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manufacture of the state. Walling v. Michigan, 116 U. S. 446, 6 Sup. Ct. 454, is another case in which a statute imposed a tax on nonresidents, or their representatives, for selling liquor in the state, which discriminated in favor of citizens of the state of Michigan. It is clear that these decisions cannot be relied upon to show that the Virginia license law is unconstitutional because it discriminates in favor of residents, and against nonresidents, of the state. The statute makes no such discrimination. It requires the same license tax of an agent who engages in the business of selling manufactured implements or machines, whether he be a citizen of Virginia or of another state. The cases above cited establish what enactments in license tax laws are discriminations in favor of the citizens of the state enacting such laws, and against the citizens of sister states, and are therefore invalid, as impinging upon the provision of the constitution of the United States regulating commerce among the states. The decisions of the supreme court of the United States are equally clear and conclusive as to certain provisions in state tax laws which are not in conflict with the commercial clause of the United States constitution. Machine Co. v. Gage, 100 U. S. 676, was a case in which the plaintiff was a corporation of the state of Connecticut. It manufactured sewing machines at Bridgeport, in that state, and had an agency at Nashville, in the state of Tennessee. From the latter place an agent was sent into Sumpter county, in that state, to sell machines there. A tax was demanded from him for a peddler's license to make such sales. He denied the validity of the law. under which the tax was claimed. The Tennessee law fixed a tax upon peddlers of sewing machines. The sewing machines were manufactured in Connecticut. The supreme court of Tennessee held that the law taxing the peddler of such machines levied the tax on all peddlers of sewing machines, without regard to the place of manufacture. The supreme court of the United States sustained the decision, the court saying:
“In all cases of this class to which the one before us belongs, it is a test question whether there is any discrimination in favor of the state, or of the citizens of the state, which enacted the law. Wherever there is such discrimination, it is fatal. Other considerations may lead to the same result.". “In the case before us the statute in question, as construed by the supreme court of the state, makes no such discrimination. It applies alike to sewing machines manufactured in this state and out of it. The exaction is not an unusual or an unreasonable one. The state, putting all such machines upon the same footing with respect to the tax complained of, has an unquestionable right to impose the burden."
It is sought by counsel for complainant to bring this case within the scope of the decision of the United States supreme court in Robbins v. Shelby Co. Taxing Dist., 120 U. S. 489, 7 Sup. Ct. 592. .
The statute of Tennessee imposed a tax on all drummers, and all persons not having a regular licensed house of business in Shelby taxing district. The facts, as stated in that case, were: Robbins was a citizen and resident of Cincinnati, Ohio, and was engaged in the business of drumming in the taxing district of Shelby county, Tenn., i. e. soliciting trade, by the use of samples, for the house or firm
for which he worked as a drummer; said firm doing business in Cincinnati, where all the members thereof lived. The question was as to the constitutionality of the act which imposed the tax on drummers, and the court held that it was not competent for a state to levy a tax, or impose any other restriction, upon the citizens or inhabitants of other states, for selling, or seeking to sell, their goods in such state, before they were introduced therein. We have numerous decisions in the federal courts to the same effect. But the facts in the case now before this court do not bring it in line with that class of cases. The evidence in this case shows these facts: The complainant in July, 1892, sent its agents (eight or ten of them) into Wythe county, with eight teams and wagons. In a few days afterwards there arrived at the Wytheville depot, in said county, two car loads of implements known as the “American Harrow.” That these harrows were taken from the cars by these eight or more men, who represented themselves to be agents of the American Harrow Company, and stored in a building in the said town of Wytheville. That these men then loaded their eight wagons with two harrows each, and proceeded to sell and offer to sell the same throughout the county of Wythe, and when a sale was made of a harrow they delivered to the purchaser one of the harrows which they had on their wagons. That when a license tax was demanded of them they declined to pay the same, saying they were exempt from said tax by the interstate commerce law, the said harrows being manufactured in the state of Michigan. That afterwards, when told by the commissioner of the revenue that unless the tax was paid as prescribed by section 109 of the revenue law of the Acts of Assembly of 1889–90, fixing the amount of tax to be paid by agents for the sale of manufactured implements, he would be compelled to collect the same by law, they still declined to pay the same, but expressed a willingness to pay the license tax prescribed by section 28 of said revenue law, imposing a tax upon merchants. On this statement of facts, these men do not come within the class of mercantile agents styled “drummers” or sample merchants selling, on orders, goods in another state, to be thereafter forwarded and delivered to the purchaser in the state where sold. The facts place them on a footing with citizens of the state selling goods that are within the state at the time of sale. In Webber's Case, 33 Grat. 898, the court says:
"And while it is conceded to be no easy task precisely to define when the privilege of the sample merchant begins, or when it terminates, it is very clear that a person, whether he be owner or agent, who has a place of business in a county or town, and there sells and delivers the articles at the time of sale, or a person who carries his goods from place to place, and sells and delivers the articles at the time of sale, is not selling by sample, card, or description. Such a person may be a retail merchant or a peddler, but he is not a sample merchant."
In the case cited by counsel for complainant (Robbins v. Shelby Co. Taxing Dist., 120 Ú. S. 498, 7 Sup. Ct. 592), the court held that the negotiation of sales of goods which are in another state, for the purpose of introducing them into the state where the negotiation is made, is interstate commerce. In the same case the court said:
"As soon as the goods are in the state, and become a part of its general mass of property, they will become liable to be taxed in the same manner as other property of similar character."
The court held the same doctrine in Brown v. Houston, 114 U. S. 622, 5 Sup. Ct. 1091. In Machine Co. v. Gage, 100 U. Š. 676, the court said:
"Where goods are sent from one state to another for sale, or in conséquence of a sale, they become part of its general property, and amenable to its laws, provided that no discrimination be made against them, as goods from another state, and that they be not taxed by reason of being brought from another state, but only taxed in the usual way, as other goods are.”
Applying the principles so distinctly stated in these decisions to the facts in this case, no other conclusion can be reached than that the agents of the complainant were not engaged in selling harrows by sample, taking orders therefor, the orders to be sent to their principal, in the state of Michigan, and the harrows so sold on orders forwarded to the purchasers. Had this been the course pursued by these agents, no question could have arisen as to their liability to pay the license tax demanded of them. They would clearly have been exempt from such tax. But when the plaintiff shipped its harrows by car loads from the state of Michigan into the state of Virginia, deposited these goods in a warehouse in the town of Wytheville, and then, through its agents, loaded them on wagons, sent them through the country, selling and delivering them to purchasers from the wagons, it cannot be claimed that they were engaged in interstate commerce. These goods were completely severed from the general property of the state of Michigan, were sent to the state of Virginia for sale, were commingled with the general property of the latter state, and subject to her laws.
The plaintiff's agents, in selling these goods in the manner they did, were as clearly amenable to a license tax as if they had been engaged, as agents, in selling implements and machinery manufactured in the state of Virginia. Having refused to pay the license tax, they subjected themselves to the penalty fixed by the statute, to recover which the suits were brought in the state court, the prosecution of which this court is asked to perpetually enjoin.
The contention that the Virginia statute violates article 4, § 2, of the constitution of the United States, which declares that “the citizens of each state shall be entitled to all the privileges and immunities of citizens of the several states,” cannot be sustained. The statute makes no discrimination in favor of citizens of Virginia, and against the citizens of other states. It does not violate the privileges and immunities of the complainant and its agents, as citizens of another state engaged in business pursuits in this state, but imposes upon them the same burden of taxation, and none other, that it places upon the citizens of Virginia.
Equally untenable is the proposition that the Virginia statute is in conflict with the fourteenth amendment, § 1, of the federal constitution, which provides that "no state shall make or enforce any law which shall abridge the privileges and immunities of citizens of the United States nor deny to any person within its jurisdiction the equal protection of the laws.” In view of what the court has already said on other points presented in the case, no discussion of this question is necessary. The injunction will be dissolved, with costs to the defendants.
BOSTON SAFE-DEPOSIT & TRUST CO. v. HUDSON.
(Circuit Court of Appeals, Fourth Circuit. May 28, 1895.)
JUDGMENTS-PRIORITY OVER MORTGAGES-NORTH CAROLINA STATUTES.
Under the North Carolina Code, which provides, in section 685, that conveyances by corporations, whether absolute or by way of mortgage, shall be void as to existing creditors and torts previously committed, provided such creditors or persons injured shall commence suit within 60 days after the registration of the deed; and, in section 1255, that mortgages by corporations shall not exempt their property from executions on judgments for labor or materials furnished, or for torts by which any person is killed or person or property injured,-a judgment against a railroad company for a tort causing injury to the person is superior to a mortgage executed after the tort was committed, though the action was not brought within 60 days from the registration of the mortgage. Appeal from the Circuit Court of the United States for the District of South Carolina.
This was an application by H. T. Hudson, Jr., for payment to him, out of the proceeds of sale under foreclosure of the Charleston, Cincinnati & Chicago Railroad, of the amount of a judgment ob
, tained by him against the railroad company. The circuit court granted the application. 61 Fed. 369. The Boston Safe Deposit & Trust Company, the plaintiff in the foreclosure suit, appeals. Affirmed.
This is an appeal from the decree of the circuit court ordering a judgment of the appellee, Hudson, to be paid out of the proceeds of the sale of the Charleston, Cincinnati & Chicago Railroad in preference to the claim of the first-mortgage bondholders. Hudson, while in the employ of the railroad corporation in the state of North Carolina, was injured April 29, 1887. He entered suit against the corporation October 13, 1887. In that suit judgment of nonsuit, in invitum, was entered against him at the August term, 1858. On October 2, 1888, he entered a second suit, in which he recovered judgment for $1,500 and costs. The railroad corporation, on August 9, 1887, after the injury to Hudson, executed a mortgage to secure a large issue of first-mortgage bonds, which was recorded October 8, 1887. Default having been made in the payment of the interest on the bonds, a decree of foreclosure was entered in this cause, and the railroad property sold. There were no earnings, and the proceeds of the sale were largely insufficient to pay the bonds. Hudson filed his judgment in this case, claiming that, by virtue of the statutes of North Carolina, he was entitled to be paid lis judgment in preference to the holders of the mortgage bonds. The dates are as follows: Hudson was injured April 29, 1887; his first suit was commenced October 13, 1887; the mortgage is dated August 3, 1887; the mortgage was recorded October 8, 1887; his second suit was commenced October 2, 1888. The circuit court, by its decretal order, adjudged that Hudson's claim, by the statutes of North Carolina, had priority over the bonds secured by the mortgage, and directed his claim to be paid. To reverse that decree this appeal was taken.
A. M. Lee, of Smythe & Lee, and Platt D. Walker, of Walker & Cansler, for appellant.
Julian Mitchell, for appellee.
Before GOFF, Circuit Judge, and HUGHES and MORRIS, District Judges. MORRIS, District Judge (after stating the facts). Whether or
) not Hudson's claim for personal injury was entitled to be paid in preference to the debt secured by the mortgage depends upon the effect to be given to two sections of the North Carolina Code which was adopted in 1883. In adopting this Code, the legislature of North Carolina repealed all other statutes and declared that it should be construed as one act, and as if enacted on one day. The first section is found under the head “Corporations,” and is as follows:
“Sec. 685. How Corporations may Convey by Deed; Void as to Existing Creditors. R. C., c. 26, s. 22, 1798, c. 514, s. 4. Any corporation may convey lands and all other property which is transferable by deed by deed of bargain and sale, or other proper deed, sealed with the common seal and signed by the president or presiding member or trustee, and two other members of the corporation, and attested by witnesses. But any conveyance of its property, whether absolutely or upon condition, in trust, or by way of mortgage executed by any corporation, shall be void and of no effect as to the creditors of the said corporation, existing prior to or at the time of the execution of said deed, and as to torts committed by such corporation, its agents or employés, prior to or at the time of the execution of said deed; provided said creditors or persons injured or their representatives, shall commence proceedings or actions to enforce their claims against said corporation within sixty days after the registration of said deed, as required by law.”
The second section is found under the head "Deeds and Conveyances," and is as follows:
“Sec. 1255. Property of Corporations not Exempt from Certain Liabilities on Account of Mortgages, 1879, c. 101. Mortgages of incorporate companies upon their property or earnings, whether in bonds or otherwise, hereafter issued, shall not have power to exempt the property or earnings of such corporations from executions for the satisfaction of any judgment obtained in courts of the state against such incorporation for labor performed, nor for material furnished such incorporation, nor for torts whereby any person is killed, or any person or property injured, any clause or clauses in such mortgage to the contrary notwithstanding."
The contention of the appellant is that Hudson's claim, being for a tort committed by the railroad corporation prior to the execution of the mortgage, comes within the proviso of section 685, and does not have priority over the mortgage unless Hudson's action to enforce his claim was commenced within 60 days after the recording of the mortgage, and that, although Hudson's first action was so commenced, as he was nonsuited in that action and did not commence the action in which the judgment now filed was obtained until one year after the recording of the mortgage, he has not brought himself within the terms of section 685. The contention of the appellant as to section 1255 is that it applies only to torts which nerur after the execution of a mortgage by a corporation, and therefore not to the tort for which Hudson obtained his judgment. The circuit court held (Simonton and Brawley, JJ., 61 Fed. 369) that section 1255 applied to all claims for labor, materials, or torts against a corporation, whether incurred before or after the execution of a mort
a gage, and that its beneficial provisions were not to be limited by the