Spalding Bros v. Edwards

• Decision Date: 23 April 1923
• Docket Number: No. 710,710
• Citation: 262 U.S. 66,43 S.Ct. 485,67 L.Ed. 865
• Parties: A. G. SPALDING & BROS. v. EDWARDS, Collector of Internal Revenue
• Court: U.S. Supreme Court

262 U.S. 66

43 S.Ct. 485

67 L.Ed. 865

A. G. SPALDING & BROS.

v EDWARDS, Collector of Internal Revenue.

No. 710.

Argued April 10 and 11, 1923.

Decided April 23, 1923.

Messrs. Frank Davis, Jr., of Washington, D. C., and Franklin Grady, of New York City, for plaintiff in error.

Mr. Solicitor General Beck, of Washington, D. C., for defendant in error.

Mr. Justice HOLMES delivered the opinion of the Court.

This is a suit to recover the amount of taxes collected by duress under color of the War Revenue Act of October 3, 1917, c. 63, § 600 (f). 40 Stat. 300, 316 (Comp. St. 1918, § 6309 3/4 a). The plaintiff, a corporation, manufacturer of the goods in question, says that the tax was laid on articles exported from a State, (New York,) in violation of Article 1, § 9, of the Constitution of the United States. Upon demurrer the complaint was dismissed by the District Court on the merits.

The tax is 'upon all baseball bats, * * * balls of all kinds * * * sold by the manufacturer, producer, or importer' and was levied on three occasions admitted to be similar, so that the statement of one transaction will be enough. Delgado & Cia., a firm in the city of La Guaira, Venezuela, ordered Scholtz & Co., commission merchants in New York, to buy for their account and risk a certain number of baseballs and baseball bats, etc., at an agreed price and to mark the packages D & C § La Guaira #36 to indicate the purchasers and their place. Scholtz & Co. thereupon sent to the plaintiff in writing, dated December 10, 1918, this:

'Export order from Scholtz & Co., Shipping and Commission Merchants. * * * Please ship on or before the _____ per steamer _____. Rush. * * * Errors in weight often entail heavy fines in Foreign Customs Houses, therefore be careful when weighing and marking Goods, as we shall hold you responsible for any fines caused through your errors. Cases or crates must be made to fit Goods as duty is paid by Gross weight. Shipping mark and number to be put on packages. [As above, with statement of the goods wanted.] Please send Memo. Invoice at once so we can apply for license and clear at Custom House.'

Scholtz & Co. Instructed the plaintiff to deliver the packages so marked to the Atlantic & Carribbean Steam Navigation Co., an exporting carrier in New York. The plaintiff marked and delivered the goods as directed and was given a receipt by the carrier which it sent to Scholtz & Co. and which was exchanged by them for an export bill of lading in their name, dated February 10, 1919. The goods were transported and delivered in due time to Delgado & Cia. Scholtz & Co. paid the plaintiff on February 1 and were paid their commission by Delgado & Cia. in ninety days from date of shipment. The transaction from start to finish was understood and intended by he plaintiff and Scholtz & Co. to be for the purpose of exporting the goods to Delgado & Cia. in Venezuela. The question is whether the sale was a step in exportation, assuming as appears to be the fact, that the title passed at the moment when the goods were delivered into the carrier's hands.

The fact that the law under which the tax was imposed was a general law touching all sales of the class, and not aimed specially at exports, would not help the defendant if in this case the tax was 'laid on Articles exported from any State,' because that is forbidden in terms by the Constitution. Article 1, § 9. United States v. Hvoslef, 237 U. S. 1, 18, 35 Sup. Ct. 459, 59 L. Ed. 813, Ann. Cas. 1916A, 286; Crew Levick Co. v. Pennsylvania, 245 U. S. 292, 38 Sup. Ct. 126, 62 L. Ed. 295. Articles in course of transportation cannot be taxed. William E. Peck & Co. v. Lowe, 247 U. S. 165, 173, 38 Sup. Ct. 432, 62 L. Ed. 1049. So we return to the question that we have stated. To answer it with regard to any transaction we have to fix a point at...