Nashville St Ry v. Wallace

• Decision Date: 06 February 1933
• Docket Number: No. 176,176
• Citation: 77 L.Ed. 730,87 A.L.R. 1191,53 S.Ct. 345,288 U.S. 249
• Parties: NASHVILLE, C. & ST. L. RY. v. WALLACE, Comptroller of Treasury of Tennessee, et al
• Court: U.S. Supreme Court

288 U.S. 249

53 S.Ct. 345

77 L.Ed. 730

NASHVILLE, C. & ST. L. RY.

v WALLACE, Comptroller of Treasury of Tennessee, et al.

No. 176.

Argued Dec. 12, 1932.

Decided Feb. 6, 1933.

Appeal from the Supreme Court of the State of Tennessee.

[Syllabus from pages 249-251 intentionally omitted] Mr. Fitzgerald Hall, of Nashville, Tenn., for appellant.

[Argument of Counsel from pages 251-255 intentionally omitted] Messrs. W. F. Barry, Jr., and E. F. Hunt, both of Nashville, Tenn., for appellees.

[Argument of Counsel from pages 255-257 intentionally omitted] Messrs. Edwin M. Borchard, of New York City, and Charles E. Clark, of New Haven, Conn., amici curiae.

Mr. Justice STONE delivered the opinion of the Court.

Appellant brought suit in the Chancery Court of Davidson county, Tenn., under the Uniform Declaratory Judgments Act of that state,¹ chapter 29, Tennessee Public Acts 1923, to secure a judicial declaration that a state excise tax levied on the storage of gasoline, chapter 58, Tennessee Public Acts 1923, as amended by chapter 67, Tennessee Public Acts 1925, is, as applied to appellant, invalid under the commerce clause and the Fourteenth Amendment of the Federal Constitution. A decree for appellees was affirmed by the Supreme Court of the state, and the case comes here on appeal under section 237(a) of the Judicial Code (28 USCA § 344(a).

After the jurisdictional statement required by Rule 12 (28 USCA § 354) was submitted, this Court, in ordering the cause set down for argument, invited the attention of counsel to the question 'whether a case or controversy is presented, in view of the nature of the proceedings in the state courts.' This preliminary question, which has been elaborately briefed and argued, must first be considered, for the judicial power with which this Court is invested by article 3, § 1, of the Constitution, extends by article 3, § 2, only to 'cases' and 'controversies'; if no 'case' or 'controversy' is presented for decision, we are without power to review the decree of the court below. Muskrat v. United States, 219 U.S. 346, 31 S.Ct. 250, 55 L.Ed. 246.

In determining whether this litigation presents a case within the appellate jurisdiction of this Court, we are concerned, not with form, but with substance. See Fidelity National Bank & Trust Co. v. Swope, 274 U.S. 123, 47 S.Ct. 511, 71 L.Ed. 959. Compare Gasoline Products Co., Inc., v. Champlin Refining Co., 283 U.S. 494, 498, 51 S.Ct. 513, 75 L.Ed. 1188. Hence, we look not to the label which the Legislature has attached to the procedure followed in the state courts, or to the description of the judgment which is brought here for review, in popular parlance, as 'declaratory,' but to the nature of the proceeding which the statute authorizes, and the effect of the judgment rendered upon the rights which the appellant asserts.

Section 1 of the Tennessee Declaratory Judgments Act confers jurisdiction on courts of record 'to declare rights * * * whether or not further relief is or could be claimed' and provides that 'no action or proceeding shall be open to objection on the ground that a declaratory judgment or decree is prayed for. The declaration may be either affirmative or negative in form and effect; and such declaration shall have the force and effect of a final judgment or decree.' By section 2 it is provided that 'any person * * * whose rights, status or other legal relations are affected by a statute * * * may have determined any question of construction or validity arising under the * * * statute * * * and obtain a declaration of rights * * * thereunder.'

Under section 6, the court may refuse to render a declaratory judgment where, if rendered, it 'would not terminate the uncertainty or controversy giving rise to the proceeding.' Declaratory judgments may, in accordance with section 7, be reviewed as are other orders, judgments, or decrees, and under section 8 'further relief based on a declaratory judgment or decree may be granted whenever necessary or proper.' Section 11 requires that, 'when declaratory relief is sought, all persons shall be made parties who have or claim any interest which would be affected by the declaration, and no declaration shall prejudice the rights of persons not parties to the proceeding.'

This statute has often been considered by the highest court of Tennessee, which has consistently held that its provisions may only be invoked when the complainant asserts rights which are challenged by the defendant, and presents for decision an actual controversy to which he is a party, capable of final adjudication by the judgment or decree to be rendered. Miller v. Miller, 149 Tenn. 463, 261 S.W. 965; Goetz v. Smith, 152 Tenn. 451, 465, 278 S.W. 417; Hodges v. Hamblen County, 152 Tenn. 395, 277 S.W. 901; Cummings v. Shipp, 156 Tenn. 595, 3 S.W.(2d) 1062; Tennessee Eastern Electric Co. v. Hannah, 157 Tenn. 582, 587, 12 S.W.(2d) 372; Perry v. City of Elizabethton, 160 Tenn. 102, 106, 22 S.W.(2d) 359; Nashville Trust Co. v. Dake, 162 Tenn. 356, 359, 36 S.W.(2d) 905. It has also held that no judgment or decree will be rendered when all the parties who will be adversely affected by it are not before the court. Harrell v. American Home Mortgage Co., 161 Tenn. 646, 32 S.W.(2d) 1023; Sadler v. Mitchell, 162 Tenn. 363, 367, 36 S.W.(2d) 891.

Proceeding in accordance with this statute, appellant filed its bill of complaint in the state chancery court joining as defendants the appellees, the Attorney General and the state officials charged with the duty of collecting the gasoline privilege tax imposed by the Tennessee statute. The complaint alleged that appellant is engaged in purchasing gasoline outside the state, which it stores within the state pending its use within and without the state in the conduct of appellant's business as an interstate rail carrier; that appellees assert that the statute taxes the privilege of storing gasoline within the state and is applicable to appellant; that they have demanded payment of the tax in a specified amount and have determined to enforce their demand; and that, under the circumstances alleged, the statute as applied to appellant is invalid under the commerce clause and the Fourteenth Amendment. The relief prayed was that the Taxing Act be declared unconstitutional as applied to appellant. The chancery court sustained the appellees' demurrer to the sufficiency in law of the allegations relied on to establish the unconstitutionality of the tax. Its final decree dismissing the bill on the merits has been affirmed by the highest court of the state.

That the issues thus raised and judicially determined would constitute a case or controversy if raised and decided in a suit brought by the taxpayer to enjoin collection of the tax cannot be questioned. See Risty v. Chicago, R.I. & Pac. R. Co., 270 U.S. 378, 46 S.Ct. 236, 70 L.Ed. 641. Compare Terrace v. Thompson, 263 U.S. 197, 44 S.Ct. 15, 68 L.Ed. 255; Pierce v. Society of the Sisters, 268 U.S. 510, 45 S.Ct. 571, 69 L.Ed. 1070, 39 A.L.R. 468; Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 47 S.Ct. 114, 71 L.Ed. 303, 54 A.L.R. 1016. The proceeding terminating in the decree below, unlike that in South Spring Hill Gold Mining Co. v. Amador Medean Gold Mining Co., 145 U.S. 300, 12 S.Ct. 921, 36 L.Ed. 712; Muskrat v. United States, 219 U.S. 346, 31 S.Ct. 250, 55 L.Ed. 246, was between adverse parties, seeking a determination of their legal rights upon the facts alleged in the bill and admitted by the demurrer. Unlike Fairchild v. Hughes, 258 U.S. 126, 42 S.Ct. 274, 66 L.Ed. 499; Texas v. Interstate Commerce Commission, 258 U.S. 158, 42 S.Ct. 261, 66 L.Ed. 531; Massachusetts v Mellon, 262 U.S. 447, 43 S.Ct. 597, 67 L.Ed. 1078; New Jersey v. Sargent, 269 U.S. 328, 46 S.Ct. 122, 70 L.Ed. 289, valuable legal rights asserted by the complainant and threatened with imminent invasion by appellees, will be directly affected to a specific and substantial degree by the decision of the question of law; and, unlike Luther v. Borden, 7 How. 1, 12 L.Ed. 581; Field v. Clark, 143 U.S. 649, 12 S.Ct. 495, 36 L.Ed. 294; Pacific States Telephone & Telegraph Co. v. Oregon, 223 U.S. 118, 32 S.Ct. 224, 56 L.Ed. 377; Keller v. Potomac Electric Power Co., 261 U.S. 428, 43 S.Ct. 445, 67 L.Ed. 731; Federal Radio Commission v. General Electric Co., 281 U.S. 464, 50 S.Ct. 389, 74 L.Ed. 969, the question lends itself to judicial determination and is of the kind which this court traditionally decides. The relief sought is a definitive adjudication of the disputed constitutional right of the appellant, in the circumstances alleged, to be free from the tax (see Old Colony Trust Co. v. Commissioner, 279 U.S. 716, 724, 49 S.Ct. 499, 73 L.Ed. 918); and that adjudication is not, as in Gordon v. United States, 2 Wall. 561, 17 L.Ed. 921, and Postum Cereal Co. v. California Fig Nut Co., 272 U.S. 693, 47 S.Ct. 284, 71 L.Ed. 478, subject to revision by some other and more authoritative agency. Obviously the appellant, whose duty to pay the tax will be determined by the decision of this case, is not attempting to secure an abstract determination by the Court of the validity of a statute (compare Muskrat v. United States, supra, 219 U.S. 361, 31 S.Ct. 250, 55 L.Ed. 246; Texas v. Interstate Commerce Commission, supra, 258 U.S. 162, 42 S.Ct. 261, 66 L.Ed. 531), or a decision advising what the law would be on an uncertain or hypothetical state of facts, as was thought to be the case in Liberty Warehouse Co. v. Grannis, 273 U.S. 70, 47 S.Ct. 282, 71 L.Ed. 541, and Willing v. Chicago Auditorium Ass'n, 277 U.S. 274, 48 S.Ct. 507, 72 L.Ed. 880. See, also, Liberty Warehouse Co. v. Burley Tobacco Growers' Co-op. Marketing Ass'n, 276 U.S. 71, 88, 48 S.Ct. 291, 72 L.Ed. 473. Compare Arizona v. California, 283 U.S. 423, 463, 51 S.Ct. 522, 75 L.Ed. 1154. Thus the narrow question presented for determination is whether the controversy before us, which would be justiciable in this Court if...