Standard Oil Company v. Combs.

282, said that cattle brought into a county for pasturage were not there transiently, but were there for such a purpose as subjected them to taxation. A similar doctrine was declared in Hardesty v. Fleming, 57 Tex. 395.

There is, as is obvious from what we have said, a radical difference between this case and the case of Standard Oil Co. v. Bachelor, supra, for in that case nothing was to be done to the property in this State; it was ready for shipment and the owner intended to ship it as soon as means of transportation could be procured; while in the present case the property was not ready for shipment nor was it intended to be shipped until subjected to a process changing its form and enhancing its value. The question of intent is a material one, for great abuse would grow up if property might be accumulated without the intention to ship at once, or as soon as by reasonable diligence means of transportation could be obtained. The materiality of, the intention to ship was noted in Ogilvie v. Crawford County, supra, where it was said: "This allegation of intention is essential, because otherwise a purchaser might crib his corn on a railway with no purpose of immediate shipment but for the purpose of awaiting the future course of the markets or with intent to evade taxation; in which cases the transit would, in my opinion, be treated as at an end, for the time being at least." The intention of the buyer in this case was to keep the property within this State for a definite purpose, and not to ship it until that purpose had been accomplished. While it was here awaiting the execution of that purpose it was within the protection of our laws, and must bear its share of the public burdens. Judge Story says: "A nation within whose territory any personal property is actually situate has an entire dominion over it while therein in point of sovereignty and jurisdiction, as it has over immovable property situate there." Story Confl. Laws, § 550. The authorities sustain this doctrine. Ames Iron Works v. Warren, 76 Ind. 512; s. c., 40 Am. Rep. 258; Green v. Van Buskirk, 7 Wall. 139; Clark v. Tarbell, 58 N. H. 88.

Property in this State for the purpose of being subjected to a process essential to its fitness for sale or use is situated here, no matter what may be its destination. All property in a mill or factory owned by non-residents is situated here while work or skill is being expended upon it, although the purpose for which it was bought was to prepare it for foreign markets. Cotton or wool in a New England mill or factory for the purpose of being manufactured into fabrics

Standard Oil Company v. Combs.

is situated there, wherever its owner may reside, or whatever he may intend to do with it after the manufacturing process is completed, and what is true in such a case is equally so in the present.

A statute subjecting to taxation property bought in this State, and kept here for the purpose of undergoing a partial process of manufacture, is not in conflict with that provision of the National Constitution which provides that Congress shall have power "to regulate commerce with foreign nations, and among the several States." Constitution U. S., art. 1, § 8. There is in such a case no interference with inter-State commerce; the State does no more than exercise an attribute of sovereignty over personal property within its dominion, and does not usurp any power belonging to Congress. If it be true that a State cannot tax property in such a case, then wheat sent here to be manufactured into flour in our mills cannot be taxed, although it is situate within our territory and is within the protection of our laws. This position of counsel is not supported by principle, nor is it in harmony with the adjudged cases. Judge Cooley says: "But a tax on property that may be the subject of commerce under congressional legislation is not a tax on commerce. Neither is a tax on property that has been the subject of such commerce, where it is taxed only as property, and in common with all other property within the State." Cooley Taxn. 62. Coal was brought from Pennsylvania to Louisiana for sale, taxes were assessed against it in the latter State, and it was held that the statute authorizing the tax did not violate the constitutional provision of which we are speaking. Brown v. Houston, 33 La. Ann. 843; s. c., 39 Am. Rep. 284.

The statute declares that taxes shall be levied upon property as property, and does not discriminate against any person, or any class of persons, and is valid under the decisions of the Supreme Court of the United States.

The principle established by the decisions of that court is, that the taxing power of the State may be exercised upon property within its territory, although commerce and its instruments may be indirectly affected, but that no discrimination can be made in favor of the citizens of one State in matters affecting inter-State commerce, nor can there be any regulation of commerce. County of Mobile v. Kimball, 102 U. S. 691; Webber v. Virginia, 103 id. 344; Machine Co. v. Gage, 100 id. 676; Cook v. Pennsylvania, 97 id. 566; Waring v. Mayor, 8 Wall. 110; Pervear v. Com., 5 id. 475; License

Tax Cases, id. 462;

Coles v. Peck.

McGuire v. Com., 3 id. 387; Brown v. Maryland, 12 Wheat. 419. Many acts of legislation indirectly affecting commerce have been upheld, and the general rule is that if the legis lation does not assume the form or effect of a regulation of commerce, it will not violate the National Constitution. Munn v. Illinois, 94 U. S. 113; Sherlock v. Alling, 93 id. 99; State Tax Case, 15 Wall. 284; Cooley v. Board etc., 12 How. 299; Harrigan v. Connecticut River, etc., Co., 129 Masss. 580; s. c., 37 Am. Rep. 387; Western Union Tel. Co. v. Pendleton, 95 Ind. 12.

The State has power to lay taxes on property bought within its limits, and intended to be ultimately transported to another State for sale or use. A statute providing for the assessment of taxes in such a case is not in conflict with the provision of the Constitution of the United States 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, § 10, Constitution of U. S. This provision does not apply to articles brought into one State from another, nor to articles intended to be carried out of one State to another, but applies only to intercourse with foreign nations. Woodruff v. Parham, 8 Wall. 123; Hinson v. Lott, id. 148; Machine Co. v. Gage, supra; Brown v. Houston, supra; City of New Orleans v. Eclipse, etc., Co., 33 La. Ann. 647; s. c., 39 Am. Rep. 279; State v. Pinckney, 10 Rich. (Law) 474; Harrison v. Mayor, etc., 3 Sm. & M. 581.

Judgment affirmed.

COLES V. PECK.

(96 Ind. 333.)

Landlord and tenant-tenant erecting building — election to renew or purchase.

A lease provided that the lessee might erect a building, and that at the end of the term the lessor might elect to renew the lease, or to buy the building or sell the lot, at a price to be ascertained by arbitrators. The lessee built. but the lessor failed to elect. The lessee then elected to purchase the lot. but the lessor refused to join in an arbitration to fix the price. Held, that the lessee was entitled to equitable relief.

VOL. XLIX-21

A

Coles v. Peck.

CTION for rent. The opinion states the case. had judgment below.

A. C. Downey, for appellants.

J. S. Jelley, for appellee.

The plaintiff

NIBLACK, J. On the 6th day of March, 1873, Eliza Peck, by an instrument in writing, mutually executed, leased to Reece N. P. Buchanan and James Buchanan, a lot of ground in the city of Rising Sun, for a period of ten years at the rent of $50 per year, payable annually in advance, the term to commence on the 10th day of March, 1873, and end on the 10th day of March, 1883, and the lessees to have the privilege of erecting on the lot, and occupying during their term, a two-story brick house, suitable for business purposes. The instrument contained the following additional provisions:

"And it is further agreed between said parties, and made part of the conditions of this lease, that at the expiration of the same the said lease is to be renewed and continued for another term of time of ten years on the same terms, that is to say, $50 per year, or the party of the first part is to purchase the building and improvements from the party of the second part or the party of the second part is to purchase the grounds. Either one of the three is to be done, and that at the option of the party of the first part, and she shall notify the other party twelve months before the expiration of the time which one she will elect to do. And in case the lease is not renewed, and a sale is to take place as in either case above named, then each party is to choose a competent disinterested freeholder who shall appraise the value of the ground or building, as the case may be, and they shall have power, in case they see proper to choose a like third person, and the party who is to purchase shall pay to the other the amount so stated by them to be the value. And if this lease is renewed for the second term of ten years, then at the expiration of that time sale from one to the other shall be made as above stated, either the land to the party of the second part or the building to the first party, to be determined as above set forth. And all the terms, covenants and conditions of this lease shall extend to the heirs, administrators, executors or assigns of the parties to the same."

The Buchanans went immediately into possession and soon thereafter erected on the leased lot a two-story brick building of the value

Coles v. Peck.

of $3,000. During the year 1877 all the interests and the estates of the Buchanans in the lease were assigned and transferred to John B. Coles and Daniel S. Wilber, who very soon went into and have ever since continued in possession of the leasehold premises.

On the 20th day of March, 1883, Eliza Peck, the lessor, commenced this action against Coles and Wilber by filing a complaint against them before a justice of the peace for the sum of $50, as the amount alleged to be due in advance for rent of the leased lot from the 10th day of March, 1883, to the 10th day of March, 1884. Coles and Wilber appeared before the justice and answered: First, in general denial. Second, By way of cross complaint, setting up the lease and the matters connected with it herein above referred to, and averring the performance of all the covenants and conditions of the lease on their part; also averring that the plaintiff failed to elect whether she would renew the lease, or purchase the building on the leased ground, or sell the ground to the defendants, and to notify the defendants of her election in the premises twelve months before the expiration of the term of the lease, or at any other time; that on the 3d day of February, 1883, they, the defendants, elected to purchase the leased ground, and so notified the plaintiff; that they thereupon selected Richard M. Jones, a competent and disinterested freeholder of said city of Rising Sun, as an appraiser to appraise said leased ground, fixing the time for said appraisement for the 10th day of March, 1883, and the place at the front door of the building on the leased ground, of all which they notified the plaintiff in writing on said 3d day of February, 1883; that on the 10th day of March, 1883, the said Richard M. Jones appeared at the time and place named in the above mentioned notice in writing, but the plaintiff failed and refused to select any person on her part to appraise the leased ground which the defendants had so elected to purchase; that the plaintiff so failing and refusing, the defendants immediately selected George B. Gibson, also a competent and disinterested freeholder of the city of Rising Sun, to act also as an appraiser of the leased ground in question; that the said Jones and Gibson then and there proceeded to appraise said leased ground, and appraised the same at $322, of which they at once gave notice in writing both to the plaintiff and defendants; that after receiving notice of such appraisement, that is to say on said 10th day of March, 1883, the defendants tendered to the plaintiff, and offered to pay her, in legal tender United States treasury notes,