Western Oil Refining Co. v. Dalton
| Decision Date | 03 April 1915 |
| Citation | 174 S.W. 1138 |
| Parties | WESTERN OIL REFINING CO. v. DALTON, Clerk of County Court. |
| Court | Tennessee Supreme Court |
Appeal from Circuit Court, Trousdale County; J. M. Gardenhire, Judge.
Suit by the Western Oil Refining Company against Lytle Dalton, Clerk of the Trousdale County Court. From a judgment of the circuit court affirming a judgment of justice court for defendant, plaintiff appeals. Reversed, and judgment rendered for plaintiff.
True & Dorsey, of Springfield, and J. D. McMurray, of Hartsville, for appellant. The Attorney General, for appellee.
This suit was begun before a justice of the peace by the Western Oil Refining Company, hereinafter referred to as the Oil Company, against Dalton, clerk of the county court, to recover a sum demanded of it as a privilege tax, and which it paid under protest. From an adverse judgment the Oil Company prosecuted an appeal to the circuit court, where the case was heard on an agreed statement of facts, and the Oil Company denied relief; this appeal resulting.
The Oil Company was incorporated under the laws of Indiana; its principal office and place of business being at Indianapolis. It maintains no branch offices, and has had no office, agency, or warehouse in this state. It has a refinery at Lawrenceville, Ill., the products of which it sells direct to the trade. It also manufactures in the state of Indiana steel barrels to contain oil so produced. These products are marketed through the medium of salesmen, one of whom was Todd, whose field included portions of Tennessee.
In accordance with the regular system, Todd went to Trousdale county and took written orders for oils and barrels, which orders were addressed to the company; these orders being taken on condition that a sufficient number of the same could be procured to justify a shipment to Hartsville in that county, where the purchasers were to receive the goods. The orderers were given the privilege of examining the goods to ascertain whether they were as represented.
A specimen of the order is as follows:
Western Oil Refining Company
Indianapolis, Ind
Order No. 132. Date, May 1
Sold to William B. Smith; ship to Hartsville
Tenn.; post office, R. R. 2, Templow
Tenn.
How to ship, ......; when, ......
Terms, C. O. D.; telephone, Nos. 300, 143.
50 gallons kerosene ............... $ 6.50
1 steel barrel ................... 5.50
______
$12.00
[Signed] Purchaser, William B. Smith.
Salesman, J. E. Todd.
In some instances, however, the purchaser of oil had his own barrel and ordered only oil.
On receipt of the orders; the company shipped a tank car of oil from its refinery in Illinois and a car load of barrels from Indiana to itself at Hartsville for the purpose of filling the orders.
Upon arrival of these cars at Hartsville, the agent of the railroad company there wired the Oil Company, whereupon it by mail notified the purchasers, and sent Todd from Indiana, his home, to make deliveries, but only to ordering customers, which deliveries were made in manner following:
To those who had ordered only oil, the quantity specified in the order, and no more, was drawn from the tank car used for transport into the customer's barrel; otherwise a barrel as specified was taken from the car load of barrels and filled with oil so drawn; collections being made at the time. There was no storage of the oil in a depot or warehouse, or at all, except that a few customers were late in coming in, and a few barrels of oil were left as long as several days for them at the side of the railroad track, and the cars used for interstate transport released. Most of these customers later called for and took these barrels so temporarily left for them. Any barrels not so taken up were reshipped to the Oil Company at Scotsville, Ky.
At the end of each day's delivery Todd remitted all collections to the Oil Company at Indianapolis. He was paid his salary and expenses from that point, and had no monetary interest in the sales or collections.
Adopting this method of sale and delivery approximately one-half cent per gallon was saved in freight charges, and was more convenient.
The authority under which the clerk, Dalton, demanded and collected the privilege tax was section 4 of chapter 479 of the Acts of Tennessee of 1909, which provides that:
"Each and every person, firm, partnership, corporation, or local agent having oil depots, storage tanks, or warehouses for the purpose of selling, delivering, or distributing oil of any description, and each and every person, firm, partnership, corporation, or local agent using a railroad car or railroad depots for such purpose, shall pay a privilege tax as follows," etc.
The Oil Company's theory for recovery is that these commodities were protected as being in the course of interstate commerce, and therefore not subject to the local taxing power.
The contentions of the defendant clerk in support of the taxing power of the state are that the mode of shipment was a scheme or device adopted by the Oil Company to evade or circumvent the tax laws of this state, within the scope of the ruling in the case of Austin v. Tennessee, 179 U. S. 359, 21 Sup. Ct. 132, 45 L. Ed. 232; and, further, that in the transfer of oil from tank cars into barrels at Hartsville, in this state, the commodities (oil and barrels) had come to rest in this state from course of commerce, and were thus so "acted upon" by the consignor as that the original package, the tank, was broken, and new packages created, thus losing to the commodities their distinct character of interstate shipments, and bringing them within the range of local taxation, within the claimed meaning of Brown v. Maryland, 12 Wheat. 443, 6 L. Ed. 678, and May v. New Orleans, 178 U. S. 501, 20 Sup. Ct. 976, 44 L. Ed. 1167.
These contentions of the defendant clerk must be tested as to soundness by several rulings made in recent cases by the Supreme Court of the United States in which the character of commodities has been considered, in such connection, and defined with no inconsiderable nicety. This test may be by us made to best purpose by taking up and analyzing these federal decisions, which must govern us in determination of the pending case, in historical order.
In Caldwell v. North Carolina, 187 U. S. 625, 23 Sup. Ct. 229, 47 L. Ed. 338, reversing 127 N. C. 521, 37 S. E. 138, it appeared that the Chicago Portrait Company, from its office in Chicago, after taking orders in North Carolina, shipped to Greensboro, in that state, enlarged portraits, and, in a separate package, picture frames; that, on receipt at Greensboro, Caldwell, as agent of the portrait company, carried them to a room of the company, opened the boxes in which the respective shipments were made, assorted and put together the pictures and frames, and made deliveries to purchasers in Greensboro. The court, through Mr. Justice Shiras, said:
The argument of the Supreme Court of North Carolina had been that, as the pictures had not been completed by their being framed in Chicago, no title passed from the company to a given purchaser until the pictures were put into the frames and delivered by agent Caldwell, and that, as the act of combination and completion and the act of delivery were in North Carolina, the local tax law was applicable.
We think it obvious that the federal Supreme Court put its immediate holding contra on the point that a particular picture and a particular frame were originally designed the one for the other, before consignment, in conformity with the selection of the frame on the part of the customer; further, that the separation of the packages was treated as being merely for convenience in handling.
In the case of Rearick...
To continue reading
Request your trial
-
City of Waseca v. Braun
...102 S.W. 77. The holding, however, in that case can no longer be said to be the law for in the later case of Western Oil Refining Co. v. Dalton, 131 Tenn. 329, 174 S.W. 1138 (where the Tennessee court followed the Tansil case), the Federal Supreme Court in Western Oil Refining Co. v. Lipsco......
-
Western Oil Refining Company v. Lipscomb
...the state could not exact a privilege tax therefor consistently with the commerce clause of the Constitution (see Western Oil Ref. Co. v. Dalton, 131 Tenn. 329, 174 S. W. 1138), and, second, that what was done thereafter—rebilling and forwarding the cars from Columbia to Mount Pleasant and ......
- Western Oil Refining Co. v. Dalton