Source: https://www.law.cornell.edu/supremecourt/text/309/414
Timestamp: 2016-10-01 17:48:01
Document Index: 770551210

Matched Legal Cases: ['§ 8', '§ 10', '§ 1309', '§ 601', '§ 601', '§ 630', '§ 601', '§ 309', '§ 601', '§ 309', '§ 630', '§ 601']

McGOLDRICK, Comptroller of City of New York, v. GULF OIL CORPORATION. | US Law | LII / Legal Information Institute
Supreme Court aboutsearch liibulletin subscribe previews McGOLDRICK, Comptroller of City of New York, v. GULF OIL CORPORATION.
309 U.S. 414 (60 S.Ct. 664, 84 L.Ed. 840)
Reargued: Feb. 27, 1940.
[HTML] Syllabus from pages 414-416 intentionally omitted
Argument of Counsel from pages 416-420 intentionally omitted
The New York Court of Appeals affirmed without opinion, 281 N.Y. 647, 22 N.E.2d 480, but by its amended remittitur declared that the affirmance was upon the ground, and none other, that the tax as applied violated the commerce clause of the Federal Constitution, Article I, § 8, Clause 3, Article I, § 10, Clause 2, which commands that no state shall lay any imposts or duties on imports or exports, and Article VI, Clause 2, making the 'Constitution, and the Laws in Pursuance thereof * * * the supreme Law of the Land'.
We granted certiorari upon a petition which challenged the several grounds of decision as defined by the amended remittitur of the Court of Appeals, the questions presented being of public importance.
The taxing enactment, Local Law No. 24 of 1934, p. 164, published as Local Law No. 25, is that of the municipal assembly of the City of New York, adopted pursuant to authority of Chapter 815 of the New York Laws of 1933, Ex.Sess., as amended by Chapter 873 of New York Laws of 1934, Ex.Sess. Its details were recently discussed in our opinion in McGoldrick v. Berwind-White Coal Mining Company, decided January 29, 1940, 309 U.S. 33, 60 S.Ct. 388, 84 L.Ed. - and it is unnecessary to repeat them here. It suffices to say that it lays a tax on purchasers for consumption of tangible personal property at the rate of 2 per cent. of the sales price. The tax is conditioned upon events occurring within the state, either transfer of title or possession of the purchased property, or an agreement within the state, 'consummated there' for the transfer of title or possession. The duty of collecting the tax and paying it over to the Comptroller is imposed on the seller, who must pay it whether he collects it or not, in addition to the duty imposed upon the buyer to pay the tax to the Comptroller when not so collected.
Section 309(a) of the Tariff Act of 1930, 46 Stat. 590, 690, 19 U.S.C.A. § 1309(a), authorizes the withdrawal, duty free, under regulations of the Secretary of the Treasury of articles from bonded manufacturing warehouses, for supplies to vessels of the United States engaged in foreign trade and directs that no such article shall be landed at any port or place in the United States or its possessions. By virtue of the terms already noted of §§ 601 and 630 of the Revenue Act of 1932, these provisions were extended to articles sold for fuel to vessels engaged in foreign trade, and the provisions of statutes and regulations relating to withdrawal from manufacturing bonded warehouses
for export were thus extended to similar withdrawals of fuel oil for disposition as ships' stores.
It will be noted that the tax imposed on importation of crude petroleum by § 601 of the Revenue Act of 1932 is, by force of its own provisions, to be treated as a duty imposed by the Tariff Act of 1930, which, in turn, has incorporated, by reference, customs regulations relating to the entry of merchandise in bonded manufacturing warehouses, its manufacture there and its withdrawal from bonded warehouses for exportation or disposition as ships' stores;
that § 630, read in conjunction with § 601(b) and the related provisions of the Tariff Act of 1930 (§ 309(b)) provides that articles manufactured from imported articles and laden for use on vessels engaged in foreign commerce under customs regulations are to be duty free and considered or held as exported for the purpose of the drawback provisions of both § 601 of the Revenue Act of 1932 and § 309(b) of the Tariff Act of 1930.
From the time of importation until the moment when the bunker 'C' oil is laden on vessels engaged in foreign trade, the imported petroleum and its product, the fuel oil, is segregated from the common mass of goods and property within the state, and is subject to the supervision and control of federal customs officers.
It cannot lawfully be removed from the manufacturing warehouse except for delivery for use as fuel to a vessel engaged in foreign commerce and it cannot lawfully be diverted from such destination and use and cannot, after delivery to the vessel, be landed in the United States. Throughout, the oil is subject to the obligation of respondent's bonds that it shall remain under such supervision and control and shall not be diverted from its ultimate destination as ships' stores.
That such was the purpose of the present legislation is confirmed by its history. Senate Report No. 58, 73d Cong., 1st Sess., on the bill which was enacted as § 630 of the Revenue Act of 1932, exempting fuel placed on vessels engaged in foreign commerce from the tax, declared, page 3: 'It is believed that the amendment will enable the American manufacturers to compete more favorably with their foreign competitors for this business without any substantial loss of revenue, since the effect of the present act is to force purchases abroad'. It added that the provisions for drawback of the tax on importation 'also relieves American manufacturers from a competitive disadvantage'. From statements made on the floor of the Senate by the sponsor of the bill it appears that one purpose of the exemption was to increase the trade in fuel oil in American ports which had been lost through purchase of fuel in foreign ports by vessels engaged in foreign commerce following the imposition of the tax by § 601(c)(4). 77 Cong.Rec., Part III, 32123214.
Certiorari which had been allowed by the Supreme Court of the United States December 4, 1939, 308 U.S. 545, 60 S.Ct. 260, 84 L.Ed. -, before the amendment of the remittitur by the New York Court of Appeals, was dismissed January 15, 1940, 309 U.S. 2, 60 S.Ct. 375, 84 L.Ed. -, on the ground that in the absence of an explicit statement by the Court of Appeals that it had annulled the assessment of the tax solely because of the violation of the Federal Constitution, the Court was unable to find that the decision of the highest court of the state did not rest upon an adequate nonfederal ground. On motion for rehearing, based on the amended remittitur of the Court of Appeals, the order of dismissal was, on February 5, 1940, vacated and the cause restored to the docket, 309 U.S. 692, 60 S.Ct. 512, 84 L.Ed. -.
See Articles 455 to 461, Customs Regulations of 1931, cf. Articles 410414, Regulations of 1915; Articles 433437, Regulations of 1923 and Articles 464470 of the 1937 Regulations.