CALDWELL v. STATE OF NORTH CAROLINA(1903)
At June term, 1900, of the superior court of Guilford county, state of North Carolina, E. M. Caldwell was tried before a court and jury for an alleged offense in having engaged in the business of delivering pictures without having first obtained a license so to do. The jury found a special verdict as follows:
Upon this special verdict the court adjudged that defendant was guilty, and sentenced him to pay a fine of $20 and costs of the action. From this judgment the defendant appealed to the supreme court of North Carolina. [127 N. C. 521, 37 S. E. 138]. That court, Faircloth, Ch. J., and Clark, J., dissenting, on November 7, 1900, affirmed the judgment of the superior court; and thereupon the cause was brought to this court by a writ of error allowed by the chief justice of the supreme court of North Carolina.
Messrs. Charles M. Stedman and W. R. Plum for plaintiff in error.
Mr. Alfred M. Scales for defendants in error.
Mr. Justice Shiras delivered the opinion of the court:
It might fairly be contended that, upon the facts found by the special verdict, the defendant was not guilty of engaging in the business of delivering pictures without a license, within the purview of the ordinance in question. But as the supreme court of North Carolina has held otherwise, we must accept that conclusion as a question of construction belonging to that court. Our task is to determine whether the ordinance, as so construed, is invalid as an attempt to interfere with and to regulate interstate commerce, and can be speedily performed, for [187 U.S. 622, 625] we think the case falls within previous decisions of this court on this subject.
Such decisions are numerous, but we do not deem it necessary to refer to but a few of them.
The subject was elaborately considered in Robbins v. Shelby County Taxing Dist. 120 U.S. 489 , 30 L. ed. 694, 1 Inters. Com. Rep. 45, 7 Sup. Ct. Rep. 592. The case was brought here on a writ of error to the supreme court of Tennessee, which had held valid a statute of that state, by which it was enacted that 'all drummers and all persons not having a regular licensed house of business in the taxing district, offering for sale or selling goods, wares, or merchandise therein by sample, shall be required to pay to the county trustee the sum of $10 per week or $25 per month for such privilege, and no license shall be issued for a longer period of three months.' Robbins, the plaintiff in error, was a citizen and resident of the city of Cincinnati, Ohio, and was convicted of having offered for sale articles of merchandise belonging to a firm in Cincinnati without having procured a license. In his discussion of the case Mr. Justice Bradley stated the following principles, as already established by this court: The Constitution of the United States having given to Congress the power to regulate commerce, not only with foreign nations, but among the several states, that power is necessarily exclusive whenever the subjects of it are national in their character, or admit only of one uniform system or plan of regulation; that where the power of Congress to regulate is exclusive, the failure of Congress to make express regulations indicates its will that the subject shall be left free from any restrictions or impositions, and any regulation of the subject by the states, except in matters of local concern only, is repugnant to such freedom; that the only way in which commerce between the states can be legitimately affected by state laws is when, by virtue of its police power, and its jurisdiction over persons and property within its limits, a state provides for the security of the lives, health, and comfort of persons and the protection of property, and imposes taxes upon persons residing within the state or belonging to its population, and upon vocations and employments pursued therein, not directly connected with foreign or interstate commerce, or with some other [187 U.S. 622, 626] employment or business exercised under authority of the Constitution and laws of the United States; and imposes taxes upon all property within the state, mingled with and forming part of the great mass of property therein; but that, in making such internal regulations, a state cannot impose taxes upon persons passing through the state, or coming into it merely for a temporary purpose, especially if connected with interstate or foreign commerce; nor can it impose such taxes upon property imported into the state from abroad, or from another state, and not become part of the common mass of property therein; and no discrimination can be made, by such regulations, adversely to the persons or property of other states; and no regulations can be made directly affecting interstate commerce.
Upon these established principles the conclusion was reached that the state statute in question was invalid, and the following observations are pertinent to the question before us:
Asher v. Texas, 128 U.S. 129 , 32 L. ed. 368, 2 Inters. Com. Rep. 241, 9 Sup. Ct. Rep. 1, was a case where a state statute required from 'every commercial traveler, drummer, salesman, or solicitor of trade, by sample or otherwise, an annual occupation tax,' and such legislation was declared inoperative, so far as it affected one soliciting orders for a business house in another state. The same doctrine was held in Stoutenburgh v. Hennick, 129 U.S. 141 , 32 L. ed. 637, 9 Sup. Ct. Rep. 256, in the case of an agent of a Maryland business house soliciting orders in the District of Columbia without having taken out a license as required by an act of the legislative assembly of the District of Columbia.
In Lyng v. Michigan, 135 U.S. 161 , 34 L. ed. 150, 3 Inters. Com. Rep. 143, 10 Sup. Ct. Rep. 725, the general proposition was repeated:
In Crutcher v. Kentucky, 141 U.S. 47 , 35 L. ed. 649, 11 Sup. Ct. Rep. 851, an act of the state of Kentucky which forbade the agent of an express company, not incorporated by the laws of that state, from carrying on busi- [187 U.S. 622, 628] ness without first obtaining a license from the state, was held to be a regulation of commerce and invalid. Mr. Justice Bradley, speaking for the court, said:
In Brennan v. Titusville, 152 U.S. 289 , 38 L. ed. 719, 4 Inters. Com. Rep. 658, 14 Sup. Ct. Rep. 829, was again presented the question of the validity of an ordinance providing 'that all persons canvassing or soliciting, within said city [of Titusville], orders for goods, books, paintings, wares, or merchandise of any kind, or persons delivering such articles under orders so obtained or solicited, shall be required to procure from the mayor a license to transact said business, and shall pay the said treasurer therefor the following sums, according to the time for which said licenses shall be granted,' and also prescribing a penalty for failing to procure such license. An agreed statement of facts showed that Shepard was a manufacturer of picture frames and maker of portraits, residing in Chicago in the state of Illinois, of which state he was a citizen, and in which state he had his manufactory and place of business; that in the prosecution of his business he employed agents, who, under his directions, solicited orders for pictures and picture frames in the state of Pennsylvania and in other states of the Union, by going personally to residents and citizens of said state of Pennsylvania and other states, and exhibiting samples of his pictures and frames, going when necessary, from house to house; that Brennan was an agent of the said Shepard, employed by him to travel and solicit orders for pictures and [187 U.S. 622, 629] frames, upon a salary; that upon receiving orders for pictures and picture frames, the agents of Shepard forwarded the same to him at Chicago, where the goods were made, and from there shipped to the purchasers in Titusville by railroad freight and express, and the price of said goods was collected and forwarded by the express companies and sometimes by the agents to said Shepard at Chicago; that Brennan, the agent employed by Shepard, was engaged in conducting the business in the manner stated, at the time of his arrest, and acting solely for Shepard.
Upon such a state of facts, and upon a review of the cases, this court held it was not bound by the decision of the highest court of the state in which such a tax was authorized and imposed that such a tax was an exercise of the police power, and not of the taxing power; and that the ordinance in question imposed a tax upon interstate commerce, and was therefore void. To the argument that no discrimination was made in the ordinance between domestic and foreign drummers, the court said:
The last case we shall cite is the recent one of Stockard v. Morgan, 185 U.S. 27 , 46 L. ed. 785, 22 Sup. Ct. Rep. 576, where was considered the validity of a statute of the state of Tennessee providing for the collection of a privilege tax on the occupation of merchandise brokers. [187 U.S. 622, 630] By agreement of the parties two questions only were argued in the state court: (1) Whether or not the complainants, who had filed a bill to restrain the collection of the tax, were merchandise brokers and subject by the statute to tax as such; (2) whether or not their business constituted interstate commerce, and therefore was beyond the reach of the state's taxing power. The state supreme court held that the complainants, as merchandise brokers, were within the meaning of the statute, and that the tax was a valid one under the Constitution of the United States.
This court, though recognizing that it was obliged to accept the construction put upon the statute by the state court, reversed the judgment of that court in respect to the nature of the commerce as interstate. In the opinion of the court, delivered by Mr. Justice Peckham, the principal cases, beginning with Brown v. Maryland, 12 Wheat. 419, 6 L. ed. 678, and ending with Brennan v. Titusville, were again reviewed, and the conclusions there reached were affirmed.
The state supreme court endeavored to distinguish the present case from that of Brennan v. Titusville, in the following observations:
We are not persuaded by this reasoning. It seems to proceed upon two propositions: First, that the pictures in question were not completed before they were brought to Greensboro; and, second, that the articles were not shipped directly to the purchasers, but to an agent of the senders in Greensboro.
But it certainly cannot be pretended that, if the pictures and the disconnected frames had been directly shipped to the purchasers, the license tax could have been imposed, either on the vendor out of the state, or on the purchaser within the state. If the pictures and the frames intended for them had been shipped directly to the purchasers, whether in the same or separate packages, such a transaction would, beyond question, be interstate commerce beyond the reach of the taxing power of the state. It is too plain for argument that the supposed in- [187 U.S. 622, 632] complete condition of articles of commerce, if shipped directly to the purchasers, cannot subject them to the license tax.
But we are not disposed to concede that, under the facts of this case, the pictures were, in any proper sense, incomplete when received in Greensboro. That the frames and the pictures were in separate packages, if such was the case, was merely for convenience in packing and handling, and 'placing the pictures in their proper places' (the language of the verdict ), meant that each picture was placed in the frame designed for it. The selection of the frame was as much a part of the purchase and sale as the selection of the picture.
Nor does the fact that these articles were not shipped separately and directly to each individual purchaser, but were sent to an agent of the vendor at Greensboro, who delivered them to the purchasers, deprive the transaction of its character as interstate commerce. It was only that the vendor used two instead of one agency in the delivery. It would seem evident that, if the vendor had sent the articles by an express company, which should collect on delivery, such a mode of delivery would not have subjected the transaction to state taxation. The same could be said if the vendor himself, or by a personal agent, had carried and delivered the goods to the purchaser. That the articles were sent as freight by rail, and were received at the railroad station by an agent who delivered them to the respective purchasers, in nowise changes the character of the commerce as interstate.
Transactions between manufacturing companies in one state, through agents, with citizens of another, constitute a large part of interstate commerce; and for us to hold, with the court below, that the same articles, if sent by rail directly to the purchaser, are free from state taxation, but, if sent to an agent to deliver, are taxable through a license tax upon the agent, would evidently take a considerable portion of such traffic out of the salutary protection of the interstate commerce clause of the Constitution.
It cannot escape observation that efforts to control commerce of this kind, in the interest of the states where the purchasers reside, have been frequently made in the form of statutes and [187 U.S. 622, 633] municipal ordinances, but that such efforts have been heretofore rendered fruitless by the supervising action of this court. The cases hereinbefore cited disclose the truth of this observation.
Upon principle and authority, therefore, we conclude that the judgment of the Supreme Court of North Carolina should be and is reversed, and the cause is remanded to that court to take further proceedings not inconsistent with this opinion.