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U.S. Supreme Court

Union Refrigerator Transit Co. v. Kentucky, 199 U.S. 194 (1905)

Union Refrigerator Transit Company v. Kentucky

No. 84

Argued October 13, 16, 1905

Decided November 13, 1905

199 U.S. 194


The power of taxation is exercised upon the assumption of an equivalent rendered in the protection of the property and person of the taxpayer, and if such equivalent cannot possibly be rendered because the property taxed is wholly beyond the jurisdiction of the taxing power, the taxation thereof within the domicil of the owner amounts to a taking of property without due process of law.

While there may be individual cases where the weight of the tax necessarily

Page 199 U. S. 195

falls unequally on account of special circumstances, the general rule is that, in classifying property for taxation, some benefit to the property taxed is a controlling consideration, and a plain abuse of the power in this respect may justify judicial interference.

The proper use of a legal fiction is to prevent injustice and the maxim mobilia sequuntur personam may only be resorted to when convenience and justice so require. That doctrine does not apply to tangible personal property permanently located in another state where it is employed and protected, acquires a situs, and is subject to be there taxed irrespective of the domicil of the owner, and an attempt on the part of the state in which the owner is domiciled to tax such property amounts to a deprivation of property without due process of law within the purview of the Fourteenth Amendment.

So held in regard to the taxation of cars owned by a transit refrigerating company and which were permanently employed without the state in which the company was domiciled.

This proceeding was begun by a statement filed by the revenue agent of the commonwealth in the Jefferson County court, praying that certain personal property belonging to the plaintiff in error be assessed for taxation for state, county, and municipal taxes, and be also adjudged to pay a penalty of twenty percent on the aggregate amount of the tax.

To this statement the transit company filed certain demurrers and answers, upon which, and upon the deposition of the comptroller of the company in St. Louis, Missouri, the case went to a hearing, and resulted in a finding of facts that the transit company was the owner of two thousand cars in September, 1897, 1898, 1899, and 1900, to which years the recovery was limited, of the value of $200 each; that its cars were employed by the company by renting them to shippers, who took possession of them from time to time at Milwaukee, Wisconsin, and used them for the carriage of freight in the United States, Canada, and Mexico, the company being paid by the railroads in proportion to the mileage made over their lines; that the correct method of ascertaining the number of cars which should be assessed for taxation was to ascertain and list such a proportion of its cars as, under a system of averages upon their gross earnings, were shown to be used in the State of Kentucky during the fiscal year, the court finding by this method that

Page 199 U. S. 196

there were subject to assessment in Kentucky twenty-eight cars for the year 1897, twenty-nine for the year 1898, forty for the year 1899, and sixty-seven for 1900.

The court also found that the cars other than those mentioned were not liable to assessment.

The order of the county court was affirmed by the circuit court, and an appeal taken to the Court of Appeals of Kentucky, which reversed the judgment of the court below, and found that the company was liable to taxation upon its entire number of two thousand cars, and directed the court below to enter judgment against it for the taxes appropriate to this number. 26 Ky. 23.

To review this judgment this writ of error was sued out.

Page 199 U. S. 201

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