Hughes Bros Timber Co v. State of Minnesota

• Decision Date: 23 November 1926
• Docket Number: No. 170,170
• Citation: 71 L.Ed. 359,47 S.Ct. 170,272 U.S. 469
• Parties: HUGHES BROS. TIMBER CO. v. STATE OF MINNESOTA
• Court: U.S. Supreme Court

272 U.S. 469

47 S.Ct. 170

71 L.Ed. 359

HUGHES BROS. TIMBER CO.

v STATE OF MINNESOTA.

No. 170.

Argued Oct. 7, 1926.

Decided Nov. 23, 1926.

Messrs. H. A. Carmichael, W. D. Bailey, and Oscar Mitchell, and of Duluth, Minn., for petitioner.

[Argument of Counsel from page 470 intentionally omitted]

Messrs. James E. Markham, Clifford Hilton, and G. A.

Youngquist, all of St. Paul, Minn., and H. H. Phelps, of Glendale, Cal., for State of Minnesota.

Mr. Chief Justice TAFT delivered the opinion of the Court.

This was a special proceeding in the district court of Cook county, Minnesota, by the state, through the county treasurer, to collect taxes on personal property owned by the Hughes Bros. Timber Company. With the penalty and fees and costs, the amount sued for was $2,919.50. The amount claimed by items appeared in a delinquent list furnished by the treasurer to the sheriff of the county for collection for the year 1922. It included a tax upon 10,000 cords of pulp wood of the assessed value of $21,233. In its answer as amended, the timber company pleaded that the pulp wood was not subject to taxation in the state of Minnesota at the time it was assessed, May 1, 1922, but was at that time in actual transit in interstate commerce by continuous route from the state of Minnesota to the state of Michigan. This presents the only question in the case.

The issue was submitted, without a jury, to the district court which found that the wood was not being carried in interstate commerce. The result was a judgment against the timber company for $2,456.78, including a penalty. The case was appealed to the Supreme Court, which held that the judgment of the District Court was wrong in the penalty imposed, because the defendants had not been given opportunity to pay the correct amount of the taxes, but with this modification affirmed the judgment of the District Court. 163 Minn. 4, 203 N. W. 436. The case is here by certiorari granted October 12, 1925. 269 U. S. 542, 46 S. Ct. 22, 70 L. Ed. 402.

The Timber Company was a partnership, having its office headquarters at Hovland, Cook county, Minn. The Swamp river flows through the county and empties into the Pigeon river. The latter forms the boundary between Cook county, Minn., and the province of Ontario, Canada, and empties into Lake Superior. The timber company's pulp wood was cut and gathered at various places in the county, but was hauled to the Swamp river and piled up on the ice and on its banks at a point about two miles and a half above its discharge into the Pigeon river. In October, 1921, the Timber Company had made a contract with the Central Paper Company, of Muskegon, Mich. By that contract the timber company agreed to deliver to the paper company, over the rail of the paper company's vessels at the mouth of the Pigeon river, approximately 10,000 cords of spruce pulp wood. The timber company agreed to load the wood into them as promptly as possible after its arrival. The paper company was to give to the timber company three days' notice of the arrival of its vessels at the booms where the logs were held, The wood was to be scaled and measured by a representative of both parties when the first cargo was loaded, and also on arrival at Muskegon, Mich., the measurement at Muskegon to be the basis for final settlement. The price per cord was to be $12. The paper company agreed to make progress estimates or provisional measurements during the months of January, February, and March at river landings, and an advance of $3 per cord for all wood inspected and measured, its inspector to be properly assisted by the timber company. The title to the wood on which advances were made was to be in the name of the paper company and to be branded at the time of provisional inspection and measurement. The paper company agreed to advance the second 25 per cent. or $3 per cord when the wood was delivered in the Pigeon river booms, and the balance, or $6 a cord, within five days after its delivery at Muskegon. Liability insurance, was to be carried and paid by the timber company, and cargo insurance was to be carried and paid for by the paper company. There was a warranty of title and freedom from all incumbrances by the timber company.

The hauling and placing of the logs on the ice and on the banks of the Swamp river were completed the latter part of March. When the ice broke, April 29, 1922, the drive of the logs began; those on the ice moved of themselves, and those on the banks were pushed in. The drive was conducted by the timber company's men. It had lasted 18 days when the logs reached the Pigeon river booms. By the latter part of July, all the logs had been shipped by vessels of the paper company on the lake to Muskegon.

We do not think it important, for purposes of this case, to decide where the title to the timber was at the time the drive began. The paper company had an interest in...