This Court will not lightly attribute improper motives to the
lawmaking power, and will not, on a mere charge, regard a statute
imposing inspection fees as an act to raise revenue.
Ellis v.
United States, 206 U. S. 246.
Prima facie, the charge for inspection in an act otherwise
constitutional is reasonable.
Western Union Tel. Co. v. New
Hope, 187 U. S. 417.
The fact that oil inspection laws have been passed in a majority of
the states shows that oil is a proper subject for police
regulation.
In this case, this Court cannot conclude that the charge for
inspecting oil, provided by the North Carolina oil inspection law
of 1909, is
Page 222 U. S. 381
so seriously in excess of what is necessary for the object
designed to be effected as to justify the imputation of bad faith
and the conclusion that the law is one for revenue and not merely
for inspection.
Patpsco Guano Co. v. South Carolina,
171 U. S.
354.
This Court cannot determine what the actual operation of a
statute will be after its enactment by going outside the record and
taking judicial knowledge of what has happened since the filing of
the transcript here.
If the inspection fees exacted under a state statute average
largely more than enough to pay expenses, the presumption is that
the state will reduce them to conform to the constitutional
authority to impose fees solely to reimburse for expense of
inspection.
What relief shall be accorded to one who may sustain injury by
the failure of a state to protect his rights under the Constitution
cannot be determined before there has been such failure.
A requirement by the legislature that illuminating oils must be
safe, pure, and afford a satisfactory light establishes a
sufficient primary standard, and remitting to the proper state
board the establishment of rules and regulations to determine what
oils measure up to those standards does not amount to a delegation
of legislative power.
Where one complains that regulations promulgated under
legislative authority by a state board are unreasonable and
oppressive, he should seek relief by applying to that board to
modify them.
A state police statute cannot be declared invalid because in the
opinion of this Court it does not accord with sound policy. The
appeal for redress must be to the lawmaking power.
In the year 1909, North Carolina passed an act for the
inspection, under the control of the Board of Agriculture, of all
kerosene or other illuminating oils sold or offered for sale in the
state. The object of such inspection was declared to be in order to
determine the safety and value of such oils for illuminating
purposes. A charge of one-half cent per gallon was fixed, which law
declared should be paid to the Commissioner of Agriculture for the
purpose of defraying expenses connected with the inspection,
testing, and analyzing of oils in this state. It was provided that
the act should go into effect on July 1, 1909.
Page 222 U. S. 382
Two days after,
viz., on July 3, 1909, this suit was
commenced by the appellant, the Red "C" Oil Manufacturing Company,
a corporation of the State of Maryland. The defendants named were
the Board of Agriculture of North Carolina and the members of the
Board, and the object of the bill was to restrain the enforcement
of the act referred to because it was charged to be not a proper
exertion of the police power of the state, and besides was asserted
to be repugnant to the Constitution of the United States.
The bill averred that the complainant was a large shipper of
illuminating oils from the State of Maryland into the State of
North Carolina, and that it did an extensive business in North
Carolina in dealing in such oil. The provisions of the assailed act
were set out
in extenso, as also the terms of an act of
the general assembly approved on March 9, 1909, which forbade the
collection of a tax upon dealers in oils, authorized by § 58
of the Revenue Act, passed at the same session,
"from any persons, dealers, or corporations paying the taxes
imposed under the inspection law enacted at the present session of
the General Assembly, entitled, 'An Act to Provide for the
Inspection of Illuminating Oils and Fluids;' Provided, however, if
the said oil inspection act should be held invalid, § 58,
Revenue Act, shall remain in full effect."
In the preamble of this latter act, it was recited that the
"inspection tax" was much greater than the "tax" imposed under
§ 58 of the Revenue Act, and that "it is not the purpose of
the General Assembly that the said tax shall be cumulative." In
addition to averring the appointment of inspectors by the Board of
Agriculture, and the purpose of the Board to enforce the collection
of the inspection taxes, there were set forth the regulations
adopted by the Board under the authority of the statute.
Page 222 U. S. 383
The particulars by which it was asserted the statutory charge
was shown to be unlawful may be thus summarized: the charge or
"tax" was not for the purpose of defraying the cost of the
inspection of oil, but was imposed for revenue upon the goods of
complainant shipped into the State of North Carolina from the State
of Maryland, and was hence in conflict with the commerce clause and
the Fourteenth Amendment. The law, it was charged, was not a police
regulation, since an inspection of oil "for value and luminosity"
was not within the competency of legislative action, and the public
safety was not concerned, since illuminating oils, as the result of
modern methods of manufacture, were no longer explosive. The charge
or tax, it was averred, was more than double the amount necessary
for the inspection proposed, and would realize annually a surplus
for the state treasury of more than $20,000. It was further charged
that the act fixed no standard for the guidance of the Board of
Agriculture, but in effect arbitrary powers were conferred upon the
Board, and, indeed, legislative authority had been delegated to it.
The power thus conferred, it was also alleged, had been exerted in
an arbitrary manner, and tests prescribed which were not necessary
"in order to procure the safety of oil, to protect the people from
the sale of oils which are dangerous." Certain of the regulations
promulgated by the Board were also assailed as being uncertain,
unreasonable, illegal, and oppressive.
On the filing of the bill, an order was entered temporarily
restraining the defendants from enforcing, as against the
complainant, the statute and the rules and regulations of the Board
thereunder. The restraining order was subsequently amended by
requiring the complainant, "pending the final determination of this
cause," to "pay the one-half cent per gallon upon all illuminating
oils sold by it in the state, as prescribed in said act." The
defendants jointly and severally answered the bill, and took
Page 222 U. S. 384
issue upon all the matters alleged in the complaint. As regards
the allegation that the inspection fee was unnecessarily high and
would yield a large surplus over the expenses, the defendants
said:
"Defendants say that they have made no estimate that any excess
may be left after paying all the proper and necessary expenses of
inspection, and these defendants say that they have no means of
actually approximating the amount that the tax of one-half cent per
gallon will yield, or the expenses of equipping and maintaining a
competent inspection force and department. That the legislature
thought that one-half cent a gallon would be necessary to pay the
expenses of inspection, and these defendants are informed and
believe, and therefore aver, that this is as low an inspection tax
as there is to be found in any state having oil inspection laws,
and lower than the taxes in a great many of the states. In some
states, there is a graduated scale of taxation of more than
one-half cent for small quantities and less than one-half cent for
large quantities. The said act expressly provides, in § 6,
that the Commissioner of Agriculture shall include in his report to
the General Assembly an account of the expenses under this act. The
said act also provides that all money paid for inspection taxes
shall be kept by the State Treasurer as a distinct fund, to be
styled, 'The Oil Inspection Fund.' At the end of one year, it can
be seen exactly what the inspection costs and how much is paid for
it by dealers in oil, and until it shall appear that said tax is
excessive, a charge to that effect by complaint is premature and
ill considered."
Both parties filed affidavits in support of their respective
claims. The matter was heard upon a motion for an injunction upon
the bill, answer, and affidavits just referred to. Elaborately
examining all the contentions, the court (172 F. 695) concluded
that the complainant was not entitled to relief by injunction, and
that,
Page 222 U. S. 385
as respects the other relief asked, the bill should be
dismissed. A final decree was thereupon entered, and this appeal
was then taken.
Page 222 U. S. 389
MR. CHIEF JUSTICE WHITE, after making the foregoing statement,
delivered the opinion of the Court.
In view of the full reference to and the review of decided cases
made by the district judge in the opinion by
Page 222 U. S. 390
him delivered, we content ourselves with a comparatively brief
discussion of the questions pressed at bar.
These all come to two propositions, which are thus stated by
counsel:
"1. That the North Carolina oil inspection act is
unconstitutional and void in that, under the guise of exercising a
police power, the General Assembly of North Carolina is really
attempting to impose a revenue tax upon interstate commerce."
"2. That the said inspection act is unconstitutional in that the
General Assembly of North Carolina has attempted to delegate to the
Board of Agriculture legislative powers."
As to the first proposition, we append in the margin a clear and
adequate summary of the act, made by the judge below.
*
Page 222 U. S. 391
The bill, as we have stated, was filed when the statute had been
in force but two days, and when, of necessity, the result of its
operations was conjectural. We are asked now to hold that, although
the General Assembly declared in the statute that the charge or tax
authorized to be imposed was made "for the purpose of defraying the
expenses connected with the inspection, testing, and analyzing of
oils in this state," the real purpose of the legislature was to
levy a tax for revenue in violation of the commerce clause of the
Constitution. Reading the statute as an entirety or in connection
with the supplemental legislation of March 9, 1909, we find no
adequate reason for imputing to the General Assembly of North
Carolina an attempt to do one thing under the guise or pretense of
doing another. The mere designation of the exaction as a tax is not
sufficient to warrant the deduction
Page 222 U. S. 392
that the charge authorized for the inspection was not one really
for such purpose. We cannot lightly attribute improper motives to
the lawmaking power.
Florida &c. Ry. Co. v. Reynolds,
183 U. S. 471;
Ellis v. United States, 206 U. S. 246.
Putting out of view, therefore, questions of motive, two subsidiary
contentions remain;
viz: (a) that oil is not a proper
subject of inspection, and (b) that the tax in question is so
excessive on its face as to be unconstitutional. The conceded fact
that in thirty-five states of the Union oil inspection laws are in
force is sufficient to adversely dispose of the first of these
contentions. As stated by the court below:
"While there is much diversity of opinion in respect to the
danger of explosion from the use of kerosene oil, and of the power
to ascertain its illuminating capacity, it is evident that the
question has not so far passed beyond the domain of debate that the
legislature may not subject it
Page 222 U. S. 393
to reasonable inspection before permitting its sale in the
state. The court cannot say that such a law has no reasonable
relation to the public safety or welfare."
The contention that the tax is so excessive on its face as to
conclusively evidence the unconstitutionality of the burden, if
imposed as a mere inspection charge, is, we think, also without
merit.
Prima facie the charge must be deemed to be
reasonable.
Western Union Telegraph Co. v. New Hope,
187 U. S. 419.
Again, as said by the court below:
"It appears from an examination of the various oil inspection
laws in force in the United States that the charges for inspection
vary from one-half to one and one-half cents per gallon, and that,
in states wherein population and other conditions are similar to
those in this state, the charge is about the same as that fixed by
the act."
Looking at the elements which may have possibly entered into the
calculation of the General Assembly as to what would be a
reasonable inspection charge, we cannot, to quote from the opinion
in the
Patapsco Guano case,
Patapsco Guano Co. v.
North Carolina, 171 U. S.
354,
"conclude that the charge is so seriously in excess of what is
necessary for the objects designed to be effected as to justify the
imputation of bad faith, and change the character of the act."
In disposing of the contention just stated, we are not at
liberty to travel outside of the record and take judicial notice of
the operation of the act since the transcript of record was filed
in this Court. We here reiterate what was said in the case last
cited (p.
171 U. S.
354):
"If the receipts are found to average largely more than enough
to pay the expenses, the presumption would be that the legislature
would moderate the charge."
If the trial made of the act establishes the fact to be as
asserted, that the exaction in question is excessive, the
presumption is that, in the
Page 222 U. S. 394
orderly conduct of the public business of the state, the
necessary correction will be made to cause the act to conform to
the authority possessed, which is to impose a fee solely to
recompense the state for the expenses properly incurred in
enforcing the authorized inspection. What relief should be awarded
in the event the Legislature of North Carolina failed in its
positive duty in this particular is not a question open for
consideration upon this record, as no such failure of duty on the
part of the legislature had occurred or could possibly have
happened when this suit was commenced, a few days after the passage
of the act.
The remaining contention is that the act is repugnant to the
state constitution because it attempts to delegate to the Board of
Agriculture the exercise of legislative powers. The legislative
requirement was that the illuminating oils furnished in North
Carolina should be safe, pure, and afford a satisfactory light, and
it was left to the Board of Agriculture to determine what oils
would measure up to these standards. We think a sufficient primary
standard was established, and that the claim that legislative
powers were delegated is untenable.
Buttfield v.
Stranahan, 192 U. S. 492;
Union Bridge Co. v. United States, 204 U.
S. 364;
St. Louis Iron Mountain & S. Ry. Co. v.
Taylor, 210 U. S. 281;
United States v. Grimaud, 220 U.
S. 506.
We have not attempted to enumerate the objections urged against
the rules and regulations adopted by the Board of Agriculture. The
court below was clearly right when it observed that if, as the
complainant alleged, the standard of safety fixed by the Board was
unreasonably high, or the method of testing oil unsatisfactory, and
not such as was in general use, or the regulations in other
respects were unjust or oppressive, it should seek relief by
applying to the Board of Agriculture to modify them. A law cannot
be declared invalid because, in the opinion
Page 222 U. S. 395
of the court, it does not accord with sound policy. The appeal
for redress in such case must be to the lawmaking power.
Decree affirmed without prejudice.
* The act provides:
SEC. 1. "That all kerosene or other illuminating oils sold or
offered for sale in this state shall be subject to inspection and
test to determine the safety and value for illuminating purposes."
All manufacturers, wholesalers, and jobbers, before selling or
offering for sale, in this state, any kerosene or other oil for
illuminating purposes are required to file with the Commissioner of
Agriculture a statement showing that they desire to do business in
the state, and to furnish the name or brand of the oil or oils
which they desire to sell, with the names and address of the
manufacturer, and that such oil will comply with the requirements
of the law.
SEC. 2. Power is conferred upon the Commissioner of Agriculture
to collect samples of any illuminating oil offered for sale in this
state, and have the same analyzed. The inspection of oil, as
authorized by the act, is to be made under the direction of the
Board of Agriculture, which is authorized
"to make all necessary rules and regulations for the inspection
of such oil, and to adopt standards of safety, purity, or absence
from objectionable substances, and luminosity, when not in conflict
with this act, and which they may deem necessary to provide the
people of the state with satisfactory illuminating oil."
The Board of Agriculture is required to appoint oil inspectors
not exceeding in number one from each congressional district, whose
compensation shall not exceed $1,000 a year and expenses. They are
given power to examine all barrels, tanks, or other vessels
containing kerosene or other illuminating oils, to see that they
are properly tagged, and shall, as directed, collect and test
samples of oil offered for sale in different sections of the state,
and when instructed, collect and send samples to the Department of
Agriculture for examination.
SEC. 3.
"For the purpose of defraying the expenses connected with the
inspection, testing, and analyzing oils in this state, there shall
be paid to the commissioner a charge of one-half cent per gallon,
which payment shall be made before delivery to agents, dealers, or
consumers in this state."
Provision is made for attaching to each barrel, tank car, and
other containers, a tag or stamp to be furnished by the
Commissioner of Agriculture, showing that the tax has been paid.
When oil is shipped in tank cars or other large containers, the
manufacturer or jobber shall give notice to the Commissioner of
Agriculture of every shipment, with the name and address of the
person, company, or corporation to whom it is sent, and the number
of gallons, on the day the shipment is made.
SEC. 4.
"All moneys received under the provisions of this act shall be
paid into the state treasury and kept as a distinct fund to be
styled 'The Oil Inspection Fund.' All checks or orders in payment
for tags or stamps shall be made payable to the State Treasurer.
The Commissioner of Agriculture is authorized to draw out of said
fund, upon his warrant, such sums as may be necessary to pay all
expenses incurred in connection with this act, including salary to
oil chemist, or chemists, cost of inspection, blanks,"
etc.
SEC. 5.
"The State Treasurer shall, on the first day of June and
December of each year, turn into the general fund of the state all
moneys of the oil fund in his hands in excess of the amount drawn
out by the Commissioner of Agriculture for expenses."
SEC. 6. The Commissioner of Agriculture is required to include
in his report to the General Assembly an account of the operations
and expenses under the act.
SEC. 7. Provides that, whenever complaint is made to the
Department of Agriculture in regard to the illuminating qualities
of any oil sold in this state, the commissioner shall cause a
sample of said oil or oils complained of to be procured, and have
the same thoroughly analyzed and tested as to safety and
illuminating qualities. If such analysis or other tests shall show
that the oil is either unsafe or of inferior illuminating quality,
its sale shall be forbidden, and report of the result or results
shall be sent to the party making the complaint and to the
manufacturer of such oil.
The remaining sections prescribe penalties for violation of the
provisions of the law. The act went into effect July 1, 1909.
