May Company v. City of New Orleans

• Citation: 44 L.Ed. 1165,20 S.Ct. 976,178 U.S. 496
• Decision Date: 21 May 1900
• Docket Number: No. 332,332
• Parties: F. MAY & COMPANY, Plffs. in Err. , v. CITY OF NEW ORLEANS
• Court: United States Supreme Court

178 U.S. 496

20 S.Ct. 976

44 L.Ed. 1165

F. MAY & COMPANY, Plffs. in Err.,

v CITY OF NEW ORLEANS.

No. 332.

Argued March 6, 7, 1900.

Decided May 21, 1900.

Messrs. D. C. Mellen and J. Ward Gurley for plaintiffs in error.

Messrs. W. B. Sommerville and Samuel L. Gilmore for defendant in error.

Mr. Justice Harlan delivered the opinion of the court:

The plaintiffs in error, a commercial firm in New Orleans, brought this action in the civil district court, parish of Orleans, to prevent the enforcement of certain tax assessments made by the city of New Orleans in the year 1897.

The petition alleged that during the whole of the year 1897 the plaintiffs were engaged in importing for sale foreign goods, upon all of which they paid the duties and imposts levied by the United States;

That the board of assessors for the parish of Orleans assessed them for that year $2,500 on 'merchandise and stock in trade,' and $1,000 under the head of 'money loaned on interest, all credits and all bills receivable, money loaned and advanced or for goods sold, all credits of any and every description;' and——

That such assessments were void for the following reasons: 1. All merchandise and stock in trade had and carried by the plaintiffs during 1897 consisted of dry goods imported by them from foreign countries upon which duties, imposts, and import taxes were levied by the United States and paid by them, and which were sold only in unbroken original packages as imported, and the assessment thereon was in violation of article 1, § 10, paragraph 2, of the Constitution of the United States. 2. All the credits and bills receivable of the firm during that year consisted wholly of sums due on the purchase price of the above merchandise sold in unbroken and original packages as imported, and the assessment thereon was in violation of the same constitutional provision. 3. The assessment of $1,000 upon 'money loaned on interest' was unconstitutional because the plaintiffs at no time during 1897 had any money loaned on interest.

A temporary injunction having been granted against any sale of the plaintiff's property for the taxes in question, the city answered, denying each allegation of the petition.

The only evidence in the case was the testimony of one of the plaintiffs as to the manner in which the company conducted its business. That testimony, using substantially the words of the witness, may be thus summarized:

Representatives of the firm went to Europe and obtained from different manufacturers samples of goods, which were sent to New Orleans and were used by plaintiffs in obtaining what were known as import orders. Besides that method, if any article was thought good they placed what were known as stock orders; that is, they ordered the goods on their own account. But in most cases the firm sold the goods, and did not keep a stock on hand. All their goods were imported, and customs duties were paid on them. They did not handle domestic goods.

They sold the goods in the packages in which they were received, because the bulk of their business was jobbing trade. Two, three, or five hundred packages might be ordered. If the order were for 500 dozen towels, they might come packed 2, 3, or 5 dozen in a package. Such a package was never broken. If a small customer came in they might sell him one package. Itha d often happened that customers desired only a sample, in which case a package might be broken to get it. Upon these samples the importers obtained orders. If an order was given for 500 dozen towels, put up in packages of 5 dozen each when shipped to the firm by the manufacturer in Europe, they would be enclosed in a wooden case. Cases containing such orders might not come to the firm's store at all, but would go directly to the customer unopened. But if there were two or three orders in a case it would be brought to the store, opened, and the different orders taken out. But they never opened any of the packages in the case.

An import order was one placed on samples to be manufactured, and about 65 per cent of the firm's business was done by import orders. They would submit to the buyer a line of samples, and he would give an import order, with the understanding that the goods ordered were to be manufactured, and the delivery of them not made for three or four months. If he placed a stock order it was for goods that were in the store ready for delivery.

Goods were always ordered on the firm's own account. They might receive an order for 200 dozen towels, but give an order on the manufacturer for 500 dozen, for 300 of which they had no order, but which they might sell while in process of manufacture. They were the owners of all goods that came to them upon those orders.

The lace handled by them was put up in cartons or pasteboard boxes, each box containing 12 pieces of lace, each piece 12 yards long. In filling orders a number of these cartons or boxes were put in another box or case by the manufacturer, and so received by the firm. If a case contained only one order it was sent directly to the customer. If the case happened to contain two or more orders it went to the store, where it was opened and the orders separated.

Bobbinet was received in cases containing 30, 40, or 50 packages of 2, 3, or 4 pieces each. If a customer wished to buy bobbinet, he was told that he would have to buy at least one package; that they did not sell one piece only, but in packages. The bulk of the business in bobbinet was directly on import orders. At times 6, 7, or 8 cases which did not come to the store were sold to one firm. Bobbinet was not sold by the case. If more than one order came in a case it was broken open and the orders separated.

The stock of the firm consisted mostly of bobbinet and household lines. They also kept a number of samples of dolls and toys, household linens, towels, sheets, embroideries, and laces.

We here give a part of the examination of the witness: 'Q. Some of which goods were sold in these cartons as you describe, and not in the original packages? A. Some of which were sold out of stock and some on import orders. Q. Let us make that clear. I understand you to say,—let us take this case of cartons of laces. You may order such a quantity of laces as would consist of, say 50 cartons, and the factory ships them to you in a large wooden box? A. The packer does that. The manufacturer does not even put them in a case himself, but gets the packer to do that; and there are certain goods not in the lace line, but in the household linen line which do not come in cases; they come in bales. Q. I want to get a thorough explanation of the way you get at these goods. Say a dozen or more packages of goods are shipped by the manufacturer in a wooden box for convenience, as I understand many of those cases go direct to your customers? A. A great many. Q. And in other cases, where they contain more than one order, the cases are opened by you and the orders separated? A. Yes; but the order is generally sent in the case itself. The goods may be shipped in a wrapper by express. The case does not signify that this is the original package. The original package is the one in which the goods are put up at the factory. If a manufacturer puts up 5 dozen towels in a package, that package is the original package, and if I oen that package I break the original package; but, whether he puts those packages in a case or not, it remains in the original package. The original package is the original wrapper put around the goods at the factory, and is known as such in the trade.'

In reference to 'money loaned on interest, all credits and all bills receivable, money loaned and advanced or for goods sold, all credits of any and every description,' in the assessment, the witness said that the only property possessed by the firm in 1897 of the kind mentioned in those items were bills receivable. Those bills consisted of money due them on sales of imported goods by customers who had given orders which had been filled, but for which they had not paid. Some of these goods were sold out of stock and some on import orders. They had no money loaned on interest in 1897. The firm was continuing to do business in 1898 in the same way as in the previous year.

Upon final hearing the civil district court adjudged that the assessment in question was unconstitutional and void, and the injunction against the city was made perpetual. That judgment having been reversed upon appeal, with directions to dissolve the injunction and dismiss the petition, the contention here is that the plaintiffs in error have been denied rights and immunities secured to them by the Constitution of the United States.

The supreme court of Louisiana, speaking by Mr. Justice Blanchard, said, among other things: 'The question, then, which the case really presents is, What is the 'original package'? Is it the package in which the goods are put up for convenience by the foreign manufacturer, or is it the case, the box, the covering in which the goods so put up by the manufacturer are packed for shipment? Is the manufacturer's package the original package in the legal interpretation, or must that be held to be the original package which is delivered to the carrier for transportation to the desired destination? If the package put up by the manufacturer be the original package, then plaintiffs' objection to the assessment complained of is well taken. If the case or box in which the goods are placed for shipment be the original package, then their case falls.' After referring to some of the adjudged cases, the court said that the authorities supported the contention of the city that the 'original package' in this case must be held to be that in which the goods were shipped to and received by the plaintiffs, and not the smaller packages put up by the manufacturer and packed in the box delivered to the carrier.

If the goods of the plaintiffs were assessed for taxation before they had ceased to be...