It is the essential character of commerce which determines
whether it is interstate or intrastate, and not the accident of
through or local bills of lading.
Where commodities are in fact destined from one state to
another, a rebilling or reshipment en route does not of itself
break the continuity of the movement or require that any part be
classified differently from the remainder.
Plaintiff, an Indiana corporation, for the purpose of filling
orders taken by its salesmen in Tennessee, shipped into that state
a tank car of oil and a carload of barrels and filled the orders
from the cars through a traveling agent, who drew the oil from the
tank into the barrels, or into others furnished by the customers,
and made delivery to the latter, collecting the price at the time.
The cars were billed to the plaintiff to a point in Tennessee where
part of the orders was filled, and thence rebilled to the plaintiff
to another point in that state where the remaining orders were
filled and the supply of oil and barrels exhausted, this in
pursuance of plaintiff's plan and intention at the time of original
shipment that the cars should remain at the first place only long
enough to fill the orders from there, and should then proceed to
the second. Held
that the movement of the goods to the
first place and its continuance thence to the second were connected
parts of a continuing interstate commerce movement to the latter,
and that plaintiff could not be subjected to an occupation or
privilege tax under the law of Tennessee because of the sales
consummated at either destination.
The case is stated in the opinion.
Page 244 U. S. 347
MR. JUSTICE VAN DEVANTER delivered the opinion of the court:
This was a suit by an Indiana corporation to recover money paid
under protest as an occupation or privilege tax in Tennessee. The
plaintiff had an oil refinery in Illinois and a steel barrel
factory in Indiana, and was selling the products of its refinery
and factory upon orders taken by traveling salesmen in its employ.
For the purpose of filling orders so taken in Maury County,
Tennessee, it shipped into that county from its refinery a tank car
of oil and from its factory a car of steel barrels. Both cars were
billed to the plaintiff at Columbia, in that county, and, after the
orders from that place were filled, were rebilled to the plaintiff
at Mount Pleasant, in the same county, where the orders from the
latter place were filled. At both places, the orders were filled
directly from the cars by a traveling agent of the plaintiff and
the purchase price was collected at the time, this being what was
contemplated when the orders were taken. If the order was for both
oil and barrels, the oil was drawn out of the tank car into the
barrels and the two were jointly delivered, and if oil alone was
ordered, it was drawn from the tank car into barrels otherwise
provided by the buyer. When the cars were originally shipped, they
contained just the quantity of oil and the number of barrels
required to fill the orders from the two places, and the plaintiff
intended that they should remain at Columbia only long enough to
fill the orders from that place, and then should be sent to Mount
Pleasant, so the orders from that place could also be filled. The
quantity of oil and the number of barrels required to fill the
orders from Mount Pleasant were in the cars continuously from the
time of the original shipment
Page 244 U. S. 348
until the cars reached that place. The plaintiff had no office
or local agent in Tennessee, nor any oil depot, storage tank, or
warehouse in that state.
The statute, c. 479, Acts 1909, § 4, under which the tax was
exacted and paid, provides:
"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."
The objection made to the tax, as applied in the circumstances
stated, was that it was a tax upon interstate commerce, and
therefore violative of the commerce clause of the Constitution. In
the county court, judgment was given for plaintiff, and this was
reversed by the supreme court of the state, which held, first, that
what was done up to and including the filling of the orders from
Columbia was interstate commerce, and the state could not exact a
privilege tax therefor consistently with the commerce clause of the
Constitution (see Western Oil Refining Co. v. Dalton,
Tenn. 329), and, second, that what was done thereafter -- rebilling
and forwarding the cars from Columbia to Mount Pleasant and then
filling the orders from that place -- was intrastate commerce, and
afforded an adequate basis for exacting the tax.
Of the first part of the decision, it is enough to say it is
supported by a long line of adjudicated cases in this Court, among
them being these: Caldwell v. North Carolina, 187 U.
; Dozier v. Alabama, 218 U.
; Crenshaw v. Arkansas, 227 U.
; Stewart v. Michigan, 232 U.
In the second part of the decision, we think the court erred.
Unlike Gulf, Colorado & Santa Fe Ry. Co. v. Texas,
204 U. S. 403
this is not a case where, at the time of the
Page 244 U. S. 349
original billing, the shipper had no purpose to continue the
transportation beyond the destination then indicated; nor is it a
suit, as was that, to penalize a carrier which rightly conformed
its action to what was said in the bill of lading. On the contrary,
it is a case where the shipper intended from the beginning that the
transportation should be continued beyond the destination
originally indicated, and where there is nothing which requires
that decisive effect be given to the bill of lading. Ordinarily the
question whether particular commerce is interstate or intrastate is
determined by what is actually done, and not by any mere billing or
plurality of carriers, and where commodities are in fact destined
from one state to another, a rebilling or reshipment en route does
not, of itself, break the continuity of the movement or require
that any part be classified differently from the remainder. As this
Court often has said, it is the essential character of the
commerce, not the accident of local or through bills of lading,
that is decisive. Southern Pacific Terminal Co. v. Interstate
Commerce Commission, 219 U. S. 498
Railroad Commission v. Worthington, 225 U.
; Texas & New Orleans R. Co. v. Sabine
Tram Co., 227 U. S. 111
Louisiana Railroad Commission v. Texas & Pacific Ry.
Co., 229 U. S. 336
Chicago, Milwaukee & St. Paul Ry. Co. v. Iowa,
233 U. S. 334
233 U. S. 343
South Covington & Cincinnati Street Ry. Co. v.
Covington, 235 U. S. 537
235 U. S.
Here, when the cars were started from Illinois and Indiana, it
was intended by the shipper, as is expressly conceded, that they
should be taken to Columbia, Tennessee, where a portion -- a
definite portion -- of the contents of each was to be taken out and
delivered, and that the cars, with the remainder of the contents,
should proceed to Mount Pleasant in the same state, and this is
what actually was done. Columbia was the destination of only a part
of the merchandise, not of all. As to part, it was merely the place
of a temporary stop en route. The original
Page 244 U. S. 350
billing to Columbia and the rebilling from there to Mount
Pleasant operated in the same way as would an original billing to
Mount Pleasant, with the privilege of stopping en route at Columbia
to deliver a part of the merchandise. Indeed, it is stipulated that
the reason for not billing the cars through to Mount Pleasant in
this way was because the carriers receiving the shipments "would
not allow such a stop-over privilege, though the same is allowed on
nearly every other kind of shipment." Certainly the transportation
of the merchandise destined to Mount Pleasant was not completed
when it reached Columbia; nor was the continuity of its movement
broken by its temporary stop at that place. As to that merchandise,
the journey to Columbia and the journey from there to Mount
Pleasant were not independent, each of the other, but in fact and
in legal contemplation were connected parts of a continuing
interstate movement to the latter place.
It results that the tax was imposed for carrying on interstate
commerce, and so was repugnant to the Constitution, and void.
THE CHIEF JUSTICE dissents, being of opinion that the case is
controlled by May v. New Orleans, 178 U.