People v. Moring.

Comst.) 424; Town of Guilford v. Supervisors, 13 N. Y. (3 Kern.) 143; Mayor of N. Y. v. Second Ave. R. R. Co., 32 Id. 261; 11 Johns. 80; 2 Coke Ins. 532; Almy v. California, 24 How. U. S. 169; Brown v. Maryland, 12 Wheat, 419, 440, 447.

HUNT, J. [After stating the facts.]-The demurrer was sustained in the court below upon the ground that the act of the legislature of New York in question was repugnant to the Constitution of the United States, and void. It was also held to be in violation of the provisions of section 13 of article 7 of the Constitution of the State of New York, and to be void for that reason. I shall examine these questions only, disregarding some defects and omissions in the framework of the indictment, which, if insisted upon, might be the occasion of technical embarrassment.

The defendant claims the law in question to be invalid, as being repugnant to that provision of the constitution of the United States which authorizes Congress "to regulate commerce with foreign nations, and among the several States, and with the Indian tribes," and also with that provision of the same instrument which declares that "No State shall, without the consent of Congress, lay any imposts or duties on imports or exports, except what may be absolutely necessary for executing its inspection laws" (art. 1, § 8, subd. 3; § 10, subd. 2).

The exaction from the broker of the fees or duties required by the law of 1866, now before us, is claimed by him to be an interference with commerce, and to be a tax or duty upon imports, and so in violation of the constitutional provisions quoted.

These provisions of the United States constitution have been the subject of frequent consideration in the federal courts; and in seeking a conclusion in the present case, we are not without the aid of great landmarks to guide us in our way. An examination of the principles of the adjudicated cases will assist us in reaching a correct result in the case before us.

The case of Gibbons v. Ogden, 9 Wheat. 1, involved the validity of the act of the legislature of the State of New York granting to Livingston and Fulton the exclusive navigation of

People v. Moring.

all the waters within the jurisdiction of that State, with boats. moved by fire or steam, for a term of years. These acts were adjudged to be a violation of the constitutional provision authorizing Congress to regulate commerce among the States, so far as they prohibited vessels licensed according to the laws of the United States for carrying on the coasting trade, from navigating the said waters by means of fire or steam. In discusssing the question, what is this power of regulation, Chief Justice MARSHALL says: "It is the power to prescribe the rule by which commerce is to be governed. This power, like all others vested in Congress, is complete in itself, may be exercised to its utmost extent, and acknowledges no limitations other than are prescribed in the constitution. . . The wisdom and discretion of Congress, their identity with the people, and the influence which their constituents possess at elections, are, in this as in many other instances,—as that, for example, of declaring war, the sole restraints on which they have relied to secure them from its abuse. restraints on which the people must often rely representative governments."

They are the solely in all

This power to regulate commerce is exclusively in Congress, and cannot be exercised by the States (p. 199). Still, there remain to the States the rights, so important in their effects upon commerce, and so difficult to distinguish from its regulation, of framing and executing inspection laws, quarantine laws, health laws of every description, and a regulated system of pilotage.

In the case of Brown v. State of Maryland, 12 Wheat. 419, the leading opinion was delivered by the same learned judge; and the court held that an act of the legislature of the State of Maryland, requiring all importers of foreign goods by the bale or package, and other persons selling the same by wholesale, bale or package, to take out a license, for which they should pay fifty dollars, and in case of neglect, subjecting them to certain forfeitures and penalties, was repugnant to the section of the United States constitution already quoted, in reference to regulating commerce, as well as to that forbidding the laying of duties or imposts.

The reasoning of the court is briefly this: An impost or

People v. Moring.

duty on imports is a custom or tax levied on articles imported, or brought into a country. Usually, and to prevent evasions of the law, this right is exercised before the importer is permitted to take possession of the goods. It is none the less an impost, however, when the levy is delayed until the goods are landed. The power to tax immediately upon landing is the same as the power to tax while entering the port. There is no difference between the power to prohibit the sale of an article and a power to prevent its introduction into the country. No goods would be imported if none could be sold. The same power which imposes a light duty may impose one amounting to prohibition. When the importer has so acted on the thing imported that it has become incorporated and mixed up with the mass of property in the country, it loses its distinctive character as an import, and becomes subject to the taxing power of the State; but while remaining the property of the importer, in his warehouse, in the original form or package in which it is imported, a tax upon it is plainly a tax upon imports, within the prohibition of the constitution. A tax on the sale of an article imported only for sale is a tax on the article itself.

I shall have occasion again to allude to certain distinctions contained in this opinion, which will be pertinent to the case in hand.

The three cases against the States of Massachusetts, Rhode Island and New Hampshire, termed the License Cases, are reported in 5 How. U. S. 504. It was there held that a law of Massachusetts, providing that no person shall presume to be a retailer of wine, brandy, &c., in less quantity than twentyeight gallons, and that delivered and carried away all at one time, unless he is first licensed as a retailer of wine and spirits, and that the commissioners shall not be required to grant such license when in their opinion the public good does not require it, was not inconsistent with any provision of the United States constitution, or any act of Congress under it.

The law of Rhode Island forbade the sale of rum, gin, brandy, &c., in a less quantity than ten gallons, although the brandy which was sold in this case was duly imported from France into the United States, and purchased, by the party in

People v. Moring.

dicted, from the original importer. The law of New Hamp shire imposed a similar restriction, although in this case the article sold was a barrel of American gin, purchased in Boston, carried coastwise to Piscataqua, and there sold in the same barrel. These laws were also held to be valid within the provisions of the constitution and laws of the United States.

In these cases the leading opinion was delivered by TANEY, Ch. J.

These decisions were placed upon the ground that, although the regulation of commerce with foreign nations and among the several States belonged exclusively to Congress, the regulation of the internal traffic of a State belonged to itself, free from any control or interference on the part of the Federal government.

The doctrine of Brown v. Maryland, that while goods were in the hands of the importer, in the shape in which they were introduced, and in which they were intended to be sold, they were not subject to taxation, either by direct assessment or by requiring a license to sell, was reiterated. The laws in ques

tion were held not to act upon the article until after it had passed the line of foreign commerce, and become a part of the general mass of the property of the State.

It was decided in Nathan v. Louisiana, 8 How. U. S. 73, that a tax imposed by a State upon all money or exchange brokers was not void for repugnance to constitutional power of Congress to regulate commerce; and this although the business of the defendant Nathan was confined exclusively to the sale and purchase of foreign bills of exchange.

It was held to be a tax upon the business of the defendant simply, upon his credit or his capital, and not a charge upon the commerce of the country.

The last case to which I shall refer is that of Almy v. State of California, 24 How. U. S. 169. The defendant Almy was indicted for a violation of a law of the State of California, which required a stamp of a certain value, expressing the amount of the duty, to be attached to any bill of lading for the transportation of gold or silver to any place without the State. The court held that this was substantially a tax on exports; that a bill of lading or some similar document, was an invariable ac

People v. Moring.

companiment of shipment, and that a tax upon the instrument was a tax upon the article itself. They say: "The intention to tax the export of gold and silver, in the form of a tax on a bill of lading, is too plain to be mistaken."

The principles to be extracted from these cases are as follows:

1. That the power of regulating commerce with foreign nations, and among the States, and the power of taxing imports or exports, belongs to Congress exclusively.

2. That Congress has no power to interfere with the internal traffic of a State. That authority is vested in the State alone. 3. That imported property, while remaining in the hands of the importer in its original form, cannot be taxed by State authority.

4. That when it leaves the importer's hands, and becomes incorporated with the general mass of the property of the country, it becomes subject to State taxation.

5. That taxation upon the right to sell in any form an article of import, intended for sale, or upon the necessary instrument of exporting an article intended for export, is a taxation upon the article itself, and not permitted by the Federal constitution.

6. That the imposition by a State of a tax upon a particular kind of business is constitutional, although the subject matter of the business relate entirely to dealings with foreign countries. Judged by these principles, I can discover no objection to the legislative acts now under discussion.

Since the year 1784, the legislature of the State of New York has, from time to time, passed laws taxing the sales of goods by auctioneers. This has been the practice, both as to foreign and domestic goods. L. 1784 (1 Greenl.) 64; L. 1792 (2 Greenl.) 470.

The constitution of 1821 recognized this practice, and provided for the purposes to which the moneys thus received should be applied. § 10, art. 7; L. 1824, c. 47; L. 1838, c. 52; L. 1864, c. 62.

This taxation has State of New York, of dollars annually.

been a valuable source of revenue to the often reaching to a quarter of a million During a period of eighty years this