[257 U.S. 99, 100] Mr. Murray Seasongood, of Cincinnati, Ohio, for plaintiff in error.
Mr. Justice PITNEY delivered the opinion of the Court.
A suit for injunction brought in a state court by Anderson against Durr, then auditor, and Cooper, then treasurer, of Hamilton county, Ohio, raised the question whether a certain property tax imposed under authority of the state of Ohio upon plaintiff, a resident of that state, by reason of his owning a membership-figuratively termed a 'seat'-in the New York Stock Exchange, infringed his rights under the commerce clause of the Constitution of the United States or the 'due process of law' or 'equal protection' provisions of the Fourteenth Amendment. His assault upon the tax was sustained by the court of first instance (20 Ohio N. P. [N. S.] 538), but overruled by the Court of Appeals (29 O. C. A. 465), and finally by the Supreme Court of the state (100 Ohio St. 251, 126 N. E. 57). Until the decision of the latter court the federal right had been asserted merely as a claim of immunity from the tax under the constitutional provisions referred to, without drawing in question the validity of any statute of, or authority exercised under the state on the ground of their being repugnant to those provisions. After the final decision, in an application to the Supreme Court for a rehearing, plaintiff for the first time asserted that the decision, if adhered to, rendered the Ohio taxation statutes invalid because of such repugnance. This application was denied without reasons given, and hence must be regarded as having come too late to raise any question for review by this court. Loeber v. Schroeder, 149 U.S. 580, 585 , 13 S. Sup. Ct. 934, Fullerton v. Texas, 196 U.S. 192, 193 , 25 S. Sup. Ct. 221; Corkran Oil Co. v. Arnaudet, 199 U.S. 182, 193 , 26 S. Sup. Ct. 41. Therefore a writ of error, allowed by the Chief Justice of the Supreme Court, must be dismissed because not the proper mode of review under section 237, Judicial Code, as amended by Act of September 6, 1916, c. 448, 39 Stat. 726 (Comp. St. 1214). But an application for the allowance of a writ of certiorari, made to this court under [257 U.S. 99, 107] the same section, consideration of which was postponed until the hearing on the writ of error, will be granted, and the case determined thereunder.
The essential facts are as follows: Plaintiff holds a membership or seat in the New York Stock Exchange for which he paid $60,000, and which carries valuable privileges and has a market value for the purposes of sale. The Exchange is not a corporation or stock company, but a voluntary association consisting of 1,100 members, governed by its own constitution, by-laws and rules, and holding the beneficial ownership of the entire capital stock of a New York corporation which owns the building in which the business of the Exchange is transacted, with the land upon which it stands, situated in the city of New York and having a value in excess of $ 5,000,000. A member has the privilege of transacting a brokerage business in securities listed upon the Exchange, but may personally buy or sell only in the Exchange building. Membership is evidenced merely by a letter from the secretary of the Exchange notifying the recipient that he has been elected to membership. Admissions to membership are made on the vote of the committee on admissions. Membership may be transferred only upon approval of the transfer by the committee, and the proceeds are applied first to pay charges and claims against the retiring member arising under the rules of the Exchange, any surplus being paid to him. On the death of a member, his membership is subject to be disposed of by the committee; but his widow and descendants are entitled to certain payments out of a fund known as the 'gratuity fund.' In the business of brokers in stocks and bonds a differentiation is made between members of the Exchange and nonmembers, in that business is transacted by members on account of other members at a commission materially less than that charged to nonmembers. A firm having as a general partner a member of the Exchange is entitled to [257 U.S. 99, 108] have its business transacted at the rates prescribed for members.
That a membership held by a resident of the state of Ohio in the Exchange is a valuable property right, intangible in its nature but of so substantial a character as to be a proper subject of property taxation, is too plain for discussion. That such a membership, although partaking of the nature of a personal privilege and assignable only with qualifications, is property within the meaning of the bankrupt laws, has repeatedly been held by this court. Hyde v. Woods, 94 U.S. 523 , 524-525; Sparhawk v. Yerkes, 142 U.S. 1, 12 , 12 S. Sup. Ct. 104; Page v. Edmunds, 187 U.S. 596, 601 , 23 S. Sup. Ct. 200. Whether it is subjected to taxation by the taxing laws of Ohio is a question of state law, answered in the affirmative by the court of last resort of that state, by whose decision upon this point we are controlled. Clement Nat. Bank v. Vermont, 231 U.S. 120, 134 , 34 S. Sup. Ct. 31.
The chief contention here is based upon the due process of law provision of the Fourteenth Amendment: it being insisted that the privilege of membership in the Exchange is so inseparably connected with specific real estate in New York that its taxable situs must be regarded as not within the jurisdiction of the state of Ohio. Louisville & Jeffersonville Ferry Co. v. Kentucky, 188 U.S. 385 , 23 Sup. Ct. 463, is cited. It is very clear, however, as the Supreme court held, that the valuable privilege of such membership is not confined to the real estate of the Stock Exchange; that a member has a contractual right to have the association conducted in accordance with its rules and regulations, and incidentally, has the right to deal through other members on certain fixed percentages and methods of division of commissions; that this right to secure the services of other members and to 'split commissions' is a valuable right, by which plaintiff in Cincinnati may properly hold himself out as a member entitled to the privileges of the Exchange, denied to nonmembers; and [257 U.S. 99, 109] that thus he is enabled to conduct from and in his Cincinnati office a lucrative business through other members in New York. The court held, and was warranted in holding, that the membership is personal property, and being without fixed situs has a taxable situs at the domicile of the owner. Mobilia sequuntur personam. See Union Transit Co. v. Kentucky, 199 U.S. 194, 205 , 26 S. Sup. Ct. 36. The asserted analogy to Louisville & Jeffersonville Ferry Co. v. Kentucky, supra, cannot be accepted. That decision related to a public franchise arising out of legislative grant, held to be an incorporeal hereditament in the nature of real property and to have no taxable situs outside the granting state. It did not involve the taxation of intangible personal property. See Hawley v. Malden, 232 U.S. 1, 11 , 34 S. Sup. Ct. 201, Ann. Cas. 1916C, 842; Cream of Wheat Co. v. Grand Forks, 253 U.S. 325, 328 , 40 S. Sup. Ct. 558.
Nor is plaintiff's case stronger if we assume that the membership privileges exercisable locally in New York enable that state to tax them even as against a resident of Ohio. See Rogers v. Hennepin County, 240 U.S. 184, 191 , 36 S. Sup. Ct. 265. Exemption from double taxation by one and the same state is not guaranteed by the Fourteenth Amendment (St. Louis S. W. Ry. v. Arkansas, 235 U.S. 350 , 367-368, 35 Sup. Ct. 99); much less is taxation by two states upon identical or closely related property interests falling within the jurisdiction of both, forbidden (Kidd v. Alabama, 188 U.S. 730, 732 , 23 S. Sup. Ct. 401; Hawley v. Malden, 232 U.S. 1, 13 , 34 S. Sup. Ct. 201, Ann. Cas. 1916C, 842; Fidelity & Columbia Trust Co. v. Louisville, 245 U.S. 54, 58 , 38 S. Sup. Ct. 40, L. R. A. 1918C, 124).
That plaintiff is denied the equal protection of the laws, within the meaning of the Fourteenth Amendment, cannot be successfully maintained upon the record before us. The argument is that other brokers in the same city are not taxed upon the value of their memberships in the local stock exchange, nor upon the privilege of doing business in New York Stock Exchange securities. As to the [257 U.S. 99, 110] local exchange memberships, it may be that the failure to tax them is but accidental or due to some negligence of subordinate officers, and is not properly to be regarded as the act of the state. If it be state action, there is a presumption that some fair reason exists to support the exemption, not applicable to a membership in the New York Exchange, and plaintiff has shown nothing to overcome the presumption. As to the privilege referred to it already has been shown that the rights incident to plaintiff's property interest give him pecuniary advantages over others in the same business. Manifestly this furnishes a reasonable ground for taxing him upon the property right, although others enjoying lesser privileges because of not having it may remain untaxed.
The contention that the tax constitutes a direct burden upon interstate commerce is groundless. Ordinary property taxation imposed upon property employed in interstate commerce does not amount to an unconstitutional burden upon the commerce itself. Pullman's Car Co. v. Pennsylvania, 141 U.S. 18, 23 , 11 S. Sup. Ct. 876; Cleveland, etc., Railway Co. v. Backus, 154 U.S. 439, 445 , 14 S. Sup. Ct. 1122; Postal Telegraph Cable Co. v. Adams, 155 U.S. 688, 700 , 15 S. Sup. Ct. 268, 360.
Writ of error Dismissed.
Writ of certiorari granted.
Mr. Justice HOLMES.
The question whether a seat in the New York Stock Exchange is taxable in Ohio consistently with the principles established by this court seems to me more difficult than it does to my Brethren. All rights are intangible personal relations between the subject and the object of them created by law. But it is established that it is not enough that the subject, the owner of the right, is within the power of the taxing state. He cannot be taxed for land situated elsewhere, and the same is true of personal [257 U.S. 99, 111] property permanently out of the jurisdiction. It does not matter, I take it, whether the interest is legal or equitable, or what the machinery by which it is reached, but the question is whether the object of the right is so local in its foundation and prime meaning that it should stand like an interest in land. If left to myself I should have thought that the foundation and substance of the plaintiff's right was the right of himself and his associates personally to enter the New York Stock Exchange building and to do business there. I should have thought that all the rest was incidental to that and that that on its face was localized in New York. If so, it does not matter whether it is real or personal property or that it adds to the owner's credit and facilities in Ohio. The same would be true of a great estate in New York land.
As my Brothers VAN DEVANTER and McREYNOLDS share the same doubts it has seemed to us proper that they should be expressed.