Wheeler Lumber Co. v. United States, 281 U.S. 572 (1930)

281 U.S.
572
50 S.Ct. 419
74 L.Ed. 1047
WHEELER LUMBER BRIDGE & SUPPLY CO. OF DES

MOINES, IOWA,
v.
UNITED STATES.
No. 15.
Argued April 25, 1929.
Decided May 26, 1930.
Mr. Jesse I. Miller, of Washington, D. C., for plaintiff.

The Attorney General, for the United States.
Mr. Justice VAN DEVANTER delivered the opinion of the Court.
The Court of Claims has certified to us a question concerning which it desires

instruction for the proper disposition of the aboveentitled cause now pending
before it. Late in the last term we dismissed the certificate in the belief that the
question propounded embraces the whole case, and so could not be answered
consistently with the applicable statute or with the constitutional limitations on
our jurisdiction. But before the term closed we vacated the order of dismissal
(279 U. S. 826, 49 S. Ct. 515, 73 L. Ed. 978) and held the matter for further
consideration.
The facts shown in the certificate are as follows: In the years 1918, 1919, 1920,
and 1921, the plaintiff, a corporate dealer in bridge materials, engaged to sell
and deliver to each of several counties in the States of Iowa and Nebraska a
quantity of lumber, which in each instance was needed and used by the
purchasing county in the construction or repair of bridges along public
highways within the county. The plaintiff was to ship the lumber from places
outside the State to designated points within the purchasing county and there
deliver the same to the county f. o. b. at stated prices. The plaintiff fulfilled its
engagement as made. The shipping was done by railroad under bills of lading
calling for delivery by the carrier to the plaintiff, or on its order, at destination.
The plaintiff forwarded the bills of lading to the county clerk; and when the
shipments reached their destination the county clerk, acting for the county and
conforming to the plaintiff's intention, presented the bills of lading to the
carrier, paid the transportation charges, accepted the lumber, deducted the
transportation charges from the stipulated f. o. b. price, and remitted the
balance to the plaintiff.
3
The federal revenue laws in force at the time imposed on the transportation of
freight by rail or water a tax of 3 per cent. of the amount paid for that service;
required that the tax be paid 'by the person paying for the service'; and
authorized the carrier to collect the tax on behalf of the government; but
declared that transportation service rendered to a State should be exempt from
the tax. Revenue Act 1917, c. 63, 500, 501, 502, 503, 40 Stat. 300, 314, 315;
Revenue Act 1918, c. 18, 500(a) and (h), 501(a), 502, 40 Stat. 1057, 1101,
1102, 1103. In the administrative regulations issued under those laws the
exemption of transportation service to a State was construed as including such
service to her 'political subdivisions, such as counties, cities, towns, and other
municipalities.'
No tax on the transportation service was demanded or paid when the

transportation charges were paid. But thereafter the Collector of Internal
Revenue assessed such a tax against the plaintiff and the plaintiff paid it under
protest. Application was then made by the plaintiff to have the amount
refunded; but the application was denied by the Commissioner of Internal
Revenue.
The suit in the Court of Claims was brought by the plaintiff against the United
States to recover the amount collected on the tax; that exaction being assailed
on two grounds: One that the transportation service was rendered to the
purchasing counties, and therefore was exempt from the tax, and the other that,
as the counties paid the carrier its transportation charges, the liability, if any,
for the tax did not attach to the plaintiff.
The certificate further shows that the court referred the case to a commissioner
who, in accord with the reference, reported special findings of fact; and that
both parties conceded the correctness and accuracy of the report. In making the
certificate the court accepted and summarized the facts reported by its
commissioner.
The question certified, somewhat shortened in words but not altered in

substance, is
Where a vendor, who has engaged to sell and deliver lumber needed for public
bridges to a county at a designated point in the county f. o. b. at a stated price,
ships the lumber by rail to that point preparatory to there effecting the required
delivery and forwards the bills of lading to the county, and the latter,
conformably to the vendor's intention, surrenders the bills of lading to the
carrier, pays its transportation charges, receives the lumber from it, deducts
from the f. o. b. price at destination the transportation charges paid to the
carrier, and remits the balance to the vendor-is the transportation of the lumber
to the place of delivery a service rendered to the county (State) within the
meaning of the exempting provisions of section 502 of the Revenue Act of
1917 and section 500(h) of the Revenue Act of 1918, and within the principle
recognized and applied in Panhandle Oil Co. v. Mississippi, 277 U. S. 218, 48
S. Ct. 451, 72 L. Ed. 857, 56 A. L. R. 583?
The statute providing for certification of questions by the Court of Claims is

section 3(a) of the Act of February 13, 1925, c. 229, 43 Stat. 936, 939 (28
USCA 288(a), which reads:
10
'That in any case in the Court of Claims, including those begun under section
180 of the Judicial Code, that court at any time may certify to the Supreme
Court any definite and distinct questions of law concerning which instructions
are desired for the proper disposition of the cause; and thereupon the Supreme
Court may give appropriate instructions on the questions certified and transmit
the same to the Court of Claims for its guidance in the further progress of the
cause.'
11
This is a new provision. Similar provisions have permitted particular federal

courts to certify questions to this Court, but this provision is the first giving
such authority to the Court of Claims.
12
There are two reasons why a certification by that court which embraces the
whole case cannot be entertained by this Court. One is that to accept such a
certification and proceed to a determination thereon, in advance of a decision by
that Court, would be an exercise of original jurisdiction by this Court contrary
to the constitutional provision which prescribes that its jurisdiction shall be
appellate in all cases other than those affecting ambassadors, other public
ministers and consuls, and those in which a State shall be a party. Article 3, 2,
cl. 2. The other is that the statute permits a certification only of 'definite and
distinct questions of law.'
Even the restricted certification permitted by the statute invokes action which is
13
13
rather exceptional in the appellate field. But that such action is appellate is now
settled. Early and long-continued usage amounting to a practical construction of
the constitutional provision requires that it be so regarded.
14
In section 6 of the Act of April 29, 1802, c. 31, 2 Stat. 156, Congress made
provision for restricted certifications from the circuit courts to this Court in
advance of a decision by the former. That provision remained in force and was
given effect for seventy years. Many certifications in both civil and criminal
cases were entertained and dealt with under it. Indeed, it was the only mode in
which questions of law in cases of several classes could be brought to this Court
during that period.
15
But in exercising that jurisdiction this Court uniformly ruled that it could not
entertain the certifications unless they were of distinct questions of law and not
of the whole case, for otherwise it would be assuming original jurisdiction
withheld from it by the Constitution. White v. Turk, 12 Pet. 238, 239, 9 L. Ed.
1069; United States v. Stone, 14 Pet. 524, 525, 10 L. Ed. 572; Nesmith v.
Sheldon, 6 How. 41, 43, 12 L. Ed. 335; Webster v. Cooper, 10 How. 54, 55, 13
L. Ed. 325; The Alicia, 7 Wall. 571, 573, 19 L. Ed. 84; United States v. Perrin,
131 U. S. 55, 58, 9 S. Ct. 681, 33 L. Ed. 88; Baltimore & Ohio R. Co. v.
Interstate Commerce Commission, 215 U. S. 216, 224, 30 S. Ct. 86, 54 L. Ed.
164.
16
And in applying the provision of 1802 and other later provisions permitting
certifications, this Court, while holding, on the one hand, that it cannot be
required through certifications thereunder to pass upon questions of fact, or
mixed questions of law and fact, or to accept a transfer of the whole case; or to
answer questions of objectionable generality-which instead of presenting
distinct propositions of law cover unstated matters lurking in the record-or
questions that are hypothetical and speculative, has distinctly held, on the other
hand, that the certification of a definite question of law is not rendered
objectionable merely because the answer may be decisive of the case, and also
that the importance or controlling character of the question certified, if it be a
question of law and suitably specific, affords no ground for declining to accept
the certification. United States v. Mayer, 235 U. S. 55, 66, 35 S. Ct. 16, 59 L.
Ed. 129, and cases cited.
17
The practice and rulings just described are equally applicable to certifications
under the provision relating to the Court of Claims.
18
Upon further consideration of the present certificate in the light of that practice
and those rulings, we are of opinion that the certificate is not open to any valid
objection and should be entertained. The question certified is a distinct and
definite question of law and its materiality is adequately shown. Neither in form
nor in effect does it embrace the whole case. It does not include any question of
fact, but, on the contrary, treats the facts as fully ascertained and definitely
states those out of which it arises. No doubt, with these facts ascertained, an
affirmative answer to the question would be decisive of the case. But if the
answer were in the negative the case would be left where another question of
law raised by the plaintiff's petition and mooted in the Court of Claims, but not
certified, would need to be resolved by that Court before a judgment could be
given.
19
We thus are brought to the solution of the certified question. Counsel for the
government concede, and rightly so, that the exemption accorded to a State by
section 502 of the Revenue Act of 1917 and section 500(h) of the Revenue Act
of 1918 should be construed as extending to her counties, as is done in the
administrative regulations. The Court of Claims, evidently entertaining this
view of the exemption, inquires whether the transportation described in the
question is a service rendered to the county within the meaning of those
sections. The transportation is had at the vendor's instance and is his means of
getting his lumber to the place of sale and delivery. He engages to deliver f. o.
b., not at the place of shipment, but at the place of destination, which is the
place of sale and delivery. There is no delivery, and therefore no sale, until after
the transportation is completed. Upon these facts, recited in the question, we
are of opinion that the transportation is not a service rendered to the county in
the sense of the sections cited, but is a service rendered to the vendor.
Conceding that the sections are parts of a taxing scheme, and assuming that
they are intended to recognize and fully respect the constitutional immunity of a
state agency, such as a county, from federal taxation, we think they neither
require such transportation to be regarded as a service to the county nor operate
to exempt such transportation from the tax.
20
The tax is not laid on the sale nor because of the sale. It is laid on the
transportation and is measured by the transportation charges. True, it appears
that here the transportation was had with a view to a definite sale; but the fact
remains that transportation was not part of the sale but preliminary to it and
wholly the vendor's affair. United States v. Normile, 239 U. S. 344, 348, 36 S.
Ct. 122, 60 L. Ed. 319. It follows that the tax on the transportation cannot be
regarded as a tax or burden on the sale. Cornell v. Coyne, 192 U. S. 418, 24 S.
Ct. 383, 48 L. Ed. 504.
21
As the tax is not laid on the sale or in any wise measured by it, the case of
Panhandle Oil Co. v. Mississippi, 277 U. S. 218, 48 S. Ct. 451, 72 L. Ed. 857,
56 A. L. R. 583, referred to in the question and relied on by the plaintiff, is not
in point.
22
Question Answered 'No.'

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281 U.S.

WHEELER LUMBER BRIDGE & SUPPLY CO. OF DES

Mr. Jesse I. Miller, of Washington, D. C., for plaintiff.

The Court of Claims has certified to us a question concerning which it desires

No tax on the transportation service was demanded or paid when the

The question certified, somewhat shortened in words but not altered in

The statute providing for certification of questions by the Court of Claims is

This is a new provision. Similar provisions have permitted particular federal

Question Answered 'No.'

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