Source: http://supreme.nolo.com/us/75/110/case.html
Timestamp: 2019-04-24 06:27:51+00:00

Document:
The Bay of Mobile being included within the statutory definition of the port of Mobile, contracts for the purchase of cargoes of foreign merchandise before or after the arrival of the vessel in the said bay, where the goods by the terms of the contract, are not to be at the risk of the purchaser until delivered to him in said bay, do not constitute the purchaser an "importer," and the goods so purchased and sold by him, though in the original packages, may be properly subjected to taxation by the state.
Error to the Supreme Court of Alabama, the question involved arising upon that clause of the Constitution which ordains that "no state shall lay any imposts on imports, or exports, except what may be absolutely necessary for executing its inspection laws."
The City of Mobile is situated on the west bank of the Mobile River, a short distance above its entry into the Bay of Mobile. The bay stretches about thirty miles below the city, and is connected with the Gulf of Mexico by a narrow strait. The Town of Mobile, by an Act of Congress passed 22 July, 1813, [Footnote 1] was designated as the only port of entry for a collection district bounded by West Florida on the east, and Louisiana on the west, and comprising the bays, inlets, and rivers emptying into the gulf. The Bay of Mobile is a part of this district. Vessels anchor twenty-five miles below the city, and are unladen there upon lighters, which bring their cargoes to the town. Those coming from Great Britain frequently bring a cargo of salt, and cargoes of this kind are generally sold in advance of their arrival, or as soon as they reach the bay, before bulk is broken, or they are unloaded.
in the lower bay. When it arrived in the lower bay, he furnished his own lighters, and took the cargo from off the vessel. Until the time of such delivery the risk remained in the shippers. The consignees made the entries, presented the invoices and bills of lading, made the necessary deposit of coin for the estimated amount of the duties, and procured the permits, and when the duties were finally liquidated as required by law and the regulations of the Treasury Department, they adjusted and paid the balance.
When Waring sold the salt he sold it in the original packages, to traders, in large quantities and for resale.
In the year 1866, the corporate authorities of Mobile imposed a tax for municipal purposes upon all sales of merchandise in that city, and claimed of Waring a tax upon the sales of salt that he had made for six months preceding the date of the ordinance, under its conditions. He refused to pay, assigning for a reason that the salt disposed of by him was an import from a foreign country, and that the sales being made by him in the way they were, in the original packages, were still an "import," and thus under the clause of the Constitution above quoted, he was not liable. The mayor arrested and fined him. The chancellor on a bill filed declared the tax illegal. The supreme court of the state on appeal held otherwise. They did not regard Waring as an importer, and considered that the constitutional prohibition upon the states to levy duties or taxes on imports had no application to him.
provision was, that if any such merchant or trader neglected or failed to make such return, he should be subject to such a fine, not exceeding fifty dollars per day, as the mayor of the city might impose for each day's failure or refusal.
Sales of merchandise were made by the complainant within that period to a large amount, and he was duly notified that he was required to make return, under oath, of the gross amount of such sales, and having neglected and refused to comply with that requirement within the time specified in the ordinance, the mayor of the city caused a summons to be issued and duly served, commanding the complainant to appear before him, as such mayor, to answer for such neglect, but he refused to obey the commands of the summons, and thereupon a warrant was issued, and he was arrested and brought before the mayor to answer for such contempt; and after hearing he was sentenced to pay a fine of fifty dollars for a breach of the before-mentioned ordinance. Subsequently, a second notice of a similar character was given, and the complainant still neglecting and refusing to make the required returns, he was again summoned to appear before the mayor to answer for the neglect, but he refused a second time to obey the commands of the precept, and, thereupon, such proceedings were had that he was again found guilty of contempt and was sentenced to pay an additional fine of fifty dollars.
the complainant in the Chancery Court sued out a writ of error, under the 25th section of the Judiciary Act, and removed the cause into this Court.
Exemption from state taxation in this case is claimed by complainant upon the ground that the sales made by him were of merchandise, in the original packages, as imported from a foreign country, and which was purchased by him, in entire cargoes, of the consignees of the importing vessels before their arrival, or while the vessels were in the lower harbor of the port.
"that from and after the 1st day of August next, the town of Mobile shall be and the same is hereby established the sole port of entry for the district, including the shores, waters, and inlets of the Bay and River Mobile, and of the other rivers, creeks, inlets, and bays emptying into the Gulf of Mexico, east of the said River Mobile, and west thereof, to the eastern boundary of the State of Louisiana. [Footnote 2]"
and those going there for that purpose from Liverpool frequently carry salt, using it in many cases as ballast instead of the articles more usually employed, which do not pay freight. Such shipments are made by the owners or charterers of the vessel, and the salt, whether stowed as cargo or used as ballast, is usually consigned to the agents of the vessel. Purchases of salt imported under such circumstances were made by the complainant to a very large amount, and the record shows that he sold the salt at his place of business in the city to traders and large consumers in the original packages. The contracts to purchase were made before the goods were entered at the custom house, with the consignees of the salt, sometimes before and sometimes after the arrival of the vessel at the anchorage in the lower harbor, but the terms of the contract in all cases were that the risk should continue to be in the shipper until the salt was delivered to the complainant over the side of the vessel into his lighters. He agreed to furnish the lighters and to bring them alongside of the vessel, and the contract was that the salt, when it was transshipped into the lighters of the complainant, became his property, and he assumed the risk and expense of transporting the same to the wharf and from thence to his own warehouse or place of business; but if the goods were lost before such delivery the agreement to purchase was not obligatory.
Viewed in the light of these conceded facts the defendants contend that the complainant was not the importer of the salt, that the salt was imported by the owners of the vessel, and that the sale of the salt as made by the consignees to the complainant was a sale of imported merchandise.
Reference need not be made to the subsequent proceedings of the appraisers, weighers, and gaugers, preparatory to the liquidation of the duties, as no one pretends that any of those acts can be performed before the goods are imported.
In order to obtain a permit to discharge the salt into the lighters in this case, the proof is full to the point, that a deposit of coin had to be made at the custom house by the consignees, and that the duties were finally paid by them as liquidated, after the true weight of the salt was ascertained by the return of the weighers. They made the entries, presented the invoices and bills of lading, made the necessary deposit of coin for the estimated amount of the duties, and procured the permits, and when the duties were finally liquidated as required by law and the regulations of the Treasury Department, they adjusted and paid the balance.
Whether the contracts to purchase were made before or after the vessel arrived in the bay is quite immaterial, as the agreement was, that the risk should continue to be in the owner or consignees until they delivered the salt into the complainant's lighters, alongside of the vessel. Delivery, under the terms of the contract, could not be made before the vessel arrived, nor before the salt was legally entered at the custom house, as the hatches could not be removed for any such purpose until the permit was received from the collector.
Nothing of the kind, however, was done in this case. On the contrary, the agreement was, that the loss, if before the delivery of the goods into the lighters, should fall on the shippers. Influenced by these considerations the court is of the opinion that the shippers or consignees were the importers of the salt, and that the complainant was the purchaser of the importers, and the second vendor of the imported merchandise.
which shall appear to him most convenient and proper. Variations from the usual course of proceedings in such matters are also necessarily made at all the ports and places where lighters are required in loading and unloading ships and vessels engaged in commerce and navigation."
More than half a century has elapsed since the act of Congress was passed establishing the town of Mobile the sole port of entry for that district, and the record furnishes abundant reason to conclude that the course of proceedings throughout that entire period, in respect to imported goods brought there from foreign countries in ships and vessels whose draft was such that they could not cross the inner bar, has been the same as that heretofore described. Permanent as the obstruction to navigation is, the case is much stronger even than the one for which provision is made in the principal collection act, and after such long acquiescence by all interested in the course pursued by the officers of the customs, the court is of the opinion that the proceedings may well be sustained.
therein prescribed. Dissatisfied with the judgment he removed the cause into this Court by writ of error, and this Court held, Marshall, C.J., giving the opinion of the Court, that the state law was a tax on imports, and that the mode of levying it, as by a tax on the occupation of the importer, merely varied the form in which the tax was imposed without varying the substance; that while the articles imported remained the property of the importer in his warehouse in the original forms or packages in which they were imported, a tax upon them was too plainly a duty on imports to escape the prohibition of the Constitution, but the court admitted that whenever the importer has so acted upon the thing imported that it has become incorporated and mixed with the mass of property in the country, it must be considered as having lost its distinctive character as an import, and as having become subject to the taxing power of the state.
finds the articles already incorporated with the mass of property by the act of the importer.
Importers selling the imported articles in the original packages are shielded from any such state tax, but the privilege of exemption is not extended to the purchaser, as the merchandise, by the sale and delivery, loses its distinctive character as an import.
3 Stat. at Large 35.
The Bark Edwin, 1 Clifford 325; Same Case, 24 How. 389.
The Mary, 1 Gallison 206; The Boston, ib., 239; United States v. Lyman, 1 Mason 482; 1 Stat at Large 655; Conrad v. Pacific Insurance Co., 6 Pet. 262; Gray v. Lawrence, 3 Blatchford 117.
1 Stat. at Large 644.
1 Stat. at Large 656. Gen.Reg. (1857) 145.
Audenried v. Randall, 16 American Law Register 664; Newsom v. Thornton, 6 East 41; Pratt v. Parkman, 24 Pickering 42.
United States v. Vowell, 5 Cranch 372; Schooner Mary, 1 Gallison 209; The Boston, ib., 245; United States v. Arnold, 1 ib. 353; Same v. Lindsey, 1 ib. 365; Harrison v. Vose, 9 How. 381; United States v. Lyman, 1 Mason 482; Meredith v. United States, 13 Pet. 494.
1 Stat. at Large 694.
Brown v. Maryland, 12 Wheat. 437.
Pervear v. Commonwealth, 5 Wall. 479.

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