1. In a regular course of business, gasoline was sold by an oil
company in Mississippi to shrimp packers in that state, was
delivered at the wharves of their packing plants there, and was
thence carried by the packers' boats to a neighborhood in Louisiana
and delivered to shrimp fishermen for use in fishing. The fishermen
brought their catches to the packing plants, sold them to the
packers, and were charged with the cost of the gasoline. The oil
company received in each case from the packer a so-called bill of
lading, signed by the master of the boat on which the gasoline was
loaded, purporting to show a consignment to the packer, to the
Louisiana neighborhood as destination, on that boat and providing
that the gasoline should remain the property of the oil company
until delivered to the consignee or its agent at such
"destination," and that all risks should be upon the purchaser. The
oil company paid no freight. The packers, when the gasoline was
delivered at their plants, were free to do with it as they liked.
Held, that the sales by the Oil Company were not in
interstate commerce, and were subject to be taxed by Mississippi.
P.
280 U. S.
395.
2. It is not within the power of the parties, by the form of
their contract, to convert a local business into an interstate
commerce business protected by the Commerce Clause when the
contract achieves nothing else. P.
280 U. S.
394.
156 Miss. 377 affirmed.
Appeal from a judgment of the Supreme Court of Mississippi
upholding taxes. The suit was brought by the state Attorney General
to collect the taxes from the oil company. A judgment of the
Chancery Court dismissing the bill was affirmed by the Supreme
Court after a hearing before a division thereof consisting of three
judges. Upon suggestion of error, there was a rehearing by the full
court, resulting in the decree here considered.
Page 280 U. S. 393
MR. JUSTICE HOLMES delivered the opinion of the Court.
This is a suit by the Mississippi to collect a tax on
distributors of gasoline of three and four cents respectively per
gallon sold, according to the statute in force at the time of the
sales. The defense was that the sales were in interstate
commerce.
The Supreme Court of the
Page 280 U. S. 394
state upheld the tax, 119 So. 360, and the defendant, the
Superior Oil company, appealed to this Court on the ground that the
statutes as applied violated the commerce clause of the
Constitution of the United States. Article I, ยง 8.
The facts are as follows. The Superior Oil company, a
corporation created and doing business in Mississippi, sold
gasoline to packers in Biloxi in that state and delivered it at the
packers' wharves. The latter loaded the oil upon their own fishing
boats and sent it out to the neighborhood of Grants Pass,
Louisiana, where they delivered it to shrimp fishermen for use in
fishing. The fishermen brought their catch back to Biloxi, sold it
to the packers, and were charged with the cost of the oil in
account. The appellant received in each case from the purchaser
what is called a bill of lading, signed by the master of the boat
on which the oil was loaded and reading in part:
"Consigned to Gussie Fontaine Pkg. co. [or other purchasers].
Destination: Grants Pass, La. By boat Frank Louis, owned or
operated by Gussie Fontaine Pkg. Co."
The instrument then provided that
"the property consigned herein remains the property of said
Superior Oil company until it shall be delivered to consignee or
consignee's agent at point of destination,"
with provisions throwing all risks upon the purchasers. The
seller, of course, paid no freight. The document seems to have had
no other use than, as the Supreme Court of Mississippi said, to try
to convert a domestic transaction into one of interstate commerce.
There was no consignee at the point of destination. The goods were
delivered to the so-called consignee before they started, and were
in its hands throughout. There was no point of destination for
delivering of the oil, but merely a neighborhood in which the
packers that had bought it and already held it expected to sell it
again. The document hardly can affect the case, because it is
"not within the power of the
Page 280 U. S. 395
parties by the form of their contract to convert what was
exclusively a local business, subject to state control, into an
interstate commerce business, protected by the commerce
clause;"
Browning v. Waycross, 233 U. S. 16,
233 U. S. 23, at
least when the contract achieves nothing else.
The importance of the commerce clause to the Union, of course,
is very great. But it also is important to prevent that clause's
being used to deprive the states of their lifeblood by a strained
interpretation of facts. We may admit that this case is near the
line. There was a regular course of business, known to the
appellant, that took the gasoline into another state, and if by
mutual agreement the oil had been put into the hands of a third
person, a common carrier, for transportation to Louisiana, the mere
possibility that the vendor might be able to induce the carrier to
forego his rights might not have been enough to keep the
transaction out of interstate commerce.
A.G. Spalding &
Bros. v. Edwards, 262 U. S. 66 (a
case of foreign export,
see Sonneborn Brothers v. Cureton,
262 U. S. 506,
262 U. S.
520-521). But here the gasoline was in the hands of the
purchaser to do with as it liked, and there was nothing that in any
way committed it to sending the oil to Louisiana except its own
wishes. If it had bought bait for fishing that it intended to do
itself, the purchase would not have been in interstate commerce,
because the fishing grounds were known by both parties to be beyond
the state line. A distinction has been taken between sales made
with a view to a certain result and those made simply with
indifferent knowledge that the buyer contemplates that result.
Louisville & Nashville, R. Co. v. Parker, 242 U. S.
13,
242 U. S. 14;
Kalem Co. v. Harper Brothers, 222 U. S.
55,
222 U. S. 62.
The only purpose of the vendor here was to escape taxation. It was
not taxed in Louisiana, and hoped not to be in Mississippi. The
fact that it desired to evade the law, as it is called, is
immaterial, because the very meaning of a line in the law
Page 280 U. S. 396
is that you intentionally may go as close to it as you can if
you do not pass it.
Bullen v. Wisconsin, 240 U.
S. 625,
240 U. S.
630-631. But, on the other hand, the desire to make its
act an act in commerce among the states was equally unimportant
when it was apparent that the buyer's journey to Louisiana was
accidental so far as the appellant was concerned. It is a matter of
proximity and degree as to which minds will differ, but it seems to
us that the connection of the seller with the steps taken by the
buyer after the sale was too remote to save the seller from the
tax. Dramatic circumstances, such as a great universal stream of
grain from the purchase to a market elsewhere, may affect the legal
conclusion by showing the manifest certainty of the destination and
exhibiting grounds of policy that are absent here.
Judgment affirmed.
MR. JUSTICE VAN DEVANTER and MR. JUSTICE BUTLER dissent.
