ERROR to the Court of Appeals of Maryland; the case being thus: A statute of Maryland granted to the Baltimore and Ohio Railroad Company the right to make a branch or lateral road from Baltimore to Washington City, and of employing machinery and carriages thereon, for the transportation of freight and passengers.*fn1 And it was further enacted, 'That the company shall be entitled to charge and take for conveying each person, the whole distance between the cities of Baltimore and Washington, not exceeding two dollars and fifty cents, and in proportion for every shorter distance. 'That the said company shall pay to the treasurer of the Western Shore of Maryland, on the first Monday in January and July in each and every year, for the use of the State, one-fifth of the whole amount which may be received for the transportation of passengers on said railroad by said company during the six months last preceding.'There were other statutes on the main subject, but this one presents the substance of the enactments. This enactment was accepted, and the payment made for many years of one-fifth of $1.50, the fare asked. However, after a certain time the railroad company denied the constitutionality of the stipulation to pay, and refused further payment. Hereupon the State sued the company in one of the State courts of Baltimore. The action was indebitatus assumpsit. The declaration contained two counts: the first for money due and payable, the second for money had and received. In answer to a demand of the defendant for a bill of particulars, the following was filed by the State. 'The claim is for the particulars following, viz.: For $500,000, being the one-fifth part of the whole amount of moneys received by the defendant for the transportation of passengers upon the Washington branch of the Baltimore and Ohio Railroad, from the 1st day of January, 1860, to the 1st day of January, 1870; which said sum of $500,000 was received by the defendant for the use of the plaintiff, and was due and in arrears to the plaintiff at the time of the institution of this action.' The defendant pleaded the general issue, and on that issue the case was tried. The record showed that at the trial of the cause, after all the acts of Assembly constituting the charter referred to, and bearing on the question, had been submitted, the defendant, by his counsel, prayed the court to instruct the jury that these acts, so far as they provided that the defendant should pay to the treasurer of the Western Shore of Maryland, on the first Monday of January and July in each and every year, for the use of the State, one-fifth of the whole amount that may be received for the transportation of passengers on the branch road mentioned in said acts during the six months last preceding, were unconstitutional, because in conflict with the Constitution of the United States; and secondly, that the defendant was not estopped from setting up the defence. The plaintiff, on the other hand, prayed the court to instruct the jury that even if the said provision was unconstitutional, still the defendant, by accepting the terms of the charter, was bound to pay to the State the one-fifth part of the passage-money in question. The court granted the prayer of the defendant and refused that of the plaintiff, and a verdict and judgment were rendered for the former. The Court of Appeals of Maryland reversed the judgment and awarded a venire de novo. Upon the second trial the same instructions were asked by each party respectively, and the court below, in conformity with the decision of the Court of Appeals, refused the instruction asked for by the defendant and granted that asked for by the plaintiff, and a verdict and judgment were rendered for the latter. This judgment was affirmed by the Court of Appeals, and was now brought here under the assumption that it was within section 709 of the Revised Statutes,*fn2 the old twenty-fifth section of the Judiciary Act.
The opinion of the court was delivered by: In the Freight Tax Cases,*fn4 to which we refer as much in point, Mr. Justice Strong, delivering the opinion of this court, says:
Messrs. J. H. B. Latrobe and Reverdy Johnson, for the plaintiff in error.
The question is, were the statutes of Maryland and the contract made under them constitutional?
We submit that this question has been settled by this court in the case of Crandall v. State of Nevada.*fn3
That case arose upon an act of Assembly of Nevada. The act was thus:
'There shall be levied and collected a capitation tax of $1.00 upon every person leaving the State by any railroad, stagecoach, or other vehicle engaged or employed in the business of transporting passengers for hire.'
This court pronounced the act unconstitutional.
Is there any essential difference between that act of Nevada and the Maryland act?
1. In the Nevada case the effect was to make each passenger leaving the State pay $1.00 to the State. In the case at bar the effect was to make each passenger entering or leaving the State by the Washington branch road pay 30 cents, or one-fifth of $1.50.
The payment to the State is irrespective of the earnings of the company, out of which are defrayed the cost of running the road, &c., and a dividend to the stockholders; these are met by the $1.20, which is the company's share of the $1.50.
That the phrase 'one-fifth of a given sum' is an accurate statement of the quotient resulting from dividing 'the given sum' by five cannot, of course, be denied. The tax of $1.00, therefore, in Nevada, was not more specific than a tax of one-fifth of the gross receipts, when the fare was $1.50, in Maryland.
In the Nevada case the carrier was made the collector for the State; in the case at bar the company is made the collector, and required by the law to pay the tax to the State out of what it receives from the passenger.
In the Nevada case the legislation was general in its operation; in the case at bar it is special, being confined to a single company.
But the principle involved is independent of the number of carriers to whom the legislation is applicable. The wrong done is to each particular passenger; and the fact that the law is not uniform in its operation–that a portion only of the people who travel that portion, namely, who use a particular road, is affected by it–is not an argument in its favor.
If it is unconstitutional to exact payment from a person entering or leaving the State, the unconstitutionality cannot be evaded by the name that is given the exaction; and the fact that in Nevada the law called the collection to be made from the passengers a capitation tax, and that in Maryland it is described as one-fifth of the gross receipts of the passenger traffic between Baltimore and Washington, can make no difference.
'It has repeatedly been held that the constitutionality or unconstitutionality of a State tax is to be determined not by the form or agency through which it is to be collected, but by the subject on which the burden is laid.'
2. Is there any distinction due to the fact that in the Nevada case the law imposed a tax, and in the case at bar the company contracted to pay the tax?
If, as we assume, the law is unconstitutional because of its exaction from the passenger, it can make no difference whether the State imposes the tax by a general law or whether it is the result of a special contract with the party receiving it in the first instance. If it is wrong, as the Nevada case has decided, for the State to impose such a tax, the wrong cannot be rectified by a contract in which the carrier agrees to pay it out of a gross fund. If the State cannot, of itself, make the traveller pay a portion of his fare into the State treasury, it cannot delegate to another the power to compel a payment that is, subsequently and circuitously, to find its way into it, unless indeed we are prepared to admit that the law can be simply evaded by the form in which those who collude to evade it may contract for the purpose.
The constantly recurring question is, 'Is the charge one that increases the cost of transportation to the passenger for the use of the State, beyond what it would be were the fare regulated by circumstances irrespective of the State?'
That the company, after fixing the fare irrespectively of the tax, would pay the 30 cents per passenger out of it, cannot be supposed. Fixing the fare, the amount to be paid to the State out of the gross receipts, as a matter of course became a matter of consideration; and equally as a matter of course a sum was fixed, the deduction of 20 per cent. from which would still leave a remunerative compensation to the company, which becomes as much the collector for the State of the latter's 20 per cent. as the stage-owner in Nevada was made the collector of the $1.00 there. Had the stage-owner been willing to pay the tax, he ...