Court Opinion

ID: 9418468
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:26:41.209789+00
Date Added: 2024-06-11T17:22:03.394233
License: Public Domain

*273Mr. Justice Clarke,
dissenting.
I greatly regret that I cannot concur in the opinion and judgment of the court in this case, and I think it is my duty to state briefly as I may the grounds of my dissent.
The Eureka Pipe Line Company is a West Virginia corporation, owning pipe lines which are wholly within that State. Of the twenty-two and a half millions of barrels of oil which the company transported in the year in controversy, ending July 1, 1919, six and one-half millions of barrels were produced in West Virginia and the remainder came from other southern and western States. Of that produced in West Virginia, one and one-quarter millions of barrels were delivered to refineries in that State, and the balance was delivered to connecting carriers, at the state line, for interstate transportation. There is no controversy as to the oil from other States or as to the state-produced oil that was delivered to refineries in the State; but to the holding of the court that the state-produced oil, which ultimately went out of the State, moved in interstate commerce from the time it left the wells, I cannot" agree.
The company owns about forty-three hundred miles of pipe line in West Virginia, all of- which, with the exception of a few hundred miles of main or trunk line, is used for the purpose of “ gathering ” oil from twenty-seven counties of the State, — it covers them as with a network.
The admitted method of doing business was as follows: When the oil was delivered by the producer to the company, it issued to him what is called a “ credit balance,” which was a paper reciting that he had credit on its books for the designated number of barrels of oil and it con-' tained a blank for the entry of “ storage charges.” The oil thus delivered moved to some one of several points on the main lines of the company, all within the State and designated in the record as “ central points,” or “ delivery *274points,” or “ tariff points.” This movement of .the oil was under a tariff filed ^by the company with the State Public Service Commission, which, in the year under discussion, read:
“ Local Tariff. The rates named in this tariff are for intrastate transportation of crude petroleum.”
“ For gathering and transporting oil from wells to delivery points within the State of West Virginia, 20 cents. Storage, per day, l/40th cent.”
Thus, by the contract between the parties, the oil was received for transportation to points, within the State only. No consignee or destination was named, but, on the contrary, a charge was provided for indefinite storage, which the record shows was often paid, and the parties united in calling this part of the transportation a “ Local and an intra-state shipment.” . .
Further, in order to give the oil any intrastate delivery the owner was required to issue to the company a paper called a “ delivery 'order,” but, if he wished it to move in interstate commerce he must deliver to' the company an entirely different order called a “ tender of shipment,” which was a paper naming a place of delivery outside the State and reciting that the transportation should be under a designated interstate tariff.
All transportation of the oil before the issuing of the “ tender of shipment ” was under the local tariff described. It was not released for transportation or delivery of any kind, either state or interstate, until a “ delivery order ” or a “ tender of .shipment ” was. delivered to the company by the owner and when the latter was delivered the oil moved thereafter under the terms of another, a joint interstate tariff, filed with the Interstate . Commerce Commission at Washington by the Eureka Company, in conjunction with other companies owning lines connecting with its mains at the state line.
*275To this we must add that, as a West Virginia corporation, the Eureka Company was subject to the statute of that State, requiring that any company engaged in the transportation of petroleum in the State shall not in any manner ship or transport, or permit t'o be shipped or transported, or in any manner remove from the tanks or pipe lines of such company, any petroleum without a written order (a “ delivery order ” for intrastate, or a “ tender of shipment ” for interstate, delivery); and also that every such company “ shall at all times have in their pipes and tanks an amount of merchantable oil equal to the aggregate of outstanding ... . credit balances, on the books thereof.”
If this were all there was in the transaction, plainly the oil could not be considered as moving in interstate commerce until a “ tender of shipment ” was issued, for until that time it was without a consignee or destination and was held under a local tariff, providing a rate of twenty cents per barrel for intrastate transportation, and a charge for storage.
But the court concludes that-this plainly intrastate shipment is converted into an interstate shipment by a single circumstance, viz: that when the oil, thus moving under a local tariff for a local charge, reached the trunk, line, if that line happened to’ be “ running ” oil of the same kind and quality, the local oil was turned into the main and was at once moved out of the State, evenffhbugh a “ tender of shipment ” may not have been' issued- to-release it and give it destination. It is to be noted,.however, that if the company was not “running” oil of the like kind and quality when the local oil reached the trunk line, it was held at the junction (tariff point) until like oil was to be “ run ” again, when’ it was sent forward. This may have been for a day or for two weeks.
This circumstance, that the oil became under these conditions a “part of a stream that is pouring through *276and out of the State,” it is held, gave the shipment an interstate character from the moment it left the wells. This holding is adopted, says the court, as a “ practical conception ” of the matter, but it is precisely because it seems to me a too highly technical conception to find place in the world of practical business, that I dissent from such a conclusion. It is true that the physical oil moved, as stated, out of the State, but its removal without a tender of shipment caused no reduction whatever in the volume of like oil in the State; that volume, by the statute, by the contract of the parties and by the tariff filed by the company, must continue undiminished to meet all outstanding “ credit balances ” and the evidence of the assistant superintendent of the company is that this requirement was constantly complied with. ■ ■ The conclusion of. the court, therefore, allows the mere business convénience of the company (it saves storage tank-age) to convert into interstate commerce that which all the parties, by their contract and conduct treated, and charged and paid for, as an intrastate transportation, and thereby subordinates, in my judgment, the substance to the merest form of the transaction.
Believing, as I do, that this transporting of oil over approximately four thousand miles of “ gathering ” lines in the State to the trunk lines, was a local shipment, as the' parties all declared it to be, I think the State should be permitted to impose a reasonable license or occupation tax upon the company engaged in such extensive state activity, measured by the volume of such traffic, and that the judgment of the Supreme Court of Appeals of West Virginia'restraining the statute to this scope should be affirmed.
For the reasons stated in the dissenting opinion of Mr. Justice Brandéis in No. 30 of this term, Dahnke-Walker Milling Co. v. Bondurant, post, 282, I think this case is subject to review in this court only upon writ of certiorari, *277and that, therefore, the motion to dismiss the writ of error should have been granted, but it has seemed to me important to . discuss, as I have done, the question of interstate commerce involved.
Mr. Justice Pitney and Mr. Justice Brandéis join in this opinion as to the merits of the controversy. Mr. Justice Brandéis also concurs as to the question of jurisdiction.