Court Opinion

ID: 3520768
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:32:29.899975+00
Date Added: 2024-06-11T14:19:45.842072
License: Public Domain

Appellant, the state, on relation of the attorney-general, filed the bill in this case in the chancery court of Harrison county against appellee to recover of the latter gasoline excise taxes alleged to be due appellant by appellee for the period between the 1st day of April, 1926, and the 1st day of November, 1927, under the provisions of chapter 119, Laws of 1926, and the statutes of which that act was amendatory. The case was tried on bill, answer, and proof, resulting in a final decree dismissing appellant's bill. From that decree appellant prosecutes this appeal.
Appellee contended, and the chancellor held, that for the state to impose the excise tax sought to be recovered by the appellant would violate paragraph 3, section 8, article 1, of the Constitution of the United States, which confers on Congress the power to regulate commerce among the several states.
If appellee was due the state any gasoline excise taxes when the bill in this case was filed, it was for gasoline sold by appellee to certain packers of sea food at Biloxi, and by the latter shipped into Louisiana. As to all such gasoline, the appellee contends that the contracts of sale and purchase thereof were part of interstate commerce, and, therefore, under the commerce clause of the Federal Constitution, the state was without power to burden such commerce by imposing excise or privilege taxes thereon. While appellant contends that, under the facts of the case, the contracts for the sale and purchase of such gasoline were no part of, and had no relation whatever to, interstate commerce, and that, therefore, the gasoline sold was taxable under chapter 119, Laws of 1926, and the statutes of which that act was amendatory, as if it had been sold in and had never left this state.
There was no conflict in the evidence as to the controlling facts, which were as follows: Several packers of sea food, doing business in and near Biloxi, bought large *Page 381 
quantities of shrimp and other sea food from fishermen engaged in fishing therefor out in the marshes near Grant's Pass, in the state of Louisiana. It was necessary for these fishermen to be supplied with gasoline and other supplies while they were engaged in making their catch. The packers who bought their catch furnished this gasoline and other necessary supplies, to be paid for when their catch was brought in and purchased by the packers. These packers owned boats which plied between Biloxi and Grant's Pass. They purchased gasoline from appellee and others, and transported it to the fishermen in such boats, which would take the gasoline out into the Louisiana marshes near Grant's Pass, and there deliver it to the fishermen, to whom it was charged by the packers, and, by the fishermen, paid for as stated. On the trial, it was agreed between the parties that the transactions had between appellee and the Gussie Fontaine Packing Company exemplified the manner in which appellee sold and delivered to the packing companies all the gasoline involved in this cause. The Gussie Fontaine Packing Company bought shrimp and, perhaps, other sea food, from fishermen in Louisiana near Grant's Pass. The fishermen needed gasoline, and the packing company would purchase the required amount from appellee on open account to be paid for on the first of the succeeding month. Appellee would then deliver this gasoline in containers on the wharfs at Biloxi to the packing company, where it would be loaded into its own boat and transported to its fishermen. The fishermen came in about every two weeks, and the packing company would then have a settlement with them, in which they would be charged with the gasoline so delivered to them by the packing company, and credited with the amount due them by the packing company for their catch. The boat owned by the Gussie Fontaine Packing Company, the Frank Louis, was not a common carrier of freight, but was used by the packing company alone for its own purposes, principally for transporting supplies, including gasoline, *Page 382 
to its fishermen between Biloxi and Grant's Pass, which boat was registered as a fishing boat. When the Gussie Fontaine Packing Company purchased gasoline from appellee for transportation to Grant's Pass for the purposes named, it executed and delivered to the appellee a receipt or bill of lading as follows:
"No. 4882                         Biloxi, Miss. 12/20, 1927
"Received in good order and condition from Superior Oil Company Biloxi, Miss.
===========================================================
No. Pieces.       |  Description of Articles.  |  Weight.
— ----------------|----------------------------|-----------
2 drums gasoline  |                            |
-----------------------------------------------------------

"Consigned to Gussie Fontaine Pkg. Co., destination Grant's Pass, La. By boat Frank Louis, owned or operated by Gussie Fontaine Pkg. Co. The master of said boat, Frank Louis acknowledges receipt of said goods and agrees to deliver merchandise as consigned in like good order and condition.
"It is further understood and agreed that the property consigned herein remains the property of the said Superior Oil Company until it shall be delivered to consignee or consignee's agent at point of destination, but that all due caution and carefulness will be exercised by master and crew of said boat Frank Louis to protect said property and effect a safe delivery without undue delay.
"In consideration of the packet rate charged for carrying property described herein the owners of this boat assume liability for its safe delivery. Should there be damage in loading or unloading, transfers to other vessels or any damages in leakage in transit caused by carelessness or negligence, this damage and loss shall be sustained by owners of boat accepting this shipment.
"366-537                  [Signed]         JOSEPH ADAMS, "Master of Boat Frank Louis.
"Received $ ____ Collect — to apply in prepayment of packet charges, on property hereon described from *Page 383 
Biloxi, Mississippi, to Grant's Pass, Louisiana. For Master of Boat."
Appellee is a corporation located and doing business in Biloxi, Harrison county, Mississippi, selling and distributing gasoline at both wholesale and retail. The Gussie Fontaine Packing Company is also a corporation located and doing business in Harrison county, Mississippi.
It will be seen from what has been stated that the Gussie Fontaine Packing Company purchased its gasoline from appellee to be delivered to it on the wharf at Biloxi, where it was received by the packing company's boat, loaded therein, and transported to Grant's Pass, and there sold to the packing company's fishermen. No freight was paid by either the appellee or the packing company. There was no depot or station at Grant's Pass, or anywhere else in the Louisiana marshes, to which goods shipped could have been consigned. Grant's Pass was merely a touching point for boats, but was not a place of business for the receipt and distribution of freight. There was no common carrier of freight, either by rail or water, between Biloxi and Grant's Pass.
Putting the facts of the case in a short way: Appellee, a corporation of this state, doing business at Biloxi, sold the gasoline involved in this case to various packers of sea food also located and doing business at Biloxi, and charged the purchase price to the packers on open account payable at the end of the succeeding month. Under the contracts of purchase, the appellee delivered the gasoline on the wharfs at Biloxi, where it was loaded by the packers into their own boats, and by such boats transported to the fishermen supplying the packers with sea food for packing purposes. The fishermen were plying their avocation in the Louisiana marshes near Grant's Pass. The packers sent the gasoline out there, and sold and delivered it to their fishermen who paid for it as stated. In other words, the sales and purchases of the gasoline were between parties doing business in this *Page 384 
state, and were negotiated and consummated between them in this state, unless it can be said that the reservation of title to the gasoline in the appellee, by the terms of the bills of lading issued by the purchasers until it was delivered at Grant's Pass, changed the transaction from a domestic one to an interstate commerce transaction.
The question is not whether the gasoline moved in interstate commerce, for there is no dispute about that. It moved from Biloxi, in this state, to a point near Grant's Pass, in Louisiana. And, under the evidence at the time the gasoline was purchased, it was intended by the purchasers for that identical interstate commerce. The question is whether or not the contract of sale and the purchase of gasoline between the appellee and the packers were an integral part of that commerce. We think the solution of this question largely turns upon the effect to be given the reservation of title to the gasoline, as set out in the bills of lading therefor issued by the boat master of the packers. It seems clear that the sales and delivery of the gasoline and payment therefor by the purchasers in this state, apart from that provision in the bills of lading, constituted purely domestic transactions, having no relation whatever to interstate commerce. In considering this question, it should be borne in mind that the bills of lading were not issued to appellee by a common carrier, but were issued by the purchasers of the gasoline themselves, the packers, or, to be more specific, by the masters of their boats, which amounted to the same thing.
The title to the gasoline was not reserved in the appellee for the purpose of securing the payment of the purchase price thereof. There is no pretense of that kind on the part of the appellee. Nor was it retained for any other purpose, so far as the record shows, unless it was a means of trying to convert purely domestic transactions into interstate commerce transactions. The packers, as stated, transported the gasoline into Louisiana by means of their own boats, which were not common carriers, and no freight was paid by either the appellee *Page 385 
or the packers for such transportation. Under the stipulations in the bills of lading, the packers assumed all responsibility for safe delivery of the gasoline to their fishermen, including all damage thereto in loading and-unloading and transferring same, and loss by leakage in transit. What protection or security did the reservation of title to the gasoline until delivery to the consignee afford appellee? What, if anything, did appellee gain, or what could it have gained by it? We are unable to see any. Mr. Royster, the general manager of appellee, in effect, confessed, as a witness for his company, that the retention of title in the bills of lading was for the purpose of converting transactions exclusively domestic in their nature into transactions in interstate commerce.
We know of no decision of the supreme court of the United States substantially parallel in its facts to this case. But, in numerous decisions by that court, the question involved has been discussed. The solution of this question is easy, where, under the contract of sale, the shipment is delivered to a common carrier for destination in another state. It is much more difficult when the purchaser retains control of the transportation and can change his mind and divert the delivery from an interstate destination to a destination in the state where the shipment originated. The character of shipment depends evidentially on the circumstances. There must be considered what the owner has done in the way of preparation for the journey and in carrying it out. It is true that the mere power of a shipper to divert a shipment already begun does not take it out of interstate commerce, if the other facts show that the journey has already begun in good faith, nor does a temporary interruption of the passage when reasonable and in furtherance of the intended transportation. Hughes Bros. Timber Co. v. Minnesota,272 U.S. 469, 47 S. Ct. 170, 71 L. Ed. 359; Champlain Realty Co. v. Brattleboro, 260 U.S. 364, 43 S. Ct. 146, 67 L. Ed. 309, 25 A.L.R. 1195; Railroad Co. v. Mims, 111 Miss. 574, 71 So. 827. *Page 386 
In Browning v. Waycross, 233 U.S. 16, 34 S. Ct. 578, 58 L. Ed. 829, the court held that the business of erecting lightning rods within the corporate limits of a municipality carried on by an agent of a nonresident manufacturer of such rods, in whose behalf the agent had solicited orders for the sale of such rods, and from whom he had received the rods when shipped into the state on such orders, may be subjected to a municipal license without violating the commerce clause of the Federal Constitution, although such contracts bound the seller, at his own expense, to attach them to the houses of the persons who ordered them. The court further held in that case that it was not "within the power of the parties by the form of their contract to convert what was exclusively a local business, subject to state control, into an interstate commerce business protected by the commerce clause."
We do not think that United States v. Simpson, 252 U.S. 465, 40 St. Ct. 364, 64 L. Ed. 665, 10 A.L.R. 510; United States v. Hill,248 U.S. 420, 39 S. Ct. 143, 63 L. Ed. 337, and Kirmyer v. Kansas,236 U.S. 568, 35 S. Ct. 419, 59 L. Ed. 721, are in point. Those cases simply hold that intoxicating liquor transported across state lines was interstate commerce, regardless of what the purpose was in so transporting the liquor. That is not the question here. The gasoline involved in this case, immediately after its purchase by the packers, moved in interstate commerce; it was purchasd with that intention. Both the seller and the purchaser knew that the gasoline was going to move across the state line into Louisiana. But, what did that have to do with the contracts of sale and the purchase? If the appellee, under the contract, had any real substantial part in the transportation of the gasoline into Louisiana, that would make them interstate commerce transactions. But, the evidence shows, beyond any doubt, that appellee had no part in the transportation. It simply delivered the gasoline to the packers in this state, who took charge of it and transported it into another state. All the appellee has to hang *Page 387 
to to make interstate commerce transactions out of these sales of gasoline is the stipulation in the bills of lading providing for the retention of title in appellee until the gasoline should be delivered to the consignee at Grant's Pass, Louisiana, and this stipulation stands right in the face of the undisputed fact that there was no consignee, at or near Grant's Pass. And, furthermore, as shown, the gasoline was delivered by the appellee to the packers on the wharves at Biloxi, in this state, and there the packers, by means of their boats, took charge of it and transported it to Grant's Pass for sale to their fishermen, but that they were under no enforceable obligation to appellee to do so. They were free to transport the gasoline to any other point in or out of this state. The gasoline, in other words was delivered to the consignees right here in the state, on the wharfs at Biloxi, and, therefore, the provision in the bills of lading, fixing Grant's Pass as the place of delivery, was no more than so much blank space. The packers purchased the gasoline from the appellees in this state, and paid for it. What real concern, therefore, did appellee have as to where the gasoline was to be transported, and by what means? We can see no reason whatever. The contracts of purchase and sale were complete when the gasoline was delivered on the wharves in this state. No security was demanded by, or given appellee, by the packers for payment of the purchase price. Under the provisions of the bills of lading, the entire risk of loss in transportation was assumed by the packers, and, if that had not been done, it seems that any loss in transit would have fallen on the packers, because the gasoline was being carried in their own boats.
We cannot give our assent to the proposition that the bare fact, that the appellee and the packers went through the form in the bills of lading of providing that the title to the gasoline should remain in appellee until delivered to the consignee at Grant's Pass, made the contracts of sale and purchase of the gasoline interstate commerce *Page 388 
transactions. We think there is little substance in that position. It is too shadowy. It is without sound reason.
It follows from these views that the suggestion of error should be sustained, and the judgment heretofore rendered in this case by this court set aside, and that this court should now render the judgment that the court below should have rendered, which is that the appellant recover of the appellee the sum of twenty-five thousand two hundred fifty-four dollars and ninety-eight cents, with six per cent. interest from November 1, 1927, representing the amount shown by the evidence to be due by the appellee to the state for the taxes sued for. Reversed and suggestion of error sustained; former judgment in this case set aside; decree of court below reversed, and decree here for appellant.
Suggestion of error sustained, and reversed, and judgment here for appellant.
Cook and Ethridge, JJ., dissenting.