1. A contract of sale between two coal dealers for delivery of
coal by the one to the other in car load lots, f.o.b. cars at the
mine where produced, is a transaction in interstate commerce not
subject to be invalidated by a license law of the state if the
buyer, though entitled to stop the coal when so delivered, in
practice buys it for shipment to his customers in other states and
procures such shipment by orders under which the seller takes bills
of lading, in the buyer's name, from the railroad at the mine and
consigns the coal to such customers.
Dahnke-Walker Co. v.
Bondurant, 257 U. S. 282. P.
267 U. S.
225.
Reversed.
Certiorari to a judgment of the Supreme Court of Tennessee which
affirmed a judgment against the petitioner in his action for breach
of a contract to purchase coal.
Page 267 U. S. 224
MR. JUSTICE HOLMES delivered the opinion of the Court.
This is a suit for breach of a contract to purchase coal. The
only question here is whether the state Courts erred in holding
that the plaintiff (Flanagan, the petitioner) could not recover for
an undeniable breach because, at the time when the defendant, the
Federal Company, refused to accept the coal, the plaintiff's
license as a coal dealer had
Page 267 U. S. 225
expired. The plaintiff says that the transaction was interstate
commerce, and therefore not subject to such regulation by state
laws.
The contract was made on August 19, 1920, and bound the
plaintiff to deliver and defendant to accept approximately two
hundred cars of Tracy City run of mine coal at nine dollars per ton
f.o.b. cars mines,
i.e., at Tracy City, Tennessee.
Shipments to be approximately fifty cars per month. Time, September
1, 1920, to December 31, 1920. Payments to be made weekly for coal
shipped in previous week. The Federal Coal Company bought to sell
again. It did not receive the coal itself, but gave orders to
Flanagan, who took bills of lading from the Railroad Company at
Tracy City in the name of the Federal Coal Company and consigned
the coal to that Company's customers in other states as directed.
The Company usually did not sell in Tennessee. It broke off its
contract because the price of coal went down and, as it said, its
customers refused to keep to their bargains in their turn.
There was some discussion below to show that Flanagan also
bought this coal as a dealer, and so was subject to the law in
respect of this transaction. But, for the present purpose, it is
immaterial how he came by what he sold. For if he was engaged in
interstate commerce, he could not be impeded because he was a
dealer any more than if he was selling from his own mine. It was
understood between the parties that these dealings were steps in
sending coal from the mines to purchasers in other states. Very
likely the Federal Coal Company might have stopped the coal at
Tracy City in Tennessee, but it had no thought of doing so, and
Flanagan understood the course of business in which he was expected
to cooperate and did cooperate. Therefore in this matter the
parties were engaged in interstate commerce, and the state law,
even if valid as a tax, could not invalidate their contract.
Dahnke-Walker Milling Co. v. Bondurant, 257 U.
S. 282,
Page 267 U. S. 226
257 U. S. 290;
Lemke v. Farmers' Grain Co., 258 U. S.
50;
A.G. Spalding & Bros. v. Edwards,
262 U. S. 66,
262 U. S. 69-70.
We see no sufficient reason for believing that the decision would
have been the same if the state Court had regarded the transactions
as interstate commerce, and therefore its decision must be
reversed.
Judgment reversed.