Argued and submitted December 6, 1912. and residents of various states in the southDecided February 24, 1913.

ern and western portions of the United States, and that the said persons who sold the said grain to the said defendant, E. R. Bacon, did, prior to the said sale, and the shipment of said grain, as hereinafter mentioned, enter into certain contracts with certain railroad companies for the transSee same case below, 243 Ill. 313, 44 portation of said grain to the cities of New L.R.A. (N.S.) 586, 90 N. E. 686.

N ERROR to the Supreme Court of the State of Illinois to review a judgment which affirmed a judgment of the Municipal Court of the City of Chicago for the recovery of a tax. Affirmed.

York and Philadelphia and various other cities in the eastern portions of the United States, all of said cities being outside of the state of Illinois, in and by which said contracts the said persons reserved the right to the owners of the said grain to remove said

Statement by Mr. Justice Hughes: This is a writ of error to review a judgment of the supreme court of the state of Illinois, which affirmed a judgment for the amount of a tax assessed against the plain-grain from the cars of the said railroad comtiff in error for personal property in the year 1907. The contention that the assessment was in violation of article I., § 8, clause 3, of the Federal Constitution, in that it was laid upon a subject of interstate commerce, was overruled by the state court. 243 Ill. 313, 44 L.R.A. (N.S.) 586, 90 N. E. 686.

panies at the city of Chicago, Illinois, for the mere temporary purposes of inspecting, weighing, cleaning, clipping, drying, sacking, grading, or mixing, or changing the ownership, consignee, or destination of said grain; that after the making of the said contracts by the original vendors of the said grain and the said railroad companies, the said original vendors delivered to the said railroad companies, under and in accordance with the said contracts, the said grain for transportation to said cities of New York, Philadelphia and the said *divers other[507 cities specified in the said contracts of shipment.

ious agents, by and through whom he disposed of grain and other commodities on the eastern markets, and that all of the said grain above mentioned was purchased by him as aforesaid for the sole and only purpose of being sold and disposed of by and through his said agents in the aforesaid eastern cities, and that the said grain or any portion thereof was not at any time intended, by said original owners nor by said E. R. Bacon, for use, sale, or disposi tion in the state of Illinois.

The facts were agreed to, as follows: "That the defendant, E. R. Bacon, had, on the 1st day of April, 1907, and for many years prior to said date, his residence and domicil in the town of Lake View, in the county of Cook, and state of Illinois; that the defendant, E. R. Bacon, on the 1st day of April, 1907, and prior thereto, occupied "That the said E. R. Bacon was, prior and controlled a certain private grain ele- to and on April 1st, 1907, represented in vator known as Wabash Elevator, and that the cities of New York, Philadelphia, and the said grain elevator was located at 33d the said divers other cities in the said eastand Waterville streets in the town of Southern portions of the United States by varTown, in the city of Chicago, county of Cook, and state of Illinois; that the only personal property in the town of South Town owned by the defendant on the 1st day of April, 1907, was certain grain stored in the said elevator above mentioned, and certain personal property used by him in his business office located at 234 La Salle 506] street, in the city of Chicago, Illinois, and that the said business office and the said personal property used by said defendant therein was not then a part of or in any way connected with said grain elevator; that the said defendant, E. R. Bacon, has paid the tax assessed on April 1st, 1907, on all the personal property used by him in his said business office located at 234 La Salle street, in the city of Chicago, Illinois; that the said defendant, E. R. Bacon, has paid the tax assessed on April 1st, 1907, on all his personal property located in the town of South Town, except the tax assessed on the grain which was stored in the said Wabash Elevator on the 1st day of April, 1907; that all of said grain stored in the said Wabash Elevator on the 1st of April, 1907, was sold to the defendant, E. "That the said grain was sold to the deR. Bacon, by various persons domiciled in'fendant, E. R. Bacon, by the original vend

"That at the time the said grain was sold to the said defendant, E. R. Bacon, by the said original vendors thereof, domiciled in and residents of said southern and western portions of the United States, his sole and only intention regarding the said grain was that all of the said grain should be transported and carried from the place of its said original consignment to said railroad companies to the said points of destination named in the said contracts of shipment entered into between the said original vendors of said grain and the said railroad companies, as hereinbefore mentioned.

Mr. Walter Bachrach argued the cause, and, with Messrs. Moritz Rosenthal and Joseph, W. Moses, filed a brief for plaintiff in error:

The temporary detention of the grain while in transit, without the intention of abandoning the original movement beyond the limits of the state, which movement was ultimately completed, did not deprive the transportation of the character of interstate commerce.

ors of said grain, along with the existing | the taxes assessed on the said personal propcontracts of shipment between the said erty on the said 1st day of April, 1907, and original vendors and the said railroad com- that the said defendant, E. R. Bacon, owned, panies, and along with the said privilege on the 1st day of April, 1907, no other perof removing said grain from the said cars sonal property taxable by the taxing bodies of the said railroad companies, which said of the state of Illinois other than that privilege was reserved to the owner of the above mentioned." said grain in the manner and for the purposes herein before mentioned; that in pursuance of the privilege which the defendant, E. R. Bacon, was entitled to under said con508] tracts of shipment, as the owner of said grain, he removed said grain from the said railroad cars, and placed the same in his said private Wabash Elevator, for the sole purposes of inspecting, weighing, cleaning, clipping, drying, sacking, grading, and mixing, as specified in said contracts of shipment, and not for the purposes of changing the ownership, consignee, or destination of said grain; and that said grain remained in said elevator for only such time as was reasonably necessary for the purposes of inspecting, weighing, cleaning, clipping, drying, sacking, grading, and mixing; and that immediately after said grain had been inspected, weighed, cleaned, clipped, dried, sacked, graded, and mixed, it was turned over again to the said railroad companies for shipment to the said eastern cities in accordance with the said provisions of the said original contracts of shipment entered into between the said original vendors of said grain and the said railroad companies, and that the said grain was thereupon forwarded by said railroad companies to its said original points of destination.

"That the said grain so placed and contained in the said elevator was not, nor was any part thereof, at any time on, before, or after the 1st day of April, 1907, sold or disposed of or consumed in the state of Illinois, but that said grain and each and every part thereof was transported out of said state to the points of destination, and in the manner and form aforesaid;

“That on the 1st day of April, 1907, the board of assessors of Cook county, Illinois, assessed a tax against the said E. R. Bacon on the said grain contained in the said Wabash Elevator on the said 1st day of April, 1907, on a valuation of $5,000, which was established by the board of review, and which was equalized by the state board of equalization, and that the tax levied thereon against the defendant, E. R. Bacon, for the year 1907, amounts to $360; which is the tax to recover which the suit is brought; that the defendant owns certain 509] personal property in the town of Lake View, county of Cook and state of Illinois, and that said personal property is contained in his said domicil and residence, and that the said defendant has heretofore paid all

Coe v. Erroll, 62 N. H. 303, affirmed in 116 U. S. 517, 29 L. ed. 715, 6 Sup. Ct. Rep. 475; Caldwell v. North Carolina, 187 U. S. 622, 47 L. ed. 336, 23 Sup. Ct. Rep. 229; Kelley v. Rhoades, 188 U. S. 1, 47 L. ed. 359, 23 Sup. Ct. Rep. 259; Connecticut River Lumber Co. v. Columbia, 62 N. H. 286; Prairie Oil & Gas Co. v. Ehrhardt, 244 Ill. 634, 91 N. E. 680; State, Detmold, Prosecutor, v. Engle, 34 N. J. L. 425; State, Lehigh, & W. Coal Co., Prosecutor, v. Carrigan, 39 N. J. L. 36; Berwind & White Coal Co. v. Jersey City, 75 N. J. L. 76, 67 Atl. 181; Burlington Lumber Co. v. Willetts, 118 Ill. 559, 9 N. E. 254.

The character of a shipment, whether local or interstate, is not affected by a transfer of the title during the transportation.

Gulf, C. & S. F. R. Co. v. Texas, 204 U. S. 403, 51 L. ed. 540, 27 Sup. Ct. Rep. 360; Connecticut River Lumber Co. v. Columbia, 62 N. H. 286.

Those cases which hold that property which is detained within the state on its interstate journey is taxable are distinguishable from the one at bar, and may be classified as follows:

1. Where the produce was grown in the taxing state, and had never been out of that state, but was intended for exportation by the owner.

Coe v. Errol, 62 N. H. 303, affirmed in 116 U. S. 517, 29 L. ed. 715, 6 Sup. Ct. Rep. 475; Diamond Match Co. v. Ontonagon, 188 U. S. 82, 47 L. ed. 394, 23 Sup. Ct. Rep. 266.

2. Where the property, though coming from another state, was being held in actual storage, to be removed for use at a more profitable time.

(a) To be held until orders for it were taken.

Susquehanna Coal Co. v. South Amboy, 184 Fed. 941; Lehigh & W. Coal Co. v. Junction, 75 N. J. L. 922, 15 LRA. (N.S.) 514, 68 Atl, 806.

(b) Until the owner desired to use it in view that if the grain was in transit in his own business.

Diamond Match Co. v. Ontonagon, 188 U. S. 82, 47 L. ed. 394, 23 Sup. Ct. Rep. 266; Burlington Lumber Co. v. Willetts, 118 Ill. 559, 9 N. E. 254.

interstate commerce it was exempt from local taxation. In its opinion, that court said: "The sole question presented by this record is, was the grain upon which the tax was levied in transit on April 1, 1907? If

(c) Until customers made their selection it was so in transit, it was not liable to from goods being detained.

American Steel & Wire Co. v. Speed, 192 U. S. 500, 48 L. ed. 538, 24 Sup. Ct. Rep.

365.

3. Where there was not a through shipment, and any further movement required a new specification of the goods and new forwarding orders.

General Oil Co. v. Crain, 209 U. S. 211, 52 L. ed. 754, 28 Sup. Ct. Rep. 475.

4. Where the goods were partially for sale within the taxing state, and the part to be there sold was unascertained.

American Steel & Wire Co. v. Speed, 192 U. S. 500, 48 L. ed. 538, 24 Sup. Ct. Rep.

be taxed while passing through the state to its destination. On the other hand, if it was not in transit, but had a situs in this state, it was subject to taxation under state authority." In this view of the issue, the court sustained the recovery of the amount of the tax.

It is now contended, however, by the defendant in error, that the question thus defined was an immaterial one; that even if the property was in transit, and was the subject of interstate commerce, it was nevertheless liable to assessment, in common with the other personal property of the plaintiff in error, because he was a resident of the state, and the property was within the limits of the county where the assessment was made.

This argument proceeds upon a misconception of the ground upon which the power to tax articles actually moving in interstate transportation is denied to the states. That denial rests upon the supremacy of the Federal power to regulate interstate commerce. Its postulate is the necessary free

Messrs. Louis J. Behan and Gustavus J. Tatge submitted the cause for defend-dom of that commerce from the burden of ants in error. Mr. Francis S. Wilson was on the brief:

Property, even though in transit and the subject of interstate commerce, is subject to general assessment for taxation as other property at the domicil of its owner.

such local exactions as are inconsistent with the control and protection of that power. The fact that such a burden is sought to be imposed by the state of the domicil of the owner, upon property moving in interstate commerce, creates no exception. That state enjoys no prerogative to make levy upon such property passing through it, because it may belong to its citizens. They, as well as others, are under the shelter of the commerce clause. The question [512 is determined not by the residence of the owner, but by the nature and effect of the particular state action with respect to a sub

Ayer & L. Tie Co. v. Keown, 122 Ky. 580, 93 S. W. 588; Amory Mfg. Co. v. Gulf, C. & S. F. R. Co. 89 Tex. 419, 59 Am. St. Rep. 65, 37 S. W. 856; Adams Exp. Co. v. Ohio State Auditor, 166 U. S. 185, 41 L. ed. 965, 17 Sup. Ct. Rep. 604; Brown v. Houston, 114 U. S. 622, 29 L. ed. 257, 5 Sup. Ct. Rep. 1091; State Freight Tax Case, 15 Wall. 232, 21 L. ed. 146; Pickard v. Pullman South-ject ern Car Co. 117 U. S. 34, 29 L. ed. 785, 6 Sup. Ct. Rep. 635; State Tonnage Tax Cases (Cox v. Lott) 12 Wall. 204, 20 L. ed. 370; Horn Silver Min. Co. v. New York, 143 U. S. 305, 36 L. ed. 164, 4 Inters. Com. Rep. 57, 12 Sup. Ct. Rep. 403; Story, Confl. L. § 550.

which has come under the sway of a paramount authority.

This is clearly shown by the reasoning of the decisions which define the limits of the state taxing power with respect to property about to leave the state of its origin, or while it is on its way to its destination in another state. In Coe v. Errol, 116 U. S. 517, 29 L. ed. 715, 6 Sup. Ct. Rep. 475, the question was whether the products of a state (in that case timber cut in the forests of New Hampshire), 511] Did the enforcement of the local tax though intended for exportation to another upon the grain in the elevator of the plain-state, and partially prepared for that purtiff in error amount to an unconstitutional pose by being deposited at a place or port interference with interstate commerce? of shipment, was liable to be taxed like other property within the state. The claim

Mr. Justice Hughes, after making the above statement, delivered the opinion of the court:

The supreme court of Illinois was of the

of immunity by reason of the fact that it, cease to be part of the general mass of propwas owned by nonresidents was at once dis-erty in the state, subject, as such, to its juposed of. "If not exempt from taxation for risdiction and to taxation in the usual way, other reasons," said the court (Id. p. 524), until they have been shipped or entered with "it cannot be exempt by reason of being a common carrier for transportation to anowned by nonresidents of the state. We other state, or have been started upon such take it to be a point settled beyond all con- transportation in a continuous route or tradiction or question, that a state has ju-journey. We think that this must be the risdiction of all persons and things within true rule on the subject. It seems to us its territory which do not belong to some antenable to hold that a crop or a herd is other jurisdiction." The case was put upon exempt from taxation merely because it is, the same basis as though the timber had by its owner, intended for exportation. If been owned by residents of New Hampshire, such were the rule in many states there and the question was treated as being one would be nothing but the lands and real with respect to the point of time at which estate to bear the taxes. Some of the[514 goods produced within the state, which are Western states produce very little except the subject of exportation to another state, wheat and corn, most of which is intended cease to be liable to state taxation. It was for export; and so of cotton in the Southern concluded that these articles could be taxed states. Certainly, as long as these products by the state until, but not after, they had are on the lands which produce them, they been actually started in the course of trans- are part of the general property of the portation to another state, or had been com- state. And so we think they continue to be mitted to a carrier for that purpose. until they have entered upon their final journey for leaving the state and going into another state." (Id. pp. 527, 528.)

The court said: "This question does not present the predicament of goods in course of transportation through a state, though detained for a time within the state by low water or other causes of delay, as was the 513]case of the "logs cut in the state of Maine, the tax on which was abated by the supreme court of New Hampshire. Such goods are already in the course of commercial transportation, and are clearly under the protection of the Constitution. And so, we think, would the goods in question be when actually started in the course of transportation to another state, or delivered to a carrier for such transportation." 525.)

(Id. p.

After pointing out the importance of clearly defining, so as to avoid all question, the time when state jurisdiction over the commodities of commerce begins and ends, and after commenting on the established rule as to the power of taxation with respect to goods which had come to their place of rest within the state, for disposal and use (Woodruff v. Parham, 8 Wall. 123, 19 L. ed. 382; Brown v. Houston, 114 U. S. 622, 29 L. ed. 257, 5 Sup. Ct. Rep. 1091), the court thus restated its conclusion, in language applicable generally to the products of the state without distinction with respect to ownership by residents or nonresidents: "But no definite rule has been adopted with regard to the point of time at which the taxing power of the state ceases as to goods exported to a foreign country or to another state. What we have already said, however, in relation to the products of a state intended for exportation to another state will indicate the view which seems to us the sound one on that subject; namely, that such goods do not

In General Oil Co. v. Crain, 209 U. S. 211, 52 L. ed. 754, 28 Sup. Ct. Rep. 475, the owner of the property, which was sought to be subjected to an inspection tax in Tennessee, was a Tennessee corporation. The property was oil contained in the company's tanks at Memphis. It was contended that the oil in these tanks was in transit from the place of manufacture in Pennsylvania to the place of sale in Arkansas, and that the holding of it in Memphis was merely for the pupose of separation, distribution, and reshipment, and was for no longer time than required by the nature of the business and the exigencies of transportation. The court considered the question from the standpoint of the general power of the state to tax. The oil was held to be taxable, but not upon the ground that its owner was domiciled in Tennessee. It was recognized that if the oil were actually in transit, it would not be taxable. But it was found not to be in movement through the state; it had reached the destination of its first shipment and was held at Memphis for the business purposes and profits of the company. The principle applied was that announced in American Steel & Wire Co. v. Speed, 192 U. S. 500, 48 L. ed. 538, 24 Sup. Ct. Rep. 365. See Kelley v. Rhoads, 188 U. S. 1, 5, 7, 47 L. ed. 359, 360, 362, 23 Sup. Ct. Rep. 259; Diamond Match Co. v. Ontonagon, 188 U. S. 82, 93-96, 47 L. ed. 394, 398-400, 23 Sup. Ct. Rep. 266.

We come, then, to the question whether the grain here involved was moving in interstate commerce, so that the imposition of the local tax may be said to be repugnant to the Federal power.

515] *The following facts are shown by the himself or not, as he chose. He might sell agreed statement:-The grain had been the grain in Illinois or forward it, as he shipped by the original owners, who were saw fit. It was in his possession, with the residents of southern and western states, control of absolute ownership. He intended under contracts for its transportation to to forward the grain after it had been in New York, Philadelphia, and other eastern spected, graded, etc., but this intention, cities, which reserved to the owners the while the grain remained in his keeping, right to remove it from the cars at Chicago and before it had been actually committed "for the mere temporary purposes of in- to the carriers for transportation, did not specting, weighing, cleaning, clipping, dry- make it immune from local taxation. He ing, sacking, grading, or mixing, or chang- had established a local facility in Chicago ing the ownership, consignee, or destina- for his own benefit, and while, through its tion" thereof. While the grain was in tran-employment, the grain was there at rest, sit it was purchased by Bacon, the plaintiff there was no reason why it should not be in error, who succeeded to the rights of the included with his other property within the vendors under the contracts of shipment. state in an assessment for taxation which He was represented at the points of destina- was made in the usual way, without distion by agents through whom he disposed crimination. Woodruff v. Parham, 8 Wall. of grain and other commodities on the east-123, 19 L. ed. 382; Brown v. Houston, 114 ern markets, and the grain in question was U. S. 622, 29 L. ed. 257, 5 Sup. Ct. Rep. purchased by him solely for the purpose of 1091; Coe v. Errol, 116 U. S. 517, 29 L. ed. being sold in this way, and with the inten-715, 6 Sup. Ct. Rep. 475; Pittsburg & S. tion to forward it according to the shipping | Coal Co. v. Bates, 156 U. S. 577, 39 L. ed. contracts; it was not his intention to dispose of it in Illinois. Upon the arrival of the grain in Chicago, Bacon availed himself of the privilege reserved and removed it from the cars to his private elevator. This removal, it is said in the agreed statement of facts, was for the sole purposes of inspecting, weighing, grading, mixing, etc., and not for the purpose of changing its ownership, consignee, or destination. It is added that the grain remained in the elevator only for such time as was reason ably necessary for the purposes above men tioned, and that immediately after these had been accomplished it was turned over to the railroad companies, and was forwarded by them to the eastern cities, in accordance with the original contracts of transportation. No part of the grain was sold or consumed in Illinois. It was while it was in Bacon's elevator in Chicago that it was included in the assessment as a part of his personal property.

But neither the fact that the grain had come from outside the state, nor the inten516]tion of the owner to send it to another state, and there to dispose of it, can be deemed controlling when the taxing power of the state of Illinois is concerned. The property was held by the plaintiff in error in Chicago for his own purposes and with full power of disposition. It was not being actually transported, and it was not held by carriers for transportation. The plain tiff in error had withdrawn it from the carriers. The purpose of the withdrawal did not alter the fact that it had ceased to be transported and had been placed in his hands. He had the privilege of con tinuing the transportation under the ship ping contracts, but of this he might avail

538, 5 Inters. Com. Rep. 30, 15 Sup. Ct. Rep. 415; Diamond Match Co. v. Ontonagon, 188 U. S. 82, 93–96, 47 L. ed. 394, 398, 400, 23 Sup. Ct. Rep. 266; American Steel & Wire Co. v. Speed, 192 U. S. 500, 48 L. ed. 538, 24 Sup. Ct. Rep. 365; General Oil Co. v. Crain, 209 U. S. 211, 52 L. ed. 754, 28 Sup. Ct. Rep. 475.

The question, it should be observed, is not with respect to the extent of the power of Congress to regulate interstate commerce, but whether a particular exercise of state power, in view of its nature and operation, must be deemed to be in conflict with this paramount authority. American Steel & Wire Co. v. Speed, 192 U. S. pp. 521, 522, 48 L. ed. 546, 547, 24 Sup. Ct. Rep. 365, Thus, goods within the state may be made the subject of a nondiscriminatory[517 tax, though brought from another state, and held by the consignee for sale in the original packages. Woodruff v. Parham, 8 Wall. 123, 19 L. ed. 382. In Brown v. Houston, 114 U. S. 622, 29 L. ed. 257, 5 Sup. Ct. Rep. 1091, the coal on which the local tax was sustained had not been unloaded, but was lying in the boats in which it had been brought into the state, and from which it was offered for sale. In Pittsburg & S. Coal Co. v. Bates, 156 U. S. 577, 39 L. ed. 538, 5 Inters. Com. Rep. 30, 15 Sup. Ct. Rep. 415, coal had been shipped from Pittsburg to Baton Rouge in barges which, to accommodate the owner's business, had been moored about 9 miles above the point of destination. The coal, while remaining on the barges under these conditions, was held subject to taxation. In General Oil Co. v. Crain, 209 U. S. 211, 52 L. ed. 754, 28 Sup. Ct. Rep. 475, the oil which had been brought from Pennsylvania to Memphis, a distribut