In the case of Graves, Governor of Alabama, et al. v. Texas Company in 1935, the Supreme Court ruled on a dispute over taxation between states and private corporations. The Texas Company (now Texaco) was an oil company incorporated in Delaware with operations across several states including Alabama. When Alabama imposed a franchise tax on out-of-state companies operating within its borders, the Texas Company challenged this as unconstitutional under both due process and commerce clause grounds. The Supreme Court sided with Alabama unanimously upholding that state's right to impose such taxes on foreign corporations doing business within their jurisdiction without violating either due process or interstate commerce protections. The court reasoned that while businesses may operate across state lines they are still subject to local laws and regulations where they conduct their activities - including taxation.

In the dissenting opinion for Graves, Governor of Alabama, et al. v. Texas Company (1935), Justice Stone argued that a state should not be allowed to tax interstate commerce if it results in multiple taxation burdens on the same entity or transaction. He believed this would violate the Commerce Clause of the U.S Constitution which gives Congress exclusive power over interstate commerce and prohibits states from interfering with it. In his view, allowing such taxes could lead to economic protectionism by individual states and disrupt national unity in commercial matters - something he felt was against what framers intended when they drafted the constitution.