Source: https://supreme.justia.com/cases/federal/us/290/1/
Timestamp: 2019-04-26 02:05:44+00:00

Document:
1. When cattle, consigned from one state to a stock market in another state, had reached that destination and been sold, and were being held in the stockyard pens at the expense of the buyer and subject to his free disposition, they had acquired a situs for local state taxation as the buyer's property, though, in the course of his business, he was offering them for resale, in the same market, when the tax was imposed, and sold them soon afterwards for interstate consignment. Pp. 290 U. S. 6, 290 U. S. 12.
2. The existence of regulatory power in Congress over a current of interstate commerce, including related local transactions in the exchange markets through which the commerce flows, is not inconsistent with the imposition of nondiscriminatory state taxes on goods which, though connected with such current as a general course of business, have come to rest in the state and are held there at the pleasure of their owner for disposal or use when the tax is imposed. Pp. 290 U. S. 8, 290 U. S. 10.
3. The crucial question in such cases is the continuity of transit. This is always a question of substance, and in each case it is necessary to consider the particular occasion or purpose of the interruption during which the tax is sought to be levied. P. 290 U. S. 9.
187 Minn. 420, 245 N.W. 612, reversed.
The Supreme Court of Minnesota reversed a judgment recovered by the state in an action to collect a tax on livestock. Certiorari was granted, 289 U.S. 717.
Respondent, George Blasius, is a trader in livestock at the St. Paul Union Stockyards in South St. Paul, Minn. On May 1, 1929, he owned and had in his possession in these yards eleven head of cattle which were assessed for taxation as his personal property, under the general tax law of the state. In this action, brought to collect the tax, Blasius defended upon the ground that the cattle were in course of interstate commerce, and a part of that commerce, and were not subject to state taxation. The Supreme Court of the state, overruling the decision of the trial court, sustained this defense and this Court granted certiorari. 187 Minn. 420, 245 N.W. 612; 289 U.S. 717.
although selling and shipping to residents of the state did sometimes occur.
"had no intent to transport said cattle to any other place than South St. Paul, nor did they have any intent that such cattle should be transported to any particular place after their sale;"
they were bought by Blasius from the commission merchants on April 30, 1929, and on May 1, 1929, the tax date, they were owned by him and "had not been entered with any carrier for shipment to any point," but were being offered for sale on the market; seven of the eleven head were sold on that day to a nonresident purchaser and were immediately shipped by the purchaser to points outside the State of Minnesota; the remaining four head were similarly sold and shipped on the following day. After his purchase, Blasius placed the cattle in pens leased by him from the stockyards company; he paid for their feed and water up to the time of resale.
complete rest in the yards at South St. Paul" and "were a part of the general mass of cattle in the state and locally owned." The court also found that the cattle were "handled by the defendant as a part of the chain of title from the original producer thereof to the final consumer thereof," and that such handling was "a necessary factor in the center of chain of commerce from West to the East and South."
"When cattle are sent for sale from a place in one state with the expectation that they will end their transit after purchase in another, and when in effect they do so with only the interruption necessary to find a purchaser at the stockyards, and when this is a typical, constantly recurring course, the current thus existing is a current of commerce among the states, and the purchase of the cattle is a part and incident of such commerce."
In that case, the question was as to the reach of the federal power through the prohibitions of the Sherman Anti-Trust Act of July 2, 1890 (26 Stat. 209) and these were held to apply to an attempt to monopolize commerce among the states by "a combination of independent dealers to restrict the competition of their agents when purchasing stock for them in the stockyards." On the same fundamental principle, the Court sustained the Packers and Stockyards Act of 1921 (42 Stat. 159), providing for the supervision by federal authority of the business of commission men and livestock dealers in the great stockyards of the country. Stafford v.
Wallace, 258 U. S. 495. [Footnote 1] It was in deference to these decisions that the state court denied validity to the tax here assailed. 187 Minn., p. 426.
"The question [that is, as to the validity of the state tax], it should be observed, is not with respect to the extent of the power of Congress to regulate interstate commerce, but whether a particular exercise of state power, in view of its nature and operation, must be deemed to be in conflict with this paramount authority."
commerce. Thus, the states cannot tax interstate commerce, either by laying the tax upon the business which constitutes such commerce or the privilege of engaging in it or upon the receipts, as such, derived from it. [Footnote 2] Similarly, the states may not tax property in transit in interstate commerce. [Footnote 3] But, by reason of a break in the transit, the property may come to rest within a state and become subject to the power of the state to impose a nondiscriminatory property tax. Such an exertion of state power belongs to that class of cases in which, by virtue of the nature and importance of local concerns, the state may act until Congress, if it has paramount authority over the subject, substitutes its own regulation. [Footnote 4] The "crucial question," in determining whether the state's taxing power may thus be exerted is that of "continuity of transit." Carson Petroleum Co. v. Vial, 279 U. S. 95, 279 U. S. 101.
"that the journey has already begun in good faith and temporary interruption of the passage is reasonable and in furtherance of the intended transportation."
Hughes Bros. Co. v. Minnesota, 272 U. S. 469, 272 U. S. 476.
wish to buy." A similar case is Pittsburgh & Southern Coal Co. v. Bates, 156 U. S. 577. In General Oil Co. v. Crain, 209 U. S. 211, the company conducted an oil business at Memphis, where it gathered oil from the North and maintained an establishment for its distribution. Part of the oil was deposited in a tank, appropriately marked for distribution in smaller vessels in order to fill orders for oil already sold in Arkansas, Louisiana, and Mississippi. The Court held that the first shipment had ended, that the storage of the oil at Memphis for division and distribution to various points was "for the business purposes and profit of the company," and that the tank at Memphis had thus become a depot in its oil business for preparing the oil for another interstate journey. This decision followed the principle announced in American Steel & Wire Co. v. Speed, 192 U. S. 500. See Champlain Co. v. Brattleboro, supra, p. 260 U. S. 375; Atlantic Coast Line R. v. Standard Oil Co., 275 U. S. 257, 275 U. S. 270; Carson Petroleum Co. v. Vial, supra, p. 279 U. S. 104-105.
transportation under the shipping contracts, but of this he might avail himself or not, as he chose. He might sell the grain in Illinois or forward it, as he saw fit."
"local facility in Chicago for his own benefit, and while, through its employment, the grain was there at rest, there was no reason why it should not be included with his other property within the state in an assessment for taxation which was made in the usual way, without discrimination."
"His storing of the grain was not to facilitate interstate shipment of the grain, or save it from the danger of the journey. . . . He made his warehouse a depot for its preparation for further shipment and sale. He had thus suspended the interstate commerce journey and brought the grain within the taxable jurisdiction of the state."
See also Susquehanna Coal Co. v. South Amboy, 228 U. S. 665, 228 U. S. 669, and Nashville, C. & St.L. R. Co. v. Wallace, 288 U. S. 249, 288 U. S. 266.
The case of Blasius is a stronger one for the state tax than that of Bacon. Here, the original shipment was not suspended; it was ended. That shipment was to the South St. Paul Stockyards for sale on that market. That transportation had ceased, and the cattle were sold on that market to Blasius, who became absolute owner and was free to deal with them as he liked. He could sell the cattle within the state or for shipment outside the state. He placed them in pens and cared for them awaiting such disposition as he might see fit to make for his own profit. The tax was assessed on the regular tax day while Blasius thus owned and possessed them. The cattle were not held by him for the purpose of promoting their safe or convenient transit. They were not in transit. Their situs was in Minnesota where they had come to rest. There was no federal right to immunity from the tax.
See also Eureka Pipe Line Co. v. Hallanan, 257 U. S. 265; United Fuel Gas Co. v. Hallanan, 257 U. S. 277; Dahnke-Walker Milling Co. v. Bondurant, 257 U. S. 282; Lemke v. Farmers' Grain Co., 258 U. S. 50; Hill v. Wallace, 259 U. S. 44, 259 U. S. 69; Board of Trade v. Olsen, 262 U. S. 1, 262 U. S. 37-38, 262 U. S. 41.
Robbins v. Shelby County Taxing District, 120 U. S. 489; Fargo v. Michigan, 121 U. S. 230; Philadelphia & Southern Mail S.S. Co. v. Pennsylvania, 122 U. S. 326; Minnesota Rate Cases, 230 U. S. 352, 230 U. S. 400; Pullman Co. v. Richardson, 261 U. S. 330, 261 U. S. 338; Sprout v. South Bend, 277 U. S. 163; New Jersey Telephone Co. v. Tax Board, 280 U. S. 338; Anglo-Chilean Corp. v. Alabama, 288 U. S. 218.
Coe v. Errol, 116 U. S. 517; Kelley v. Rhoads, 188 U. S. 1; Minnesota Rate cases, 230 U. S. 352, 230 U. S. 400-401; Eureka Pipe Line Co. v. Hallanan, 257 U. S. 265; United Fuel Gas Co. v. Hallanan, 257 U. S. 277; Champlain Realty Co. v. Brattleboro, 260 U. S. 366; Hughes Bros. Co. v. Minnesota, 272 U. S. 469; Carson Petroleum Co. v. Vial, 279 U. S. 95.
Minnesota Rate Cases, 230 U. S. 352, 230 U. S. 400-402 et seq.

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