Source: https://supreme.justia.com/cases/federal/us/209/211/
Timestamp: 2019-04-23 02:28:48+00:00

Document:
Where complainant is entitled to equitable relief against the enforcement by state officers of an unconstitutional state statute, the judgment of the state court dismissing the bill for lack of jurisdiction on the ground that the suit is one against the state gives effect to the statute, denies complainant a constitutional right, and is reviewable by this Court under § 709, Rev.Stat.
the manner of its enforcement is not a suit against the state within the meaning of the statute of 1873 of Tennessee denying jurisdiction to the courts of the state of suits against the state.
Provisions of the federal Constitution and of the Fourteenth Amendment cannot be nullified by the state prohibiting suits in its own courts against state officers to prevent their enforcing unconstitutional statutes and contending that the National tribunals are also precluded from entertaining such suits under the Eleventh Amendment.
Merchandise may cease to be interstate commerce at an intermediate point between the place of shipment and ultimate destination, and if kept at such point for the use and profit of the owners and under the protection of the laws of the state, it becomes subject to the taxing and police power of the state. The act of 1899 of Tennessee providing for the inspection of oil is not an unconstitutional burden on interstate commerce as applied to oil coming from other states and ultimately intended for sale and distribution in other states but meanwhile stored in Tennessee for convenience of distribution and for reshipping from tank cars and barreling.
machinery for the reception and delivery of, oil at every point at which plaintiff ships oil. For some years, plaintiff has been engaged in business at Memphis, and has made that city not only a place of business at which to sell oil to the citizens and residents of Tennessee, but also has made it one of its distributing points to which its oils are shipped from Pennsylvania and Ohio in tank cars, from which cars the oils are unloaded into various tanks, barrels, and other receptacles for the purpose of being forwarded to its customers in Arkansas, Louisiana, and Mississippi, in which states it has many regular customers, from whom it always has on hand many unfilled orders for oil, to be delivered as soon as possible or convenient.
At Memphis plaintiff has numerous tanks or receptacles for oil of various kinds and sizes, among which are the following: (1) a tank or vessel in which is kept oil for which orders have been received from the states above mentioned before its shipment from the manufacturing plants, and which is especially shipped to fill such orders. This oil is unloaded at Memphis only for the purpose of distribution in smaller vessels to meet the requirements of such orders, and is kept separate from oils for sale in Tennessee, in a tank plainly and conspicuously marked "Oil Already Sold in Arkansas, Louisiana, and Mississippi," and remains in Tennessee only long enough (a few days) to be properly distributed according to the orders therefor. (2) Another tank or vessel for oil to be sold in those states, but for which [there were] no orders at the time of shipment from the manufacturing plants. This tank is marked "Oil to be Sold in Arkansas, Louisiana, and Mississippi," and is kept separate and apart from all other oil until required to supply orders from plaintiff's customers in those states, and is never sold except upon the receipt of such orders.
paid such charges up to the present time on all of its oils shipped into Tennessee, whether intended for sale in that state or other states. Until recently, plaintiff has unloaded the greater portion of its oil from its tank cars to its stationary tanks without attempting to separate the oil sold or intended to be sold in the states above mentioned from that to be sold in the State of Tennessee, and paid the inspection charges upon all. Plaintiff, however, is now separating its oil in the manner above described because it has been advised that the oil intended to be sold outside of Tennessee is not subject to inspection in that state if kept separate from the oil sold or intended to be sold in that state.
Defendant claims the right to inspect such oils, although he knows and admits no sales thereof are made in Tennessee, and claims that he is not only entitled, but that it is his duty, to inspect the same and collect the regular fees in such inspection.
"insofar as it provides for or requires an inspection of any of the oil in said tanks, because such inspection would be a regulation of and interference with commerce between the States of Pennsylvania and Ohio, from which said oil was shipped, and the States of Arkansas, Louisiana, and Mississippi, to which the same was shipped, in violation of the Constitution and laws of the United States, and especially of the third clause of § 8 of Article I of the Constitution of the United States, which provides that Congress shall have power 'to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.'"
the residents and citizens of Tennessee or the reputation of her manufactured products. (2) The fees are unreasonable and exorbitant for the service performed, and very much greater than necessary to provide for inspection, and that, after payment of the salaries and other expenses incident to inspection, there is a surplus of many thousands of dollars put into the treasury annually. (3) The act is void under the Constitution of the State of Tennessee because the inspection is not necessary or conducive to the benefit of the State of Tennessee or the citizens thereof, and the act is therefore unnecessary, unreasonable, and not a valid exercise of the police power of the state, but a mere tax or charge imposed under the guise of a police regulation, and as such is in conflict with Article II, § 28, of the Constitution of Tennessee, which requires all property to be taxed according to its value, and that taxes be equal and uniform throughout the state.
It is alleged that the act provides in § 2 a heavy penalty, consisting of a fine from twenty to fifty dollars for each offense, against any dealer or manufacturer who shall obstruct the inspector in the discharge of his duties, or refuse to permit him upon his premises for the performance thereof, and provides in § 4 that it shall be a misdemeanor for any person to sell any oil before having it inspected as provided in the act, and, on conviction, shall be fined $300, and the oil, if found to be rejected, shall be forfeited and sold. Plaintiff therefore it is alleged, on account of the severe penalties, could not afford to take the risk of selling any oil without inspection, or take the risk of refusing permission to inspect. That it is doubtful if plaintiff, if it paid the fees under protest, could recover the same, and if they could be recovered, it would be necessary for plaintiff to bring suit every thirty days for the charges paid for the preceding thirty days, so that an indefinite number of suits would be necessary. Irreparable injury will therefore result, it is alleged, if the inspection against plaintiff's oils under the act of 1899 be not enjoined.
"That no court in the State of Tennessee has, nor shall hereafter have, any power, jurisdiction, or authority to entertain any suit against the state, or any officer acting by the authority of the state, with a view to reach the state, its treasury, funds, or property, and all such suits now pending, or hereafter brought, should be dismissed as to the state, or such officer, on motion, plea, or demurrer of the law officer of the state, or counsel employed by the state."
The demurrer was overruled "as to that part of the bill in reference to the first tank mentioned in said bill." It was sustained "as to all that part of the bill in reference to the second tank mentioned in said bill." The ground of demurrer which went to the jurisdiction of the court was overruled "as to the oil in both tanks."
A preliminary injunction which had been granted was continued in force. Inspection, however, it was adjudged might proceed, the fees to be paid into court pending appeal to the supreme court of the state.
An appeal was taken, and the supreme court decided that the suit was one against the state, and reversed the decree of the chancery court. 117 Tenn. 82.
"that this holding involved no federal question, but only the powers and jurisdiction of the courts of the State of Tennessee, in respect to which the Supreme Court of Tennessee is the final arbiter."
consent." And it is hence insisted that the court, by dismissing the bill, gave effect to the law which was attacked. It is further insisted that the bill undoubtedly presents rights under the Constitution of the United States and conditions which entitle plaintiff in error to an injunction for the protection of such rights, and that a statute of the state which operates to deny such rights, or such relief, "is itself in conflict with the Constitution of the United States."
Plaintiff in error, to sustain its contention that the suit is not one against the state, but one to restrain "unconstitutional aggression" by a state officer upon private property, cites many cases in this Court. To these cases defendant in error makes no other reply than to say that they were cases in the federal courts and within the acknowledged range of the jurisdiction of courts, while the question presented by the motion to dismiss is not the rights plaintiff in error may have, but what remedies it has, and the power of the state over those remedies so far as its own courts are concerned. The difference is urged as material, and the following cases are adduced: Semple v. Hagar, 4 Wall. 431; Norton v. Shelby County, 118 U. S. 425; Smith v. Adsit, 16 Wall. 185, 83 U. S. 190; Callan v. Bransford, 139 U. S. 198; Freeport Water Co. v. Freeport, 180 U. S. 587, 180 U. S. 601; Newman v. Gates, 204 U. S. 89, 204 U. S. 95; Chambers v. Baltimore & Ohio R. Co., 207 U. S. 142.
the case, we cannot shut our eyes to the total want of jurisdiction under the twenty-fifth section or any other section of the Judiciary Act. It is plain that, if the court had assumed jurisdiction, and had declared the defendant's patent void for the reason alleged in the bill, the defendant would have had a case which might have been reviewed by this Court under the twenty-fifth section, and one on which there might have been a question and difference of opinion. But it is hard to perceive how the twenty-fifth section could apply to a judgment of a state court which did not decide that question, and refused to take jurisdiction of the case. The matter is too plain for argument."
In other words, it was decided that the federal question must be decided before it can be reviewed. Apparently there was no thought of considering whether the question of jurisdiction was rightly decided. That was seemingly considered out of the power of this Court to inquire into.
"relates to the existence of an inferior tribunal of the state, and that depending upon the constitutional power of the legislature of the state to create it and supersede a preexisting institution. Upon a subject of this nature the federal courts will recognize as authoritative the decision of the state court."
Claiborne County v. Brooks, 111 U. S. 400, 111 U. S. 410, was cited.
"the bill was dismissed for want of jurisdiction. The judgment of the court respecting the extent of its equitable jurisdiction is, of course, not reviewable here."
"It may well have been determined that the plaintiff's remedy against Adsit was at law, and not in equity, even if the sale from Holmes to him was utterly void. But whatever may have been the reasons for the decision, whether the court had jurisdiction of the case or not is a question exclusively for the judgment of the state court."
In Callan v. Bransford, a writ of error to the Court of Appeals of Virginia was dismissed on the ground that that court had disposed of the case on the ground that the matters involved were purely pecuniary, and that the amount in controversy in each case was less than sufficient to give the court jurisdiction under the Constitution of the state. "This being so," this Court said, "we are of opinion that the writs of error to that court must be dismissed."
"With what functions the circuit courts of the state [Illinois] may be invested may not be of federal concern. It is also a matter of construction, in which we might be obliged to follow the state courts."
the review of a final judgment or decree, actually or constructively deciding such question, when rendered by the highest court of a state in which a decision in the suit could be had, and as, for the want of a proper appeal, no final judgment or decree in such court has been rendered, it results that the statutory prerequisite for the exercise in this case of the reviewing power of this Court is wanting."
"But, subject to the restrictions of the federal Constitution, the state may determine the limits of the jurisdiction of its courts, and the character of the controversies which shall be heard in them. The state policy decides whether and to what extent the state will entertain in its courts transitory action, where the causes of action have arisen in other jurisdictions. Different states may have different policies, and the same state may have different policies at different times. But any policy the state may choose to adopt must operate in the same way on its own citizens and those of other states. The privileges which it affords to one class it must afford to the other. Any law by which privileges to begin actions in the courts are given to its own citizens, and withheld from the citizens of other states, is void because in conflict with the supreme law of the land."
of Virginia, and they involve questions very much like those in the case at bar. Poindexter v. Greenhow was an action of detinue for personal property distrained by Greenhow for delinquent taxes, in payment of which Poindexter had tendered coupons cut from bonds issued by the State of Virginia under act of the state passed in 1871. This act, it was held, constituted a contract between the holder of the coupons and the state that they should be received for taxes, which contract, it was further held, was impaired by the subsequent act under which Greenhow justified the distraint of Poindexter's property.
It was urged that the action could not be maintained, because it was substantially an action against the state, to which it had not assented. It was further urged that the remedy was afforded of a right to recover back all the taxes after payment under protest, and that this constituted the sole remedy.
"The state has passed no such law, for it cannot, and what it cannot do, it certainly, in contemplation of law, has not done. The Constitution of the United States and its own contract, both irrepealable by any act on its part, are the law of Virginia, and that law made it the duty of the defendant to receive the coupons tendered in payment of taxes, and declared every step to enforce the tax, thereafter taken, to be without warrant of law. . . . He stands, then, stripped of his official character, and, confessing a personal violation of the plaintiff's rights, for which he must personally answer, he is without defense."
by injunction, when the remedy at law is inadequate, from doing positive acts, for which they are personally and individually liable, taking or injuring the plaintiff's property, contrary to a plain official duty requiring no exercise of discretion, and in violation of the Constitution or laws of the United States."
"But no injunction can be issued against officers of a state to restrain or control the use of property already in the possession of the state, or money in its treasury when the suit is commenced; or to compel the state to perform its obligations; or where the state has otherwise such an interest in the object of the suit as to be a necessary party."
possibility of extremes. There need not, however, be imagination of extremes, if by extremes be meant a deliberate purpose to prevent the assertion of constitutional rights. Zeal for policies, estimable, it may be, of themselves, may overlook or underestimate private rights. The swift execution of the law may seem the only good, and the rights and interests which obstruct it be regarded as a kind of outlawry. See Ex Parte Young. ante, p. 209 U. S. 123, where this subject is fully discussed, and the cases reviewed.
"the court would be bound first to determine whether the oil in these tanks was in fact and in law, as claimed by complainant, a part of interstate commerce, and to do this we would be bound to hold, and proceed upon the theory, that the court had jurisdiction of the whole controversy."
And that the court declared it was precluded from doing by the act of 1873. In other words, refused to consider that which might bring the oils under the protection of the Constitution of the United States.
its operation in the particular instance works a violation of a constitutional right; for the cases are numerous where the tax laws of a state, which, in their general and proper application, are perfectly valid, have been held to become void in particular cases, either as unconstitutional regulations of commerce or as violations of contracts, prohibited by the Constitution, or because, in some other way, they operate to deprive the party complaining of a right secured to him by the Constitution of the United States."
And inquiries of fact may be necessary to exhibit the unconstitutionality of a statute, as in Reagan v. Farmers' Loan & Trust Co., 154 U. S. 362, and Smyth v. Ames, 169 U. S. 466.
It being, then, the right of a party to be protected against a law which violates a constitutional right, whether by its terms or the manner of its enforcement, it is manifest that a decision which denies such protection gives effect to the law, and the decision is reviewable by this Court. Wilmington &c. v. Alsbrook, 146 U. S. 279.
We are brought, then, to consider whether the law would, if administered against the oils in controversy, violate any constitutional right of plaintiff in error.
As determining an affirmative answer to this question, it is contended that the oil in both tanks was in transit from the place of manufacture, Pennsylvania, to the place of sale, Arkansas. The delay at Memphis, it is urged, was merely for the purpose of separation, distribution, and reshipment, and was no longer than required by the nature of the business and the exigencies of transportation. The difference in the oil in tank No. 1 and that in tank No. 2, it is further said, is that the former was sold before shipment, and the latter was to be held in Tennessee for sale; but in neither case was the oil to be sold in Tennessee, and it is hence insisted that the interstate transit of the oil was never finally ended in Memphis, but was only temporarily interrupted there.
in Coe v. Errol, 116 U. S. 517, to be the point of time that an article is committed to a carrier for transportation to the state of its destination, or started on its ultimate passage. The latter is defined to be, in Brown v. Houston, 114 U. S. 622, the point of time at which it arrives at its destination. But intermediate between these points questions may arise. State v. Engle, 34 N.J.L. 425; State v. Carrigan, 39 N.J.L. 35; The Daniel Ball, 10 Wall. 557.
In Pittsburg Coal Company v. Bates, 156 U. S. 577, coal in barges shipped from Pittsburg, Pennsylvania, to Baton Rouge, Louisiana, was stopped about nine miles above destination. It was held that it had ceased to be interstate commerce, and was subject to taxation by the State of Louisiana.
In Diamond Match Company v. Ontonagon, 188 U. S. 82, logs in transit to a point without the state were held subject to taxation under a statute of the state, where they would "naturally leave the state in the ordinary course of transit."
"The substance of these cases is that, while the property is at rest for an indefinite time, awaiting transportation, or awaiting a sale at its place of destination, or at an intermediate point, it is subject to taxation. But if it be actually in transit to another state, it becomes the subject of interstate commerce, and is exempt from local assessment."
shipment and ultimate destination may cease to be a subject of interstate commerce. Necessarily, however, the length and purpose of the interruption of transit must be considered.
"Delay within the state which is no longer than is necessary for the convenience of transshipment for its transportation to its destination will not make it property within the state for the purposes of taxation."
See also, in State v. Carrigan, 10 Vroom 36, where coal also shipped from Pennsylvania to a port in New Jersey, and remained there no longer than was necessary to obtain vessels to transport it to other places, was held to be in course of transportation, and not subject to the taxing power of the state. In Burlington Lumber Co. v. Willetts, 118 Ill. 559, the principle was recognized that property in transitu was not subject to the taxing power of a state, but it was held that logs in rafts sent from Wisconsin to Burlington, Iowa, by the Mississippi River, a part of which were stopped at a place in Illinois called Boston Harbor, to be there kept until needed at Burlington for mill purposes, were subject to taxation. The court said that the property was "kept at New Boston on account of the profit of the owners to keep it there," and, further, that the company was engaged in business in the state, beneficial to itself, and its property was so located as to claim that protection of the laws of the state, and hence was liable to taxation.
inState v. Engle, supra, but for the business purposes and profit of the company. It was only there for distribution, it is said, to fulfill orders already received. But to do this required that the property be given a locality in the state beyond a mere halting in its transportation. It required storage there -- the maintenance of the means of storage; of putting it in and taking it from storage. The bill takes pains to allege this.
"Complainant shows that it is impossible, in the coal oil business such as complainant carries on, to fill separately each of these small orders directly from the railroad tank cars, because of the great delay and expense in the way of freight charges incident to such a plan, and for the further reason that an extensive plant and apparatus is necessary in order to properly and conveniently unload and receive the oil from said tank cars, and it would be impracticable, if not impossible, to have such apparatus and machinery at every point to which complainant ships said oil."
This certainly describes a business -- describes a purpose for which the oil is taken from transportation, brought to rest in the state, and for which the protection of the state is necessary -- a purpose outside of the mere transportation of the oil. The case therefore comes under the principle announced in American Steel & Wire Co. v. Speed, 192 U. S. 500.
We have considered this case so far in view of the cases which involve the power of taxation. It may be that such power is more limited than the power to enact inspection laws. Patapsco Guano Co. v. Board of Agriculture, 171 U. S. 356. The difference, if any exists, it is not necessary to observe. The cases based on the taxing power show the contentions of plaintiff in error are without merit -- in other words, show that its oil was not property in interstate commerce.
The fundamental question before the state court of original jurisdiction was whether it had jurisdiction, under the constitution and laws of Tennessee, of a suit like this. Manifestly, if that court was forbidden by the laws under which it was created to take cognizance of cases like this, it had no alternative but to dismiss this suit. The court overruled a demurrer to the bill, one of the grounds of demurrer being that the suit was one "against the state or against an officer of the state, acting by authority of the state, with a view to reach the state, its treasury, funds, or property." It thereby sustained its jurisdiction, and proceeded to a decree on the merits. The case being carried to the Supreme Court of Tennessee, that court reversed the judgment and held that no court of Tennessee could, under its statutes, take cognizance of this suit and give the decree asked. Upon that ground, it did what it said the inferior state court should have done -- namely, dismissed the suit for want of jurisdiction to give the relief asked.
"That no court in the State of Tennessee has, nor shall hereafter have, any power, jurisdiction, or authority to entertain any suit against the state, or any officer acting by the authority of the state, with a view to reach the state, its treasury, funds, or property, and all such suits now pending, or hereafter brought, shall be dismissed as to the state, or such officer, on motion, plea, or demurrer of the law officer of the state, or counsel employed by the state."
entertain jurisdiction of the suit. The question, we have seen, was determined adversely to jurisdiction. That certainly is a state, not a federal, question. Surely Tennessee has the right to say of what class of suits its own courts may take cognizance, and it was peculiarly the function of the Supreme Court of Tennessee to determine such a question. When, therefore, its highest court has declared that the Tennessee statute referred to in argument did not allow the inferior state court to take cognizance of a suit like this, that decision must be accepted as the interpretation to be placed on the local statute. Otherwise, this Court will adjudge that the Tennessee court shall take jurisdiction of a suit of which the highest court of the state adjudges that it cannot do consistently with the laws of the state which created it and which established its jurisdiction. It seems to me that this Court, accepting the decision of the highest court of Tennessee as to the meaning of the Tennessee statute in question, as I think it must, has no alternative but to affirm the judgment on the ground simply that the ground upon which it is placed is broad enough to support the judgment without reference to any question raised or discussed by counsel.
What is said in the opinion of the Court about the Eleventh Amendment is, I submit, entirely irrelevant to any decision of the present case by this Court. That Amendment relates wholly to the judicial power of the United States, and has absolutely nothing to do with the inquiry as to the jurisdiction of the inferior state court under the Tennessee statute of 1873. In determining what relief this Court can or should give in respect of the judgment under review, we need not consider the scope and meaning of the Eleventh Amendment, for it was long ago settled that a writ of error to review the final judgment of a state court, even when a state is a formal party and is successful in the inferior court, is not a suit within the meaning of the Amendment. Cohen v. Virginia, 6 Wheat. 264, 19 U. S. 408-409.
its being from taking cognizance of this suit is conclusive here, and the judgment of that court should therefore be affirmed without reference to any other question raised or discussed.
I am unable to agree to the judgment in this case, for the reason that the statute here in question, as it was enforced against the property of the plaintiff in error, in my opinion was an interference with interstate commerce which was beyond the power of the state. It is to be observed that the court below did not construe the statute as applying to articles in the course of transportation between the states, and not destined for sale to consumers in the state -- or, in other words, the court did not hold that the statute applied to the property here affected by it. On the contrary, the court expressly refrained from passing upon the merits of the controversy, and dismissed the bill for want of jurisdiction. We, however, have assumed jurisdiction of the controversy, for reasons given in the opinion of the court, in which I concur, and therefore cannot escape the duty of interpreting the meaning of the statute. I think we should, if it be possible, give to the statute a meaning which places its constitutionality beyond doubt. The law seems clearly to be designed to protect state manufacturers and consumers within the state. Its operation is limited by the words of the first section, which directs the governor to appoint inspectors for illuminating fluids "which may be manufactured or offered for sale in the state." Far from enlarging the meaning of these restrictive words, the other provisions of the law accord with and confirm them. The oil in tank No. 1, at least, which was neither manufactured in the state nor offered for sale in the state, is, by this interpretation, removed from the operation of the statute, and I think we ought so to decide.
But if it be assumed that the oil in tank No. 1 is subjected to inspection by the law, in my opinion. the law is unconstitutional.
a drove of cattle, whose long interstate journey was interrupted, for humane reason, to give them a few days of rest and refreshment. With respect to this oil, no business whatever was done in the state except that which was required to conduct the transaction of interstate commerce begun in another state and to be completed in a third state. The single consideration that the property enjoys in Tennessee the protection of the laws of the state cannot be enough to justify state taxation. If that were so, all property in the course of interstate transportation would be subject to state tax in every state through which it should pass. I conclude that the oil in question was actually in the course of transportation between the states, was delayed in the State of Tennessee only for the purpose of conveniently continuing that transportation, and was therefore protected from state taxation by the commerce clause of the Constitution. Coe v. Errol, 116 U. S. 525; Kelley v. Rhoads, 188 U. S. 1. Cases of taxation upon property before it has entered the channels of interstate transportation, or after the transportation has finally ended, seem to me to have no application. In the former class, the property is taxable because it has not ceased to be a part of the mass of the property of the state, and in the latter class because it has come to rest as a part of the mass of the property of the state. Between those two points of time, it is exempt from the taxing power of the state. In every case where the tax has been sustained, there were facts present regarded as essential by the court, which are absent here. The property had either not begun its interstate journey, as in Coe v. Errol, ubi supra, and Diamond Match Company v. Ontonagon, 188 U. S. 82, or it had ended that journey, and was held for sale in common with other property in the state, as in Brown v. Houston, 114 U. S. 622; Pittsburg Coal Company v. Bates, 156 U. S. 577, and American Steel & Wire Co. v. Speed, ubi supra.

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