Source: https://www.law.cornell.edu/supremecourt/text/222/380
Timestamp: 2019-04-25 23:54:51+00:00

Document:
RED 'C' OIL MANUFACTURING COMPANY, Appt., v. BOARD OF AGRICULTURE OF NORTH CAROLINA, William A. Graham, H. C. Carter, et al.
Argued: December 21 and 22, 1911.
In the year 1909, North Carolina passed an act for the inspection, under the control of the board of agriculture, of all kerosene or other illuminating oils sold, or offered for sale, in the state. The object of such inspection was declared to be in order to determine the safety and value of such oils for illuminating purposes. A charge of 1/2 cent per gallon was fixed, which law declared should be paid to the commissioner of agriculture for the purpose of defraying expenses connected with the inspection, testing, and analyzing of oils in this state. It was provided that the act should go into effect on July 1, 1909. Two days after, viz., on July 3, 1909, this suit was commenced by the appellant, the Red 'C' Oil Manufacturing Company, a corporation of the state of Maryland. The defendants named were the board of agriculture of North Carolina and the members of the board, and the object of the bill was to restrain the enforcement of the act referred to because it was charged to be not a proper exertion of the police power of the state, and, besides, was asserted to be repugnant to the Constitution of the United States.
The bill averred that the complainant was a large shipper of illuminating oils from the state of Maryland into the state of North Carolina, and that it did an extensive business in North Carolina in dealing in such oil. The provisions of the assailed act were set out in extenso, as also the terms of an act of the general assembly approved on March 9, 1909, which forbade the collection of a tax upon dealers in oils, authorized by § 58 of the revenue act, passed at the same session, 'from any persons, dealers, or corporations paying the taxes imposed under the inspection law enacted at the present session of the general assembly, entitled, 'An Act to Provide for the Inspection of Illuminating Oils and Fluids;' Provided, however, if the said oil inspection act should be held invalid, § 58, revenue act, shall remain in full effect.' In the preamble of this latter act it was recited that the 'inspection tax' was much greater than the 'tax' imposed under § 58 of the revenue act, and that 'it is not the purpose of the general assembly that the said tax shall be cumulative.' In addition to averring the appointment of inspectors by the board of agriculture, and the purpose of the board to enforce the collection of the inspection taxes, there were set forth the regulations adopted by the board under the authority of the statute.
The particulars by which it was asserted the statutory charge was shown to be unlawful may be thus summarized: The charge or 'tax' was not for the purpose of defraying the cost of the inspection of oil, but was imposed for revenue upon the goods of complainant shipped into the state of North Carolina from the state of Maryland, and was hence in conflict with the commerce clause and the 14th Amendment. The law, it was charged, was not a police regulation, since an inspection of oil 'for value and luminosity' was not within the competency of legislative action, and the public safety was not concerned, since illuminating oils, as the result of modern methods of manufacture, were no longer explosive. The charge or tax, it was averred, was more than double the amount necessary for the inspection proposed, and would realize annually a surplus for the state treasury of more than $20,000. It was further charged that the act fixed no standard for the guidance of the board of agriculture, but in effect arbitrary powers were conferred upon the board, and, indeed, legislative authority had been delegated to it. The power thus conferred, it was also alleged, had been exerted in an arbitrary manner, and tests prescribed which were not necessary 'in order to procure the safety of oil, to protect the people from the sale of oils which are dangerous.' Certain of the regulations promulgated by the board were also assailed as being uncertain, unreasonable, illegal, and oppressive.
Both parties filed affidavits in support of their respective claims. The matter was heard upon a motion for an injunction upon the bulk, answer, and affidavits just referred to. Elaborately examining all the contentions, the court (172 Fed. 695) concluded that the complainant was not entitled to relief by injunction, and that, as respects the other relief asked, the bill should be dismissed. A final decree was thereupon entered and this appeal was then taken.
Messrs. Robert W. Winston and Charles B. Aycock for appellant.
Messrs. T. W. Bickett and R. H. Battle for appellees.
In view of the full reference to and the review of decided cases made by the district judge in the opinion by him delivered, we content ourselves with a comparatively brief discussion of the questions pressed at bar.
'1. That the North Carolina oil inspection act is unconstitutional and void in that, under the guise of exercising a police power, the general assembly of North Carolina is really attempting to impose a revenue tax upon interstate commerce.
Sec. 1. 'That all kerosene or other illuminating oils sold or offered for sale in this state shall be subject to inspection and test to determine the safety and value for illuminating purposes.' All manufacturers, wholesalers, and jobbers, before selling or offering for sale, in this state, any kerosene or other oil, for illuminating purposes, are required to file with the commissioner of agriculture a statement showing that they desire to do business in the state, and to furnish the name or brand of the oil or oils which they desire to sell, with the names and address of the manufacturer, and that such oil will comply with the requirements of the law.
The board of agriculture is required to appoint oil inspectors not exceeding in number one from each congressional district, whose compensation shall not exceed $1,000 a year and expenses. They are given power to examine all barrels, tanks, or other vessels containing kerosene or other illuminating oils, to see that they are properly tagged, and shall, as directed, collect and test samples of oil offered for sale in different sections of the state, and when instructed, collect and send samples to the Department of Agriculture for examination.
Sec. 3. 'For the purpose of defraying the expenses connected with the inspection, testing, and analyzing oils in this state, there shall be paid to the commissioner a charge of 1/2 cent per gallon, which payment shall be made before delivery to agents, dealers, or consumers in this state.' Provision is made for attaching to each barrel, tank car, and other containers, a tag or stamp to be furnished by the commissioner of agriculture, showing that the tax has been paid. When oil is shipped in tank cars or other large containers, the manufacturer or jobber shall give notice to the commissioner of agriculture of every shipment, with the name and address of the person, company, or corporation to whom it is sent, and the number of gallons, on the day the shipment is made.
In disposing of the contention just stated we are not at liberty to travel outside of the record and take judicial notice of the operation of the act since the transcript of record was filed in this court. We here reiterate what was said in the case last cited: 'If the receipts are found to average largely more than enough to pay the expenses, the presumption would be that the legislature would moderate the charge.' If the trial made of the act establishes the fact to be as asserted, that the exaction in question is excessive, the presumption is that, in the orderly conduct of the public business of the state, the necessary correction will be made to cause the act to conform to the authority possessed, which is to impose a fee solely to recompense the state for the expenses properly incurred in enforcing the authorized inspection. What relief should be awarded in the event the legislature of North Carolina failed in its positive duty in this particular is not a question open for consideration upon this record, as no such failure of duty on the part of the legislature had occurred or could possibly have happened when this suit was commenced, a few days after the passage of the act.
The remaining contention is that the act is repugnant to the state Constitution because it attempts to delegate to the board of agriculture the exercise of legislative powers. The legislative requirement was that the illuminating oils furnished in North Carolina should be safe, pure, and afford a satisfactory light, and it was left to the board of agriculture to determine what oils would measure up to these standards. We think a sufficient primary standard was established, and that the claim that legislative powers were delegated is untenable. Buttfield v. Stranahan, 192 U. S. 492, 48 L. ed. 534, 24 Sup. Ct. Rep. 349; Union Bridge Co. v. United States, 204 U. S. 364, 51 L. ed. 523, 27 Sup. Ct. Rep. 367; St. Louis I. M. & S. R. Co. v. Taylor, 210 U. S. 281, 52 L. ed. 1061, 28 Sup. Ct. Rep. 616; United States v. Grimaud, 220 U. S. 506, 55 L. ed. 563, 31 Sup. Ct. Rep. 480.
We have not attempted to enumerate the objections urged against the rules and regulations adopted by the board of agriculture. The court below was clearly right when it observed that if, as the complainant alleged, the standard of safety fixed by the board was unreasonably high, or the method of testing oil unsatisfactory, and not such as was in general use, or the regulations in other respects were unjust or oppressive, it should seek relief by applying to the board of agriculture to modify them. A law cannot be declared invalid because, in the opinion of the court, it does not accord with sound policy. The appeal for redress in such case must be to the lawmaking power.
Sec. 4. 'All moneys received under the provisions of this act shall be paid into the state treasury and kept as a distinct fund to be styled 'The Oil Inspection Fund.' All checks or orders in payment for tags or stamps shall be made payable to the state treasurer. The commissioner of agriculture is authorized to draw out of said fund, upon his warrant, such sums as may be necessary to pay all expenses incurred in connection with this act, including salary to oil chemist, or chemists, cost of inspection, blanks,' etc.
Sec. 6. The commissioner of agriculture is required to include in his report to the general assembly an account of the operations and expenses under the act.
Sec. 7. Provides: That, whenever complaint is made to the Department of Agriculture in regard to the illuminating qualities of any oil sold in this state, the commissioner shall cause a sample of said oil or oils complained of to be procured, and have the same thoroughly analyzed and tested as to safety and illuminating qualities. If such analysis or other tests shall show that the oil is either unsafe or of inferior illuminating quality, its sale shall be forbidden, and report of the result or results shall be sent to the party making the complaint and to the manufacturer of such oil.
The remaining sections prescribe penalties for violation of the provisions of the law. The act went into effect July 1, 1909.
DI SANTO v. COMMONWEALTH OF PENNSYLVANIA.
GREAT NORTHERN RY. CO. v. STATE OF WASHINGTON.
BOURJOIS, INC., v. CHAPMAN et al.
SOUTH CAROLINA STATE HIGHWAY DEPARTMENT et al. v. BARNWELL BROS., Inc., et al.
MAYO et al. v. UNITED STATES.
CLYDE MALLORY LINES v. STATE OF ALABAMA ex rel. STATE DOCKS COMMISSION.
PANAMA REFINING CO. et al. v. RYAN et al. AMAZON PETROLEUM CORPORATION et al. v. SAME.
P. F. PETERSEN BAKING CO. et al. v. BRYAN, Governor, et al.
MUTUAL FILM CORPORATION, Appt., v. INDUSTRIAL COMMISSION OF OHIO et al.
STANDARD STOCK FOOD COMPANY, Appt., v. H. R. WRIGHT, as State Food and Dairy Commissioner of Iowa.
STANDARD OIL CO. v. GRAVES.
PURE OIL CO. v. STATE OF MINNESOTA.
DOUGLAS et al. v. NOBLE.
PHIPPS, Director of Department of Commerce of Ohio, v. CLEVELAND REFINING CO. OF CLEVELAND, OHIO.
HARRY T. HALL, Superintendent of Banks and Banking of the State of Ohio, Appt., v. GEIGER-JONES COMPANY, NO 438. HARRY T. HALL, Superintendent of Banks and Banking of the State of Ohio, Appt., v. DON C. COULTRAP. NO 439. HARRY T. HALL, Superintendent of Banks and Banking of the State of Ohio, Appt., v. WILLIAM R. ROSE and the RiChard Auto Manufacturing Company. NO 440.
PHILLIPS et al. v. COMMISSIONER OF INTERNAL REVENUE.

References: v. 
 § 58
 § 58
 § 58
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.