Chassanoil v. City of Greenwood

• Citation: 166 Miss. 848,148 So. 781
• Decision Date: 06 May 1933
• Docket Number: 30495,30494
• Court: United States State Supreme Court of Mississippi
• Parties: CHASSANOIL v. CITY OF GREENWOOD. SABIN v. SAME

148 So. 781

166 Miss. 848

CHASSANOIL v. CITY OF GREENWOOD.

SABIN v. SAME

Nos. 30494, 30495

Supreme Court of Mississippi

May 6, 1933

Suggestion Of Error Overruled June 12, 1933.

(En Banc.)

1. CONSTITUTIONAL LAW. Statutes.

Construction will be placed upon statute, it reasonably possible, which will render it constitutional and carry out legislative purpose.

2 COMMERCE.

State is without power to tax interstate commerce, or right to engage therein.

3. CONSTITUTIONAL LAW.

Taxing statutes must be construed to reflect manifest purpose of Legislature to legally tax intrastate commerce, and not interstate commerce.

4. CONSTITUTIONAL LAW.

In passing upon constitutionality of statute, court cannot accept, as binding, agreements constituting merely conclusions from facts, nor understanding of parties as to general course of business dealing.

5 COMMERCE.

Statutes imposing privilege tax upon cotton brokers, persons buying and selling cotton, and cotton factors or merchants, and ordinance imposing privilege tax on persons buying or selling cotton, Held limited to transactions in intrastate commerce and, therefore, not invalid as burden on interstate commerce (Laws 1930, chapter 88, sections 55, 56, 58; Laws 1932 chapter 89, sections 61, 62, 64).

6. COMMERCE. "Interstate commerce" begins, rendering goods not subject to state taxation, when goods begin interstate journey, passing beyond state's authority.

The essential character of commerce, not accident of through bills of lading, is its continuity of movement in foreign commerce, and that determines federal or state control over it. Goods take character as interstate or foreign commerce when actually started in the course of transportation to another state or to a foreign country.

7. COURTS.

Construction of state statute is for state court, and federal courts are bound thereby.

8. COMMERCE.

Control of state over intrastate commerce is full and complete, subject only to provisions of Federal Constitution.

9. CONSTITUTIONAL LAW.

Powers of state, not delegated to federal government, are reserved to state or people.

10. COMMERCE.

That which is inherent in intrastate commerce does not lose its essential nature when it becomes part of transactions in interstate commerce.

11. COMMERCE.

Where legislative intention was not to tax interstate commerce, error of administrative officers or court in determining particular transaction constitutes interstate commerce does not affect validity of taxing statute.

ANDERSON, J., dissenting.

HON. S. F. DAVIS, Judge.

APPEAL from circuit court of Leflore county HON.S. F. DAVIS, Judge.

Separate proceedings by W. H. Chassanoil, and by R. F. Sabin, against the city of Greenwood, for a refund of certain privilege taxes. From a judgment of the circuit court, on appeal, denying the application for refund, the petitioners appeal. Judgment affirmed. See, also, 144 So. 548.

Affirmed.

Ward Allen, of Greenwood, for appellants.

The tax, the constitutionality of which is challenged in this suit, is a privilege tax on the buying and selling of commodities in the channels of interstate commerce. It is, therefore, a tax upon the very thing which motivates and propels the commodity in the channels of interstate commerce, and for that reason the tax is a striking example of a direct burden on interstate commerce such as has always been held to be unconstitutional by the Supreme Court of the United States. Appellants' business is nothing more or less than a necessary part of and an advancement of interstate commerce, and we are confident that a case cannot be found in which a tax on the buying and selling of an article in interstate commerce has been sustained as constitutional.

Bowman v. Continental Oil Co., 256 U.S. 642, 41 S.Ct. 606.

The particular part played by appellants in the scheme which is the usual and ordinary course of business in handling and marketing long staple cotton in the Mississippi Delta, is to sell that cotton to mills located beyond the territorial confines of the state and to fill such orders by going upon the market in the city of Greenwood, and buying cotton of the peculiar type of grade and staple which he has sold, and shipping that cotton to fill the order. Such buying and selling of cotton is a necessary part of the aforesaid scheme and usual and ordinary course of business.

Stafford v. Wallace, 258 U.S. 495, 42 S.Ct. 397.

Appellants buy indiscriminately of cotton which has been transported to the compress by wagon, automobile, or truck, and of cotton which has been transported to the compress by rail, and it appears to us that this fact alone is sufficient to label appellants' business as interstate commerce. They are selling and buying a product temporarily halted only for the purpose of compressing and of determining the final destination as between points without the state of Mississippi, which has already been billed through by the carriers, and upon which a single interstate freight rate is charged.

Lemke v. Farmers Grain Co., 258 U.S. 50, 42. S.Ct. 244; Shafer v. Farmers Grain Co., 268 U.S. 189, 45 S.Ct. 481.

In the cases at bar we are only asking the court to hold invalid the taxing ordinance and statutes in question in so far as they affect a business done in the particular manner in which the record shows that the business of these appellants was carried on.

6 R. C. L. 130, 132, sections 129, 130.

E. W. Smith, of Clarksdale, amicus curiae.

It is submitted that the authorities cited in the brief filed on behalf of the appellant herein are conclusive. Not only has the Supreme Court of the United States resolved this question in favor of the appellant, but this court likewise has so held.

W. L. Matthews et al. v. J. F. Rodgers et al., 284 U.S. 521, 76 L.Ed. 447; City Sales Agency v. Smith, 126 Miss. 202; Miller, State Revenue Agent v. I. C. Railroad Co., 146 Miss. 422.

Green, Green & Jackson, of Jackson, amici curiae.

The invalidity of this privilege tax was adjudged in a three-judge court at New Orleans, in Matthews v. Rodgers, reversed on the ground of no equity jurisdiction, 284 U.S. 521, 76 L.Ed. 447, and this direct decision of the three judges, with deference, should be here followed.

No burden may be placed by this statute upon interstate commerce.

Lawrence v. Commission, 286 U.S. 280, 76 L.Ed. 1106; Nashville, Chattanooga & St. Louis Ry. Co. v. Wallace, U. S. Supreme Court, Feb. 7, 1933; Anglo-Chilean Nitrate Sales Corp. v. Alabama, U. S. Sup. Ct., Feb. 6, 1933; Stafford v. Wallace, 258 U.S. 495, 66 L.Ed. 735, at p. 518, 742; Board of Trade v. Olsen, 262 U.S. 1, 67 L.Ed. 839; Swetland v. Curtiss Airports Corp., 41 F.2d 929.

Seventy-five per cent of this cotton is moved into Greenwood on a local bill of lading, and its journey was thereafter to be continued as from the initial point to the point of destination. Thereby that constituted interstate commerce.

Hohenberg v. Louisville & N. R. Co., 46 F.2d 952, 955; Baltimore & Ohio S.W. R. Co. v. Settle, 260 U.S. 166, 43 S.Ct. 28, 67 L.Ed. 189; New York Live Poultry Chamber of Commerce v. United States, 47 F.2d 156; M'Fadden v. Alabama Great Southern R. Co., 241 F. 562.

This cotton thus initially moving from its place of origin to the compress at Greenwood utilized that as but a facility in its interstate journey, which alone could be continued in virtue of the rendition of those services therefor requisite by these cotton buyers; otherwise this federal warehouse, created as an instrumentality of interstate commerce, would have become a place of final rest, and that intended by Congress therein to be done would be subverted by Mississippi, if it so saw fit, taxing the instrumentality requisite for the continued movement of the stream towards its destination.

Louisiana Public Service Co. v. Texas & N. O. R. Co., 284 U.S. 130, 76 L.Ed. 204; Foster-Fountain Packing Co. v. Haydel, 278 U.S. 10, 73 L.Ed. 153; Carson Petroleum Co. v. Vial, 279 U.S. 104, 73 L.Ed. 631; People v. Perry (Cal.), 291 P. 237; Texas & P. Ry. Co. v. Langbehn (Tex.), 158 S.W. 246; McFadden v. A. G. S. R. Co., 241 F. 565; State v. S. A. & A. P. Ry. Co. (Tex.), 73 S.W. 575; United States v. Gosho Co. (5 C. C. A.), 23 F.2d 675; Harrington v. Mo. Pac. R. Co. (Kan.), 254 P. 380; Di Santo v. Pennsylvania, 273 U.S. 37, 71 L.Ed. 527.

Somerville & Somerville, of Cleveland, amici curiae.

Section 56 of chapter 88, Laws of 1930 which requires cotton buyers to pay a privilege tax does not violate article 1, section VIII, clause 3, of the Constitution of the United States which authorizes Congress to have power to regulate commerce with foreign nations and among the several states. Applying the law it is our understanding that when cotton is stored in the compress at Cleveland, in Bolivar county, Mississippi, it is not then in interstate commerce although such cotton is later delivered to a common carrier and transported in interstate commerce.

Bacon v. Illinois, 227 U.S. 502, 57 L.Ed. 227; Harrison v. Mayor, etc., of Vicksburg, 3 S. & M. 581; Osborne, Agent Southern Express Co. v. Mayor, etc., of Mobile, 83 U.S. 479, 21 L.Ed. 470; Nathan v. State of Louisiana, (U. S.), 8 Howard 70, 12 L.Ed. 992.

A. H. Bell and W. S. Vardaman, Jr., both of Greenwood, for appellee.

It must be noted that this privilege license as required by the Legislature affects the entire state and affects all the cotton bought and sold in the state of Mississippi. The presumption of law is that the Legislature in passing this statute attempted to and did levy a tax only upon the business conducted within the boundaries of the state.

New Orleans, Mobile & Chicago Railroad Co. v. State, 110 Miss. 290, 70 So. 355.

It is well settled that when the...