Source: https://supreme.justia.com/cases/federal/us/279/95/
Timestamp: 2019-04-21 08:12:35+00:00

Document:
1. Goods purchased at interior points for export do not lose their character as goods in foreign commerce and become subject to state taxation because, after shipment to the exporter to a domestic port, they are temporarily stored there for reasons of expedition and economy preparatory to their loading on the vessels of foreign consignees. P. 279 U. S. 101.
2. An exporter bought oil in interior states to fill orders from abroad; had it shipped by rail in tank cars to a port in Louisiana, on bills of lading to the exporter at export rates; pumped it from the car tanks into storage tanks at the port, and from these delivered it into the ships of foreign consignees, the title passing from the exporter to them upon such delivery. The oil in each tank car, and as stored, was not segregated or destined to any particular cargo or shipment abroad, but it was all bought and held to fill foreign orders previously received; none of it was or could be otherwise disposed of at that port; none of it was subjected to any treatment of manufacture there, and the storage was but a necessary meaon of securing prompt transshipment and avoiding demurrage charges, by accumulating the oil from the tank cars pending the arrival of a foreign consignee's ship, or to make up a full cargo for one already waiting. Held that the continuity of the journey was not broken by the storage, and that a Louisiana tax on the oil while so stored was unconstitutional.
Certiorari, 278 U.S. 595, to review a decree of the Supreme Court of Louisiana which reversed a decree of a district court enjoining the levying of a tax, in he suit of the Petroleum Company against a sheriff, an assessor, and the Louisiana Tax Commission.
This was a petition by the Carson Petroleum Company, a corporation of Delaware, to enjoin Leon C. Vial, sheriff and tax collector of the Parish of St. Charles, Laouisiana. R. A. De Broca, assessor for the parish, and the Louisiana Tax Commission, from laying and levying against it an alleged illegal assessment of duties on a quantity of oil in storage tanks at St. Rose in the parish. They were ad valorem duties levied on all the property of the petitioner subject to taxation. The taxation was objected to because it was deemed an interference with interstate and foreign commerce.
The district court granted the injunction on the ground that the oil was in transit from another state to a foreign country and was halted only temporarily at St. Rose, and had no situs in the parish or state. The Supreme Court of Louisiana reversed the decree and ordered that the tax be collected with the penalties imposed by law.
cars, without being treated in any way. The oil is never kept on hand at St. Rose any longer than is necessary. The quantity on hand is always awaiting either the arrival of a ship or the accumulation of a sufficient quantity to load a ship."
The oil company asserts that the interstate and foreign shipment of the oil, from the refineries in the Mid-Continent Field into and across the state and across the sea to the foreign ports is a continuous interstate and foreign shipment, notwithstanding the stoppage and storage of the oil at St. Rose, where it had to await either the arrival of a ship or the accumulation of a sufficient quantity of oil to load a ship. On the other hand, the state authorities claim that there were two separate shipments -- the one which ended when the tank cars arrived and were unloaded at St. Rose and the foreign shipment, which began when the oil was loaded aboard ship for a foreign port. Hence they contend that, while the oil was stored in the tanks at St. Rose, under the protection of the state and local government, it was subject to state and local taxation even though intended and prepared for exportation.
The crucial question to be settled in determining whether personal property or merchandise moving in interstate commerce is subject to local taxation is that of its continuity of transit. The leading case is that of Coe v. Errol, 116 U. S. 517, in which Mr. Justice Bradley for this Court laid down the principles that should be applied. It was a case of floating logs. There were two lots, one where the logs were cut in Maine and were floated down the Androscoggin on their way to Lewiston, Maine, but, after starting on the trip, were detained for a season in New Hampshire by low water. It was held that they were free from local taxation in New Hampshire because they had begun the interstate trip, and the cause of detention was to be found in the necessities of the passage and trip back to Maine, which was held to be continuous.
This ruling, which was by the state court of New Hampshire, was approved by this Court. But, in respect to the other lot, this Court found that the logs were gathered in New Hampshire in what the court termed an "entrepot," looking to ultimate transportation to another state, but that, when taxed, they had not started on their final and continuous journey, and hence were not in interstate commerce and were taxable.
In Champlain Realty Co. v. Brattleboro, 260 U. S. 366, logs gathered on the West River in Vermont for a destination in New Hampshire were held not taxable in Vermont, though detained for a considerable time by a boom at Brattleboro to await subsidence of high water in the Connecticut River. It was held that as the interruption was only to promote the safe or convenient transit, the continuity of the interstate trip was not broken, as shown in State v. Engle, 34 N.J.Law, 425; State v. Carrigan, 39 N.J.Law, 35, and in Kelley v. Rhoads, 188 U. S. 1, where sheep driven 500 miles from Utah to Nebraska, traveling 9 miles a day, were held immune from taxation in Wyoming, where they stopped and grazed on their way.
state. It is much more difficult when the owner retains complete control of the transportation, and can change his mind and divert the delivery from the intended interstate destination, as in the Champlain Company case. The character of the shipment in such a case depends upon all the evidential circumstances looking to what the owner has done in the preparation for the journey and in carrying it out. The mere power of the owner to divert the shipment already started does not take it out of interstate commerce if the other facts show that the journey has already begun in good faith and temporary interruption of the passage is reasonable and in furtherance of the intended transportation, as in the Champlain case. Here, the case is even stronger in that the owner and initiator of the journey could not, by his contract, divert the logs after they had started from Swamp river without a breach of contract made by him with his vendee, who, by the agreement of sale, divided with him the responsibility for the continuous interstate transportation."
"Ordinarily, the question whether particular commerce is interstate or intrastate is determined by what is actually done, and not by any mere billing or plurality of carriers, and where commodities are in fact destined from one state to another, a rebilling or reshipment en route does not of itself break the continuity of the movement or require that any part be classified differently from the remainder.
As this Court often has said, it is the essential character of the commerce, not the accident of local or through bills of lading, that is decisive."
An instance of interruption of railroad transportation is Bacon v. Illinois, 227 U. S. 504. Bacon, the owner of the grain and the taxpayer, had bought it in the South and had secured the right from the railroads transporting it to remove it from their custody to his private grain elevator in Illinois, where, for his own purpose, he proceeded to inspect, weigh, clean, clip, dry, sack, grade, or mix it, and had power under his contract with the carriers either to change its ownership, consignee, or destination, or to restore the grain, after the processes mentioned, to the carriers to be delivered at the destination in another state according to his original intention. The question was whether the removal of the grain to his private elevator interrupted the continuity of the transportation and made the grain subject to local taxation there. It was held that it did; that the grain was locally dealt with in the interest of the owner while it was in his custody, and was subject to his complete disposition for a collateral business purpose of his own.
marked "Oil already sold in Arkansas, Louisiana and Mississippi," while the local oil and that yet to be sold was kept in other tanks. The oil in No. 1 was divided according to the orders already received into barrels and larger containers, to be forwarded by rail to customers in the three states named. It was contended that oil of tank No. 1 was on a continuous trip through Memphis from sources in the North to the ascertained customers in Arkansas, Louisiana, and Mississippi, and was not taxable at Memphis. It was held that the doings of the company in thus separating the oil after it reached Memphis into various amounts in different containers was itself a local business in Memphis, and that the delivery into Memphis of the oil and its subsequent shipment made two separate interstate shipments and permitted local taxation on the oil while it awaited the second shipment. The court seemed to regard the redistribution of the oil at Memphis as a rest interrupting the journey, and the Memphis yard for the tanks as an assembling entrepot like that described by Mr. Justice in Coe v. Errol.
The court was divided, and there was very vigorous dissent. The case has caused discussion, and it must be admitted that it is a close one, and might easily have been decided the other way. The result was probably affected by the impression created by the original situation and the somewhat artificial rearrangement of tanks in a large entrepot for redistribution of oil to avoid previous taxability.
construction of what is continuity of the journey, in cases where the court finds from the circumstances that export trade has been actually intended and carried through.
Terminal Company being a part of the railway for such purpose. The case therefore comes under Coe v. Errol, 116 U. S. 517, where it is said that goods are in interstate, and necessarily as well in foreign, commerce when they have 'actually started in the course of transportation to another state, or delivered to a carrier for transportation.'"
it a various character by the steps in its transportation would be extremely artificial. Once admit the principle, and means will be afforded of evading the national control of foreign commerce from points in the interior of a state. There must be transshipment at the seaboard, and if that may be made the point of ultimate destination by the device of separate bills of lading, the commerce will be given local character though it be essentially foreign."
"And the shipment was not an isolated one, but typical of many others, which constituted a commerce amounting in the year 1905 to 14,667,670 feet of lumber and in the year 1906, 39,554,000 feet. Nor was there a break, in the sense of the interstate commerce law and the cited cases, in the continuity of the transportation of the lumber to foreign countries by the delay and its transshipment at Sabine. Swift & Co. v. United States, 196 U. S. 375. Nor, as we have seen, did the absence of a definite foreign destination alter the character of the shipments."
See also Railroad Commission v. Texas & Pacific Ry., 229 U. S. 336; Spaulding & Bros. v. Edwards, 262 U. S. 66, 262 U. S. 70.
time as the arrival of the ships at the port of transshipment. The use of the tanks at the point of transshipment cannot be distinguished from the storing of the lumber on the docks or in the slips between them till the vessel to carry it should be ready. The quickness of transshipment in both cases was the chief object each exporter plainly sought. In both cases, the selection of the point of shipment and the equipment at that point were solely for the speedy and continuous export of the product abroad, and for no other purpose. No lumber or oil was sold there but that to be exported. There was no possibility of any other business there. Whatever hesitation might be prompted in deciding this case, if the Crain case stood alone, the effect of the decisions of this Court since is such as to make it inapplicable to the case before us.
MR. JUSTICE McREYNOLDS and MR. JUSTICE SANFORD are in favor of affirming the judgment on the authority of General Oil Co. v. Crain, 209 U. S. 211.

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