Hooven & Allison Co. v. Evatt, 324 U.S. 652 (1945)

Hooven & Allison Co. v. Evatt

No 38
Argued November 7, 8, 1944
Decided April 9, 1945
324 U.S. 652

CERTIORARI TO THE SUPREME COURT OF OHIO

Syllabus

1. Where, upon review here of state court decisions, the existence of an asserted federal right or immunity depends upon the appraisal of undisputed facts of record, or where reference to the facts is necessary to the determination of the precise meaning of the federal right or immunity, as applied, this Court is free to reexamine the facts as well as the law in order to determine for itself whether the asserted right or immunity is to be sustained. P. 659.

2. Since it appears on consideration of petitioner’s course of business and of the circumstances attending the importation that petitioner was the inducing and efficient cause of bringing the fibers into the country, which is importation, petitioner, not the foreign sellers or the agents, was the importer of fibers brought from the Philippine Islands and other places outside the United States, and the constitutional immunity from state taxation of the imported fibers survived their delivery to petitioner. Pp. 659, 664.

3. For the purpose of determining whether petitioner was the importer in the constitutional sense, it is immaterial whether title to the merchandise vested in the petitioner at the time of shipment or only after its arrival in this country. P. 662.

4. When merchandise is brought here from another country, the extent of its immunity from state taxation turns on the essential nature of the transaction, considered in the light of the constitutional purpose, and not on the formalities with which the importation is conducted or on the technical procedures by which it is effected. P. 663.

5. The purpose of the constitutional prohibition of state taxes on imports is to protect the exclusive power of the national government to tax imports and to prevent what, in matter of substance, would amount to the imposition of additional import duties by States in which the property might be found or stored before its sale or use. P. 664.

6. The constitutional immunity of the imports from state taxation was not lost by their storage (in the original packages) in warehouses at petitioner’s factory pending their use in petitioner’s manufacturing operations for which they were imported. Pp. 664, 668.

7. For the purpose of the constitutional immunity, it is immaterial whether the imported merchandise is stored (in the original packages) in the importer’s warehouse at the port of entry or in an interior State. P. 664.

8. Upon the record in this case, there is no reason to consider whether, for purposes of the constitutional immunity, the mere presence of some fibers in the factory was so essential to current manufacturing requirements that they could be said to have entered the process of manufacture, and hence were already put to the use for which they were imported. P. 667.

9. Such discriminations as there may be against domestic and in favor of foreign producers of goods in this situation are implicit in the constitutional provision and in its purpose to protect imports from state taxation. P. 667.

10. The difficulty of ascertaining in particular cases when an original package is broken arises out of the original package rule itself. P. 668.

11. Reconciliation of the competing demands of the constitutional immunity of imports and of the state’s power to tax is an extremely practical matter. P. 668.

12. In view of the constitutional authority of Congress to consent to state taxation of imports, and hence to lay down its own test for determining when the immunity ends, there is no convincing practical reason for abandoning the original package rule, or, if it is to be retained in the case of imports for sale, for rejecting it in the case of imports for manufacture. P. 668.

13. Articles brought from the Philippine Islands into the United States are imports subject to the constitutional provisions relating to imports -- both because they are brought into the United States and because the place whence they are brought is not a part of the United States in the constitutional sense to which the provisions with respect to imports are applicable. Pp. 668, 679.

142 Ohio St. 235, 51 N.E.2d 723, reversed.

Certiorari, 321 U.S. 762, to review a judgment sustaining an assessment of state taxes.