice White was not present at the argument, and took no part in the decision of the case. Mr. Justice Harlan, dissenting: It seems to me that the opinion and judg ment in this case are not in harmony with former decisions of this court. The comptroller of New York has imposed upon the plaintiff in error, a Michigan corporation doing business in New York, an annual tax for the year 1894 and the preceding five years, upon the sum of $90,000 “as capital employed" in the latter state. The authority for this tax was found in a statute of New York providing that "every corporation, joint-stock company, or association whatever, now or hereafter incorporated, or 1898. PEOPLE, ex rel. PARKE, DAVIS, & Co., v. ROBERTS. ganized, or formed under, by, or pursuant to| Lott, 8 Wall. 148, 150 [19: 387, 388], was a statute of Alabama declaring that "before law in this state or in any other state or decided. That case Involved the validity of country, and doing business in this state, except only savings banks and institutions for it shall be lawful for any dealer or dealers companies, banks, in spirituous liquors to offer any such liqsavings, life insurance foreign insurance companies, manufacturing uors for sale within the limits of this state, or mining corporations, or companies wholly such dealer or dealers introducing any such engaged in carrying on manufacture or min- liquors into the state for sale shall first pay ing ores within this state, and agricultural the tax collector of the county into which and horticultural societies or associations, such liquors are introduced, a tax of fifty which exceptions, however, shall not in- cents per gallon upon each and every gallon[668] clude gas companies, trust companies, elec- thereof." This court said: "If this section tric or steam heating, lighting, and power [the one just quoted] stood alone in the leg. companies, shall be liable to and shall pay islation of Alabama on the subject of taxa tax, as a tax upon its franchise or busi- ing liquors, the effect of it would be that ness, into the state treasury annually, to be all such liquors brought into the state from the original casks by which they came into computed as follows," etc. Laws of N. Y. other states and offered for sale, whether in 1889, 112th Sess. chap. 353, p. 467. The goods sold by the plaintiff in error, the state, or by retail in smaller quantities, by its agents in New York, are manufactured would be subject to a heavy tax, while the in the state of Michigan. If the plaintiff same class of liquors manufactured in the had been wholly engaged in carrying on man-state would escape the tax. It is obvious ufacture in New York it would have been exempied by the statute from the taxes in question. So that the question in this case is, whether it is competent for New York to impose a tax upon the franchise or business [667] of manufacturing corporations or companies, foreign or domestic, not "wholly engaged" in carrying on manufacture within its limits, while at the same time it exempts from such taxation like corporations or companies wholly engaged in carrying on manufacture in that state. see. that the right to impose any such discrimi- Is not such legislation an injurious dis-the other states of the Union." Again: crimination against the manufacturing busi- "But while the case has been argued here ness and the manufactured goods of other with a principal reference to the supposed states, in favor of the manufacturing busi- prohibition against taxing imports, it is to ness and the manufactured goods of New be seen from the opinion of the supreme The the clause of the Constitution which gives York, which is forbidden by the Constitution court of Alabama delivered in this case, that of the United States? Let us question presented for consideration is of to Congress the right to regulate commerce serious objection to the validity of the Alasuch importance as to justify an extended among the states was supposed to present a reference to our former decisions. In Woodruff v. Parham, 8 Wall. 123, 140 bama statute. Nor can it be doubted that [19: 382, 387], it was contended that a pro- a tax which so seriously affects the intervision in the charter of the city of Mobile, change of commodities between the states Alabama, authorizing the collection of a tax as to essentially impede or seriously interon sales at auction, was invalid in its appli- fere with it is a regulation of commerce. And cation to auctioneers who sold in that state it is also true, as conceded in that opinion, in the original packages goods and mer-that Congress has the same right to regulate chandise the product of states other than commerce among the states that it has to "The case be-regulate commerce with foreign nations, and Alabama. This court said: that whenever it exercises that power all conflicting state laws must give way, and That court seems to have that if Congress had made any regulation covering the matter in question we need inquire no further. relieved itself of the objection by holding that the tax imposed by the state of Alabama was an exercise of the concurrent right of regulating commerce remaining with the state until some regulation on the subject had been made *by Congress. But, assuming[669] the tax to be, as we have supposed, a discriminating tax, levied exclusively upon the products of sister states, and looking to the consequences which the exercise of this amounting, as we have seen, to a total abopower may produce if it be once conceded, At the same term of the court Hinson v.lition of all commercial intercourse between fore us is a simple tax on sales of merchan- 327 1 |