(dissenting) .
Plaintiff’s bill, while general as to the collection of gasoline taxes on all sales made and to be made by it to the agencies of the federal government, really was in two distinct portions, had two distinct objects. One was to enjoin the prosecution of suits against it on account of taxes on gasoline stored and withdrawn for sale to government agencies through a past five-year period, when the ruling and recognition of the state authorities was that1 these sales were exempt from the tax. The other was to enjoin the claim and collection of taxes in the future on gasoline which, under sales contracts it pleaded it had made with the. United States, it would in future withdraw from storage and sell and deliver to agencies of the United States.
Upon the plainest principles, I think the collection of the back taxes may not be enjoined, for as appears from the pleadings and the agreed statement of facts, these taxes, if collected, will be collected by suit in which all of the plaintiff’s defenses will be available to it. An injunction will not issue to restrain a suit which has been or is to be brought on the ground. *247merely of the invalidity of the claim. Cavanaugh v. Looney, 248 U.S. 453, 39 S.Ct. 142, 63 L.Ed. 354; Boise Artesian Water Co. v. Boise City, 213 U.S. 276, 31 S.Ct. 720, 55 L.Ed. 611; Northport Power & L. Co. v. Hartley, 283 U.S. 568, 51 S. Ct. 581, 75 L.Ed. 1275; Champlin Ref. Co. v. Corporation Comm., 286 U.S. 210, 52 S.Ct. 559, 76 L.Ed. 1062, 86 A.L.R. 403; Yarnell v. Hillsborough Packing Co. (C.C.A.) 70 F.(2d) 435. I do not understand the majority opinion to hold otherwise, or that under their opinion any injunction will be granted as to past transactions. The majority opinion does hold, though, and it is from that holding J dissent, that there is equity in plaintiff’s bill for an injunction as to future transactions. This injunction, as I understand the opinion, will restrain the claim and collection of taxes upon all gasoline plaintiff withdraws in future, to directly or indirectly, as described in its bill, and in the agreed statement of facts, supply government agencies with which it has contracts.
My difference with the majority is fundamental. They think the tax is on the sale. With respect, I submit that it is not. The statute which lays this tax lays it on plaintiff as a storer in the state. It becomes payable by it when the gasoline is withdrawn for ultimate use by the storer, whether that use is to consume it or to part with title and possession of it by sale or otherwise. The Supreme Court of Alabama once,1 and the Fifth Circuit Court of Appeals twice 2 has so declared. No contrary opinion has been called to my attention.
In the opinion of the majority it is said that Panhandle Oil Co. v. State of Mississippi ex rel. Knox, 277 U.S. 218, 48 S.Ct. 451, 72 L.Ed. 857, 56 A.L.R. 583, a suit at law for taxes, controls. I do not think so. There the tax was on the sale, not as it is hare on the privilege of storing. That case did not hold, none has yet held, that taxes may not be collected merely because they fall on a person or a thing at some step in the process of getting an article to a governmental market. The contrary is well settled by the decisions of the Supreme Court as collected in Register v. Commissioner (C.C.A.) 69 F.(2d) 607, 93 A.L.R. 186. This is made particularly clear in Trinityfarm Construction Co. v. Grosjean, 291 U.S. 466, 54 S.Ct. 469, 78 L.Ed. 918. Here, as it was there, the taxpayer is an independent dealer. It is not a government instrumentality. The taxpayer here is a general storer of gasoline using the facilities of the state of Alabama to store its gasoline there under the protection of the police power of the state. It ought not to be doubted that in taxing its business as a storer, and in measuring the tax by the withdrawals from storage, the state of Alabama was not intending to, nor does it, tax “the operations of an instrument employed by the government of the Union to carry its powers into operation.” To contend that it does seems to me to be running the principle of exemption into the ground, and doing so in connection with a tax which in most states keeps the highways up, assists to run the schools, and generally forms, perhaps, the most dependable and most generous source of revenue. I say nothing here of the wisdom or expediency of the tax. I merely note the wide, the universal employment by the state of it.
I admit that the principle of federal exemption was in the Panhandle Case, 277 U.S. 218, 48 S.Ct. 451, 72 L.Ed. 857, 56 A.L.R. 583, and the Grayburg Oil Co. Case, 278 U.S. 582, 49 S.Ct. 185, 73 L.Ed. 519, and of state exemption in the Indian Motorcycle Co. Case, 283 U.S. 570, 51 S.Ct. 601, 75 L.Ed. 1277, pushed further than I liked to see it pushed. But I do not, in this case, kick against the pricks. I merely insist here that the Supreme Court has made it clear that those cases went to the verge that the claim of this goes beyond.
But if the majority is right and I am w.rong, in regard to the tax as tax, the exemption as exemption, there are other reasons grounded in equitable considerations why the injunction should not issue.
The plaintiff pleads and proves,3 indeed, it bases its suit upon pleading and *248proving that the United States government will not buy gasoline from it at a price which takes the tax into consideration, and that to obtain the business, plaintiff has already bound itself by contract to supply the gasoline needs of the agencies named at a price which has excluded the tax. In other words, plaintiff has absorbed the tax and thereby insured the government at all events from being burdened by it. Does a storer of gasoline who, in order to obtain government business, has so contracted, succeed to the government’s exemption and thereby, by a kind of subrogation, acquire an affirmative equity in advance of sales for a general injunction as to future dealings? An injunction which supervising, overseeing, and auditing all of the transactions which the plaintiff will in future have, will require the court to determine as to each one as it arises, whether and to what extent the exemption applies? I do not think so. I should not think so if the bill alleged that all of the transactions were to be with agencies exercising admittedly governmental functions. In a controversy of this kind over the imposition and collection of a state tax, valid as to all of the other business the plaintiff does, it seems to me that equity would best stay its hand, and not by injunction undertake to supervise the state’s fiscal and taxing activities.
Defendant, citing pertinent Alabama statutes, insists that plaintiff has, within the decision in Matthews v. Rodgers, 284 U.S. 521, 52 S.Ct. 217, 76 L.Ed. 447; Stratton v. St. Louis & Southwestern R. Co., 284 U.S. 530, 52 S.Ct. 222, 76 L.Ed. 465, an adequate remedy at law to pay the tax*249es and recover them back if they are due. Plaintiff denies that this is so. But considerations of adequate remedy at law aside, I think this is a case in which federal equity jurisdiclon ought not to be exerted to interfere in matters involving the fiscal affairs of a state and its subdivisions, because there is lacking here a substantial showing of the existence of a right, and a really threatened and irreparable injury which demand the exercise of that jurisdiction. Pape v. St. Lucie Inlet Dist. and Port Authority (C.C.A.) 75 F. (2d) 865, and cases cited at page 869. Not that the federal court should here determine the validity or invalidity of the exemption claim. “All that the federal court does is to announce that it will stand aloof. It inquires whether anything has happened whereby a court of equity would be moved to impose equitable conditions upon equitable relief.” Atlantic Coast Line v. Florida, 295 U.S. 301, 315, 55 S. Ct. 713, 719, 79 L. Ed. 1451.
No case has been cited, I have found none, where an injunction of this supervising kind has issued. When, as further appears from the pleadings and the agreed statement, the withdrawals which plaintiff seeks to protect from state tax will be for deliveries to government agencies without reference to whether these agencies are or are not, as to the matters they use the gasoline for, engaged in governmental functions, there is an additional reason why a general injunction should not issue.
The agreed statement of facts, as set out in note 3, supra, shows the names and to some extent the nature of the agencies with which plaintiff has contracted for future deliveries, and in regard to which it asks the injunction. Nothing is shown however, there or elsewhere from which it may be told as to some of these agencies, at least, whether the activities they engage in are in a tax exemption sense, governmental, or whether the uses for which the gasoline is bought will be. It is settled, by South Carolina v. United States, 199 U. S. 437, 26 S.Ct. 110, 50 L.Ed. 261, 4 Ann. Cas. 737; Flint v. Stone Tracy Co., 220 U.S. 107, 31 S.Ct. 342, 55 L.Ed. 389, Ann. Cas. 1912B, 1312; Ohio v. Helvering, 292 U.S. 360, 54 S.Ct. 725, 78 L.Ed. 1307; Helvering v. Powers, 293 U.S. 214, 55 S. Ct. 171, 173, 79 L.Ed. 291, that “the state cannot withdraw sources of revenue from the federal taxing power by engaging in businesses which constitute a departure from the usual governmental functions, and to which, by reason of their nature, the federal taxing power would normally extend.” “The fact that the state has power to undertake such enterprises, and that they are undertaken for what the state conceives to be the public benefit, does not establish immunity. * * * The necessary protection of the independence of the state government is not deemed to go so far.” Helvering v. Powers, supra.
What the state may not, neither may the government, do. If the establishment of departments of liquor control, as in the South Carolina and Ohio cases, and the operation of a railroad, as in Helvering v. Powers, are not the exercise by the state of ordinary and usual governmental functions within the principle of exemption from federal taxation, it would seem probable that some of the agencies which plaintiff’s gasoline will activate will not be within the principle of exemption from state tax. At any rate, plaintiff actively claiming the exemption as a basis for the injunction has the burden of showing that they are, and this it has wholly failed to do. Surely in these circumstances equity should stay its hand from crippling, by a general injunction, the state’s taxing power.
I dissent.
. State v. City of Montgomery, 228 Ala. 98, 151 So. 850.
Pan American Petroleum Corporation v. State of Alabama (C.C.A.) 67 F.(2d) 590, certiorari denied 291 U.S. 670, 54 S. Ct. 454, 78 L.Ed. 1080; C. E. Ervin and T. M. Stevens, Reev’rs v. State of Alabama 80 F.(2d) 432, decided Nov. 22, 1935; cf. Standard Oil Co. v. People of California, 291 U.S. 242, 243, 54 S.Ct. 381, 78 L.Ed. 775.
“The OomjJany has entered into a contract with the Treasury Department, Procurement Division, Washington, D. C. designated as Contract TPS 6088 Region No. 2 under the terms of which the Com*248pany is required to make tank car deliveries FOB Mobile, Alabama, to the Quartermaster, United States Army, Fort McClellan, -Alabama, and also to make deliveries of gasoline FOB Mobile, Alabama, consigned to the Quartermaster, United States Army, Maxwell Field, Alabama, and also deliveries of gasoline FOB Mobile, Alabama, to Tennessee Valley Authority Wilson Dam, Alabama. This contract covers the requirements that each of these agencies or departments of the United States may require from the period from October 1, 1935, thru December 30, 1935. A copy of this contract is hereto attached marked Exhibit ‘23’ and is made apart hereof.
“The Company has also entered into a contract with the United States Department of the Interior, which contract is designated as No. LS 1959, under the terms of which the Company is required to make deliveries thru retail service stations to the United States Department of the Interior, the Administrative Division of the Bureau of Reclamation, the Public Works . Administration, the Bureau of Indian Affairs, and such other bureaus of the Department of the Interior as may from time to time desire to purchase under said contract, or the requirements which said departments or agencies of the United States may need or desire to purchase in Alabama during the perio.d from October 1, 1935 thru June 30, 1936. A copy of this contract is hereto attached.”
The agencies to which plaintiff has been selling are; U. S. Shipping Board; Alabama Transient Bureau; Alabama Relief Administration; U. S. Consular Service; U. S. Marine Hospital No. 13; Mississippi Warrior Service: U. S. Public Health Service; U. S. Veterans Hospital No. 91; U. S. Coast Guard Service; U. S. Naval Service, Pensacola; R. O. T. C. Unit, Alabama Polytechnic Institute; U. S. Engineers Service; U. S. Collector of Customs; U. S. Department of Commerce; U. S. Lighthouse Service; U. S. Observation Squadron; Nitrate Plant No. 2; U. S. Department of the Interior; U. S. War Department; U. S. Department of Agriculture; Finance Officer, Maxwell Field; U. S. Department of Justice; U. S. Navy Department; U. S. Quartermaster, Maxwell Field; Federal Barge Line; U. S. Treasury Department; U. S. Post Office Department; U. S. Veterans Administra-, tion; Public Works Administration; U. S. Naval Reserve; U. S. Veterans Bureau; U. S. Government, Washington, D. C., Civilian Works Administration; Civilian Conservation Corps; Emergency Conservation Works; Tennessee Valley Authority.
It appears that plaintiff withdraws and delivers its gasoline (a) from bulk plants; (b) from company operated service sta-' tions; (c) from consignment service stations; (d) from independent service stations, deliveries being made in tanks and title passing to operator at the time of delivery.
Both the pleadings and the facts show that when representatives of employees of government agencies with whom plaintiff has contracts get gasoline from service stations, they present identification cards showing themselves entitled to purchase such gasoline for the United States or its departments or agencies. When such gasoline is gotten from independent dealers, the company replaces such gasoline without cost to them.