1. Whether an appeal to this Court from a judgment of a state
court in a proceeding under a state "declaratory judgments" law,
presents a "case or controversy" within the jurisdiction of this
Court depends not upon the name or the form, but upon the nature
and substance, of the proceeding and the effect of the judgment
upon the rights asserted by the appellant. P.
288 U. S.
260.
2. The Tennessee Declaratory Judgments Act, as construed by the
Supreme Court of the State, may be invoked only when the
complainant asserts rights which are challenged by the defendant,
and presents for decision an actual controversy to which he is a
party, capable of final adjudication by the judgment to be
rendered, and no judgment will be rendered when all the parties who
will be adversely affected by it are not before the court. In a
suit under the Act to secure a judicial determination that a tax
levied against
Page 288 U. S. 250
the complainant, and about to be enforced by defendant state
officers, was invalid under the Federal Constitution, which, in
substance, differed from the ordinary injunction suit only in the
absence of a prayer for an injunction and of an allegation of
irreparable injury --
Held that a judgment upholding the
tax and affirming dismissal of the bill on the merits was
reviewable by this Court. Pp.
288 U. S.
260-264.
3. While the ordinary course of judicial procedure results in a
judgment requiring an award of process or execution to carry it
into effect, such relief is not an indispensable adjunct to the
exercise of the judicial function. P.
288 U. S.
263.
4. The Constitution does not require that the case or
controversy should be presented by traditional forms of procedure,
invoking only traditional remedies; the judiciary clause defined
and limited judicial power, not the particular method by which that
power might be invoked. P.
288 U. S. 264.
5. When the judicial power is invoked to review judgments of
state courts, the ultimate constitutional purpose is protection of
rights arising under the Constitution and laws of the United
States; changes by the States in the form or method by which
federal rights are brought to final adjudication in their courts do
not preclude review by this Court so long as the case retains the
essentials of an adversary proceeding, involving a real, not a
hypothetical, controversy which is finally determined by the
judgment below. P.
288 U. S.
264.
6. As the prayer for relief by injunction is not a necessary
prerequisite to the exercise of judicial power, allegations of
threatened irreparable injury, which are material only if an
injunction is asked, may likewise be dispensed with if, in other
respects, the controversy is real and substantial. P.
288 U. S.
264.
7. A railroad company brings gasoline into Tennessee, stores it
in its tanks, and withdraws and uses it as required as a source of
motive power for moving its interstate trains in that State and in
others. No ascertainable part of the gasoline when imported has a
destination beyond the local storage tanks.
Held:
(1) That, upon being unloaded and stored, the gasoline ceases to
be a subject of interstate commerce, and loses its immunity as such
from state taxation. P.
288 U. S.
265.
(2) A Tennessee "privilege tax" on the storage of gasoline
within the State and its withdrawal from storage for sale or use,
when applied to petitioner's gasoline, is not a tax on the use of
the gasoline as an instrument of commerce, and burdens the
function
Page 288 U. S. 251
of interstate commerce too indirectly and remotely to transgress
constitutional limitations. P.
288 U. S.
267.
8. The power to tax property -- the sum of all the rights and
powers incident to ownership -- necessarily includes the power to
tax its constituent parts. As the gasoline in storage could be
taxed by the State as property notwithstanding its prospective use
as an instrument of interstate commerce, the State can likewise tax
the successive exercise of two of the powers incident to it
ownership, storage and withdrawal from storage, both completed
before interstate commerce begins. P.
288 U. S.
268.
9. The constitutional power to levy taxes doe not depend upon
the enjoyment by the taxpayer of any special benefit from the use
of the funds raised by taxation. P.
288 U. S.
268.
10. The allegations of the bill showing a heavier state tax
burden upon railroads than upon common carriers by motor bus fall
short of alleging a discrimination forbidden by the commerce clause
or by the Fourteenth Amendment. P.
288 U. S.
268.
Affirmed.
APPEAL from the affirmance of a decree dismissing a bill
challenging a Tennessee excise tax.
Page 288 U. S. 258
MR. JUSTICE STONE delivered the opinion of the Court.
Appellant brought suit in the Chancery Court of Davidson County,
Tennessee, under the Uniform Declaratory Judgments Act of that
state,
* c. 29, Tennessee
Public Acts, 1923, to secure a judicial declaration that a state
excise tax levied on the storage of gasoline, c. 5, Tennessee
Public Acts, 1923, as amended by c. 67, Tennessee Public Acts,
1925, is, as applied to appellant, invalid under the commerce
clause and the Fourteenth Amendment of the Federal Constitution. A
decree for appellees was affirmed by the Supreme Court of the
State, and the case comes here on appeal under § 237(a) of the
Judicial Code.
Page 288 U. S. 259
After the jurisdictional statement required by Rule 12 was
submitted, this Court, in ordering the cause set down for argument,
invited the attention of counsel to the question "whether a case or
controversy is presented in view of the nature of the proceedings
in the state court." This preliminary question, which has been
elaborately briefed and argued, must first be considered, for the
judicial power with which this Court is invested by Art. 3, §
1 of the Constitution, extends by Art. 3, § 2, only to "cases"
and "controversies"; if no "case" or "controversy" is presented for
decision, we are without power to review the decree of the court
below.
Muskrat v. United States, 219 U.
S. 346.
In determining whether this litigation presents a case within
the appellate jurisdiction of this Court, we are concerned not with
form, but with substance.
See Fidelity National Bank v.
Swope, 274 U. S. 123;
compare Gasoline Products Co. v. Champlin Refining Co.,
283 U. S. 494,
283 U. S. 498.
Hence, we look not to the label which the legislature has attached
to the procedure followed in the state courts, or to the
description of the judgment which is brought here for review, in
popular parlance, as "declaratory," but to the nature of the
proceeding which the statute authorizes, and the effect of the
judgment rendered upon the rights which the appellant asserts.
Section 1 of the Tennessee Declaratory Judgments Act confers
jurisdiction on courts of record "to declare rights . . . whether
or not further relief is or could be claimed," and provides
that
"no action or proceeding shall be open to objection on the
ground that a declaratory judgment or decree is prayed for. The
declaration may be either affirmative or negative in form and
effect, and such declaration shall have the force and effect of a
final judgment or decree."
By § 2, it is provided that
"any person . . . whose rights, status or other legal relations
are affected by a statute . . . may have determined any question
of
Page 288 U. S. 260
construction or validity arising under the . . . statute . . .
and obtain a declaration of rights . . . thereunder."
Under § 6, the Court may refuse to render a declaratory
judgment where, if rendered, it "would not terminate the
uncertainty or controversy giving rise to the proceeding."
Declaratory judgments may, in accordance with § 7, be reviewed
as are other orders, judgments or decrees, and, under § 8,
"further relief based on a declaratory judgment or decree may be
granted whenever necessary or proper." Section 11 requires
that,
"when declaratory relief is sought, all persons shall be made
parties who have or claim any interest which would be affected by
the declaration, and no declaration shall prejudice the rights of
persons not parties to the proceeding."
This statute has often been considered by the highest court of
Tennessee, which has consistently held that its provisions may only
be invoked when the complainant asserts rights which are challenged
by the defendant and presents for decision an actual controversy to
which he is a party, capable of final adjudication by the judgment
or decree to be rendered.
Miller v. Miller, 149 Tenn. 463,
261 S.W. 965;
Goetz v. Smith, 152 Tenn. 451, 465, 278 S.W.
417;
Hodes v. Hamblen County, 152 Tenn. 395, 277 S.W. 901;
Cummins v. Shirp, 156 Tenn. 595; 3 S.W. (2d) 1062; Tennessee
Eastern Electric Co. v. Hannah, 157 Tenn. 582, 587, 12
S.W.2d 372,
Perry v. Elizabethton, 160 Tenn. 102, 106, 22
S.W.2d 359;
Nashville Trust Co. v. Drake, 162 Tenn. 356,
359, 36 S.W.2d 905. It has also held that no judgment or decree
will be rendered when all the parties who will be adversely
affected by it are not before the Court.
Harrell v. American
Home Mortgage Co., 161 Tenn. 646, 32 S.W.2d 1023;
Sadler
v. Mitchell, 162 Tenn. 363, 367, 36 S.W.2d 891.
Proceeding in accordance with this statute, appellant filed its
bill of complaint in the state Chancery Court,
Page 288 U. S. 261
joining as defendants the appellees, the Attorney General and
the state officials charged with the duty of collecting the
gasoline privilege tax imposed by the Tennessee statute. The
complaint alleged that appellant is engaged in purchasing gasoline
outside the state, which it stores within the state pending its use
within and without the state in the conduct of appellant's business
as an interstate rail carrier; that appellees assert that the
statute taxes the privilege of storing gasoline within the state
and is applicable to appellant; that they have demanded payment of
the tax in a specified amount and have determined to enforce their
demand and that, under the circumstances alleged, the statute, as
applied to appellant, is invalid under the commerce clause and the
Fourteenth Amendment. The relief prayed was that the taxing act be
declared unconstitutional as applied to appellant. The Chancery
Court sustained the appellees' demurrer to the sufficiency in law
of the allegations relied on to establish the unconstitutionality
of the tax. Its final decree dismissing the bill on the merits has
been affirmed by the highest court of the state.
That the issues thus raised and judicially determined would
constitute a case or controversy if raised and decided in a suit
brought by the taxpayer to enjoin collection of the tax cannot be
questioned.
See Risty v. Chicago, R.I. & P. Ry. Co.,
270 U. S. 378;
compare Terrace v. Thompson, 263 U.
S. 197;
Pierce v. Society of Sisters,
268 U. S. 510;
Euclid v. Ambler Realty Co., 272 U.
S. 365. The proceeding terminating in the decree below,
unlike that in
South Spring Hill Gold Mining Co. v. Amador
Medean Gold Mining Co., 145 U. S. 300;
Muskrat v. United States, 219 U.
S. 346, was between adverse parties seeking a
determination of their legal rights upon the facts alleged in the
bill and admitted by the demurrer. Unlike
Fairchild v.
Hughes, 258 U. S. 126;
Texas v. Interstate Commerce Commission, 258 U.
S. 158;
Massachusetts
v.
Page 288 U. S. 262
Mellon, 262 U. S. 447;
New Jersey v. Sargent, 269 U. S. 328,
valuable legal rights asserted by the complainant and threatened
with imminent invasion by appellees, will be directly affected to a
specific and substantial degree by the decision of the question of
law, and unlike
Luther v.
Borden, 7 How. l;
Field v. Clark,
143 U. S. 649;
Pacific States Telephone & Telegraph Co. v. Oregon,
223 U. S. 118;
Keller v. Potomac Electric Power Co., 261 U.
S. 428;
Federal Radio Commission v. General Electric
Co., 281 U. S. 464, the
question lends itself to judicial determination, and is of the kind
which this Court traditionally decides. The relief sought is a
definitive adjudication of the disputed constitutional right of the
appellant, in the circumstances alleged, to be free from the tax,
see Old Colony Trust Co. v. Commissioner, 279 U.
S. 716,
279 U. S. 724,
and that adjudication is not, as in
Gordon v.
United States, 2 Wall. 561, and
Postum Cereal
Co. v. California Fig Nut Co., 272 U.
S. 693, subject to revision by some other and more
authoritative agency. Obviously the appellant, whose duty to pay
the tax will be determined by the decision of this case, is not
attempting to secure an abstract determination by the Court of the
validity of a statute,
compare Muskrat v. United States,
supra, 219 U. S. 361;
Texas v. Interstate Commerce Commission, supra,
258 U. S. 162;
or a decision advising what the law would be on an uncertain or
hypothetical state of facts, as was thought to be the case in
Liberty Warehouse Co. v. Grannis, 273 U. S.
70, and
Willing v. Chicago Auditorium Assn.,
277 U. S. 274;
see also Warehouse Co. v. Tobacco Growers Assn.,
276 U. S. 71,
276 U. S. 88;
compare Arizona v. California, 283 U.
S. 423,
283 U. S. 463.
Thus, the narrow question presented for determination is whether
the controversy before us, which would be justiciable in this Court
if presented in a suit for injunction, is any the less so because,
through a modified procedure, appellant has been permitted to
present it in the state courts without praying for an
injunction
Page 288 U. S. 263
or alleging that irreparable injury will result from the
collection of the tax.
While the ordinary course of judicial procedure results in a
judgment requiring an award of process or execution to carry it
into effect, such relief is not an indispensable adjunct to the
exercise of the judicial function.
Fidelity National Bank v.
Swope, supra, 274 U. S. 132.
This Court has often exerted its judicial power to adjudicate
boundaries between states, although it gave no injunction or other
relief beyond the determination of the legal rights which were the
subject of controversy between the parties,
Louisiana v.
Mississippi, 202 U. S. 1;
Arkansas v. Tennessee, 246 U. S. 158;
Georgia v. South Carolina, 257 U.
S. 516;
Oklahoma v. Texas, 272 U. S.
21;
Michigan v. Wisconsin, 272 U.
S. 398, and to review judgments of the Court of Claims,
although no process issues against the Government.
United
States v. Jones, 119 U. S. 477;
compare District of Columbia v. Eslin, 183 U. S.
62;
Ex parte Pocono Pines Hotels Co., 285 U.S.
526, reported below in 73 Ct.Cls. 447. As we said in
Fidelity
National Bank v. Swope, supra, 274 U. S.
132,
"Naturalization proceedings,
Tutun v. United States,
270 U. S.
568; suits to determine a matrimonial or other status;
suits for instructions to a trustee or for the construction of a
will;
Traphagen v. Levy, 45 N.J.Eq. 448, 18 Atl. 222;
bills of interpleader so far as the stakeholder is concerned,
Wakeman v. Kingsland, 46 N.J.Eq. 113, 18 Atl. 680; bills
to quiet title where the plaintiff rests his claim on adverse
possession,
Sharon v. Tucker, 144 U. S.
533, are familiar examples of judicial proceedings which
result in an adjudication of the rights of litigants, although
execution is not necessary to carry the judgment into effect, in
the sense that damages are required to be paid or acts to be
performed by the parties."
See also Old Colony Trust Co. v. Commissioner, supra,
279 U. S. 725;
La Abra Silver Mining Co. v. United States, 175 U.
S. 423.
Page 288 U. S. 264
The issues raised here are the same as those which, under old
forms of procedure, could be raised only in a suit for an
injunction or one to recover the tax after its payment. But the
Constitution does not require that the case or controversy should
be presented by traditional forms of procedure, invoking only
traditional remedies. The judiciary clause of the Constitution
defined and limited judicial power, not the particular method by
which that power might be invoked. It did not crystallize into
changeless form the procedure of 1789 as the only possible means
for presenting a case or controversy otherwise cognizable by the
federal courts. Whenever the judicial power is invoked to review.a
judgment of a state court, the ultimate constitutional purpose is
the protection, by the exercise of the judicial function, of rights
arising under the Constitution and laws of the United States. The
states are left free to regulate their own judicial procedure.
Hence, changes merely in the form or method of procedure by which
federal rights are brought to final adjudication in the state
courts are not enough to preclude review of the adjudication by
this Court, so long as the case retains the essentials of an
adversary proceeding, involving a real, not a hypothetical,
controversy, which is finally determined by the judgment below.
See Old Colony Trust Co. v. Commissioner, supra,
279 U. S. 724.
As the prayer for relief by injunction is not a necessary
prerequisite to the exercise of judicial power, allegations of
threatened irreparable injury which are material only if an
injunction is asked may likewise be dispensed with if, in other
respects, the controversy presented is, as in this case, real and
substantial. Such was the purport and effect of our decision in
Fidelity National Bank v. Swope, supra, where it was held
that a final judgment rendered by a state court in an adversary
proceeding brought under a state statute to determine the validity
of liens about to be imposed for benefits assessed under a city
improvement ordinance presented a case
Page 288 U. S. 265
within the appellate jurisdiction of this Court. Accordingly, we
must consider the constitutional questions raised by the
appeal.
Chapter 58, Tennessee Public Acts, 1923, as amended by Chapter
67, Tennessee Public Acts, 1925, is said, by its caption, to impose
a privilege tax " on persons . . . and corporations engaged in or
carrying on the business . . . of selling or storing or
distributing gasoline . . ." within the state at the rate of
2� per gallon on the gasoline sold or stored, the tax "to be
used solely in the construction and maintenance of a highway system
in the state." But § provides:
"The tax imposed by this Act shall apply to persons, firms or
corporations, dealers or distributors storing any of the products
mentioned in this Act and distributing the same or allowing the
same to be withdrawn from storage whether such withdrawal be for
sale or other use. . . ."
Storage of the gasoline and withdrawal of it from storage within
the state for use or sale are, as the state Supreme Court has held,
the events which, by the very terms of the statute, call it into
operation.
Foster & Creighton Co. v. Graham, 154 Tenn.
412, 420, 285 S.W. 570;
Quick Service Tire Co. v. Smith,
156 Tenn. 96, 102, 299 S.W. 807.
Appellant, an interstate rail carrier, purchases large
quantities of gasoline outside the state of Tennessee and brings it
into the state in tank cars, from which it is unloaded and placed
in its own storage tanks. None of it is sold by appellant, but all
is withdrawn and used by it as a source of motive power in
interstate railway operation in Tennessee, Kentucky, Alabama and
Georgia. Storage of the gasoline is a preliminary step to such use
in interstate commerce. The tax is assailed both on the ground that
it is imposed on the gasoline while still a subject of interstate
commerce in the course of transportation from points of origin to
points outside the state of Tennessee, and on the ground that it
is, in effect, a tax upon
Page 288 U. S. 266
the use of the gasoline in appellant's business as an interstate
carrier, and is thus an unconstitutional burden on interstate
commerce.
The gasoline, upon being unloaded and stored, ceased to be a
subject of transportation in interstate commerce, and lost its
immunity as such from state taxation.
General Oil Co. v.
Crain, 209 U. S. 211;
Bacon v. Illinois, 227 U. S. 504;
Susquehanna Coal Co. v. South Amboy, 228 U.
S. 665,
228 U. S. 669;
Hart Refineries v. Harmon, 278 U.
S. 499;
Greg Dyeing Co. v. Query, 286 U.
S. 472. The fact that the oil was, in the ordinary
course of appellant's business, later withdrawn from storage for
use, some within and some without the state, part of it thus
becoming again the subject of interstate transportation, did not
affect the power of the state to tax it all before that
transportation commenced. Neither the appellant, the shippers, nor
the carrier, at the time of the shipment of the gasoline from
points of origin, arranged a destination for any part of the oil
other than the appellant's storage tanks in Tennessee. Although, in
the usual course of business, a variable and undefined part of it,
when segregated for that purpose, would again be transported across
state boundaries, appellant was free to distribute the oil either
within or without the state for use in its business or for any
other purpose. As nothing in the transaction before the withdrawal
from storage in Tennessee can be said to have given any
ascertainable part of the gasoline a destination to points beyond
the state, the case is distinguishable from
Carson Petroleum
Co. v. Vial, 279 U. S. 95, and
Texas & New Orleans R. Co. v. Sabine Tram Co.,
227 U. S. 111. The
oil in storage was not a subject of interstate commerce, and so was
a part of the common mass of goods within the state, subject to
local taxation.
General Oil Co. v. Crain, supra; Susquehanna
Coal Co. v. South Amboy, supra; Bacon v. Illinois, supra; compare
Atlantic Coast Line R. Co. v. Standard Oil Co., 275 U.
S. 257.
Page 288 U. S. 267
We cannot say that the tax is a forbidden burden on interstate
commerce because appellant uses the gasoline, subsequent to the
incidence of the tax, as an instrument of interstate commerce.
Taxes said to burden interstate commerce directly when levied upon
or measured by the operation of interstate commerce or gross
receipts derived from it are beyond the state taxing power,
East Ohio Gas Co. v. Tax Commission, 283 U.
S. 465,
283 U. S. 470;
Sprout v. South Bend, 277 U. S. 163,
277 U. S. 170,
277 U. S. 171;
Crew Levick Co. v. Pennsylvania, 245 U.
S. 292,
245 U. S. 297,
and a tax levied upon the use of gasoline in generating motive
power for a ferry boat used exclusively in interstate commerce has
been held to be so direct and immediate a burden on the commerce
itself as to be invalid.
Helson v. Kentucky, 279 U.
S. 245.
But interstate rail carriers are not wholly immune from other
forms of nondiscriminatory state taxation, even though the burden
of the tax is thus indirectly or incidentally imposed upon the
interstate commerce in which they are engaged. It cannot be doubted
that, when the gasoline came to rest in storage, the state was as
free to tax it, notwithstanding its prospective use as an
instrument of interstate commerce, as it was to tax appellant's
right of way, rolling stock or other instruments of interstate
commerce, which are subject to local property taxes.
Cudahy
Packing Co. v. Minnesota, 246 U. S. 450;
U.S. Express Co. v.
Minnesota, 223 U. S. 335;
Western Union Telegraph Co. v. Gottlieb, 190 U.
S. 412;
Adams Express Co. v. Ohio, 165 U.
S. 194,
165 U. S. 220;
see General American Tank Car Corp. v. Day, 270 U.
S. 367;
Interstate Busses Corp. v. Blodgett,
276 U. S. 245,
compare St. Louis-San Francisco Ry. Co. v. Middlekamp,
256 U. S. 226,
256 U. S. 231;
St. Louis, Southwestern Ry. v. Arkansas, 235 U.
S. 350;
Kansas City, F. S. & M. Ry. Co. v.
Botkin, 240 U. S. 227;
Kansas City, M. & B. R. Co. v. Stiles, 242 U.
S. 111;
Southern Ry. Co. v. Watts, 260 U.
S. 519. The power to
Page 288 U. S. 268
tax property, the sum of all the rights and powers incident to
ownership, necessarily includes the power to tax its constituent
elements.
See Bromley v. McCaughn, 280 U.
S. 124,
280 U. S.
136-138. Hence, there can be no valid objection to the
taxation of the exercise of any right or power incident to
appellant's ownership of the gasoline which falls short of a tax
directly imposed on its use in interstate commerce, deemed
forbidden in
Nelson v. Kentucky, supra. Here, the tax is
imposed on the successive exercise of two of those powers, the
storage and withdrawal from storage of the gasoline. Both powers
are completely exercised before use of the gasoline in interstate
commerce begins. The tax imposed upon their exercise is therefore
not one imposed on the use of the gasoline as an instrument of
commerce, and the burden of it is too indirect and remote from the
function of interstate commerce itself to transgress constitutional
limitations.
See Eastern Air Transport v. Tax Commission,
285 U. S. 147.
Appellant objects that the tax violates the Fourteenth Amendment
in that it is levied as a charge for the use of the highways, which
appellant does not use. But the levy is a tax, not a toll or charge
for use of the highways,
see Carley & Hamilton v.
Snook, 281 U. S. 66, and
the constitutional power to levy taxes does not depend upon the
enjoyment by the taxpayer of any special benefit from the use of
the funds raised by taxation.
Carley & Hamilton v. Snook,
supra; St. Louis & Southwestern Ry. Co. v. Nattin,
277 U. S. 157,
277 U. S. 159.
The allegations of the bill showing that a heavier burden of
taxation is imposed upon railroads than upon common carriers by
motor bus, examined in the light of the applicable statutes of the
State, fall short of alleging a discrimination forbidden by either
the commerce clause or the Fourteenth Amendment.
Affirmed.
* The procedure authorized by this statute has been extensively
adopted both in this country and abroad. It is said that the
Uniform Act is in force in 16 of the States and Porto Rico, and
that similar statutes have been enacted in 13 States, Hawaii and
the Philippines. For a discussion of the history of this procedural
device in France, Germany, Spain, Spanish America, Scotland,
England and India, as well as in the United States, and the types
of controversies in which it has been invoked,
see Edwin
M. Borchard, The Declaratory Judgment -- A Needed Procedural
Reform, 28 Yale L.J. 1, 105; Judicial Relief from Peril and
Insecurity, 45 Harv.L.Rev. 793, 806; The Constitutionality of
Declaratory Judgments, 31 Columbia L.Rev. 561.