patent, the delay being extraordinary, it is argued, if a conception so important in its possibilities of profit and utility was present in his mind. For this delay he gives his explanations, lack of funds, preoccupation with other uses of the audion having a cash value at the moment (its use, for illustration, as a telephone repeater), and perhaps chiefly the belief that he was a pioneer in the art without a rival in the offing. These explanations, even if not wholly convincing, are not so manifestly inadequate as to lead us to say that the conception of the oscillator as a generator of radio frequencies has been proved in any clear or certain way to have been developed and applied by Armstrong before it was born in De Forest's mind. To say this, moreover, would not be enough, even if we were willing to go so far, which, as already stated, we are not. Vacuum tube oscillators have a commercial use for other purposes besides radio. If De Forest's explanations and excuses were to be disregarded altogether, the result at most would be that the apparatus of the coupled circuits had potencies and values more important than the uses that were immediately apparent, potencies and values at least dimly apprehended, and never discarded or forgotten down to the time of their complete fruition. The benefit of all alike belonged to the inventor. Corona Cord Tire Co. v. Dovan Chemical Corp., 276 U.S. 358, 369; Roberts v. Ryer, 91 U.S. 150, 157; Stow v. Chicago, 104 U.S. 547, 550; cf. Lovell Manufacturing Co. v. Cary, 147 U.S. 623, 634; The Telephone Cases, 126 U.S. 1, 536; Robinson, Patents, Vol. 1, § 81, p. 124.

The decree of the Circuit Court of Appeals should be reversed and that of the District Court affirmed.

Reversed.

The CHIEF JUSTICE took no part in the consideration or decision of this case.

Counsel for Parties.

VIRGINIA v. IMPERIAL COAL SALES CO., INC.

CERTIORARI TO THE SUPREME COURT OF APPEALS OF VIRGINIA.

No. 16. Argued October 12, 1934.-Decided November 5, 1934. 1. Where the highest court of a State, confronted with the two questions whether a state property tax is invalid under the state taxing statutes and whether the property is immune under the commerce clause of the Federal Constitution, prefers to rest its judgment, avoiding the assessment, explicitly and exclusively on the federal ground, the case is within the jurisdiction of this Court, under 28 U. S. C., § 344 (b). P. 16.

2. Intangible property of a corporation consisting of money on hand at the place of its principal office in the State that created it and the excess of its bills and accounts receivable there over its bills and accounts payable, has its situs for property taxation in that State. P. 19.

3. The facts that such intangible property is employed wholly in interstate commerce and that the owner has no real or tangible personal property in the State, do not exempt the intangible property from a non-discriminatory property tax by the State. P. 19. 4. Cases in which state taxes on the privilege of doing an interstate business were avoided as directly burdening interstate commerce or touching property beyond the jurisdiction of the State, are inapplicable to a non-discriminatory ad valorem tax on property used in interstate commerce within the taxing jurisdiction; for such property taxation affects interstate commerce only incidentally. P. 20. 161 Va. 718, 736; 167 S. E. 268, 172 S. E. 927, reversed.

CERTIORARI, 292 U. S. 619, to review a judgment avoiding a state tax assessment for conflict with the commerce clause of the Federal Constitution. The case arose upon the application of the taxpayer to the state court of first instance for correction of the assessment and exoneration. from the tax. Judgment for the taxpayer was affirmed by the Supreme Court of Appeals on a writ of error sued out by the State.

Mr. Henry R. Miller, Jr., with whom Mr. Abram P. Staples, Attorney General of Virginia, and Mr. W. W.

Martin, Assistant Attorney General, were on the brief, for petitioner.

Messrs. James R. Caskie and F. P. Christian, Jr., for respondent.

MR. CHIEF JUSTICE HUGHES delivered the opinion of the Court.

The Imperial Coal Sales Company, a corporation organized under the laws of Virginia, sought exoneration from taxes assessed on its capital and income by the Department of Taxation of that State. The taxes were assailed under the commerce clause and the Fourteenth Amendment of the Constitution of the United States. The judgment of the trial court, holding the taxes to be invalid, was affirmed by the Supreme Court of Appeals. 161 Va. 718, 736; 167 S. E. 268, 172 S. E. 927. This Court granted certiorari. 292 U. S. 619.

The tax on income was held to be invalid upon the non-federal ground that it was unauthorized by the state. law. But in dealing with the capital tax, the state court concluded that it was "unnecessary to pass upon the construction of Section 73 of the Tax Code under which the assessment was made." While observing "a strong leaning and intent on the part of the lawmakers to exclude such corporations as the sales company from state tax action," the Court did not put its decision upon a non-federal ground but based it explicitly upon the ground that the tax was invalid under the Federal Constitution. The Court said-"We prefer to rest the decision of the validity of the capital tax here considered upon the broad proposition that it is invalid because it is a burden upon interstate commerce and forbidden by the Constitution of the United States." As the decision was thus expressly rested, not upon the inapplicability of the state law, but upon a determination of the federal

question, by which the bar of the Federal Constitution was erected against the levy of the tax, this Court has jurisdiction. 28 U. S. C. 344 (b); Henderson Bridge Co. v. Henderson City, 173 U. S. 592, 608, 609; Rogers v. Hennepin County, 240 U. S. 184, 188, 189; Grayson v. Harris, 267 U. S. 352, 358.

The material facts, as set forth by the state court, are as follows: Respondent, having its principal office in Lynchburg, Virginia, and maintaining a branch office in Cincinnati, Ohio, conducts a sale agency. Its sole business is that of selling coal for foreign coal mining corporations. It directs and manages the shipment and transportation of the coal, collects the proceeds of sale, and is paid a commission of eight per cent. Respondent does not own or lease coal mines and is not engaged in the business of mining. No coal of any consequence is sold in Virginia and none of the coal is located in Virginia at the time of sale. Nor does respondent own or operate warehouses or coal storage yards in Virginia. It does not retail, buy or own, coal but sells coal for its foreign principals in carload lots f. o. b. mines for a continuous journey between points outside of Virginia. When coal is sold through the Cincinnati office contracts are forwarded to the Lynchburg office for approval, and orders are sent to the mines for shipment. The record of sales and an account with the mines from which the coal is shipped are kept in the office at Lynchburg. Purchasers agree to pay monthly. Respondent collects the money and deposits it in bank in Lynchburg, and from these proceeds the mines are paid for the coal, less respondent's commissions.

The state court held that while respondent was doing business in Virginia, that business "arises out of, is inseparable from and incidental only to, the principal business of selling coal in interstate commerce." The Court said that a corporation engaged in interstate commerce

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may be taxed by a state on (1) its real estate and tangible personal property situated in the taxing state, and (2) upon its intangible personal property if in the taxing state it does intrastate business or has any appreciable real or tangible property. But if it has no real or tangible property and does no intrastate business in the taxing state, it cannot be taxed by that state."

1. The tax in question, styled a capital tax," is an ad valorem property tax. It is a state tax of "seventyfive cents on every one hundred dollars of the actual value" of the capital of any trade or business except that otherwise specifically taxed or exempted from taxation. Section 73, Tax Code of Virginia. By 'capital' is meant the property described. The property which is subject to the tax consists of (1) the inventory of stock on hand, (2) the excess of all bills and accounts receivable over bills and accounts payable, (3) all money on hand and on deposit, and (4) all other taxable personal property of any kind whatever, including all choses in action, equities, demands and claims, but excluding certain property specifically mentioned in the statute. Real estate used in trade or business is not held to be capital under the statute but is to be listed and taxed as other real estate; and tangible personal property used in trades and businesses mentioned in the statute is to be listed exclusively for local taxation.

In the instant case, no property was assessed under the first and fourth categories of the statute, for respondent had none. The assessment, as the state court found, was based "on the money on hand, plus the excess of the bills and accounts receivable over the bills and accounts payable." The state court treated the tax as a property tax, saying that "it must be borne in mind that the tax sought to be imposed is one upon property which is entirely intangible and which is used wholly and exclusively in interstate commerce."