Appellees are foreign corporations which transport freight in interstate commerce up and down the Mississippi and Ohio Rivers under certificates of public convenience and necessity issued by the Interstate Commerce Commission. Each has an office or agent in Louisiana but its principal place of business is elsewhere. The barges and towboats which they use in this commerce are enrolled at ports outside Louisiana; but they are not taxed by the states of incorporation.
In the trips to Louisiana a tugboat brings a line of barges to New Orleans where the barges are left for unloading and reloading. Then the tugboat pickes up loaded barges for return trips to ports outside that state. There is no fixed schedule for movement of the barges. But the turn-arounds are accomplished as quickly as possible with the result that the vessels are within Louisiana for such comparatively short periods of time as are required to discharge and take on cargo and to make necessary and temporary repairs.
Louisiana and the City of New Orleans levied ad valorem taxes under assessments based on the ratio between the total number of miles of appellees' lines in Louisiana and the total number of miles of the entire line. The taxes were paid under protest and various suits, which have been consolidated, were instituted in the District Court by reason of diversity of citizenship for their return, the contention being that the taxes violated the Due Process Clause of the Fourteenth Amendment and the Commerce Clause. Const. art. 1, § 8. The District Court gave judgment for the appellees holding that the taxes violated the Due Process Clause of the Fourteenth Amendment because the vessels had acquired no tax situs in Louisiana. D.C., 68 F.Supp 30. The Court of Appeals affirmed. 5 Cir., 166 F.2d 509. Certiorari having been denied, 334 U.S. 859, 68 S.Ct. 1530, the case was brought here by appeal. Judicial Code § 240, 28 U.S.C. § 347(b), 28 U.S.C.A. § 347(b) (now § 1254).
It is argued that the rule of tax apportionment for rolling stock of railroads in interstate commerce which was introduced by Pullman's Palace-Car Co. v. Commonwealth of Pennsylvania, 141 U.S. 18, 11 S.Ct. 876, 35 L.Ed. 613, should be applied here. In that case a nondomiciliary State was allowed to tax an interstate rail carrier by taking as the basis of assessment such proportion of its capital stock as the number of miles of railroad over which its cars ran within the State bore to the total number of miles in all the States. The Court of Appeals thought that case and its offspring inapplicable because of our decisions in Hays v. Pacific Mail S.C.o., 17 How. 596, 15 L.Ed. 254; City of St. Louis v. Wiggins Ferry Co., 11 Wall. 423, 20 L.Ed. 192; Morgan v. Parham, 16 Wall. 471, 21 L.Ed. 302; Ayer & Lord Tie Co. v. Commonwealth of Kentucky, 202 U.S. 409, 26 S.Ct. 679, 50 L.Ed. 1082, 6 Ann.Cas. 205; and Southern Pacific Co. v. Commonwealth of Kentucky, 222 U.S. 63, 32 S.Ct. 13, 56 L.Ed. 96. Some of these cases involved vessels which moved on the high seas. Hays v. Pacific Mail S.C.o., supra; Morgan v. Parham, supra; Southern Pacific Co. v. Commonwealth of Kentucky, supra. Others involved vessels moving in our inland waters, St. Louis v. Wiggins Ferry Co., supra; Ayer & Lord Tie Co. v. Commonwealth of Kentucky, supra. In each situation the Court evolved the rule that the vessels were taxable solely at the domicile of the owner, save where they had acquired an actual situs elsewhere as they did when they operated wholly on the waters within one Sta e. Old Dominion S.C.o. v. Commonwealth of Virginia, 198 U.S. 299, 25 S.Ct. 686, 49 L.Ed. 1059, 3 Ann.Cas. 1100. So far as ships of American ownership and registry sailing the high seas are concerned, it was thought that if they were not taxable at the domicile they might not be taxable at all. See Southern Pacific Co. v. Commonwealth of Kentucky, supra, 222 U.S. at page 75, 32 S.Ct. at page 17, 56 L.Ed. 96. But in neither situation was the element of apportionment involved or considered.