Where complainant is entitled to equitable relief against the
enforcement by state officers of an unconstitutional state statute,
the judgment of the state court dismissing the bill for lack of
jurisdiction on the ground that the suit is one against the state
gives effect to the statute, denies complainant a constitutional
right, and is reviewable by this Court under § 709, Rev.Stat.
A suit against state officers to enjoin them from enforcing a
state statute which violates complainant's constitutional rights
either by its terms, or by
Page 209 U. S. 212
the manner of its enforcement is not a suit against the state
within the meaning of the statute of 1873 of Tennessee denying
jurisdiction to the courts of the state of suits against the
state.
Provisions of the federal Constitution and of the Fourteenth
Amendment cannot be nullified by the state prohibiting suits in its
own courts against state officers to prevent their enforcing
unconstitutional statutes and contending that the National
tribunals are also precluded from entertaining such suits under the
Eleventh Amendment.
Merchandise may cease to be interstate commerce at an
intermediate point between the place of shipment and ultimate
destination, and if kept at such point for the use and profit of
the owners and under the protection of the laws of the state, it
becomes subject to the taxing and police power of the state. The
act of 1899 of Tennessee providing for the inspection of oil is not
an unconstitutional burden on interstate commerce as applied to oil
coming from other states and ultimately intended for sale and
distribution in other states but meanwhile stored in Tennessee for
convenience of distribution and for reshipping from tank cars and
barreling.
95 S.W. 824 affirmed.
Plaintiff in error, which was also plaintiff in the courts
below, invokes the protection of the commerce clause of the
Constitution of the United States against the collection of a tax
for the inspection of certain of its oils in Tennessee. The bill
prayed an injunction against the defendant, based on the following
facts, summarized from the bill:
The plaintiff is a Tennessee corporation with its principal
place of business in Memphis, Tennessee. It is engaged in the
manufacture and sale of coal oil and other illuminating oils in the
various states of the Union. Its wells and refining and
manufacturing plants are all located in the States of Pennsylvania
and Ohio, from which it ships its product to the states in which
they are sold and used. On account of the tendency of the oils to
leak and evaporate, and, under change of temperature, to burst the
vessel in which they are contained, it is necessary to ship the
oils in tank cars, and it is also necessary to have distributing
points for such oils in various places in the United States at
which it may receive the oils so shipped, and place it in barrels
or other smaller vessels suitable in size for filling orders, which
vary in amounts from one barrel upward. It would be impracticable
to carry on business in, or to have apparatus and
Page 209 U. S. 213
machinery for the reception and delivery of, oil at every point
at which plaintiff ships oil. For some years, plaintiff has been
engaged in business at Memphis, and has made that city not only a
place of business at which to sell oil to the citizens and
residents of Tennessee, but also has made it one of its
distributing points to which its oils are shipped from Pennsylvania
and Ohio in tank cars, from which cars the oils are unloaded into
various tanks, barrels, and other receptacles for the purpose of
being forwarded to its customers in Arkansas, Louisiana, and
Mississippi, in which states it has many regular customers, from
whom it always has on hand many unfilled orders for oil, to be
delivered as soon as possible or convenient.
At Memphis plaintiff has numerous tanks or receptacles for oil
of various kinds and sizes, among which are the following: (1) a
tank or vessel in which is kept oil for which orders have been
received from the states above mentioned before its shipment from
the manufacturing plants, and which is especially shipped to fill
such orders. This oil is unloaded at Memphis only for the purpose
of distribution in smaller vessels to meet the requirements of such
orders, and is kept separate from oils for sale in Tennessee, in a
tank plainly and conspicuously marked "Oil Already Sold in
Arkansas, Louisiana, and Mississippi," and remains in Tennessee
only long enough (a few days) to be properly distributed according
to the orders therefor. (2) Another tank or vessel for oil to be
sold in those states, but for which [there were] no orders at the
time of shipment from the manufacturing plants. This tank is marked
"Oil to be Sold in Arkansas, Louisiana, and Mississippi," and is
kept separate and apart from all other oil until required to supply
orders from plaintiff's customers in those states, and is never
sold except upon the receipt of such orders.
The defendant, as inspector of oils, from time to time inspects
plaintiff's oils at Memphis, and charges and collects for such
inspection a regular fee of twenty-five cents per barrel, as
provided in § 8 of the Act of April 21, 1899, of the Legislature of
Tennessee, c. 349, pp. 811, 814, and the plaintiff has fully
Page 209 U. S. 214
paid such charges up to the present time on all of its oils
shipped into Tennessee, whether intended for sale in that state or
other states. Until recently, plaintiff has unloaded the greater
portion of its oil from its tank cars to its stationary tanks
without attempting to separate the oil sold or intended to be sold
in the states above mentioned from that to be sold in the State of
Tennessee, and paid the inspection charges upon all. Plaintiff,
however, is now separating its oil in the manner above described
because it has been advised that the oil intended to be sold
outside of Tennessee is not subject to inspection in that state if
kept separate from the oil sold or intended to be sold in that
state.
Defendant claims the right to inspect such oils, although he
knows and admits no sales thereof are made in Tennessee, and claims
that he is not only entitled, but that it is his duty, to inspect
the same and collect the regular fees in such inspection.
Plaintiff is advised and shows that defendant has no right to
inspect the oil or collect the fees, because the act of 1899 does
not apply to them, for reasons which are elaborately set out; but
it is alleged that, if the act should be construed to apply to
them, the act is unconstitutional,
"insofar as it provides for or requires an inspection of any of
the oil in said tanks, because such inspection would be a
regulation of and interference with commerce between the States of
Pennsylvania and Ohio, from which said oil was shipped, and the
States of Arkansas, Louisiana, and Mississippi, to which the same
was shipped, in violation of the Constitution and laws of the
United States, and especially of the third clause of § 8 of Article
I of the Constitution of the United States, which provides that
Congress shall have power 'to regulate commerce with foreign
nations, and among the several states, and with the Indian
tribes.'"
Plaintiff alleges that the act of 1899 and the inspection
thereunder is not a valid exercise of the police power of the
state, and to that extent the act is unconstitutional and void,
because (1) none of the oil is manufactured in Tennessee, and the
inspection therefore is not necessary for the protection either
of
Page 209 U. S. 215
the residents and citizens of Tennessee or the reputation of her
manufactured products. (2) The fees are unreasonable and exorbitant
for the service performed, and very much greater than necessary to
provide for inspection, and that, after payment of the salaries and
other expenses incident to inspection, there is a surplus of many
thousands of dollars put into the treasury annually. (3) The act is
void under the Constitution of the State of Tennessee because the
inspection is not necessary or conducive to the benefit of the
State of Tennessee or the citizens thereof, and the act is
therefore unnecessary, unreasonable, and not a valid exercise of
the police power of the state, but a mere tax or charge imposed
under the guise of a police regulation, and as such is in conflict
with Article II, § 28, of the Constitution of Tennessee, which
requires all property to be taxed according to its value, and that
taxes be equal and uniform throughout the state.
It is alleged that the act provides in § 2 a heavy penalty,
consisting of a fine from twenty to fifty dollars for each offense,
against any dealer or manufacturer who shall obstruct the inspector
in the discharge of his duties, or refuse to permit him upon his
premises for the performance thereof, and provides in § 4 that it
shall be a misdemeanor for any person to sell any oil before having
it inspected as provided in the act, and, on conviction, shall be
fined $300, and the oil, if found to be rejected, shall be
forfeited and sold. Plaintiff therefore it is alleged, on account
of the severe penalties, could not afford to take the risk of
selling any oil without inspection, or take the risk of refusing
permission to inspect. That it is doubtful if plaintiff, if it paid
the fees under protest, could recover the same, and if they could
be recovered, it would be necessary for plaintiff to bring suit
every thirty days for the charges paid for the preceding thirty
days, so that an indefinite number of suits would be necessary.
Irreparable injury will therefore result, it is alleged, if the
inspection against plaintiff's oils under the act of 1899 be not
enjoined.
Defendant filed a demurrer which attacked the bill for want
Page 209 U. S. 216
of equity, and also the jurisdiction of the court to hear and
determine the cause for the reason that it was a "suit against the
state, or against an officer of the state, acting by authority of
the state, with a view to reach the state, its treasury, funds, or
property." By this ground of demurrer, defendant attempted to avail
himself of an act of the State of Tennessee, passed in 1873, being
§ 4507 of Shannon's Code, which provides as follows:
"That no court in the State of Tennessee has, nor shall
hereafter have, any power, jurisdiction, or authority to entertain
any suit against the state, or any officer acting by the authority
of the state, with a view to reach the state, its treasury, funds,
or property, and all such suits now pending, or hereafter brought,
should be dismissed as to the state, or such officer, on motion,
plea, or demurrer of the law officer of the state, or counsel
employed by the state."
The demurrer was overruled "as to that part of the bill in
reference to the first tank mentioned in said bill." It was
sustained "as to all that part of the bill in reference to the
second tank mentioned in said bill." The ground of demurrer which
went to the jurisdiction of the court was overruled "as to the oil
in both tanks."
A preliminary injunction which had been granted was continued in
force. Inspection, however, it was adjudged might proceed, the fees
to be paid into court pending appeal to the supreme court of the
state.
An appeal was taken, and the supreme court decided that the suit
was one against the state, and reversed the decree of the chancery
court. 117 Tenn. 82.
Page 209 U. S. 220
MR. JUSTICE McKENNA, after stating the case as above, delivered
the opinion of the Court.
It is contended by defendant in error that this Court is without
jurisdiction because no matter sought to be litigated by plaintiff
in error was determined by the Supreme Court of Tennessee. The
court simply held, it is said, that, under the laws of the state,
it had no jurisdiction to entertain the suit for any purpose. And
it is insisted
"that this holding involved no federal question, but only the
powers and jurisdiction of the courts of the State of Tennessee, in
respect to which the Supreme Court of Tennessee is the final
arbiter."
Opposing these contentions, plaintiff in error urges that
whether a suit is one against a state cannot depend upon the
declaration of a statute, but depends upon the essential nature of
the suit, and that the supreme court recognized that the statute
"added nothing to the axiomatic principle that the state, as a
sovereign, is not subject to suit save by its own
Page 209 U. S. 221
consent." And it is hence insisted that the court, by dismissing
the bill, gave effect to the law which was attacked. It is further
insisted that the bill undoubtedly presents rights under the
Constitution of the United States and conditions which entitle
plaintiff in error to an injunction for the protection of such
rights, and that a statute of the state which operates to deny such
rights, or such relief, "is itself in conflict with the
Constitution of the United States."
Plaintiff in error, to sustain its contention that the suit is
not one against the state, but one to restrain "unconstitutional
aggression" by a state officer upon private property, cites many
cases in this Court. To these cases defendant in error makes no
other reply than to say that they were cases in the federal courts
and within the acknowledged range of the jurisdiction of courts,
while the question presented by the motion to dismiss is not the
rights plaintiff in error may have, but what remedies it has, and
the power of the state over those remedies so far as its own courts
are concerned. The difference is urged as material, and the
following cases are adduced:
Semple v.
Hagar, 4 Wall. 431;
Norton v. Shelby
County, 118 U. S. 425;
Smith v.
Adsit, 16 Wall. 185,
83 U. S. 190;
Callan v. Bransford, 139 U. S. 198;
Freeport Water Co. v. Freeport, 180 U.
S. 587,
180 U. S. 601;
Newman v. Gates, 204 U. S. 89,
204 U. S. 95;
Chambers v. Baltimore & Ohio R. Co., 207 U.
S. 142.
A review of these cases becomes necessary. In
Semple v.
Hagar, Semple had a patent from the United States for a
certain tract of land. He sued Hagar to quiet his title, alleging
that Hagar claimed the land under a fraudulent Mexican grant and a
patent of the United States issued in affirmance of the grant.
Semple prayed that the grant be declared void "as issued upon false
suggestion and without authority of law." Hagar demurred to the
bill on the ground, among others, that the court had no
jurisdiction of the action. The demurrer was sustained, and the
case was brought to this Court by writ of error. A motion to
dismiss was made, which was granted. The Court said:
"We have here a very brief record, and, on the facts of
Page 209 U. S. 222
the case, we cannot shut our eyes to the total want of
jurisdiction under the twenty-fifth section or any other section of
the Judiciary Act. It is plain that, if the court had assumed
jurisdiction, and had declared the defendant's patent void for the
reason alleged in the bill, the defendant would have had a case
which might have been reviewed by this Court under the twenty-fifth
section, and one on which there might have been a question and
difference of opinion. But it is hard to perceive how the
twenty-fifth section could apply to a judgment of a state court
which did not decide that question, and refused to take
jurisdiction of the case. The matter is too plain for
argument."
In other words, it was decided that the federal question must be
decided before it can be reviewed. Apparently there was no thought
of considering whether the question of jurisdiction was rightly
decided. That was seemingly considered out of the power of this
Court to inquire into.
Norton v. Shelby County was a writ to enforce the
payment of certain bonds issued by the Board of Commissioners of
Shelby County. One of the questions in the case was whether the
board of commissioners was a legally constituted body. The supreme
court of the state decided it was not, and this Court accepted the
decision as binding. "The determination made," we said, through Mr.
Justice Field,
"relates to the existence of an inferior tribunal of the state,
and that depending upon the constitutional power of the legislature
of the state to create it and supersede a preexisting institution.
Upon a subject of this nature the federal courts will recognize as
authoritative the decision of the state court."
Claiborne County v. Brooks, 111 U.
S. 400,
111 U. S. 410,
was cited.
Smith v. Adsit was a suit for equitable relief against
a sale of land which a third party had undertaken to make, in
violation of an act of Congress. A decree was entered against Adsit
for $6,829 and dismissed as to other defendants. The decree was
reversed by the supreme court of the state, and the bill dismissed
for want of jurisdiction, and the case was brought to this Court by
writ of error. A motion to dismiss was granted,
Page 209 U. S. 223
Mr. Justice Strong, speaking for the Court, saying: "In view of
this [the action of the state court], we do not perceive that we
have any authority to review the judgment of the state court." It
was intimated in the opinion that a federal question had been
presented, but it was not decided. "As we have seen," Mr. Justice
Strong said,
"the bill was dismissed for want of jurisdiction. The judgment
of the court respecting the extent of its equitable jurisdiction
is, of course, not reviewable here."
And, further:
"It may well have been determined that the plaintiff's remedy
against Adsit was at law, and not in equity, even if the sale from
Holmes to him was utterly void. But whatever may have been the
reasons for the decision, whether the court had jurisdiction of the
case or not is a question exclusively for the judgment of the state
court."
In
Callan v. Bransford, a writ of error to the Court of
Appeals of Virginia was dismissed on the ground that that court had
disposed of the case on the ground that the matters involved were
purely pecuniary, and that the amount in controversy in each case
was less than sufficient to give the court jurisdiction under the
Constitution of the state. "This being so," this Court said, "we
are of opinion that the writs of error to that court must be
dismissed."
In
Freeport Water Co. v. Freeport, we said:
"With what functions the circuit courts of the state [Illinois]
may be invested may not be of federal concern. It is also a matter
of construction, in which we might be obliged to follow the state
courts."
In
Newman v. Gates, the federal right was asserted
under that provision of the Constitution of the United States
requiring due faith and credit to be given by each state to the
public acts, records, and judicial proceedings of every other
state. The supreme court of the state (Indiana) dismissed the
appeal to it as not having been properly taken. The case was
brought here, but dismissed. We said, through MR. JUSTICE
WHITE:
"As the jurisdiction of this Court to review the judgments or
decrees of state courts when a federal question is presented is
limited to
Page 209 U. S. 224
the review of a final judgment or decree, actually or
constructively deciding such question, when rendered by the highest
court of a state in which a decision in the suit could be had, and
as, for the want of a proper appeal, no final judgment or decree in
such court has been rendered, it results that the statutory
prerequisite for the exercise in this case of the reviewing power
of this Court is wanting."
In
Chambers v. Baltimore & Ohio Company, a statute
of Ohio gave an action for death caused by the wrongful act in
another state only when the death was that of a citizen of Ohio.
The statute was attacked on the ground that it violated that clause
of the Constitution of the United States which entitles the
citizens of each state to all the privileges and immunities of
citizens in the several states. The statute was sustained by this
Court. MR. JUSTICE MOODY, speaking for the Court, said:
"But, subject to the restrictions of the federal Constitution,
the state may determine the limits of the jurisdiction of its
courts, and the character of the controversies which shall be heard
in them. The state policy decides whether and to what extent the
state will entertain in its courts transitory action, where the
causes of action have arisen in other jurisdictions. Different
states may have different policies, and the same state may have
different policies at different times. But any policy the state may
choose to adopt must operate in the same way on its own citizens
and those of other states. The privileges which it affords to one
class it must afford to the other. Any law by which privileges to
begin actions in the courts are given to its own citizens, and
withheld from the citizens of other states, is void because in
conflict with the supreme law of the land."
But in none of these cases was the same question presented that
is presented here, nor were all of the cases cited by plaintiff in
error to sustain the jurisdiction of this Court cases in the
federal courts.
Poindexter v. Greenhow, 114 U.
S. 270, and
Chaffin v. Taylor, 114 U.
S. 309, were brought in the state courts
Page 209 U. S. 225
of Virginia, and they involve questions very much like those in
the case at bar.
Poindexter v. Greenhow was an action of
detinue for personal property distrained by Greenhow for delinquent
taxes, in payment of which Poindexter had tendered coupons cut from
bonds issued by the State of Virginia under act of the state passed
in 1871. This act, it was held, constituted a contract between the
holder of the coupons and the state that they should be received
for taxes, which contract, it was further held, was impaired by the
subsequent act under which Greenhow justified the distraint of
Poindexter's property.
It was urged that the action could not be maintained, because it
was substantially an action against the state, to which it had not
assented. It was further urged that the remedy was afforded of a
right to recover back all the taxes after payment under protest,
and that this constituted the sole remedy.
The first contention was discussed at length and rejected. The
Court said, in effect, that the defendant in the action was sued as
a wrongdoer, and could only justify himself under a valid law. And
it was said:
"The state has passed no such law, for it cannot, and what it
cannot do, it certainly, in contemplation of law, has not done. The
Constitution of the United States and its own contract, both
irrepealable by any act on its part, are the law of Virginia, and
that law made it the duty of the defendant to receive the coupons
tendered in payment of taxes, and declared every step to enforce
the tax, thereafter taken, to be without warrant of law. . . .
He stands, then, stripped of his official character, and,
confessing a personal violation of the plaintiff's rights, for
which he must personally answer, he is without defense."
(Italics ours.)
A distinction was made between the state and its government, and
it was said that an officer representing and acting for the latter
is not an agent of the former. That and other cases were reviewed
in
Belknap v. Schild, 161 U. S. 10, and
Mr. Justice Gray, speaking for the Court, said:
"In a suit to which the state is neither formally nor really a
party, its officers, although acting by its order and for its
benefit, may be restrained
Page 209 U. S. 226
by injunction, when the remedy at law is inadequate, from doing
positive acts, for which they are personally and individually
liable, taking or injuring the plaintiff's property, contrary to a
plain official duty requiring no exercise of discretion, and in
violation of the Constitution or laws of the United States."
Cases were cited. And again:
"But no injunction can be issued against officers of a state to
restrain or control the use of property already in the possession
of the state, or money in its treasury when the suit is commenced;
or to compel the state to perform its obligations; or where the
state has otherwise such an interest in the object of the suit as
to be a necessary party."
The case and those cited expose the error, which appears with a
kind of periodicity, varied in presentation, to accommodate the
particular exigency, that a state is inevitably brought into court
when the execution of its laws is arrested by a suit against its
officers. It seems to be an obvious consequence that, as a state
can only perform its functions through its officers, a restraint
upon them is a restraint upon its sovereignty from which it is
exempt, without its consent, in the state tribunals, and exempt by
the Eleventh Amendment of the Constitution of the United States in
the national tribunals. The error is in the universality of the
conclusion, as we have seen. Necessarily, to give adequate
protection to constitutional rights, a distinction must be made
between valid and invalid state laws, as determining the character
of the suit against state officers. And the suit at bar illustrates
the necessity. If a suit against state officers is precluded in the
national courts by the Eleventh Amendment to the Constitution, and
may be forbidden by a state to its courts, as it is contended in
the case at bar that it may be, without power of review by this
Court, it must be evident that an easy way is open to prevent the
enforcement of many provisions of the Constitution, and the
Fourteenth Amendment, which is directed at state action, could be
nullified as to much of its operation. And it will not do to say
that the argument is drawn from extremes. Constitutional provisions
are based on the
Page 209 U. S. 227
possibility of extremes. There need not, however, be imagination
of extremes, if by extremes be meant a deliberate purpose to
prevent the assertion of constitutional rights. Zeal for policies,
estimable, it may be, of themselves, may overlook or underestimate
private rights. The swift execution of the law may seem the only
good, and the rights and interests which obstruct it be regarded as
a kind of outlawry.
See Ex Parte Young. ante, p.
209 U. S. 123,
where this subject is fully discussed, and the cases reviewed.
The principles of the cases which we have cited were applied by
the Supreme Court of Tennessee in
Lynn v. Polk, 8 Lea 121,
where a suit against the funding board of the state was maintained
against the contention that it was a suit against the state or
against the officers of the state within the meaning of the act of
1873, on the ground that an officer executing an unconstitutional
statute is not acting by the authority of the state. The court,
however, distinguishes that case from the one at bar by saying that
plaintiff in error did not assail the inspection law for being void
upon its face, but only on the ground "that the oil upon which
defendant was about to impose inspection fees was in law affected
with interstate commerce." To enter into the inquiry involved in
the contention, it was further said,
"the court would be bound first to determine whether the oil in
these tanks was in fact and in law, as claimed by complainant, a
part of interstate commerce, and to do this we would be bound to
hold, and proceed upon the theory, that the court had jurisdiction
of the whole controversy."
And that the court declared it was precluded from doing by the
act of 1873. In other words, refused to consider that which might
bring the oils under the protection of the Constitution of the
United States.
A similar distinction was attempted to be made in
Poindexter
v. Greenhow, supra, and the court replied by saying:
"It is no objection to the remedy in such cases that the statute
whose application in the particular case is sought to be restrained
is not void on its face, but is complained of only because
Page 209 U. S. 228
its operation in the particular instance works a violation of a
constitutional right; for the cases are numerous where the tax laws
of a state, which, in their general and proper application, are
perfectly valid, have been held to become void in particular cases,
either as unconstitutional regulations of commerce or as violations
of contracts, prohibited by the Constitution, or because, in some
other way, they operate to deprive the party complaining of a right
secured to him by the Constitution of the United States."
And inquiries of fact may be necessary to exhibit the
unconstitutionality of a statute, as in
Reagan v. Farmers' Loan
& Trust Co., 154 U. S. 362, and
Smyth v. Ames, 169 U. S. 466.
It being, then, the right of a party to be protected against a
law which violates a constitutional right, whether by its terms or
the manner of its enforcement, it is manifest that a decision which
denies such protection gives effect to the law, and the decision is
reviewable by this Court.
Wilmington &c. v. Alsbrook,
146 U. S. 279.
We are brought, then, to consider whether the law would, if
administered against the oils in controversy, violate any
constitutional right of plaintiff in error.
As determining an affirmative answer to this question, it is
contended that the oil in both tanks was in transit from the place
of manufacture, Pennsylvania, to the place of sale, Arkansas. The
delay at Memphis, it is urged, was merely for the purpose of
separation, distribution, and reshipment, and was no longer than
required by the nature of the business and the exigencies of
transportation. The difference in the oil in tank No. 1 and that in
tank No. 2, it is further said, is that the former was sold before
shipment, and the latter was to be held in Tennessee for sale; but
in neither case was the oil to be sold in Tennessee, and it is
hence insisted that the interstate transit of the oil was never
finally ended in Memphis, but was only temporarily interrupted
there.
The beginning and the ending of the transit which constitutes
interstate commerce are easy to mark. The first is defined
Page 209 U. S. 229
in
Coe v. Errol, 116 U. S. 517, to
be the point of time that an article is committed to a carrier for
transportation to the state of its destination, or started on its
ultimate passage. The latter is defined to be, in
Brown v.
Houston, 114 U. S. 622, the
point of time at which it arrives at its destination. But
intermediate between these points questions may arise.
State v.
Engle, 34 N.J.L. 425;
State v. Carrigan, 39 N.J.L.
35;
The Daniel
Ball, 10 Wall. 557.
In
Pittsburg Coal Company v. Bates, 156 U.
S. 577, coal in barges shipped from Pittsburg,
Pennsylvania, to Baton Rouge, Louisiana, was stopped about nine
miles above destination. It was held that it had ceased to be
interstate commerce, and was subject to taxation by the State of
Louisiana.
In
Diamond Match Company v. Ontonagon, 188 U. S.
82, logs in transit to a point without the state were
held subject to taxation under a statute of the state, where they
would "naturally leave the state in the ordinary course of
transit."
In
Kelley v. Rhoads, 188 U. S. 1, a flock
of sheep driven from a point in Utah across Wyoming to a point in
Nebraska for the purpose of shipment by rail from the latter point
was held to be property engaged in interstate commerce, and exempt
from taxation by Wyoming under the statute taxing all livestock
brought into the state "for the purpose of being grazed." There was
no difficulty in the case except that which arose from the
contention that the manner of transit was adopted as an evasion of
the statute. Otherwise, the grazing of the sheep was as incidental
as feeding them would be if transported by rail. The pertinence of
the case to the present controversy is in its summary of the
principles of prior cases, expressed in the following passage:
"The substance of these cases is that, while the property is at
rest for an indefinite time, awaiting transportation, or awaiting a
sale at its place of destination, or at an intermediate point, it
is subject to taxation. But if it be actually in transit to another
state, it becomes the subject of interstate commerce, and is exempt
from local assessment."
Property, therefore, at an intermediate point between the place
of
Page 209 U. S. 230
shipment and ultimate destination may cease to be a subject of
interstate commerce. Necessarily, however, the length and purpose
of the interruption of transit must be considered.
In
State v. Engle, 5 Vroom 425, 435, coal mined in
Pennsylvania and sent by rail to Elizabethport, in New Jersey,
where it was deposited on the wharf for separation and assortment
for the purpose of being shipped by water to other markets for the
purpose of sale, it was held that the property was not subject to
taxation in New Jersey. The court said:
"Delay within the state which is no longer than is necessary for
the convenience of transshipment for its transportation to its
destination will not make it property within the state for the
purposes of taxation."
See also, in
State v. Carrigan, 10 Vroom 36,
where coal also shipped from Pennsylvania to a port in New Jersey,
and remained there no longer than was necessary to obtain vessels
to transport it to other places, was held to be in course of
transportation, and not subject to the taxing power of the state.
In
Burlington Lumber Co. v. Willetts, 118 Ill. 559, the
principle was recognized that property
in transitu was not
subject to the taxing power of a state, but it was held that logs
in rafts sent from Wisconsin to Burlington, Iowa, by the
Mississippi River, a part of which were stopped at a place in
Illinois called Boston Harbor, to be there kept until needed at
Burlington for mill purposes, were subject to taxation. The court
said that the property was "kept at New Boston on account of the
profit of the owners to keep it there," and, further, that the
company was engaged in business in the state, beneficial to itself,
and its property was so located as to claim that protection of the
laws of the state, and hence was liable to taxation.
Like comment is applicable to plaintiff in error and its oil.
The company was doing business in the state, and its property was
receiving the protection of the state. Its oil was not in movement
through the state. It had reached the destination of its first
shipment, and it was held there not in necessary delay or
accommodation to the means of transportation, as
Page 209 U. S. 231
in
State v. Engle, supra, but for the business purposes
and profit of the company. It was only there for distribution, it
is said, to fulfill orders already received. But to do this
required that the property be given a locality in the state beyond
a mere halting in its transportation. It required storage there --
the maintenance of the means of storage; of putting it in and
taking it from storage. The bill takes pains to allege this.
"Complainant shows that it is impossible, in the coal oil
business such as complainant carries on, to fill separately each of
these small orders directly from the railroad tank cars, because of
the great delay and expense in the way of freight charges incident
to such a plan, and for the further reason that an extensive plant
and apparatus is necessary in order to properly and conveniently
unload and receive the oil from said tank cars, and it would be
impracticable, if not impossible, to have such apparatus and
machinery at every point to which complainant ships said oil."
This certainly describes a business -- describes a purpose for
which the oil is taken from transportation, brought to rest in the
state, and for which the protection of the state is necessary -- a
purpose outside of the mere transportation of the oil. The case
therefore comes under the principle announced in
American Steel
& Wire Co. v. Speed, 192 U. S. 500.
We have considered this case so far in view of the cases which
involve the power of taxation. It may be that such power is more
limited than the power to enact inspection laws.
Patapsco Guano
Co. v. Board of Agriculture, 171 U. S. 356.
The difference, if any exists, it is not necessary to observe. The
cases based on the taxing power show the contentions of plaintiff
in error are without merit -- in other words, show that its oil was
not property in interstate commerce.
As our conclusion is that no constitutional right of the oil
company was violated by the enforcement of the law of 1899, it
follows that no error prejudicial to the company was committed by
the Supreme Court of Tennessee, and, for the reasons stated, its
judgment is
Affirmed.
Page 209 U. S. 232
MR. JUSTICE HARLAN, concurring:
The fundamental question before the state court of original
jurisdiction was whether it had jurisdiction, under the
constitution and laws of Tennessee, of a suit like this.
Manifestly, if that court was forbidden by the laws under which it
was created to take cognizance of cases like this, it had no
alternative but to dismiss this suit. The court overruled a
demurrer to the bill, one of the grounds of demurrer being that the
suit was one "against the state or against an officer of the state,
acting by authority of the state, with a view to reach the state,
its treasury, funds, or property." It thereby sustained its
jurisdiction, and proceeded to a decree on the merits. The case
being carried to the Supreme Court of Tennessee, that court
reversed the judgment and held that no court of Tennessee could,
under its statutes, take cognizance of this suit and give the
decree asked. Upon that ground, it did what it said the inferior
state court should have done -- namely, dismissed the suit for want
of jurisdiction to give the relief asked.
The statute of Tennessee which the Supreme Court of that state
construed and held to be prohibitory of this suit was an act passed
in 1873. It provides:
"That no court in the State of Tennessee has, nor shall
hereafter have, any power, jurisdiction, or authority to entertain
any suit against the state, or any officer acting by the authority
of the state, with a view to reach the state, its treasury, funds,
or property, and all such suits now pending, or hereafter brought,
shall be dismissed as to the state, or such officer, on motion,
plea, or demurrer of the law officer of the state, or counsel
employed by the state."
The oil company seeks a reversal of the decree of the state
court, contending that it was denied a right arising under the
commerce clause of the Constitution. But back of any question of
that kind was the question before the Supreme Court of Tennessee,
whether the inferior state court, under the law of its
organization, that is, under the law of Tennessee, could
Page 209 U. S. 233
entertain jurisdiction of the suit. The question, we have seen,
was determined adversely to jurisdiction. That certainly is a
state, not a federal, question. Surely Tennessee has the right to
say of what class of suits its own courts may take cognizance, and
it was peculiarly the function of the Supreme Court of Tennessee to
determine such a question. When, therefore, its highest court has
declared that the Tennessee statute referred to in argument did not
allow the inferior state court to take cognizance of a suit like
this, that decision must be accepted as the interpretation to be
placed on the local statute. Otherwise, this Court will adjudge
that the Tennessee court shall take jurisdiction of a suit of which
the highest court of the state adjudges that it cannot do
consistently with the laws of the state which created it and which
established its jurisdiction. It seems to me that this Court,
accepting the decision of the highest court of Tennessee as to the
meaning of the Tennessee statute in question, as I think it must,
has no alternative but to affirm the judgment on the ground simply
that the ground upon which it is placed is broad enough to support
the judgment without reference to any question raised or discussed
by counsel.
What is said in the opinion of the Court about the Eleventh
Amendment is, I submit, entirely irrelevant to any decision of the
present case by this Court. That Amendment relates wholly to the
judicial power of the United States, and has absolutely nothing to
do with the inquiry as to the jurisdiction of the inferior state
court under the Tennessee statute of 1873. In determining what
relief this Court can or should give in respect of the judgment
under review, we need not consider the scope and meaning of the
Eleventh Amendment, for it was long ago settled that a writ of
error to review the final judgment of a state court, even when a
state is a formal party and is successful in the inferior court, is
not a suit within the meaning of the Amendment.
Cohen v.
Virginia, 6 Wheat. 264,
19 U. S.
408-409.
In my opinion, the decision of the Supreme Court of Tennessee
that the inferior state court was forbidden by the law of
Page 209 U. S. 234
its being from taking cognizance of this suit is conclusive
here, and the judgment of that court should therefore be affirmed
without reference to any other question raised or discussed.
MR. JUSTICE MOODY, dissenting:
I am unable to agree to the judgment in this case, for the
reason that the statute here in question, as it was enforced
against the property of the plaintiff in error, in my opinion was
an interference with interstate commerce which was beyond the power
of the state. It is to be observed that the court below did not
construe the statute as applying to articles in the course of
transportation between the states, and not destined for sale to
consumers in the state -- or, in other words, the court did not
hold that the statute applied to the property here affected by it.
On the contrary, the court expressly refrained from passing upon
the merits of the controversy, and dismissed the bill for want of
jurisdiction. We, however, have assumed jurisdiction of the
controversy, for reasons given in the opinion of the court, in
which I concur, and therefore cannot escape the duty of
interpreting the meaning of the statute. I think we should, if it
be possible, give to the statute a meaning which places its
constitutionality beyond doubt. The law seems clearly to be
designed to protect state manufacturers and consumers within the
state. Its operation is limited by the words of the first section,
which directs the governor to appoint inspectors for illuminating
fluids "which may be manufactured or offered for sale in the
state." Far from enlarging the meaning of these restrictive words,
the other provisions of the law accord with and confirm them. The
oil in tank No. 1, at least, which was neither manufactured in the
state nor offered for sale in the state, is, by this
interpretation, removed from the operation of the statute, and I
think we ought so to decide.
But if it be assumed that the oil in tank No. 1 is subjected to
inspection by the law, in my opinion. the law is
unconstitutional.
Page 209 U. S. 235
The law is not sustained by the judgment of the court as an
inspection law, which it purports to be. Perhaps it could not be
under the doctrine announced and applied in
Minnesota v.
Barber, 136 U. S. 313, and
Brimmer v. Rebman, 138 U. S. 78. I am
therefore relieved from considering whether the law, because it is
a mere cloak for exacting revenue from interstate commerce, is bad
as an inspection law. The judgment of the court treats it as such,
and it is sustained not as an inspection, but as a revenue, law. I
do not dissent from such an interpretation of its effect. But, with
unfeigned deference to the opinions of my brethren, I venture to
think that the statute, as enforced in the case at bar, is bad as a
taxing law. The case of
American Steel & Wire Co. v.
Speed, 192 U. S. 500,
holds that articles, before they have ceased to be the subjects of
interstate commerce, may still be reached by the taxing power of
the state. Accordingly, it was held that the property of a citizen
of another state, which had been brought into the State of
Tennessee, placed in a warehouse for sale, and from there sold to
persons within as well as without the state, was subject to a state
tax. It was observed in the opinion in that case that the property
had come to rest in the state and was enjoying the protection of
its laws. But the case at bar, so far as it concerns the oil in
tank No. 1, to which I confine my observations, is sharply
distinguished from that case. The judgment here takes a step
forward which I think ought not to be taken. The oil in that tank
had been sold while in Pennsylvania and Ohio to purchasers in other
states than Tennessee, before it started in the course of
interstate transportation. It was shipped especially in pursuance
of such sales. It was in Tennessee only momentarily ("a few days"),
for the purpose of repacking and reshipping it, and for no other
purpose whatever. The delay was to meet the exigencies of
interstate commerce, which arose out of the nature of the
transaction. It does not seem to me important, if such be the case,
that it would begin the remainder of its interstate journey under a
new contract of shipment. It would no more seem to be the subject
of state taxation than
Page 209 U. S. 236
a drove of cattle, whose long interstate journey was
interrupted, for humane reason, to give them a few days of rest and
refreshment. With respect to this oil, no business whatever was
done in the state except that which was required to conduct the
transaction of interstate commerce begun in another state and to be
completed in a third state. The single consideration that the
property enjoys in Tennessee the protection of the laws of the
state cannot be enough to justify state taxation. If that were so,
all property in the course of interstate transportation would be
subject to state tax in every state through which it should pass. I
conclude that the oil in question was actually in the course of
transportation between the states, was delayed in the State of
Tennessee only for the purpose of conveniently continuing that
transportation, and was therefore protected from state taxation by
the commerce clause of the Constitution.
Coe v. Errol,
116 U. S. 525;
Kelley v. Rhoads, 188 U. S. 1. Cases
of taxation upon property before it has entered the channels of
interstate transportation, or after the transportation has finally
ended, seem to me to have no application. In the former class, the
property is taxable because it has not ceased to be a part of the
mass of the property of the state, and in the latter class because
it has come to rest as a part of the mass of the property of the
state. Between those two points of time, it is exempt from the
taxing power of the state. In every case where the tax has been
sustained, there were facts present regarded as essential by the
court, which are absent here. The property had either not begun its
interstate journey, as in
Coe v. Errol, ubi supra, and
Diamond Match Company v. Ontonagon, 188 U. S.
82, or it had ended that journey, and was held for sale
in common with other property in the state, as in
Brown v.
Houston, 114 U. S. 622;
Pittsburg Coal Company v. Bates, 156 U.
S. 577, and
American Steel & Wire Co. v. Speed,
ubi supra.
MR. JUSTICE HOLMES concurs.