1. Application of the New York City sales tax to sales of fuel
oil, contracted for in New York City and performed after shipment
from New Jersey by delivery to the purchaser's vessels in New York
Harbor,
held not to have imposed an unconstitutional
burden on interstate commerce.
McGoldrick v. Berwind-White Coal
Mining Co., ante, p.
309 U. S. 33. P.
309 U. S.
431.
2. Upon review of a decision of a state court adjudging a
statute of the State invalid by an erroneous construction of the
Federal Constitution, this Court will not entertain other
constitutional objections against the statute and in support of the
judgment, which were not presented to or considered by the state
court, but will reverse the judgment, leaving the state courts free
to decide any federal question remaining undecided here which may
be raised in conformity with their own procedure. P.
309 U. S.
433.
279 N.Y. 192; 280
id. 691; 18 N.E.2d 28; 21 N.E.2d 199,
reversed.
Certiorari, 307 U.S. 620, to review the affirmance of judgments,
254 App.Div. 237, 4 N.Y.S.2d 661, setting aside as in violation of
the commerce clause of the Federal Constitution a tax levied by the
City of New York on sales of fuel oil.
Page 309 U. S. 431
MR. JUSTICE STONE delivered the opinion of the Court.
This is a companion case to
McGoldrick v. Berwind-White Coal
Mining Co., ante, p.
309 U. S. 33,
brought here to review a judgment of the New York State Supreme
Court that the New York City tax laid upon sales of goods for
consumption is an unconstitutional burden on interstate
commerce.
Upon certiorari to review a determination by the Comptroller of
the City of New York that respondent was subject to a New York City
tax upon sales to it of fuel oil in 1934 and 1935, the Appellate
Division of the New York Supreme Court held that the taxing
statute, as applied, did so infringe. 254 App.Div. 237, 4 N.Y.S.2d
661. The Court of Appeals affirmed, 279 N.Y. 192, 18 N.E.2d 28,
with opinion, on the single ground that the tax was
unconstitutional by reason of its effect on interstate commerce,
and, by its amended remittitur, the court stated that the
affirmance was on the sole ground that the tax violated the
commerce clause. 280 N.Y. 691, 21 N.E.2d 199. We granted
certiorari, 307 U.S. 620, upon a petition which assailed the
determination of the state court that the tax was a prohibited
burden on interstate commerce, the question being of public
importance.
The relevant provisions of the taxing act are set out in our
opinion in the
Berwind-White Coal Mining Company case, and
need not be repeated here. The Appellate Division found facts not
challenged here as follows: appellant, a corporation of the
Republic of France, owns vessels and operates them in the
transportation of passengers
Page 309 U. S. 432
and freight between the Port of New York and France, and other
foreign countries. It is authorized to do business, and maintains
an office in New York City, where, in the course of its business,
it makes purchases of fuel oil for consumption in the operation of
its vessels, from the Standard Oil Company of New Jersey, which
also maintains an office and carries on business in the City. That
company enters into long-term contracts with the respondent,
negotiated and signed in the City, for the sale to respondent of
its requirements of fuel oil as ordered, to be delivered alongside
respondent's vessels in New York Harbor. All the sales presently
involved were of oil stored by the Standard Oil Company in its
tanks in New Jersey, which, as ordered, were transported by barge
to respondent's vessels in New York City, where it was
delivered.
The oil thus transported and delivered to respondent was of two
types. One, "bonded fuel oil," is refined oil imported by the
Standard Oil Company from foreign countries and stored in bond in
New Jersey without payment of import duties, pursuant to the
revenue laws of the United States which authorize release from the
bond upon delivery of the oil to a foreign steamship for export or
use as fuel by the vessel. The other type, known as "drawback oil,"
is the product of crude oil imported from foreign countries by the
Standard Oil Company and refined at its New Jersey plant. An import
duty is paid upon the oil, but, upon delivery of the refined oil to
a foreign steamship for export, or for use as fuel on the vessel,
the importer is entitled under the revenue laws to a refund or
drawback on the duty paid. 19 U.S.C. §§ 1309, 1313, 46 Stat. 690,
693.
So far as the validity of the tax with respect to the interstate
commerce is concerned, our decision sustaining it in the
Berwind-White Coal Mining Company case is controlling, and
the judgment must be reversed unless
Page 309 U. S. 433
the state of the record is such as to entitle respondent to
assail the tax upon constitutional grounds not urged or decided in
the state courts.
Respondent's petition to the New York Supreme Court to review
the determination of the Comptroller set out that the tax "was
assessed upon the purchase price paid on transactions in interstate
and foreign commerce," and that the City was "without power to
impose said tax on said transactions by virtue of the provisions of
the Constitution and the laws of the United States," specifying the
commerce clause, art. 1, § 8, cl. 3, and Article I, § 10, Clause 2,
prohibiting "Imposts or Duties on Imports or Exports." No mention
was made of any applicable statute of the United States.
Respondent's brief and argument here advance as reasons in
support of the judgment of the state court in its favor that the
bonded oil and drawback oil at the time of delivery to respondent,
retained their character as imports, and that they were then in
process of being exported, so that the tax imposed upon the
delivery to the purchaser is a prohibited impost or duty on imports
and exports.
Respondent concedes by its brief that the contentions it now
makes were not argued in the New York Court of Appeals, and does
not deny petitioner's assertion here that respondent stated in its
brief in the Appellate Division, "[t]he court need give no
attention to them," and that, by its brief in the Court of Appeals,
respondent explicitly limited its presentation of the case to the
interstate commerce point. Whether, under the practice of the Court
of Appeals, respondent was in the circumstances free to ask
decision of these questions there we are not advised. But, in any
event, the record does not disclose that they were presented to the
Court of Appeals, the highest court of the state in which decision
could have been had whose decision we review, and it shows
Page 309 U. S. 434
that that court considered and passed upon only the interstate
commerce question.
By virtue of the petition for certiorari addressed to the
constitutional question which the state court decided, this Court
has jurisdiction of the cause. And respondent, in urging decision
here of the constitutional questions not pressed in the state
court, relies on the familiar rule of appellate court procedure in
federal courts that, without a cross-petition or appeal, a
respondent or appellee may support the judgment in his favor upon
grounds different from those upon which the court below rested its
decision.
United States v. American Railway Express Co.,
265 U. S. 425,
265 U. S. 435;
Langnes v. Green, 282 U. S. 531.
See Central Kentucky Natural Gas Co. v. Railroad
Commission, 290 U. S. 264,
290 U. S.
269.
But it is also the settled practice of this Court, in the
exercise of its appellate jurisdiction, that it is only in
exceptional cases, and then only in cases coming from the federal
courts, that it considers questions urged by a petitioner or
appellant not pressed or passed upon in the courts below.
Blair
v. Oesterlein Co., 275 U. S. 220,
275 U. S. 225;
Duignan v. United States, 274 U.
S. 195,
274 U. S. 200. In
cases coming here from state courts in which a state statute is
assailed as unconstitutional, there are reasons of peculiar force
which should lead us to refrain from deciding questions not
presented or decided in the highest court of the state whose
judicial action we are called upon to review. Apart from the
reluctance with which every court should proceed to set aside
legislation as unconstitutional on grounds not properly presented,
due regard for the appropriate relationship of this Court to state
courts requires us to decline to consider and decide questions
affecting the validity of state statutes not urged or considered
there. It is for these reasons that this Court, where the
constitutionality of a statute has been upheld in the state court,
consistently refuses to consider any grounds of attack not raised
or decided in that court.
Page 309 U. S. 435
Dewey v. Des Moines, 173 U. S. 193;
Keokuk & Hamilton Bridge Co. v. Illinois, 175 U.
S. 626,
175 U. S. 633;
Whitney v. California, 274 U. S. 357,
274 U. S.
362-363;
New York ex rel. Cohn v. Graves,
300 U. S. 308,
300 U. S.
317.
Like considerations, we think, require us to refuse to entertain
such new grounds of attack as a support for a state judgment of
invalidity based on an erroneous construction of the Constitution.
In the exercise of our appellate jurisdiction to review the action
of state courts, we should hold ourselves free to set aside or
revise their determinations only so far as they are erroneous and
error is not to be predicated upon their failure to decide
questions not presented. Similarly, their erroneous judgments of
unconstitutionality should not be affirmed here on constitutional
grounds which suitors have failed to urge before them, or which, in
the course of proceedings there, have been abandoned.
Upon the remand of this cause for further proceedings not
inconsistent with this opinion, the state courts will be free to
decide any federal question remaining undecided here which, in
conformity with their own procedure, may be raised for decision
there, and the remand will be without prejudice to the further
presentation of any such question to this Court.
Reversed.
THE CHIEF JUSTICE and MR. JUSTICE ROBERTS concur in the view
that the questions relating to foreign commerce are not properly
before us in this case, but think that the judgment of the state
court, holding that the tax as here laid places an unconstitutional
burden upon interstate commerce, should be affirmed upon the
grounds stated in the dissenting opinion in
McGoldrick v.
Berwind-White Coal Mining Co., ante, p.
309 U. S. 33.
MR. JUSTICE McREYNOLDS and MR. JUSTICE MURPHY took no part in
the consideration or decision of this case.