Hughes Bros. Timber Co. v. Minnesota

delivered the opinion of the Court.

This was a special proceeding in the District Court of Cook County, Minnesota, by the State, through the county treasurer, to collect taxes on personal property owned by the Hughes Bros. Timber Company. With the penalty and fees and costs, the amount sued for was $2,919.50. The amount claimed by items appeared in a delinquent list furnished by the treasurer to the sheriff of the county for collection for the year 1922. It included a tax upon 10,000 cords of pulp wood of the assessed value of $21,233. In its answer as amended, the Timber Company pleaded that the pulp wood was not subject to taxation in the State of Minnesota at the time it was assessed, May 1, 1922, but was at that time in actual transit in interstate commerce by continuous route from the State of Minnesota to the State of Michigan. This presents the only question in the case.

The issue was submitted, without a jury, to the District Court, which found that the wood was not being carried in interstate commerce. The result was a judgment against the Timber Company for $2,456.78, including a penalty. The case was. appealed to the Supreme Court, which held that the judgment of the District Court was wrong in the penalty imposed,-because the defendants had not been given opportunity to pay the correct amount of the taxes, but with this modification affirmed the judgment of the District Court. 163 Minn. 4 . The case is here by certiorari granted October 12, 1925. 269 U. S. 542 .

The hauling and placing of the logs on the ice and on. the banks of the Swamp River were completed the latter part of March. When the ice broke, April 29, 1922, the drive of the logs began; those on the ice moved of themselves, and those on the banks were pushed in. The drive was conducted by the Timber Company’s men. It had lasted eighteen days when the logs reached the Pigeon River booms. By the latter part of July, all the logs had been shipped by vessels of the Paper Company on the lake to Muskegon.

We do not think it important^ for purposes of this case, to decide where the title to the timber, was at the time the drive began. The Paper Company had an interest in the timber and so had the Timber Company. Although the point was at first made by the Timber Company that the logs were not taxable in the name of the Timber Company, May 1, 1922, the day fixed as the tax day, that point is not pressed. The contract and the method of complying with it are all circumstances, however, throwing light on the question whether the transportation in interstate commerce began at the beginning, of the drive, when the ice broke up, or at the point of loading on the lake.

The Timber Company was under contract to float the timber down from the place of piling on the Swamp River and deliver it as promptly as possible. The Paper Company by payment of $3.00 a ton had acquired a qualified ownership in the timber even before it was segregated and put to float. Had the Timber Company or some one claiming under it attempted to stop the drive after it had begun, and interfered with the passage of the timber

The casé seems to us to come within the ruling of. this Court in the case of Champlain Company v. The Town of Brattleboro, 260 U. S. 366 ; That was a tax case like this. There the owner had cut pulp wood in several towns ih Vermont. The wood was placed upon the banks of the West River and its tributaries, to be floated down into the Connécticut River and thence to its destination, at the mill of the owner in Hinsdale on the New Hampshire side of the river. Four thousand of the cords had, been floated down the West River oñ the high water and reached a .boom at the mouth of the West River, but it was thought ' not safe, in view of the. high water, then to let the wood into the Connecticut. It was' contended that the logs which were held in the boom at the mouth of the West River were taxable there. We held otherwise;'that the. -interstate journey of-the logs had already begun'when

This Court distinguished the facts in that case from; the facts in ‘the main case discussed in Coe v. Errol, 116 U. S. 517 , as they can be distinguished here. It is clear that the entrepot or depot for the interstate shipment of logs was in the Swamp River. The drive in the two fivers, though under the direction of the Timber Company, was hot gathering the logs for subsequent interstate shipment; it was the interstate movement itself. Both parties intended interstate . shipment, ‘ they had - bound themselves to it,, the logs were segregated and were moving in the' contemplated journey which neither' could prevent if they carried out their agreement; . The delays in the continuity of movement were only incidental to the journey and the necessary changé in the mode of transportation by which the logs were carried from a place in one State to a place agreed upon in another.

The conclusion, in cases like this must.be determined from the -various .circumstances. Mere intention by the owner ultimately to send the .logs out, of the State does not put them in interstate commerce, nor does prepara-' tory gathering, for that purpose,, at a depot. It must appear that the movement for another State has actually begun and is going on. Solution is easy when the shipment' has been delivered to a carrier for a destination' in ■ another State. It- is much more difficult when the. owner ■retains complete control of the transportation and can' change his mind and divert the delivery from the intended interstate destination, as in the Champlain Company .case. The character of the shipment in-such a case de

íhe judgment of the Supreme Court of Minnesota is reversed and remanded for further proceedings not inconsistent with this opinion.

Reversed.