Opinion of the Court.

the Circuit Court, the mode of the assessment of the intangible property of companies, corporations and associations mentioned in section 4077 and that of individual taxpayers is different, and the intangible property of such corporations, companies and associations may in some respects differ from the intangible property belonging to individual taxpayers, but there is nothing in the statute which exempts any intangible property owned by any corporation, company or individual taxpayer from taxation, or discriminates between them.

Section 174 of the constitution of Kentucky provides that "all property, whether owned by natural persons or corporations, shall be taxed in proportion to its value, unless exempted by this constitution; and all corporate property shall pay the same rate of taxation paid by individual property. Nothing in this constitution shall be construed to prevent the general assembly from providing for taxation based on income, licenses or franchises."

But this does not prevent intangible property from being taxed, and the tax mentioned in section 4077 is not an additional tax upon the same property, but on intangible property which has not been taxed as tangible property.

We concur with the views of the Circuit Court that neither section 172 of the constitution nor any other section confines "the levy of an ad valorem tax to tangible property; but, as decided by the Kentucky Court of Appeals in Levi v. Louisville, 30 S. W. Rep. 973, it does require the levy of an ad valorem tax upon personal property as well as upon real estate, and this case decides that a license tax which is not a property tax cannot be substituted for an ad valorem tax upon personal property engaged in certain commercial pursuits in the city of Louisville. It does not decide that section 171 of the constitution, which declares that taxation shall be uniform upon all property subject to taxation within the territorial limits of the authority levying the tax, applies to taxation based upon income, license or franchise. If there is any intimation upon the subject in this case, it is that taxation which is based upon income, license or franchise may be classified by the legislature; and as to licenses, they may be levied upon some

Opinion of the Court.

employments and occupations and not upon others. If, however, we are correct in our construction of the Kentucky statutes, there is no ground for contending that there is a want of uniformity in the levy of the taxes against the defendant, even though section 171, requiring uniformity of taxation upon all property subject to taxation, applies to taxation based upon income, license or franchise, and is given its broadest possible construction."

The act received consideration in Henderson Bridge Co. v. Commonwealth, 31 S. W. Rep. 486, and the Court of Appeals of Kentucky, speaking through Grace, J., said:

"Thus we see what a varied meaning this term 'capital stock' may have. So that it becomes necessary to examine and see what was the object and meaning of the legislature when using this term in the clause before quoted from section 4079 of our statutes. In this examination it becomes important to notice those clauses of the constitution in reference to revenue and taxation, and see what was contemplated and enjoined by that instrument in reference to taxation. Section 172 provides: That all property not exempt from taxation, by this constitution, shall be assessed at its fair cash value, estimated at the price it would bring at a fair voluntary sale.'

Section 174 provides: That all property, whether owned by natural persons or by corporations, shall be taxed in proportion to its value, unless exempted by this constitution, and all corporate property shall pay the same rate of taxation paid by individual property. Nothing in this constitution shall be construed to prevent the General Assembly from providing for taxation, based on income, licenses or franchises.'

"Thus it is manifest that what the constitution intended to be taxed was property, - all property; and, as to corporations, not only all tangible property, but that it intended to leave the legislature of the State free to tax the franchises of corporations if it so desired; that the property of a corporation should be taxed as the property of an individual. It will be observed that in these several sections quoted, 'capital stock,' 'stock' and 'shares of stock' are not mentioned as being appropriate terms to designate the subjects of taxation, but

Dissenting Opinion: White, Field, Harlan, Brown, JJ.

it says 'property,' 'all property,' etc., so that there might be no confusion as to what that instrument intended. Neither is there any reason to suspect that the legislature did not understand the language and meaning of the constitution when it came to frame the revenue laws of the State under it now under consideration. Neither is there reason to suspect that it did not intend and endeavor in good faith to carry into effect the intent and meaning of the constitution. So that we may safely interpret all words and phrases (of doubtful and uncertain meaning) in accordance with and so as to effectuate and carry out that intent."

The statute thus construed cannot be overthrown for failure to conform to the requirements of sections 171, 172 and 174 of the state constitution.

Decree affirmed.

MR. JUSTICE WHITE, with whom concurred MR. JUSTICE FIELD, MR. JUSTICE HARLAN and MR. JUSTICE BROWN, dissenting.

In its ultimate analysis the legal principles by which this case should, in our opinion, be controlled are those which were by us deemed decisive in Adams Express Co. v. Ohio, 165 U. S. 194, 229. It follows that the reasons for our dissent stated in that case are pertinent to this, and we reiterate them as expressing the grounds for our dissent from the conclusions reached by the court in this case. The facts here, however, so pointedly exemplify the force of the reasons for our dissent in that case that we briefly state them. The actual value of all the tangible property owned by the express company in Kentucky was $36,614.53. This property was assessed by the local authorities for that amount and the taxes duly paid. In addition, the value of the franchise was assessed at $1,463,040, a disproportion enormously in excess of the amount imposed by the State of Ohio, great as was that disproportion. The operation of the tax is additionally illustrated by a further fact. The tax imposed in Ohio and held to be valid in Adams Express Co. v. Ohio, considered with reference to the routes.

Dissenting Opinion: White, Field, Harlan, Brown, JJ.

travelled by the agents of the express company, was at the rate of $250 per mile, whilst in this case the tax levied is at the rate of $764 per mile.

Although the fundamental legal principles which, in our opinion, should have controlled Adams Express Co. v. Ohio are the same in this case, there are yet material differences between the Kentucky and the Ohio statutes, which we think should take this case out of the ruling in the former case, even conceding that case to have been correctly decided. The tax here levied is a franchise tax. This is fully demonstrated by the dissenting opinion in Henderson Bridge Co. v. Kentucky, this day decided, ante, 155. The levy here sought to be sustained, then, is a franchise tax, assessed on a joint stock company which has no franchise, for the bill alleges that the express company is a partnership and the demurrer concedes it. Under this state of law and fact, therefore, the effect of holding the tax now in question valid, is to decide that a franchise can be taxed, when there is no franchise on which to levy the tax. This can only be escaped by contending that the right of the express company to do interstate commerce business in Kentucky, resulted from the assent of the State, and therefore the doing of such business was equivalent to accepting a franchise from the State. But to announce this proposition would overthrow the settled rule so necessary for the perpetuity of our institutions and the free intercourse between the States, that the right to transact interstate commerce business by a person or corporation is protected by the Constitution of the United States, and does not depend upon the mere grace of one of the States of the Union.

In addition to the clear distinctions, already noted, between Adams Express Co. v. Ohio and this case, there are others resulting from the difference between the Ohio and the Kentucky statutes. The Ohio statute considered in Adams Express Co. v. Ohio purported only to tax the tangible property within the State, but empowered the assessing board to consider its value as augmented by the use to which such property might be put. In other words, the Ohio law, as construed by the Supreme Court of the State. taxed only tangible property

Syllabus.

within the State enhanced in value by intangible elements outside the State. We considered, in dissenting in the Ohio case, that this was a mere disguise, a distinction without a difference, but the court held otherwise. In this case, by the law in question, the mask is thrown off, and what we conceive to be logically the thin disguise under which the courts of Ohio supported its statute is not asserted to exist, but the Kentucky statute, in unambiguous and unmistakable language, imposes the imperative duty upon the assessing board to assess property both in and out of the State. That is to say, it leaves nothing to implication or to evasion, but declares in plain English that property in and out of the State shall be assessed.

ADAMS EXPRESS COMPANY v. OHIO STATE AUDITOR.

PETITION FOR REHEARING OF NO. 337 REPORTED 165 U. S. 194; AND NOS. 469, 470 AND 471, REPORTED 165 U. S. 255.

Received March 1, 1897. Decided March 15, 1897.

The members of the court who concurred in the above named judgments, add a few observations to what has been already said.

It is well settled that no State can interfere with interstate commerce through the imposition of a tax which is, in effect, a tax for the privilege of transacting such commerce; and also that such restriction upon the power of a State does not in the least degree abridge its right to tax at their full value all the instrumentalities used for such commerce. The state statutes imposing taxes upon express companies which form the subject of these suits grant no privilege of doing an express business, and contemplate only the assessment and levy of taxes upon the properties of the respective companies situated within the respective States. In the complex civilization of to-day a large portion of the wealth of a community consists of intangible property, and there is nothing in the nature of things or in the limitations of the Federal Constitution which restrains a State from taxing such intangible property at its real value. Whenever separate articles of tangible property are joined together, not simply by a unity of ownership, but in a unity of use, there is not unfrequently developed a property, intangible though it may be, which in value exceeds the aggregate of the value of the separate pieces of tangible property.