Court Opinion

ID: 3394841
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:00:16.490506+00
Date Added: 2024-06-11T14:24:05.243711
License: Public Domain

The appellant, United Gas Pipe Company, a Delaware corporation, filed its bill of complaint in the Circuit Court of Leon County, Florida, against J.M. Lee, as Comptroller of the State of Florida. The prayer of the bill sought a restraining order against the collection by the collector of the tax, as provided for in Chapter 15658, Laws of Florida, Acts of 1931. Likewise, a permanent injunction on final hearing was prayed for against the Comptroller and his successors in office. The Comptroller filed a motion to dismiss the bill of complaint on numerous grounds and the motion was by the lower court granted, and the plaintiff below appealed.
The bill of complaint, in part, alleged that the plaintiff was a Delaware corporation and then engaged in the business of purchasing, gathering, transporting and selling natural gas at wholesale for resale to distributing systems and to individual consumers and agencies of the United States Government for their own use. It owned pipe lines located in Texas, Louisiana, Mississippi, Alabama, and Pensacola, Florida. It sold and delivered natural gas to four of its customers in Escambia County, Florida. Pursuant to sales made in advance, it transported the natural gas through its main pipe lines, in continuous and uninterrupted streams from points in the State of Mississippi or Louisiana through the State of Alabama into the State of Florida, and there delivered it in Escambia County to four customers.
The bill of complaint alleged that it is not now engaged and has not at any time been engaged in intrastate commerce in the State of Florida and all gas which it has sold to persons in the State of Florida has been sold, transported and delivered in interstate commerce and as part of its interstate business and none of such gas come to rest at any time in its flow from points in the State of Mississippi and Louisiana to the point of its consumption after its delivery to the purchasers by the plaintiff.
The allegations of the bill of complaint as to the delivery of the gas from the plaintiff's pipe lines, at the measuring station near Pensacola to its four customers in Escambia County, Florida, are substantially viz: *Page 237 
(a) Gulf Power Company. By far the greater part of the gas which has been sold by plaintiff in Escambia County has been sold and delivered at the measuring station near the city limits of Pensacola, Florida, and at the measuring station near the border of New Warrington, Florida, to Gulf Power Company, a public uitility selling gas locally at retail in the City of Pensacola and in Escambia County. Such gas was and is transported by plaintiff through its main pipe lines under pressure in a continuous and uninterrupted stream from points in the States of Mississippi or Louisiana through the State of Alabama and into the State of Florida to the point of delivery to Gulf Power Company at the outlet of the Pensacola measuring station near the city limits of Pensacola in Escambia County, Florida, and at the outlet of the New Warrington measuring station, which stations are owned and operated by plaintiff. At said stations and incidentally to its delivery to Gulf Power Company, the gas flows in uninterrupted stream through a gas regulator which automatically maintains a constant pressure for metering and delivery and through a meter for determining the amount of gas sold. At five other points on its main pipe lines in Escambia County, plaintiff delivers and has in the past delivered to Gulf Power Company gas so transported and sold to it at the outlet of taps located directly in plaintiff's main pipe line without reducing the pressure of the gas or measuring it, such reduction and measuring being done by Gulf Power Company takes possession of the gas so purchased by it at the several points of delivery mentioned in this paragraph (a) and thereafter further reduces its pressure and transmits it through its systems of distribution and service pipes and sells and delivers it locally at retail to the consuming public in the City of Pensacola and in New Warrington and elsewhere in Escambia County.
(b) Harvesters Homes Company owns a residential sub-division near Cantonment in Escambia County, Florida, and now purchases and for a short time past has purchased natural gas from plaintiff at wholesale for resale at retail to residents in said subdivision. The gas sold by plaintiff to that company was and is acquired by plaintiff and was and *Page 238 
is transported by it from points in the States of Mississippi or Louisiana through the State of Alabama and into the State of Florida to the point of delivery to Harvesters Homes Company by means of the same pipe lines and in the same manner as is set forth in subparagraph (a) of this paragraph and said gas is delivered to Harvesters Homes Company at the outlet of a measuring station installed and operated by plaintiff for that purpose on its main line near said subdivision. At said station the gas flows through a regulator and a meter for the same purposes and in the same manner as described in said subparagraph (a) of this paragraph, without interrupting its continuous flow. Harvesters Homes Company takes possession of the gas so purchased by it at said outlet and thereafter further reduces its pressure and transmits it through its distribution system and service pipes and sells and delivers it locally at retail to the residents of said sub-division.
5. If said Chapter 15658, Laws of Florida, Acts of 1931, should be so construed as to be applicable to plaintiff on account of the sales of natural gas to persons in Florida described in paragraph 2 of this bill of complaint as requiring plaintiff to pay the tax imposed by said chapter on account of said sales, then said chapter as so applied is void and of no effect because in violation of Clause 3 of Section 8 of Article I of the Constitution of the United States which provides that Congress shall have the power to regulate commerce among the several States and because said chapter would as so construed constitute an effort by the State of Florida to regulate commerce among the States and said Chapter as so construed and the tax imposed thereby would constitute a direct burden upon interstate commerce and upon sales of goods in interstate commerce in violation of said provision of the Constitution of the United States.
The motion to dismiss contained several grounds but the pertinent ones are viz: (1) the facts alleged are insufficient to warrant the relief sought; (2) the tax imposed is not a burden on interstate commerce; (3) it appears by the allegations of the bill that "the original package" was broken in Florida by a reduction in the pressure and the gas came *Page 239 
to rest in the State of Florida prior to its sale and delivery to the ultimate customers; (4) the gas when the pressure is reduced and metered was at its journey's end and taxable in Florida; (5) it appears by the bill that plaintiff's business is of an intrastate character; (6) when the pressure was reduced and the gas turned into the mains of the ultimate purchasers it was at rest for taxation purposes.
Section 1 of Chapter 15658, Acts of 1931, Laws of Florida, defines the tax; enumerates the corporations, firms and individuals, etc., liable therefor; prescribes the duty of those so engaged of reporting to the Comptroller the total amount of gross receipts annually; "the amount of gross receipts derived from business done in this State;" the amount is fixed at $1.50 on each $100.00 of gross receipts. Section 2 provides that the tax imposed shall only be upon the total amount of gross receipts received from "business done between points in the State of Florida" on the part of such companies. Section 8 of the Federal Constitution declares that Congress shall have power . . . to regulate commerce with foreign nations and among the several states with the Indian tribes. . . .
Counsel for appellee contends that the tax imposed is not a burden on interstate commerce; that the alleged facts disclose a contract for the sale of parts of mass; that the performance of the sale and delivery can occur only after a severance of the parts from the mass; the reducing of pressure, severance and measurement of the gas then occurs in the State of Florida, being the point of delivery, shows a "breaking of the package" and the interstate status ceases. We are unable to sustain this theory of disposition when studying the pertinent allegations of the bill and the several grounds of the motion to dismiss directed thereto.
It is our conclusion that the facts alleged in the bill of complaint bring the appellant within the rule enunciated by the Supreme Court of the United States in the case of State Tax Commission v. Interstate Natural Gas Co., Inc., 284 U.S. 41, 52 S.Ct. 62, 76 L.Ed. 156, and similar cases. See Illinois Gas Co. v. Central Illinois Public Service Co., 314 U.S. 498, 62 S.Ct. 384, 86 L.Ed. 371. The order appealed from is *Page 240 
reversed with directions for further proceedings in the lower court not inconsistent with this opinion.
It is so ordered.
BROWN and ADAMS, JJ., and WELCH, Circuit Judge, concur.
BUFORD, C. J., dissents.