State ex rel. Knox v. Superior Oil Co.

Decision Date11 June 1928
Docket Number27247
Citation119 So. 360,156 Miss. 377
CourtMississippi Supreme Court
PartiesSTATE ex rel. KNOX, ATTORNEY-GENERAL, v. SUPERIOR OIL CO. *

Suggestion of Error Sustained, Former Order Set Aside and Reversed, and Judgment Here for Appellant, Dec. 22, 1928. [See 280 U.S. 390, 74 L.Ed. 320.]

. (In Banc. Suggestion of Error Sustained. Former Order Set Aside and Reversed, and Judgment Here for Appellant, Dec. 22 1928.) [See 280 U.S. 390, 74 L.Ed. 320.]

COMMERCE. Licenses. Seller delivering gasoline in state, retaining title in bills of lading buyer issued until gasoline reached

Louisiana held liable for excise taxes: such sales not constituting interstate commerce transactions, and license not being violative of commerce clause (Laws 1926, chapter 119; Constitution United States article 1, section 8, par. 3).

Where seller delivered gasoline to buyers' wharves in state, and retained title until gasoline reached Louisiana in bills of lading issued by buyers, who were fish packers and who transported gasoline in their own boats to Louisiana, where they sold it to fishermen, seller was liable for excise taxes under Laws 1926, chapter 119, and statutes of which that act was amendatory, since sales were not interstate commerce transactions and excise tax did not violate Constitution United States, article 1, section 8, paragraph 3, relating to interstate commerce.

ETHRIDGE and COOK, JJ., dissenting.

HON. V. A. GRIFFITH, Chancellor.

APPEAL from chancery court of Harrison county, HON. V. A. GRIFFITH, Chancellor.

Suit by the state, on the relation of Rush H. Knox, attorney-general, against the Superior Oil Company, to recover gasoline excise taxes. From a decree dismissing complainant's bill, complainant appeals. Former judgment set aside on suggestion of error and decree of court below reversed and rendered.

Suggestion of error sustained; former judgment set aside; and decree reversed.

James W. Cassedy, of Brookhaven, and E. C. Sharp, of Booneville, for appellant.

Where the movement of goods from one state to another was not contemplated as a part of the contract such contract would not be a part of interstate commerce.

Federal Trade Commission v. P. States Paper Trade Association, 271 U.S. 61, 71 L. Ed., 539; Sonneborn Bros. v. Crieton, 262 U.S. 506, 67 L.Ed. 1095, 43 S.Ct. 643.

The parties could not by the terms of their contract convert a purely local transaction into a interstate transaction.

Browning v. Weycroff, 233 U.S. 828.

An interstate shipment exists only when a commodity has been turned over by a shipper to a common carrier to be transported from one state to another under a contract of shipment, the definite character of such shipment being fixed when the movement of the commodity has commenced for the purpose of transportation.

State v. Public Service Commission, 269 Mo. 63, 189 S.W. 377; Hessig Rice Co. v. Fairbanks, 45 Texas Civ. App. 383, 100 S.W. 959; Loverin, etc., Co. v. Travis, 135 Wis. 322, 115 N.W. 829; Hogan v. Intertype Corporation, 130 Ark. 52, 206 S.W. 58; People v. Smith, 147 Mich. 391, 110 N.W. 1102; Austin v. Tennessee, 179 U.S. 343, 45 L.Ed. 224; Cook v. Marshall County Iowa, 196 U.S. 261, 49 L.Ed. 471; Kimmell v. State, 56 S.W. 854, 104 Tenn. 184.

Jno. L. Heiss, of Gulfport, and W. L. Guice, of Biloxi, for appellee.

Shipment of goods consigned to a point in another state constitutes interstate commerce, notwithstanding an actual delivery is made before a state line is crossed.

12 C. J., p. 26, note 80; American Express Co. v. Iowa, 196 U.S. 133; 25 S. C. R. 182; 49 L.Ed. 417.

Where goods are purchased in one state for transportation to another, the commerce include the purchase quite as much as it does the transportation.

Dahnke-Walker Milling Co. v. Bondurant, 42 S. C. R. 106; Welton v. Mo., 91 U.S. 275, 23 L.Ed. 347; United States v. Hill, 248 U.S. 420.

Where transportation has acquired an interstate character it continues until the load reaches the point where the party originally intended the movement should finally end.

Binderup v. Pathe Exchange, 44 S. C. R. 96, 263 U.S. 291, 68 L.Ed. 308; Kermeyer v. Kansas, 35 R. C. R. 419; Rossi v. Penn., 35 S. C. R. 677; Public. Utilities Commission v. Attleboro, 47 S. C. R. 297; Baltimore & Ohio S.W. R. R. Co. v. Seattle, 43 S. C. R. 28; Hughes Bros. Timber Co. v. Minn., 47 S. C. R. 170; Swift & Co. v. United States, 196 U.S. 375 to 398.

Anderson J. Cook and Ethridge, JJ., dissenting.

OPINION

Anderson, J.

Appellant, the state, on relation of the attorney-general, filed the bill in this case in the chancery court of Harrison county against appellee to recover of the latter gasoline excise taxes alleged to be due appellant by appellee for the period between the 1st day of April, 1926, and the 1st day of November, 1927, under the provisions of chapter 119, Laws of 1926, and the statutes of which that act was amendatory. The case was tried on bill, answer, and proof, resulting in a final decree dismissing appellant's bill. From that decree appellant prosecutes this appeal.

Appellee contended, and the chancellor held, that for the state to impose the excise tax sought to be recovered by the appellant would violate paragraph 3, section 8, article 1, of the Constitution of the United States, which confers on Congress the power to regulate commerce among the several states.

If appellee was due the state any gasoline excise taxes when the bill in this case was filed, it was for gasoline sold by appellee to certain packers of sea food at Biloxi, and by the latter shipped into Louisiana. As to all such gasoline, the appellee contends that the contracts of sale and purchase thereof were part of interstate commerce, and, therefore, under the commerce clause of the Federal Constitution, the state was without power to burden such commerce by imposing excise or privilege taxes thereon. While appellant contends that, under the facts of the case, the contracts for the sale and purchase of such gasoline were no part of, and had no relation whatever to, interstate commerce, and that, therefore, the gasoline sold was taxable under chapter 119, Laws of 1926, and the statutes of which that act was amendatory, as if it had been sold in and had never left this state.

There was no conflict in the evidence as to the controlling facts, which were as follows: Several packers of sea food, doing business in and near Biloxi, bought large quantities of shrimp and other sea food from fishermen engaged in fishing therefor out in the marshes near Grant's Pass, in the state of Louisiana. It was necessary for these fishermen to be supplied with gasoline and other supplies while they were engaged in making their catch. The packers who bought their catch furnished this gasoline and other necessary supplies, to be paid for when their catch was brought in and purchased by the packers. These packers owned boats which plied between Biloxi and Grant's Pass. They purchased gasoline from appellee and others, and transported it to the fishermen in such boats, which would take the gasoline out into the Louisiana marshes near Grant's Pass, and there deliver it to the fishermen, to whom it was charged by the packers, and, by the fishermen, paid for as stated. On the trial, it was agreed between the parties that the transactions had between appellee and the Gussie Fontaine Packing Company exemplified the manner in which appellee sold and delivered to the packing companies all the gasoline involved in this cause. The Gussie Fontaine Packing Company bought shrimp and, perhaps, other sea food, from fishermen in Louisiana near Grant's Pass. The fishermen needed gasoline, and the packing company would purchase the required amount from appellee on open account to be paid for on the first of the succeeding month. Appellee would then deliver this gasoline in containers on the wharfs at Biloxi to the packing company, where it would be loaded into its own boat and transported to its fishermen. The fishermen came in about every two weeks, and the packing company would then have a settlement with them, in which they would be charged with the gasoline so delivered to them by the packing company, and credited with the amount due them by the packing company for their catch. The boat owned by the Gussie Fontaine Packing Company, the Frank Louis, was not a common carrier of freight, but was used by the packing company alone for its own purposes, principally for transporting supplies, including gasoline, to its fishermen between Biloxi and Grant's Pass, which boat was registered as a fishing boat. When the Gussie Fontaine Packing Company purchased gasoline from appellee for transportation to Grant's Pass for the purposes named, it executed and delivered to the appellee a receipt or bill of lading as follows:

"No. 4882

Biloxi, Miss. 12/20, 1927

"Received in good order and condition from Superior Oil Company Biloxi, Miss.

No. Pieces.

Description of Articles.

Weight.

2 drums gasoline

"Consigned to Gussie Fontaine Pkg. Co., destination Grant's Pass La. By boat Frank Louis, owned or operated by Gussie Fontaine Pkg. Co. The master of said boat, Frank Louis acknowledges receipt of Said goods and agrees to deliver merchandise as consigned in like good order and condition.

"It is further understood and agreed that the property consigned herein remains the property of the said Superior Oil Company until it shall be delivered to consignee or consignee's agent at point of destination, but that all due caution and carefulness will be exercised by master and crew of said boat Frank Louis to protect said property and effect a safe delivery without undue delay.

"In consideration of the packet rate charged for carrying property described herein the owners of this boat assume...

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