1. A sale of goods made in this country to a commission merchant
for a foreign consignee, for the sole purpose of export, and
consummated only when the goods, addressed to the foreign
consignee, are delivered by the vendor to the exporting carrier, is
a step in their exportation, and, under Const., Art. I, § 9, cannot
be taxed by the United States, even though the law under which the
tax is imposed is a general one, not aimed specially at exports. P.
262 U. S.
2. Goods were started in exportation when so delivered to the
carrier, notwithstanding the fact that the bill of lading was not
issued until later, and notwithstanding the possibility that the
commission merchant, holding the title might change his mind and
divert them from their foreign destination. P. 262 U. S.
285 F. 784 reversed.
Error to a judgment of the district court dismissing the
complaint in an action to recover money exacted by the government
as a tax on a sale of goods.
Page 262 U. S. 67
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. 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 I, § 9, of the Constitution of the United States. Upon
demurrer, the complaint was dismissed by the district court on the
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.,
in the City of La Guaira, Venezuela, ordered Scholtz & Co.,
Page 262 U. S. 68
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
to indicate the purchasers and their place. Scholtz & Co.
thereupon sent to the plaintiff in writing, dated December 10,
"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 the 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
Page 262 U. S. 69
passed at the moment when the goods were delivered into the
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 I,
§ 9. United States v. Hvoslef, 237 U. S.
, 237 U. S. 18
Crew Levick Co. v. Pennsylvania, 245 U.
. Articles in course of transportation cannot be
taxed. William E. Peck & Co. v. Lowe, 247 U.
, 247 U. S. 173
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 which, in view
of the purpose of the Constitution, the export must be said to
begin. As elsewhere in the law, there will be other points very
near to it on the other side, so that, if the necessity of fixing
one definitely is not remembered, any determination may seem
arbitrary. In this case, for instance, while the goods were in
process of manufacture, they were nonetheless subject to taxation
if they were intended for export and made with specific reference
to foreign wants. Cornell v. Coyne, 192 U.
; Heisler v. Thomas Colliery Co.,
260 U. S. 245
the other hand no one would doubt that they were exempt after they
had been loaded upon the vessel for Venezuela and the bill of
lading issued. It seems to us that the facts recited are closer to
the latter than to the former side, and that the export had
The very act that passed the title and that would have incurred
the tax had the transaction been domestic, committed the goods to
the carrier that was to take them across the sea, for the purpose
of export and with the direction to the foreign port upon the
goods. The expected and accomplished effect of the act was to start
them for that port. The fact that further acts were to be done
before the goods would get to sea does not matter,
Page 262 U. S. 70
so long as they were only the regular steps to the contemplated
result. Getting the bill of lading stands no differently from
putting the goods on board ship. Neither does it matter that the
title was in Scholtz & Co. and that, theoretically, they might
change their mind and retain the bats and balls for their own use.
There was not the slightest probability of any such change, and it
did not occur. The purchase by Scholtz & Co. was solely for the
purpose of Delgado & Cia., and for their account and risk.
Theoretical possibilities may be left out of account. In
Railroad Commission of Louisiana v. Texas & Pacific Ry.
Co., 229 U. S. 336
consignees might have retained the goods at New Orleans instead of
shipping them abroad. The fact that they came to New Orleans by
rail from another place in the state made no difference. The same
principle was applied in Texas & New Orleans R. Co. v.
Sabine Tram Co., 227 U. S. 111
227 U. S. 123
The overt act of delivering the goods to the carrier marks the
point of distinction between this case and Cornell v.
Coyne, 192 U. S. 418
put it at any later point would fail to give to exports the liberal
protection that hitherto they have received, of which an example
may be seen in Thames & Mersey Marine Ins. Co., Ltd. v.
United States, 237 U. S. 19