Source: https://supreme.justia.com/cases/federal/us/222/380/
Timestamp: 2019-04-19 02:22:20+00:00

Document:
Red "C" Oil Manufacturing Company v.
This Court will not lightly attribute improper motives to the lawmaking power, and will not, on a mere charge, regard a statute imposing inspection fees as an act to raise revenue. Ellis v. United States, 206 U. S. 246. Prima facie, the charge for inspection in an act otherwise constitutional is reasonable. Western Union Tel. Co. v. New Hope, 187 U. S. 417. The fact that oil inspection laws have been passed in a majority of the states shows that oil is a proper subject for police regulation.
so seriously in excess of what is necessary for the object designed to be effected as to justify the imputation of bad faith and the conclusion that the law is one for revenue and not merely for inspection. Patpsco Guano Co. v. South Carolina, 171 U. S. 354.
This Court cannot determine what the actual operation of a statute will be after its enactment by going outside the record and taking judicial knowledge of what has happened since the filing of the transcript here.
If the inspection fees exacted under a state statute average largely more than enough to pay expenses, the presumption is that the state will reduce them to conform to the constitutional authority to impose fees solely to reimburse for expense of inspection.
What relief shall be accorded to one who may sustain injury by the failure of a state to protect his rights under the Constitution cannot be determined before there has been such failure.
A requirement by the legislature that illuminating oils must be safe, pure, and afford a satisfactory light establishes a sufficient primary standard, and remitting to the proper state board the establishment of rules and regulations to determine what oils measure up to those standards does not amount to a delegation of legislative power.
Where one complains that regulations promulgated under legislative authority by a state board are unreasonable and oppressive, he should seek relief by applying to that board to modify them.
A state police statute cannot be declared invalid because in the opinion of this Court it does not accord with sound policy. The appeal for redress must be to the lawmaking power.
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 one-half 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.
"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 Fourteenth 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.
"Defendants say that they have made no estimate that any excess may be left after paying all the proper and necessary expenses of inspection, and these defendants say that they have no means of actually approximating the amount that the tax of one-half cent per gallon will yield, or the expenses of equipping and maintaining a competent inspection force and department. That the legislature thought that one-half cent a gallon would be necessary to pay the expenses of inspection, and these defendants are informed and believe, and therefore aver, that this is as low an inspection tax as there is to be found in any state having oil inspection laws, and lower than the taxes in a great many of the states. In some states, there is a graduated scale of taxation of more than one-half cent for small quantities and less than one-half cent for large quantities. The said act expressly provides, in § 6, that the Commissioner of Agriculture shall include in his report to the General Assembly an account of the expenses under this act. The said act also provides that all money paid for inspection taxes shall be kept by the State Treasurer as a distinct fund, to be styled, 'The Oil Inspection Fund.' At the end of one year, it can be seen exactly what the inspection costs and how much is paid for it by dealers in oil, and until it shall appear that said tax is excessive, a charge to that effect by complaint is premature and ill considered."
as respects the other relief asked, the bill should be dismissed. A final decree was thereupon entered, and this appeal was then taken.
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."
"2. That the said inspection act is unconstitutional in that the General Assembly of North Carolina has attempted to delegate to the Board of Agriculture legislative powers."
to reasonable inspection before permitting its sale in the state. The court cannot say that such a law has no reasonable relation to the public safety or welfare."
"It appears from an examination of the various oil inspection laws in force in the United States that the charges for inspection vary from one-half to one and one-half cents per gallon, and that, in states wherein population and other conditions are similar to those in this state, the charge is about the same as that fixed by the act."
"conclude that the charge is so seriously in excess of what is necessary for the objects designed to be effected as to justify the imputation of bad faith, and change the character of the act."
"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."
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; Union Bridge Co. v. United States, 204 U. S. 364; St. Louis Iron Mountain & S. Ry. Co. v. Taylor, 210 U. S. 281; United States v. Grimaud, 220 U. S. 506.
of the court, it does not accord with sound policy. The appeal for redress in such case must be to the lawmaking power.
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.
"to make all necessary rules and regulations for the inspection of such oil, and to adopt standards of safety, purity, or absence from objectionable substances, and luminosity, when not in conflict with this act, and which they may deem necessary to provide the people of the state with satisfactory illuminating oil."
"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 one-half 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.
"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,"
"The State Treasurer shall, on the first day of June and December of each year, turn into the general fund of the state all moneys of the oil fund in his hands in excess of the amount drawn out by the Commissioner of Agriculture for expenses."
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.

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