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the covenants and agreements of the party of
first part, hereinafter mentioned to be by them
kept and performed, hereby agrees with the
said party of the first part, that they will fur-
nish drawing-room cars and sleeping cars to be
used by said party for the transportation of
passengers, sufficient to meet the requirements
of travel on and over their line of railroad,
and on and over all lines of railroad which
they now control, or may hereafter control, by
ownership, lease or otherwise, the said cars so
furnished to be satisfactory to the general su-
perintendent of the first party.

2. The said party of the second part agrees
that they will keep the carpets, upholstery and
bedding of each of the said cars in good order
and repair, and renew and improve the same
when necessary, at their own expense, except
ing repairs and removals made necessary by
accident or casualty; it being understood that
the said first party shall repair all damages to
said cars, of every kind, occasioned by accident
or casualty, during the continuance of this
agreement.

3. The said party of the second part hereby agrees, at their own expense and cost, to furnish one or more employés as may be needful, upon each of said cars, whose duties shall be to collect fares for the accommodations furnished in said cars, and generally to wait upon passengers therein, and provide for their com

fort.

and shall also keep said cars in good order and
repair, including renewals of worn out parts,
and all things appertaining to said cars, neces
sary to keep them in first class condition, ex-
cept such as are provided for in article second
of this agreement.

8. The party of the first part agrees to fur-
nish said party of the second part, at conveni-
ent points, room and conveniences for airing
and storing bedding.

9. The said party of the first part further agrees that the said party of the second part shall be entitled to collect from each and every person occupying said cars, such sums for said occupancy as may be usual on competing lines furnishing equal accommodations; and that such rules and regulations shall be agreed upon as will most favor the renting of seats and couches in said cars.

10. The party of the first part hereby agrees to permit the party of the second part to place their tickets for seats and couches for sale in such of the railroad ticket offices as may be desired by said second party, and such serv ices shall be performed by and as part of the general duties of the ticket agents, and without charge to the party of the second part; proceeds of such sales to be at the risk of said second party.

11. The party of the first part hereby agrees
that said second party shall have the exclusive
right, for a term of fifteen years from the date
4. The said party of the first part hereby hereof, to furnish for the use of the first party
agrees that the general officers of said second drawing-room or parlor cars and sleeping cars,
party, and the employés named in article third including reclining-chair cars, on all the pas
of this agreement, shall be entitled to free passenger trains of said first party, and over their
sage over the lines of the first party, when they entire lines of railroad, and on all railroads
are on duty for the second party.
which they now control or may hereafter con-
trol, by ownership, lease or otherwise; and also
on all passenger trains on which they may, by
virtue of contracts or running arrangements
with other roads, have the right to use such
cars, and that they will not contract with any
other parties to run said class of cars on or
over said lines of road during said period of
fifteen years.

5. The party of the second part hereby agrees that the general officers of the first party shall be entitled to free passes in any of the cars furnished by said second party under this agree

ment.

6. It is hereby mutually agreed that the said employés of the second party named in article third of this agreement shall be governed by and subject to the rules and regulations of the said first party, which are, or may be, adopted from time to time, for the government of their own employés, and in the event of any liability arising against said first party for personal injury, death, or otherwise of any employé of said second party, it is hereby distinctly understood and agreed that the said first party shall be liable only to the same extent they would be if the person injured was an employé in fact of said first party, and for all liability in excess thereof shall be indemnified and paid by said second party.

7. The party of the first part, in consideration of the use of the aforesaid cars, hereby agrees to haul the same on the passenger trains on their line of road, and on all roads which they now control or may hereafter control by ownership, lease or otherwise; and also on all passenger trains on which they may, by virtue of contracts or running arrangements with other roads, have the right to use such cars in such manner as will best accommodate passengers desiring the use of said cars; and the said party of the first part shall, at their own expense, furnish fuel for the cars and materials for the lights, shall wash and cleanse said cars,

The said second party, for the consideration aforesaid, hereby guarantees said first party against all damages of whatsoever kind which may be by said first party incurred in conse quence of any infringement of patent rights in the construction and use of any of said cars which may be used by said second party upon the lines of said first party under this arrangement, it being the meaning and intent of this article that the said second party shall secure said first party against all manner of expenditures which may be incurred by said first party in consequence of any litigation connected with alleged infringements of patent rights for the interior arrangements of said cars, and that they will pay off and discharge all judgments obtained at any time against said first party on account of such infringements.

12. It is mutually agreed between the parties hereto, that in case either of said parties shall at any time hereafter fail to keep and perform any of the covenants herein contained to be by them respectively kept and performed, then, and in that case, after written notice shall have been given to the defaulting party thereto of the default complained of, if the said defaulting party shall refuse or neglect to make good,

[39]

[40]

[41]

keep and perform such unfulfilled covenants
and conditions of this agreement within a rea-
sonable time after such notice, the other party
shall be at liberty to declare this contract ended
and no longer in force."

cause was heard on an agreed statement of
facts, and that it is thereby made a part of the
record at large in the cause, and that the court
found the issue joined in favor of the plaintiff.
It then sets forth the material facts contained
in the agreed statement, and awards a judg
ment for $5,400, for the taxes on the thirty-
six cars, and for $1,089.90 interest, and for
costs; assigning as a reason that the State had
no power to impose a privilege tax on the plaint-
iff for running or using the thirty-six cars in
the State, the tax being a regulation of com-

lation of the Constitution of the United States.
To reverse this judgment the defendant has
sued out a writ of error.

The agreed statement further sets forth that
the plaintiff has never had any branch office or
establishment of any kind in Tennessee, unless
the fact that the plaintiff has placed its tickets
for sale with railway agents in tha State con-
stitutes the offices of such agents branch offices
or establishments of the plaintiff; that it has
never had any ticket agents of its own in Ten-merce between the States, and therefore a vio-
nessee, except in so far as the ticket agents of
the railway companies with whom the tickets of
the plaintiff have been placed for sale may be re-
garded as the agents of the plaintiff; that the The point upon which the final judgment
plaintiff has never had any other agents, officers was rendered in the case was the one considered
or employés in Tennessee, except the conductors and adjudged in the decision given on the de-
and porters which it furnishes with its cars, under murrer to the declaration. The tax was not a
its contracts with the railroad companies; that property tax, because, under the Constitution
the cars furnished by the plaintiff under those of Tennessee, all property must be taxed ac-
contracts constitute all the property owned by it cording to its value, and this tax was not meas-
in Tennessee, and the business done by it under ured by value, but was an arbitrary charge.
those contracts, such as it is, is the only busi- What was done by the plaintiff was taxed as a
ness done by it in Tennessee; that the cars privilege, it being assumed by the state authori-
furnished by it under those contracts, with the ties that the Legislature had the power, under
exception of two sleeping cars running between the Constitution of Tennessee, to enact the 6th
Nashville and Memphis, are used in transport- section of the Act of 1877, and that the plaint-
ing passengers from other States into or across iff had done what that section declared to be a
Tennessee, and from points in Tennessee to privilege. By the decisions of the Supreme
points in other States; that the same cars also Court of Tennessee, cited in the opinion of the
transport passengers from points in Tennessee circuit court on the demurrer, it is held that
to other points in that State whenever they the Legislature may declare the right to carry
properly apply for such transportation, but the on any business or occupation to be a privilege,
number of such passengers bears an inconsid- to be purchased from the State on such condi-
erable proportion to the other passengers trans- tions as the statute law may prescribe, and that
ported in those cars; that those cars run into, it is illegal to carry on such business without
out of or across Tennessee, making such stops complying with those conditions. In this case,
as the trains to which they are attached make; the payment of the tax imposed was a condi-
that, in the case of passengers traveling across tion prescribed, without complying with which
Tennessee, or from points out of it to points in what was done by the plaintiff was made ille-
it, their sleeping-car tickets are purchased and gal. The tax was imposed as a condition pre-
paid for before they enter Tennessee; but in cedent to the right of the plaintiff to run and
the case of passengers from points in Tennes-use the thirty-six sleeping cars owned by it, as
see to points in other States, or in Tennessee, it ran and used them on railroads in Tennessee.
the tickets are purchased and paid for in Ten- The privilege tax is held by the Supreme Court
nessee; that the railroad companies of Tennes- of Tennessee to be a license tax, for the privi
see with whom such contracts were made were lege of doing the thing for which the tax is im-
duly chartered by that State or organized or posed, it being unlawful to do the thing with-
operated under its laws, with power to trans-out paying the tax. What was done by the
port passengers for hire; that they are taxed plaintiff in this case, in connection with the
by that State on the value of their roads, roll-use of the thirty-six cars, if wholly a branch of
ing stock and other tangible property, and also
on the value of their franchises; that from
March 16, 1877, to the present time, the Mem-
phis and Charleston Railroad Company, and
the East Tennessee, Virginia and Georgia Rail-
road Company, both of them Tennessee corpo-
rations, have owned sleeping cars which they
have run and used during that time as sleeping What was that commerce? The plaintiff, by
cars upon their respective roads; and they have its contract, furnished sleeping cars to the rail-
not been required by the State to pay any tax road company, to be used by the latter "for
for running or using said sleeping cars upon the transportation of passengers," suflicient in
their roads, except in so far as such a tax may numbers to meet the requirements of travel on
have been included in the tax assessed on the the road. The plaintiff kept in order and re-
value of their franchises; and that the thirty-newed the carpets, upholstery and bedding of the
eight cars before mentioned included the two
cars run between Nashville and Memphis.

The agreed statement sets forth the other facts herein before contained, necessary to a recovery; and, on the 29th of December, 1884, a judgment was entered, which states that the

interstate commerce, was made by the State of
Tennessee unlawful unless the tax should be
paid, and, to the extent of the tax, a burden
was placed on such commerce; and upon prin-
ciple the tax if lawful might equally well
have been large enough to practically stop al-
together the particular species of commerce.

cars, except repairs and renewals made necessary
by accident or casualty; but all damages to the
cars by accident or casualty were repaired by the
railroad company The plaintiff furnished em
ployés on each car to collect fares for the ac-
commodations furnished by the car, and to

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[43]

[44]

So, too the service rendered to the pas senger was a unit. The car was equally a vehicle of transit, as if it had been a car owned by the railroad company, and the special conve niences or comforts furnished to the passenger had been furnished by the railroad company itself. As such vehicle of transit, the car, so far as it was engaged in interstate commerce, was not taxable by the State of Tennessee; because the plaintiff had no domicil in Tennessee and was not subject to its jurisdiction for purposes of taxation; and the cars had no situs within the State for purposes of taxation and the plaintiff carried on no business within the State, in the sense in which the carrying on of business in a State is taxable, by way of license or privilege.

[45] wait upon passengers and provide for their | car.
comfort. Those employes were governed by
the rules adopted by the railroad company to
govern its own employé, and the railroad com-
pany was liable for personal injury to, or the
death of, any such employé of the plaintiff, to
the same extent only as if such employé was in
fact an employé of the railroad company, and
the latter was indemnified by the plaintiff for
all liability in excess thereof. The railroad
company carried free on its line such employés
of the plaintiff and its general officers when on
duty for it; and the plaintiff carried free in the
cars it so furnished the general officers of the
railroad company. In consideration of the
use of such cars, the railroad company hauled
them on the passenger trains on its line, in
such manner as best accommodated passen-
gers desiring to use the cars, and furnished, at
its own expense, fuel for them and materials
for the lights, and washed and cleansed them,
and kept them in good order and repair, in-
cluding renewals of worn out parts, and all
things appertaining to them, necessary to keep
them in first class condition, with the excep-
tions before specified in regard to carpets, up-
holstery and bedding, and furnished room and
conveniences for airing and storing bedding.
The plaintiff collected from every person occu-
pying the car compensation for its accommo-
dations in seats and couches. The railroad
company permitted the plaintiff to place its
tickets for seats and couches on sale in the
ticket offices of the railroad company, the sale
to be a part of the general duties of the ticket
agents of the latter, and to be without charge
to the plaintiff, but the proceeds of sales to be
at its risk. The contract was made an exclu-
sive one for fifteen years, and the plaintiff agreed
to protect the railroad company against all lia-
bility for the infringement of any patent in the
construction and use of the cars, and there was
a provision for the termination of the contract
by either party on a breach of it by the other.
On these facts, the cars in question were cars
for the transportation of the passengers who oc-
cupied them, in their transit into or through or
out of Tennessee. They were used by the rail-class carriage over a third, or by a first class
road company for such transportation, and it
received the transit fare or compensation. For
purposes of transit, it dealt with the cars as it
would with cars owned by itself. It hauled
them, furnished fuel and materials for lights,
washed and cleansed them, kept them in re-
pair, renewed worn-out parts, repaired all dam-
ages to them by accident or casualty, and even
repaired and renewed carpets, upholstery and
bedding damaged or destroyed by accident or
casualty; all at its own expense and without
charge to the plaintiff, leaving to the plaintiff
only to make good the ordinary wear and tear
of the sitting and sleeping conveniences, and
allowing it to have the compensation for such
conveniences, and furnishing it free of charge
with all facilities for selling seats and couches.
The tax was a unit, for the privilege of the
transit of the passenger and all its accessories.
No distinction was made in the tax between the
right of transit, as a branch of commerce be-
tween the States, and the sleeping and other
conveniences which appertained to a transit in
the car. The tax was really one on the right of
transit, though laid wholly on the owner of the

[46]

The case of Atty-Gen. v. London, etc. R. Co. in the court of appeal, 6 Q. B. Div. 216, before Lord Chief Justice Coleridge, and Lords Justices Baggallay and Brett, affirming the judg ment of the Exchequer Division,5 Ex. Div. 247, is instructive in the above point of view, as to the subject in hand. There, the railway company attached to its night_trains sleeping carriages for the accommodation of such of its first class passengers as might choose to avail themselves of it. For the use of these carriages [47] they were charged an extra sum in addition to the ordinary first class fare. Besides couches with pillows, sheets and blankets, each carriage contained a lavatory, and other conveniences. Passengers using such carriage were not disturbed during the night by demands for their tickets, and, if they arrived at their destination in the night, the passengers were allowed to remain in their beds until the morning. Under a statute imposing a percentage duty "upon all sums received or charged for the hire, fare or conveyance of passengers" on any railway, the government claimed and was allowed the duty on the extra sum charged for the use of the sleeping carriage. The court of appeal, by Lord Coleridge, said: "We regard the additional accommodation afforded by the sleeping carriages as differing in no essential particular from the superior accommodation afforded by a second carriage over both. If the company issued tickets to all passengers alike, at the price charged to passengers traveling in third class carriages, and then issued tickets, at corresponding prices, to those desiring to travel in a higher class of carriage, it could hardly be contended that duty would not be payable upon the prices paid for such second ticket. The pas senger who is content to travel in a third class or second class carriage in the day, might well desire to travel in a carriage of a higher class by night; and in like manner a passenger ordinarily traveling by day in a first class carriage might desire the additional accommodation at night of a sleeping carriage. No separate charge is made in the present case; the charge, though written on a separate ticket, is in our opinion part of one charge for the conveyance of the passenger in a particular way and is, therefore, a part of the charge for the convey ance of a passenger, received and charged for such conveyance."

That case is in harmony with the views before taken in regard to the present case. The fare paid by the interstate passenger to the rail

road company, and that paid to the plaintiff, added together, were merely a charge for his conveyance in a particular way, and there was really but one charge for the transit, though the total amount paid was divided among two [48] recipients. The service was a single one, of interstate transit, with certain accommodations for comfort, and what was paid to the plaintiff was part of a charge for the conveyance of the passenger.

[49]

The views above expressed are in harmony with numerous decisions which have been made by this court on the subject to which they relate. In Almy v. California, 24 How. 169 [65 U. S. bk. 16, L. ed. 644], a stamp tax had been imposed by the State on bills of lading for the transportation of gold or silver from any point within the State to any point without it, and was held by this court to be invalid; and in Woodruff v. Parham, 8 Wall. 123, 138 [75 U. S. bk. 19, L. ed. 382, 386], it was said by this court, Mr. Justice Miller delivering its opinion, that that stamp tax "was a regulation of commerce, a tax imposed upon the transportation of goods from one State to another, over the high seas, in conflict with the freedom of transit of goods and persons between one State and another, which is within the rule laid down in Crandall v. Nevada, 6 Wall. 35 [73 U. S. bk. 18, L. ed. 745] and with the authority of Congress to regulate commerce among the States." In the State Freight Tax Case, 15 Wall. 232, 281 [82 U. S. bk. 21, L. ed. 146, 163], it was said that a State cannot tax persons for passing through or out of it; that interstate transportation of passengers is beyond the reach of a State Legislature; and that a tax upon it amounts to a tax upon the passengers transported.

In Railroad Co. v. Maryland, 21 Wall. 456, 472 [88 U. S. bk. 22, L. ed. 678, 684, Mr. Jus tice Bradley, in speaking for the court said that a State cannot impose a tax or duty on the movements or operations of commerce between the States, because it would be a regulation of such commerce "in a matter which is essential to the rights of all, and, therefore, requiring the exclusive legislation of Congress," being "a tax because of the transportation," and "therefore, virtually, a tax on the transportation."

longing to a foreign corporation engaged in
foreign or interstate commerce, may be taxel
equally with like property of a domestic corpo-
ration engaged in that business, we are clear
that a tax or other burden imposed on the prop-
erty of either corporation because it is used to
carry on that commerce, or upon the transpor-
tation of persons or property, or for the naviga-
tion of the public waters over which the trans-
portation is made, is invalid and void, as an in
terference with and an obstruction of the pow
er of Congress in the regulation of such com-
merce." The case of Telegraph Co. v. Texas,
105 U. S. 460 [Bk. 26, L. ed. 1067], in regard
to a state tax on telegraphic messages sent out
of a State, is a kindred case. The whole sub-
ject, in reference to a state tax imposed for sel-
ling goods brought into a State from other
States, was recently fully considered by this
court in Walling v. Michigan, 116 U. S. 455
[ante, 694]. And in that case Mr. Justice
Bradley, speaking for the court, says: "We
have also repeatedly held that so long as Con-
gress does not pass any law to regulate com-
merce among the several States, it thereby in-
dicates its will that such commerce shall be free
and untrammeled." See Welton v. Missouri,
[supra]; Machine Co. v. Gage, 100 U. S, 676, 678
[Bk. 25, L. ed. 755]; County of Mobile v. Kim-
ball, 102 U. S. 691, 697 [Bk. 26, L. ed. 238,
239]; Gloucester Ferry Co. v. Pennsylvania,
and Brown v. Houston, 114 U. S. 196, 204, 622,
631 [ante, 158, 257], where the cases on that
point are collected.

It is urged that the decision of the circuit
court in this case was inconsistent with the
rulings in Osborne v. Mobile, 16 Wall. 479 [83
U. S. bk. 21, L. ed. 470], and in Wiggins Ferry
Co. v. East St. Louis, 107 U. S. 365 [Bk. 27, L.
ed. 419]. It becomes necessary, therefore, to
examine those cases.

In Osborne v. Mobile, Osborne was an agent,
at Mobile, Alabama, of a Georgia corporation,
an express company, and, as such, transacted
at Mobile a general express business within and
extending beyond the limits of Alabama. An
ordinance of the City of Mobile required
an annual license fee of $500 to be paid by
every express company doing business in Mo-
bile, and having a business extending beyond
the limits of Alabama, while every express
company doing business within the limits of
the State was required to pay a license fee
of only $100, and every such company doing
business within the city was required to pay
license fee of only $50. A fine was prescribed
for a violation of the ordinance. Osborne vio-
be-lated it and was fined. The legality of the tax
was upheld. Chief Justice Chase, in delivering
the opinion of the court, cited the State Freight
Tar Case, 15 Wall. 232 [82 U. S. bk. 21, L. ed.
146], decided at the same term, as holding
"that the State could not constitutionally im-

The decisions in the various cases in this
court on the subject of a tax by a State on the
bringing in of passengers from foreign coun-
tries, and which are collected and commented
on by Mr. Justice Miller, in delivering the opin-
ion of this court in the Head Money Cases, 112
U. S. 580, 591 [Bk. 28, L. ed. 798, 801], show
it to be a settled matter that to tax the transit
of passengers from foreign countries or
tween the States, is to regulate commerce.
The principles which governed the decisions
in Welton v. Missouri, 91 U. S. 275 [Bk. 23, L.
ed. 347]; Guy v. Baltimore, 100 U. S. 434 [Bk.
25, L. ed. 743] and Moran v. New Orleans, 112
U. S. 69 [Bk. 28, L. ed. 653], holding unlaw-pose and collect a tax upon the tonnage of
ful the state taxes in those cases on interstate
commerce in merchandise, are equally applica-
ble to the tax in this case on the transit of
passengers. The rule which governs the sub-
ject is accurately and tersely stated by Mr. Jus
tice Field, in delivering the opinion of the
court, in Gloucester Ferry Co. v. Pennsylvania,
114 Ú. S. 196, 211 [ante 158, 163]: "While
it is conceded that the property in a State, be-

freight taken up within its limits and carried
beyond them, or taken up beyond its limits and
brought within them; that is to say, in other
words, upon interstate transportation," "be-
cause it was, in effect, a restriction upon inter-
state commerce, which by the Constitution was
designed to be entirely free." The tax on the
Georgia Express Company was upheld as a tax
upon a business carried on within the City of

[50]

United States for the Middle District of WILLIAM B. DINSMORE, as President of Tennessee.

[52]

[1]