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got what would have been the right of the Steel Company? Not to the price fixed by the contract but to the just compensation guaranteed by the Constitution.

In exercising the power to requisition, the Government dealt only with the Steel Company, which company thereupon became liable to deliver its product to the Government, by virtue of the statute and in response to the order. As a result of this lawful governmental action the performance of the contract was rendered impossible. It was not appropriated but ended.

Parties and a subject-matter are necessary to the existence of a contract, but neither constitutes any part of it-the contract consists in the agreement and obligation to perform. If one makes a contract for the personal services of another or for the sale and delivery of property, the Government, by drafting one of the parties into the army, or by requisitioning the subject-matter, does not thereby take the contract. In Marshall v. Glanvill, [1917], 2 K. B. 87, the plaintiff had been employed by the defendants upon a contract of service. While the agreement was in force the former was called into the military service. It was held that this put an end to the contract. The court said:

"Here the parties clearly made their bargain on the footing that it should continue lawful for the plaintiff to render and for the defendants to accept his services. The rendering and acceptance of these services ceased to be lawful in July, 1916, and thereupon the bargain came to an end."

The American and English cases all agree that the result is the same where the subject-matter of the contract is requisitioned.

In the present case the effect of the requisition was to bring the contract to an end, not to keep it alive for the use of the Government.

The Government took over during the war railroads, steel mills, ship yards, telephone and telegraph lines, the capacity output of factories and other producing activities. If appellant's contention is sound the Government thereby took and became liable to pay for an appalling number of existing contracts for future service or delivery, the performance of which its action made impossible. This is inadmissible. Frustration and appropriation are essentially different things.

The judgment of the court below is


NOTE.-There are three principal ways in which owners of property may be legally deprived of it through governmental action,-through taxation, through the exercise of the right of eminent domain, and through the exercise of the police power. Whatever the method which may be employed, the Constitution provides that neither the Federal Government nor the States may deprive any one of property without due process of law.

Due process in taxation implies that the levy shall be for a public purpose upon property within the jurisdiction of the taxing power, that it shall operate uniformly upon those who are subject to it and that their rights shall be safeguarded by appropriate methods such as notice and an opportunity for hearing. Because of the multiplicity of political units in the United States, property may often be taxed more than once, but double taxation is not contrary to due process. Property upon which an excise tax has been laid by Congress is subject to a similar tax by any State which has jurisdiction over it. Exemption from double taxation by one and the same State is not guaranteed by the Fourteenth Amendment, St. Louis Southwestern Ry. v. Arkansas (1914), 235 U. S. 350; nor is taxation by two States upon identical or closely related property interests falling within the jurisdiction of both forbidden, Kidd v. Alabama (1903), 188 U. S. 730. It was long the rule, in accordance with the maxim mobilia sequuntur personam, that tangible personal property was subject to the law of the owner's domicile, but for purposes of taxation it is recognized that such property may be taxed at the place where it is, Pullman's Palace Car Co. v. Pennsylvania (1891), 141 U. S. 18. The same is true of intangible property, such as a debt, which is property at the domicile of the creditor. Hence a nonresident husband's deposit in a bank in Ohio may be paid by order of the court, as alimony to his former wife. "The Fourteenth Amendment did not, in guaranteeing due process of law, abridge the jurisdiction which a State possessed over property within its borders, regardless of the residence or presence of the owner," Pennington v. Fourth National Bank (1917), 243 U. S. 269. But debts owed by residents of Ohio to a resident of New York and represented by notes which are kept permanently in Indiana are not property in Indiana, Buck v. Beach (1907), 206 U. S. 392. Property which is never at the domicile of the owner but which has no fixed situs elsewhere is taxable at the domicile of the owner. Hence ocean steamers belonging to a Kentucky corporation are taxable in Kentucky, Southern Pacific Co. v. Kentucky (1911), 222 U. S. 63. Likewise a seat on the New York Stock Exchange owned by a resident of Ohio is taxable in Ohio, since it is a valuable property right without fixed situs, Citizens National Bank v. Durr (1921), 257 U. S. 99. On the other hand it has been held that tangible personal property which has acquired a situs outside the State of the owner's domicile may not be taxed by that State, Delaware, Lackawanna & Western Ry. v. Pennsylvania (1905), 198 U. S. 341. But this limitation upon the power of taxation does not apply to intangible property, Hawley v. Malden (1914), 232 U. S. 1, even though it is taxable in another State because of having acquired a "business situs" there, Fidelity & Columbia Trust

Co. v. Louisville (1917), 245 U. S. 54, where it was held that a bank deposit of a resident of Kentucky in a bank of another State, where it was taxed, was also taxable in Kentucky. Likewise the income received by a beneficiary from a trust estate consisting of bonds and equipment certificates held and administered by the trustee in another State is taxable by the State of the beneficiary's domicile, Maguire v. Trefry (1920), 253 U. S. 12. So a corporation which does no business and has no property in the State in which it was incorporated is taxable therein on the excess of the market value of its outstanding stock over the value of its real and personal property, Cream of Wheat Co. v. Grand Forks (1920), 253 U. S. 325.

The taxation of corporations doing business in several States presents two questions,-of what does their taxable property consist, and what proportion of their taxable property is subject to taxation in each State. To answer these questions, especially the second one, the courts have evolved the unit rule. One of the leading cases on the subject is Adams Express Co. v. Ohio State Auditor (1897), 166 U. S. 185. The Adams Express Company, a New York corporation, possessed tangible property, both real and personal, valued at $4,189,818.57, of which property valued at $67,235 was located in Ohio. The market value of its shares of stock was about $16,800,000. The Company contended that it was taxable only on the value of its tangible property, and that the difference between that value and the market value of its capital stock, amounting to about $12,000,000, was not subject to taxation. But, the Court answered that the Company's franchise and its good will as an established industry and a going concern are things of value. "The value which property bears in the market, the amount for which its stock can be bought and sold, is the real value." The Court then said:

Where is the situs of this intangible property? Is it simply where its home office is, where is found the central directing thought which controls the workings of the great machine, or in the State which gave it its corporate franchise; or is that intangible property distributed wherever its tangible property is located and its work is done? Clearly, as we think, the latter. Every State within which it is transacting business, and where it has its property, more or less, may rightfully say that the $16,000,000 of value which it possesses springs not merely from the original grant of corporate power by the State which incorporated it, or from the mere ownership of the tangible property, but it springs from the fact that that tangible property it has combined with contracts, franchises, and privileges into a single unit of property; and this State contributes to that aggregate value not merely the separate value of such tangible property as is within its limits, but its proportionate share of the value of the entire property. That this is true is obvious from the result that would follow if all the States other than the one which created the corporation could and should withhold from it the right to transact express business within their limits. It might

continue to own all its tangible property within each of those
States, but, unable to transact the express business within
their limits, that $12,000,000 of value attributable to its in-
tangible property would shrivel to a mere trifle.

Under the unit rule a State is permitted to tax such part of a company's tangible property as lies within it and such part of its intangible property as may be fairly attributed to the business transacted in that State. The taxable value of the intangible property may be ascertained in the case of a telegraph company by taking that proportion of the total value of its capital stock which the length of its lines within the State bears to the total length of its lines, Western Union Telegraph Co. v. Taggart (1896), 163 U. S. 1; in the case of a sleeping car company by taking that proportion which the number of miles of railroad over which its cars run in the State bears to the total railway mileage of its cars, Pullman's Palace Car Co. v Pennsylvania (1891), 141 U. S. 18; in the case of a manufacturing company, by taking that proportion of its income which the value of its tangible property in the State bears to the value of all its Langible property, Underwood Typewriter Co. v. Chamberlain (1920), 254 U. S. 113; in the case of a railway, by taking that proportion which its mileage in the State bears to its total mileage, Pittsburgh &c. Ry. v. Backus (1894), 154 U. S. 421. But these criteria may not be applied mechanically. Special circumstances may require their modification. In Wallace v. Hines (1920), 253 U. S. 66, which involved a statute of North Dakota for the taxation of railway property, the Court said:

As the law is administered, the tax commissioner fixes the value of the total property of each railroad by the total value of its stocks and bonds and assesses the proportion of this value that the main track mileage in North Dakota bears to the main track of the whole line. But on the allegations of the bill, which is all that we have before us, the circumstances are such as to make that mode of assessment indefensible. North Dakota is a State of plains, very different from the other States, and the cost of the roads there was much less than it was in mountainous regions that the roads had to traverse. The State is mainly agricultural. Its markets are outside its boundaries and most of the distributing centers from which it purchases also are outside. It naturally follows that the great and very valuable terminals of the roads are in other States. So looking only to the physical track the injustice of assuming the value to be evenly distributed according to main track mileage is plain. But that is not all.

The only reason for allowing a State to look beyond its borders when it taxes the property of foreign corporations is that it may get the true value of the things within it, when they are part of an organic system of wide extent, that gives them a value above what they otherwise would possess. The purpose is not to expose the heel of the system to a mortal dart-not, in other words, to open to taxation

what is not within the State. Therefore no property of
such an interstate road situated elsewhere can be taken into
account unless it can be seen in some plain and fairly in-
telligible way that it adds to the value of the road and the
rights exercised in the State. Hence the possession of bonds
secured by mortgage of lands in other States, or of a land-
grant in another State or of other property that adds to the
riches of the corporation but does not affect the North Dakota
part of the road is no sufficient ground for the increase of
the tax. . . . In this case, it is alleged, the tax commis-
sioner's valuation included items of the kind described to
very large amounts. The foregoing considerations justify
the preliminary injunction that was granted against what
would appear to be an unwarranted interference with inter-
state commerce and a taking of property without due process
of law.

A tax of five per cent on the premiums paid for insurance upon property in Arkansas to insurance companies not authorized to do business in that State is void as to policies contracted for, delivered and paid for in Missouri. "It is true that the State may regulate the activities of foreign corporations within the State but it cannot regulate or interfere with what they do outside," St. Louis Cotton Compress Co. v. Arkansas (1922), 260 U. S. 346. See also Looney v. Crane Company (1917), 245 U. S. 178 and International Paper Co. v. Massachusetts (1918), 246 U. S. 135. The action of a local administrative body in including in a drainage district solely for purposes of taxation land which did not need draining and which was incapable of drainage and which could obtain no benefit from the draining of other land was palpably arbitrary and constitutes a deprivation of property without due process of law, Myles Salt Co. Lt., v. Iberia and St. Mary Drainage District (1916), 239 U. S. 478. The validity of a tax is to be distinguished from the validity of the measures adopted to enforce it. The former may be valid while the latter are not. "Governmental jurisdiction in matters of taxation, as in the exercise of the judicial function, depends upon the power to enforce the mandate of the State by action taken within its borders, either in personam or in rem, according to the circumstances of the case, as by arrest of the person, seizure of goods or lands, garnishment of credits, sequestration of rents and profits, forfeiture of franchise, or the like," Shaffer v. Carter (1920), 252 U. S. 37, 49. If neither the person or property of the person taxed is within the jurisdiction of the State, no tax, however valid, which it may have levied upon him, can be enforced. "The foundation of jurisdiction is physical power," McDonald v. Mabee (1917), 243 U. S. 90. See a valuable article by Joseph H. Beale, Jurisdiction to Tax, Harvard Law Review, XXXII, 587.

The power of eminent domain is a right inherent in government and is so essential to the performance of its necessary functions that it may not be contracted away, Pennsylvania Hospital v. Phila

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