Brief for the Respondents in Opposition — Continental Oil Co. v. Minnesota

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IN THE ston jae

Supreme Court ot the Melted SPIE

NO. 767

CONTINENTAL OIL COMPANY, a Corporation,

Petitioner,

vs.

STATE OF MINNESOTA,

MID-CONTINENT PETROLEUM CORPORATION, a Corpo-

ration,

Petitioner,

vs.

STATE OF MINNESOTA,

SINCLAIR REFINING COMPANY, a Corporation,

Petitioner,

vs.

STATE OF MINNESOTA,

PHILLIPS PETROLEUM COMPANY, a Corporation,

Petitioner,

vs.

STATE OF MINNESOTA,

SKELLY OIL COMPANY, a Corporation,

Petitioner,

vB.

STATE OF MINNESOTA,

THE TEXAS COMPANY, a Corporation,

Petitioner,

vs.

STATE OF MINNESOTA,

CITIES SERVICE OIL COMPANY, a Corporation,

Petitioner,

vs.

STATE OF MINNESOTA,

BARECO OIL COMPANY, a Corporation,

Petitioner,

vs.

STATE OF MINNESOTA,

ON PETITION FOR A WRIT OF CERTIORARI TO THE SUPREME

COURT OF THE STATE OF MINNESOTA.

BRIEF IN OPPOSITION.

GEO. B. SJOSELIUS,

Deputy Attorney General of the

State of Minnesota

JAMES F,. LYNCH, County Attorney

Kamsey County, Minnesota

Of Counsel: ANDREW R. BRATTER,

J. A. A. BURNQUIST Assistant County Attorney

Attorney General Ramsey County, Minnesota.

Dated January, 1945. Attorneys for the Respondent.

INDEX

: Page

ee rere eT ee Te Pree Thee 2

Pe DUNNE winder ciaccsundeensevautheeswers a 3

DS aoe oie ds «aches Revakee Caw enkeeuataes 3

DOIN sr oak bene ace esses ee sake be aeae een es bce 6

L PORMOIOD © seinccescevccuesivesneaseeene 6

If. The blending and storage of gasoline at pipe-

line tank farm served the business purposes

OF GO - PORTIIINONG sn ha vcnccccdebeches stuWa 7

Ill. The decision is in accord with the holdings

OE Sle Sa ove ee ceeds van xtsawyheuens 10

TV. Tew GUeieeee Me OOM ois dan dks caVeicuessa 12

A. Failure to know ultimate destination is

not basis for decision below........... 13

B. Trial Court’s finding is not conclusive

upon the State Supreme Court ........ "14

ORCUNO os cada ck heb aaceisi brie sen nedneeseeers 16

AUTHORITIES CITED

Page

American Mfg. Co. v. St. Louis, 250 U. 8. 459........ 9

American Railway Exp. Co. v. Kentucky, 273 U. 8. 269,

BS. cveusae tKv REC oN eee th CREE UE GREE « os kaeeeaee 15

Atlantic Coast Line R. Co. v. Standard Oil Co. 275

U.S. 257, 269, 48 8. Ct. 107, 110, 72 L. Ed. 270, 275.11, 14

Bacon vy. Illinois, 227 U. 8. 504, 33 8. Ct. 299, 67 L. Ed.

_ SPSS PEt ee Nee ho Me Pe nae CAT AE 12

Baumgartner y. U. 8., 322 U. 8. 665 ..............00. 15

Bell Teleph. Co. v. Pennsylvania, 309 U. 8. 30, 32 .... 15

Carson Petroleum Co. v. Vial, 279 U. 8. 95 2.2.2.2... 13, 14

Central U. Teleph. v. Edwardsville, 269 U. S. 190, 194,

WE vba <MaSen es Cebu kh ede a PE eh oe rhea 15

Chicago, Milwaukee & St. Paul Ry. Co. v. Iowa, 233

ey Sy ey Se Ps DO ci o's de as cone eacasbanunet 6

Chicago, M. & 8S. T. Ry. Co. v. Lowa, 233 U.S. 334, 34

SB. Ct. 592, 58 L. Ed. O88. ..... 0 eee ce wee ccecceces 12

Eastern Ohio Gas Co. v. Tax Commission, 283 U. 8.

ee Ti Bi Pee, AONE ol os sak wA dee cdo OREM eee sae

Ethyl Gasoline Corp. v. U.S. 309, UL S. 486.......... 10

General Oil v. Crain, 209 U.S. 11, S. Ct. 475, 52 L.

Oe TEE. nk ccakdnwderteae a bedvnwk SOeeaae ee chee een 12

John V. Paullin, 231 U.S. 588, 585..... een ekaeenwews 15

Lee v. Central Georgia R. Co., 252 U.S. 109, 119...... 15

Murphy v. Arnson, 96 U. B. 131] .......cccecceeoeres 9

Oliver Mining Co. v. Lord, 262 U. S. 172............: 9

Phillips Pipeline Co. v. State, 302 U. S. 642, 82 L. Ed.

$99, aflirming 339 Mo. 459, 97 S. W. 2nd 109....... 6, 10

So. Pac. Co. v. Gallagher, 306 U. S. 167, 99 S. Ct. 399,

2S a Bh EGA Pere te re ere rT ee oer is 5 12

Susquehanna v. South Amboy, 228 U. 8. 665, 57 L. Ed.

ES or a bn ks hx Ka OREN OORT IR OSes BESTT 6,11, 13

State ex rel Burr v. Seaboard, ALR Code, 92 Fla. 61,

| |) ne eer r Pee ree eee pee 12

State of Minnesota v. Blasius, 290 U.S. 1, 54 8. Ct. 34,

CO Oe BEE oe ccc dsmtees tnewe.css tart aeeteenes 12

Texas & N. O. R. Co. v. Sabine Tram Co., 227 U. 8. 111) 1B

U. & v. Erie R. Co., 280 U. 8. 94... 2s sscccsccenerss 13

Utah Power & Light Co. v. Pfost, 286 U. S. 165, 76 L.

OD IGE ceccdchevuen ov subsedseevecasheesexss 12

Minnesota Statutes 1941, See. 272.01. .......02-00 ee 2

Mason's Minnesota Statutes 1927, Sec. I9T4 .......--- 4

Minnesota Statuies 1941, Sec. 273.01 ........6-665 2

Mason's Minnesota Statutes 1927, Section 1984 ....-. 2

Minnesota Statutes 1941, See. 278.02 .......0-.2 ee ee 2

Mason’s Minnesota Statutes 1927, See. 1985........-- 2

98 U. 8. C. A., Section 344 2.2... ccc cccccccccerccsens 6

IN THE

Supreme Court of the United States

OCTOBER TERM, 1944

NO. 767

CONTINENTAL OIL COMPANY, a Corporation,

Petitioner,

vs.

STATE OF MINNESOTA,

MID-CONTINENT PETROLEUM CORPORATION, a Corpo

ration,

Petitioner,

vs.

STATE OF MINNESOTA,

SINCLAIR REFINING COMPANY, a Corporation,

Petitioner,

vB.

STATE OF MINNESOTA,

PHILLIPS PETROLEUM COMPANY, a Corporation,

Petitioner,

vs.

STATE OF MINNESOTA,

SKELLY OIL COMPANY, a Corporation

Petitioner,

vB.

STATE OF MINNESOTA,

THE TEXAS COMPANY, a Corporation,

Petitioner,

vs.

STATE OF MINNESOTA,

CITIES SERVICE OIL COMPANY, a Corporation,

Petitioner,

vs.

STATE OF MINNESOTA,

BARECO OIL COMPANY, a Corporation,

Petitioner,

vs.

STATE OF MINNESOTA,

ON PETITION FOR A WRIT OF CERTIORARI TO THE

COURT OF THE STATE OF MINNESOTA,

SUPREME

BRIEF IN OPPOSITION.

QUESTION PRESENTED.

Whether gasoline shipped from Oklahoma, Kansas and

Missouri to the terminus of the Great Lakes Pipe Line

Company in Ramsey County, there to be processed and

manufactured into a marketable product—then to be

stored indefinitely to await the receipt of orders from the

petitioners’ bulk stations or contract customers, 75% of

which come from Minnesota—-has come to rest so as to

have a situs for taxation.

STATUTES INVOLVED.

The statute under which the tax in question was levied

is Minnesota Statutes 1941, Section 272.01 (Mason’s Min-

nesota Statutes 1927, Section 1974 and reads as follows:

“All real and personal property in this state, and all

personal property of persons residing therein, includ-

ing the property of corporations * * *, is taxable, ex-

cept such as is by law exempt from taxation ;”

Also Minnesota Statutes 1941, Section 273.01 (Mason's

Minnesota Statutes 1927, Section 1984), which reads as

follows:

“ * * * personal property shall be listed and assessed

annually in reference to its value on May 1 * * *”.

Also Minnesota Statutes 1941, Section 273.02 (Mason's

Minnesota Statutes 1927, Section 1985), which reads as

follows:

“Tf any * * * personal property be omitted in the as-

sessment of any year or years, and the property there-

by escapes taxation, when such omission is discovered

the county auditor shall enter such property on the

assessment and tax books for the year or years omit-

ted; and shall assess the property, and extend against

the same on the tax list for the current year all ar-

rearages of taxes, properly accruing against it * * *”.

STATEMENT.

Petitioners, in order to provide a large stock of gasoline

from which to supply bulk stations in the Northern area,

made shipments of a minimum of 50,000 barrels each (2,-

100,000 gallons) via the Great Lakes pipeline to its tank

farm at the terminal in Ramsey County consigned to them-

selves as consignees. (Finding No. 4, R. 887, f. 2661; finding

No. 14, R. 989, f. 2693; R. 300 and 301, f. 900-902; R. 414, f.

1240, 1241; R. 994, f. 995). As the gasoline reached the

terminal it was allocated to the several shippers by the

Great Lakes. (Finding No. 12, R. 894, f. 2682; finding No.

15, R. 989, f. 2694). .

Further movement of the gasoline by rail could not be

undertaken, not because tank cars were unavailable (R.

1002, f. 1005), but because (1) the gasoline was not then

a marketable product—and Great Lakes was required to

blend the gasoline with various products including tetra

ethyl lead (Finding No. 8, R. 891, f. 2672-2673) resulting

in production of 26 different kinds of gasoline, the latter

operation requiring originally 16 to 24 hours, but in later

years, six hours (R. 897, f. 2689, Finding No. 12d) and (2)

to retain the gasoline in storage until petitioners gave ship-

ping instructions. (Finding No. 12, R. 894, f. 2682).

Reshipment was not made until petitioners received orders

from their own or customers’ bulk stations or for “spot”

sales. 75% was shipped to points in Minnesota (R. 992-

993, f. 993, Finding No. 17, R. 900, f. 2699-2700).

When the gasoline was delivered to Great Lakes, neither

the shipper or carrier knew to whom any pari thereof was

destined. The only destination known or ascertainable was

the pipeline terminal. Ultimate destination was unknown

until after orders were received (Finding No. 14, R. 898,

f. 2693; R. 300-301, f. 900-902; R. 414, f. 1240, 1241; R.

994, f. 995).

The taxes in question were non-discriminatory. (R.

994, f. 996).

Other undisputed material facts, not mentioned in the

trial court’s findings, but which must be considered in de-

termining the purpose of the interruption are:

Indefinite storage was contemplated. The tariffs permit-

ted 90 days free storage at the terminal. (R. 874, f. 2622).

The tank farm at the terminal had a capacity of 621,000

barrels (abour 26,000,000 gallons) (R. 535, f. 1604, R. 991,

f. 992). The average storage of shipments was 35 days

(R. 307-308, f. 921, 922; R. 992-9938, f. 993-994).

The gasoline in stock at the terminal was not committed

to the first orders to be received. The traffic department

of each petitioner reserved the right to determine as it

received orders, whether they should be filled from the ter-

minal stock or from the stock at one of its refineries. (R.

272-273, f. 816-818; R. 633, f. 897-898; R. 638-639, f. 1914-

1916; R. 687, f. 2060; R. 688, f. 2062; R. 695, f. 2084; R.

761, f. 2283; R. 788, f. 2362; R. 806, f. 2416; R. 824,

f. 2470).

During the winter months, petitioners, encouraged by

Great Lakes, made shipments beyond their requirements

in order to keep the pipeline employed and to build up

stocks at the terminal for busier seasons. (R. 315, f. 943).

The Interstate Commerce Commission in evaluating

Great Lakes properties for rate making purposes deter-

mined ;

“This extra handling. of gasoline is a manufacturing

or trade service rather than a transportation service.

Accordingly, all property owned by the carriers and

used in blending gasoline has been classified in this

report as owned but used for purposes other than

those of a common carrier.” (R. 850, f. 2548; R. 992,

f. 993).

The tank cars were furnished by petitioners. Railroads

do not provide them (R. 604, f. 1810-1811). The shipment

by rail is made as a separate shipment under a regular

bill of lading. (R. 993, f. 994.)

The railroads were not parties to the arrangements

whereby Great Lakes made rebates to petitioners to equal-

ize its rates with the all-rail rate. (R. 611, f. 1833).

Shipments for Phillips, Texas and Sinclair were shipped

and stored separately and were not commingled (R. 500,

f. 1500; R. 517-518, f. 1551-1552).

The State Supreme Court concluded that the gasoline

came to rest at the tank farm and rejected trial court’s

finding No. 18 (R. 900-901, f. 2700-2701) that the inter-

ruption at the terminal and the blending operations were

not intended to serve the business purposes of petitioners

but were designed and intended to facilitate operation of

the pipeline because such findings are “opposed to the

undisputed facts and are but inferences in the nature of

conclusions made by the trial court by applying to them

what it conceived to be applicable rules of law. Such find-

ings are not entitled to any more weight than a conclu-

sion of law made by the trial court.” (R. 1003-1004,

f. 1006-1007).

ARGUMENT.

JURISDICTION.

Jurisdiction of this court is invoked under Section 237

(b) of the Judicial Code (28 USCA, Section 344) because

it is claimed that the tax sustained by the decision of the

Minnesota Supreme Court (Rec. 990) violates the com-

merce clause of the United States Constitution. It is not

shown that the question has not heretofore been determined

nor is it claimed that the decision is in conflict with the

holdings of this court. They merely express a doubt. But

cite no decision upon which they rely. On the other hand

respondent cites in this brief ample authority to prove a

complete accord with such decision.

That the gasoline was in storage with the pipeline for

processing and to await receipt of orders at the time the

tax was levied does not present a new question. <A state

tax was sustained under the same circumstances in Phillips

Pipeline Co. v. State, 302 U. 8. 642, 82 L. Ed. 499, affirm-

ing 339 Mo. 459, 97 S. W. 2nd 109; and Susquehanna v.

South Amboy, 228 U. S. 665, 57 L. Ed. 1015. Cf Chicago,

Milwaukee & St. Paul Ry. Co. v. Towa, 233 U. S. 334, 58

L. Ed. 988, where the coal was still in the railroad car.

State taxation of property moved by pipeline is not new

to this court. Phillips Pipeline Co. v. State, Supra; Fast-

ern Ohio Gas Co. v. Tax Commission, 283 U. 8. 468, 75 L.

Sp aan PPS leg

Ed. 1171. The test as to when interstate commerce ends

and intrastate commerce begins is the same regardless of

the means of transportation.

Whether the findings of fact which are mixed findings

of fact and conclusions of law or purely conclusions of law

are binding upon the State Supreme Court is a state ques-

tion. The State Supreme Court determined that it is not

binding. (R. 1003-1004, f. 1606-1007.) This court is con-

cerned only with findings and conclusions sustained by

the State Court and whether such findings or conclusions

have support in the record. That the decision of the court

is so supported is conceded in the dissent:

“Careful examination of the voluminous testimony in-

dicates that the trial court might have found that

such delays and interruptions were for the benefit of

the shipper rather than the carrier and hence the oil

stocks were subject to local taxation.” (R. 1009,

f. 1012)

II.

The blending and storage of yasoline at pipeline tank

farm served the business purposes of the petitioners.

The court’s decision that the property came to rest at the

tank farm so as to become a part of the mass of property

within the state and subject to state taxation was founded

upon the ground that before the shipment to further desti-

nation could be made, the gasoline had to be processed and

manufactured into a marketable product and then stored

at the tank farm for an average of 35 days while awaiting

the receipt of orders. In other words, the tank farm was

made a facility of business for the benefit of the peti-

8

tioners. Among the benetits resulting to petitioners were

the following:

1. Jt resulted in a tremendous savings in capital invest-

ment because ii reduced to a very large extent the

number of tank cars required to serve its customers.

The railroads do not provide tank cars. The haul by rail

from Kansas City to St. Paul is six days. (Finding No.

14, R. 898, f. 2693) Therefore each tank car would be en-

route twelve additional days more than when the move-

ment by rail is from the terminal, which is probably

twenty-four hours from any point of delivery.

2. It provides greater flexibility in operation of refin-

eries and distribution of gasoline.

The tankage facilities of each petitioner are increased

by such facilities at the pipeline tank farm. When an

order is received, the traffic department of petitioners have

a choice in that they are free to determine whether the

order should be filled from the stocks at one of the refin-

eries or from the stocks at the terminal—and the decision

was not made until after the receipt of the order. Thus

when the refineries are stocked to capacity or near capacity,

an order could be shipped by all rail—otherwise from the

tank farm.

3. It provided a supply depot close at hand to all cus-

tomers in the northern area,

Tankage facilities of bulk stations is limited. (R. 891,

f. 2671) All custemers are within twenty-four hours

reach of the pipeline tank farm and can be readily sup-

plied in any emergency.

4. Petitioners save the labor costs by having blending

with tetra ethyl lead and other products done at the.

pipeline terminal.

ot

The tank farm provides a convenient place to make

distribution of the bulk shipments via the pipeline

into the smaller allotments to be shipped to the bulk

stations after orders have been received.

The essence of petitioners’ claim is that the blending

activities at the terminal were necessary to facilitate trans-

portation—to make it possible to transport greater volume

than if the blending were performed in advance of ship-

ment. Therefore interruption of the movement for this

purpose was incidental and excusable. Our answer is

that:

1. The gasoline could have been transported beyond

the terminal without blending—but that would not serve

the business interests of petitioners;

2. Blending of fluids constitutes manufacturing (Mur-

phy v. Arnson, 96 U. 8S. 131); and manufacturing is a

local business subject to local regulation and taxation re-

gardless of its effect upon transportation (Oliver Mining

Co. v. Lord, 262 U. 8. 172; American Mfg. Co. v. St. Louis,

250 U. S. 459).

Petitioners fail to mention trial court’s finding No. 17

(R. 900) that the gasoline was stored until orders were

received. Jt cannot be argued that indefinite storage for

this purpose facilitated transportation. There was neither

necessity nor purpose to send the gasoline through to the

bulk stations or customers by immediate continuity—but

to store it to await orders. This certainly served the busi-

hess purposes of petitioners.

10

IIl.

The decision is in accord with the Holdings of this Court.

In every instance when the movement of property in

interstate commerce was interrupted to permit processing

or manufacturing or storage to await the receipts of

orders, the state’s right to tax has been sustained by this

court.

The identical case is Slate v. Phillips Pipe Line Com-

pany, 302 U.S. 642, 58 8. Ct. 53, 82 L. Ed. 495, affirming

97 S. W. 2nd 109. There shipment was made under iden-

tical tariffs, the gasoline to be blended and processed and

stored as in the instant case except that after such blend-

ing, processing and storage, and not before, the gasoline

was transferred to a tank under the control of the shipper

and transportation to some 200 cities was thereafter con-

tinued by truck instead of by rail. In all other respects

the case was the same, It was there held that the inter-

state movement terminated upon the arrival of the gasoline

at the pipe line terminal and before the processing, manu-

facturing and storage commenced.

There as here, it was urged that the blending operation

facilitated operations of the pipeline; it would enable

them to expand the number of grades of gasoline to be

shipped from the terminal and meet railroad competition;

that it is dangerous to transport leaded gasoline (which

this court fonnd to be untrue in Ethyl Gasoline Corp. vr.

U.S. 209 U. 8. 436); that they “would lose custom” in

absence of blending. All these claims were considered and

rejected, The court held that the blending and _ storage

operations at the terminal, prior to delivery to the shipper

ll

constituted intra-state commerce. As a result the Pipe-

line Company was subject to the tax.

The case is parallel even if the tax was not on the ship-

per, since its validity turned upon the property coming to

rest as it arrived at the terminal.

The local activities in the Phillips case and in the case

at bar present a much stronger basis for state taxation

than Eastern Ohio Gas Co. v. Tar Commission, Supra.

It seems to us that the following are controlling cases:

Susquehanna Coal Co. v. City of South Amboy, 228

U. 8. 665, 668; 33 8. Ct. 712, 714, 57 L. Ed. 1015,

1016,

where it was said of the storage of coal in the yards of the

railroad company for the purpose of keeping a supply on

hand to fill anticipated orders that

“there was something more than the submission to

delay in transportation and the acceptance of its con-

sequences. The situation was made a facility of busi-

ness,—a business conducted (as here) through agents

and employees,”

and

Atlantic Coast Line R. Co. v. Standard OW Co., 275

U. 8. 257, 269; 48 8. Ct. 107, 110, 72 L. Ed. 270, 275,

where oil transported in ships was unloaded into tanks

for ultimate delivery to the oil company’s bulk stations

and contract customers as in the instant case, Mr, Chief

Justice Taft said:

“There is neither necessity nor purpose to send the

oil through these seaboard storage stations to interior

points by immediate continuity of transportation,

[to its 128 bulk stations] * * * Everything that is done

after the oil is deposited in the storage tanks at the

Tampa destination, or at the Jacksonville destination

- a

12

is done in the distribution of the oil to serve the pur-

poses of the plaintiff company that imported it.”

(Italics supplied. )

Other authorities supporting this proposition are; Gen-

eral Oil v. Crain, 209 U.S. 11, 28 8. Ct. 475, 52 L. Ed.

754. Chicago, M. & 8S. T. Ry. Co. v. Lowa, 233 U. 8. 334,

34.8. Ct. 592, 58 L. Ed. 988. Bacon v. Illinois, 227 U. 8.

504, 33 S. Ct. 299, 67 L. Ed. 615. So Pat. Co. v. Gal-

lagher, 306 U. S. 167, 99 S. Ct. 399, 83 L, Ed. 586.

State of Minnesota v. Blasius, 290 U. 8. 1, 54 8. Ct. 34, 78

L. Ed. 131. State ex rel Burr v. Seaboard, ALR Code, 92

Fla. 61, 109 So. 656. Utah Power & Light Co. v. Pfost,

286 U.S. 165, 76 L. Ed. 1088, and other familiar cases too

humerous to mention,

The law governing the facts in this case is so well set-

tled, no purpose would be served in issuing a writ of cer-

tiorari.

IV.

The decision is sound.

The decision did not turn upon the problem of moving

the gasoline away jrom the terminal but did turn upon the

activities at the terminal tank farm as a basis for deter-

mining that the interstate movement had ended. The

Court declared that: (1.) The terminal tank farm is the

only destination known, (2.) Interruption was not due

to lack of transportation facilities. Rail transportation

for further movement was available. (3.) The gasoline

could not be moved until processed. It was unmarketable

Finley VEEL RAE AS Or SON URE, ORE RS AS

13

as shipped. (4.) It had to be stored to await orders.

Average storage was 35 days. (5.) It agreed with the In-

terstate Commerce Commission that the blending of gaso-

line with tetra ethyl lead and other products, and the in-

definite storage thereof was a manufacturing or trade serv-

ice and not transportation. (6.) That this served the

business interests of the petitioners.

A. Failure to know ultimate destination in not basis for

decision below.

It is one of the many circumstances cited by the Court

as evidence of the termination of the interstate movement.

The Court said that neither the petitioners nor the carrier

knew the ultimate destination of the gasoline; and that

such knowledge was not possible until after orders were:

received. In the meantime the gasoline had to be processed

and stored. In all-of_the cases cited by petitioners the

ultimate destination was known at all times. The prop-

erty was being shipped to fill orders obtained in advance—

and the interruption resulted only from change of mode of

transportation and while awaiting the arrival of the means

of further transportation. Only the failure to designate

ultimate destination in the original bill of lading was ex-

cused. But the ultimate destination was at all times

ascertainable and known. This was the fact in U. 8. v.

Erie R. Co., 280 U. 8. 94: Carson Petroleum Co. v. Vial,

279 UL S. 95 and Teras & N. O, R. Co. v. Sabine Tram Co.,

227 U. S. 111. Whereas here, the initial shipment was

made in advance of obtaining orders and had to be stored

to await the arrival of the anticipated orders as in Susque-

eng 20 ie ‘ WEA SURE SINAN, —7

14

hanna v. South Amboy, Supra and in Standard Oil Co. v.

Atlantic Coastline R. Co., Supra.

Apparently movement by pipeline to provide large stocks

at the central distribution point to care for anticipated

orders is not unlike movement over water by tanker as in

the Standard Oil case, Supra.

Another important distinction is to be found in the

statement of the Court in the Carson Petroleum case,

Supra: (p. 100, f. 101).

“The oil is shipped from the storage tanks in the same

condition in which it was received from the tank cars

without being treated in any way.”

In the case at bar the gasoline is an unmarketable product

when it arrives at the terminal tank farm. Upon orders

of the petitioners it must be processed and manufacture]

into a marketable product.

B. Trial Court’s finding is not conclusive upon the State

Supreme Court.

The Supreme Court declared that the “local activities”

at the terminal tank farm served the business purposes of

the petitioners and that

‘*The findings that the processing and storage facili-

tated interstate transportation are opposed to the un-

disputed facts and are but inferences in the nature of

conclusions made by the trial court by applying to

them what is conceived to be applicable rules of law.

Such findings are not entitled to any more weight

than a conclusion of law made by a trial court.” (R.

1003, f. 1006-1007)

——-

15

Obviously this relates to a matter of local practice which

will not be reviewed by this Court. John v. Paullin, 231

U. 8S. 583, 585; Lee v. Central Georgia R. Co., 252 U. 8.

109, 119; Central U. Teleph. v. Edwardsville, 269 U. 8. 190,

194, 195; American Railway Eap. Co. v. Kentucky, 273

U. 8. 269, 272; Bell Teleph. C. v. Pennsylvania, 309 U. 8.

30, 32. Certainly the determination of the purpose of the

interruption is the ultimate conclusion to be drawn from

the facts. If appellate courts were concluded by such a

finding by the trial court, appeals would be futile. Baum-

gartner v. U. S., 322 U.S. 665. If this court has jurisdic-

tion, it extends only to review the decision and to deter-

mine whether it has support in the record.

The decision is not in conflict with the Blasius case,

supra. There the trial court’s finding of the shipper’s in-

tent was set aside by the State Supreme Court. This was

not considered erroneous state practice or error. The con-

clusion was reversed by this court because it was not sup-

ported by the record. In the instant case, even the minor-

ity opinion concedes there is adequate support.

No criticism of the court's statement concerning blend-

ing of gasoline with tetra ethyl lead is justified since 90%

of all shipments were “regular” gasoline (R. 532, f. 1594)

which was so blended (R. 525-6, f. 1575-6; R. 528-9,

f. 1584-7). nie

16

CONCLUSION.

We respectfully submit that petitioners have failed to

justify a review on writ of certiorari. It clearly appears

that the question has heretofore been determined by this

court and that the decision is in accord with applicable

decisions of this court.

GEO. B. SJOSELIUS,

Deputy Attorney General of the

State of Minnesota

JAMES F. LYNCH, County Attorney

Ramsey County, Minnesota

ANDREW R. BRATTER,

Asistant County Attorney

Ramsey County, Minnesota.

Attorneys for the Respondent.

Of Counsel:

J. A. A. BURNQUIST

Attorney General

Dated January, 1945