Article 2 of the Tennessee Constitution of 1870 provides:
'Sec. 28. All property-real, personal, or mixed-shall be taxed, but the legislature may except such as may be held by the state, by counties, cities, or towns, and used exclusively for public or corporation purposes, and such as may be held and used for purposes purely religious, charitable, scientific, literary, or educational, and shall except one thousand dollars' worth of personal property in the hands of each taxpayer, and the direct product of the soil in the hands of the producer and his immediate vendee.
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'Sec. 30. No article manufactured of the produce of this state shall be taxed otherwise than to pay inspection fees.'
By chapter 258 of the acts of Tennessee for 1903 it was, among other things, provided:
'Sec. 1. That all property-real, personal, and mixed-shall be assessed for taxation for state, county, and municipal purposes, except such as is declared exempt in the next section.
'Sec. 2. That the property herein enumerated, and none other, shall be exempt from taxation. . . . Sub-sec. 5. All growing crops of whatever nature and kind, the direct product of the soil of this state in the hands of the producer and his immediate vendee, and manufactured articles from the produce of the state in the hands of the manufacturer.'
In the recent case of Benedict Bros. v. Davidson County, 110 Tenn. 183, 191, 67 S. W. 806, 808, the supreme court of Tennessee held as follows:
'We are of opinion that, under the facts in this record, the logs upon the yard, in the hands of the mill-operating manufacturer, and his property, and lumber, rough and smooth, cut by him from such logs, grown on Tennessee soil, are articles manufactured from the produce of the state, and exempt, under the provisions of § 30, article 2, of the Constitution; and the demurrer was therefore properly overruled, and complainants, under the allegations of their bill, are entitled to recover back the taxes paid the state, and to perpetually enjoin the taxes assessed by the county and city.'
For more than three years prior to January 30, 1905, the I. M. Darnell Son & Company, a corporation of Tennessee, was domiciled in Memphis, in that state, and there owned and operated a lumber mill. Shortly prior to the date just named, pursuant to chapter 366 of the acts of Tennessee for 1903 (Tenn. Acts 1903, pp. 1097-1101), the value of the personalty of the Darnell Company was assessed for taxation by the city of Memphis at $44,000. Of this amount $19,325 was the value of logs cut from the soil of states other than Tennessee, which the company had brought into Tennessee from other states, and were held by the company as the immediate purchaser or vendee, awaiting manufacture into lumber, or consisted of lumber already manufactured by the company from logs which had been acquired and brought into the state from other states, as above mentioned, and all of which lumber was lying in the mill yard of the company, awaiting sale. The Darnell Company protested against this assessment, asserting that it was not liable to be taxed on said sum of $19,325, the value of the property owned by it as the immediate purchaser of logs brought from other states, or lumber, the product thereof. The ground of the protest was that the property represented by the valuation in question could not be taxed without discriminating against it, as like property, the product of the soil of Tennessee, was exempt from taxation under the Constitution and laws of that state, and therefore to tax its said property would violate the commerce clause (§ 8, article 1) of the Constitution, and the equal protection clause of the 14th Amendment.