Texas Transport Terminal Co v. City of New Orleans 1924, 141
Decision Date | 18 February 1924 |
Docket Number | No. 141,141 |
Citation | 264 U.S. 150,44 S.Ct. 242,68 L.Ed. 611,34 A.L.R. 907 |
Parties | TEXAS TRANSPORT & TERMINAL CO., inc., v. CITY OF NEW ORLEANS. Argued Jan. 4-7, 1924 |
Court | U.S. Supreme Court |
Messrs. George H. Terriberry, Joseph M. Rault, and W. W. Young, all of New Orleans, La., for plaintiff in error.
Mr. W. Catesby Jones, of New Orleans, La., for defendant in error.
The city of New Orleans brought this action in a Louisiana state court to recover from defendant (plaintiff in error here) a license tax of $400, imposed for the year 1922, upon its business of steamship agent. The demand was resisted on the ground that the tax was in contravention of the commerce clause of the Constitution of the United States (article 1, § 8, cl. 3), in that it was an interference with and tax upon interstate and foreign commerce. Defendant was regularly employed as agent for four steamship lines, under a contract fixing its compensation on the basis of commissions, calculated upon the gross amount of freight charges collected by it for each company. In addition, defendant occasionally represented other shipowners. All were exclusively engaged in interstate or foreign commerce, and defendant's business was confined solely to representing principals so engaged in such commerce. The service rendered consisted of soliciting and engaging cargo, nominating ships for carrying it, arranging for its delivery on the wharf, issuing bills of lading under the name of shipowner or charterer, arranging for stevedores for loading and discharging cargo, collecting freight charges, paying ships' disbursements, attending to immigration service, and assisting generally in matters of local customs and regulations. Freight moneys collected, after deducting commissions, were remitted to the owners or charterers. As such agent, defendant was authorized to solicit cargo and quote freight rates and to issue receipts in the name of its principal for cargo delivered on the wharf.
Upon these facts the trial court held that defendant's business was local in character and subject to the tax. Upon appeal, this judgment was affirmed by the state Supreme Court. 152 La. 498, 93 South. 751.
The state Supreme Court thus stated the necessity and character of the agent's duties:
This court has had frequent occasion to consider and determine the effect of taxes of the same general character as that here involved, and for present purposes we find it unnecessary to do more than refer to the general and well-established rule, which is that a state or state municipality is powerless to impose a tax upon persons for selling or seeking to sell the goods of a nonresident within the state prior to their introduction therein, Stockard v. Morgan, 185 U. S. 27, 22 Sup. Ct. 576, 46 L. Ed. 785; or to impose a tax upon persons for securing or seeking to secure the trans portation of freight or passengers in interstate or foreign commerce, McCall v. California, 136 U. S. 104, 10 Sup. Ct. 881, 34 L. Ed. 391. The latter decision controls the present case. There the agent of a railroad company was engaged in San Francisco in the business of soliciting and inducing persons to travel from the state of California into and through other states to New York City, over the line of railroad which he represented. It was held that the business of the agent constituted a method of securing passenger traffic for the company, and therefore (136 U. S. 109, 10 Sup. Ct. 882, 34 L. Ed. 391) the tax was one 'upon a means or an occupation of carrying on interstate commerce, pure and simple.' The only difference between that case and this is that there the agent was engaged in seeking interstate passenger business, while here the agent was engaged in seeking interstate and foreign freight business. Plainly, as pointed out in the McCall (136 U. S. 109, 10 Sup. Ct. 882, 34 L. Ed. 391), the principle is the same.
Ficklen v. Shelby County, 145 U. S. 1, 12 Sup. Ct. 810, 36 L. Ed. 601, is relied upon to justify the tax, but quite clearly it does not do so. The facts of that case differ materially from those of the McCall Case and those with which we are here dealing. In the Ficklen Case complainants were general merchandise brokers. They paid the initial tax imposed by the Tennessee law for the year 1887 and received and held throughout the year a general and unrestricted license to do business as such. They thereby became liable, under the statute, to pay an additional privilege tax in part graduated according to the amount of commissions received. It happened that during 1887 the principals of one complainant were wholly nonresident, and those of the other largely so. The opinion pointed out that the fact might have been otherwise then and afterward, since their business was not confined to transactions for nonresidents. At the expiration of the year complainants applied for a renewal of their licenses, which was refused because they had made no return of their commissions and no payment of the tax, as required. In deciding the case, stress was laid upon the fact that they had taken out a license under the law to do a general commission business, had given bond to report their commissions during the year and to pay the required percentage thereon, and, agreeing with the state court, it was said that resort to a judicial remedy could not be had because the authorities had refused to issue a license for the ensuing year without payment of the stipulated tax. Concluding the opinion, it was said:
'What position they would have occupied if they had not undertaken to do a general commission business, and had taken out no licenses therefor, but had simply transacted business for nonresident principals, is an entirely different question, which does not arise upon this record.'
The decision rests largely upon the elements above stated, as was pointed out by Mr. Justice Brewer in Brennan v. Titusville, 153 U. S. 289, 307, 14 Sup. Ct. 829, 834 (38 L. Ed. 719):
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