American Fertilizing Co. v. Board of Agriculture of North Carolina

• Decision Date: 14 August 1890
• Parties: AMERICAN FERTILIZING CO. v. BOARD OF AGRICULTURE OF NORTH CAROLINA et al.
• Court: U.S. Court of Appeals — Fourth Circuit

43 F. 609

AMERICAN FERTILIZING CO. v. BOARD OF AGRICULTURE OF NORTH CAROLINA et al.

United States Circuit Court, E.D. North Carolina.

August 14, 1890

Before BOND and SEYMOUR, JJ.

SEYMOUR J.

The plaintiff, a citizen and resident of Virginia, brings this suit against the board of agriculture of North Carolina, to perpetually enjoin the latter from enforcing against it the state tax on fertilizers. The act in litigation (Code, Sec 2190, amended and re-enacted in the statute of March 7, 1877) provides, in section 8 of the last-mentioned statute, as well as in the act which it amends, brought forward in the Code that no commercial fertilizers shall be sold or offered for sale until the manufacturer or importer obtain a license from the treasurer of the state, for which shall be paid a privilege tax of $500 per annum for each separate brand. The plaintiff alleges that it is engaged in the manufacture and sale of commercial fertilizers; that it has a large and profitable business in North Carolina, amounting annually to over $25,000 that it has on hand in the state more than $2,000 worth of fertilizers; that defendants have, under the pretext that they are subject to forfeiture for non-payment of such tax, seized a car-load of its fertilizers, and that they threaten that they will seize all fertilizers which plaintiff has shipped, or shall ship, into the state; and will prosecute its agents for misdemeanor in selling its fertilizer without having obtained the license required by the statutes above cited. Plaintiff further avers that unless defendants are restrained, its business will be entirely destroyed, and it will be damaged in a sum exceeding $2,000, and that its goods in excess of $2,000 will be seized by defendants under the provisions of such legislation. Defendants by their answer admit the seizure of the fertilizer, as alleged in the complaint, and aver that the cause of such seizure is the failure and refusal of plaintiff to pay a license tax of $500, as required by the laws of the state. They also admit that, unless restrained by this court, they will continue to make seizures and institute prosecutions against plaintiff's agents, etc., and insist that the tax in question is valid, both as a tax on the trade of selling commercial fertilizers, and further as a police regulation of the state.

The case has been argued at the present term on a motion made by defendant upon the pleadings to dissolve the injunction heretofore granted by the circuit judge. It is claimed at the outset, that the court has no jurisdiction, on the ground that the amount in controversy is less than $2,000. We do not think the subject of the controversy limited to the sum of $500, the tax imposed. The tax is an annual one, and the value to plaintiff of the injunction cannot be measured by the tax of a single year. Moreover, plaintiff asks to be relieved from threatened penalties and from interference with its business, illegal if this tax upon its brand of fertilizers is unconstitutional, the damage to result from which it places at a large sum. The court cannot, at this state of the case, determine that such damages will be less than the sum required to give it jurisdiction. Railroad Co. v. Ward, 2 Black, 485, seems to us in point. It was an action brought for the abatement of a bridge as a public nuisance. To the objection that the damages sustained by plaintiff were not sufficient to give the court jurisdiction, CATRON, J., says:

'The character of the nuisance and the sufficiency of the damage sustained is to be judged by the courts; but the want of a sufficient amount of damage having been sustained to give the federal court jurisdiction will not defeat the remedy, as the removal of the obstruction is the matter in controversy, and the value of the object must govern.'

In the southern district of New York, a suit brought to restrain the maintenance of an awning over a part of Great Jones street, having been removed to the circuit court, a motion to remand was made, on the ground that the matter in dispute did not exceed $500. The court in denying the motion said:

'The matter in dispute is the value of the right to maintain the awning, not the amount of damages done by it to plaintiff. This appears to be more than $500." Whitman v. Hubbell, 30 F. 81.

And in the same court, in an action for infringement of a trade-mark, WHEELER, J., says:

'There would be difficulty in maintaining the jurisdiction if the profits to be recovered were the measure of the orator's rights involved; but that is not so understood. An injunction may be of much greater value to the orator than any amount he may show himself entitled to, and it cannot be said now that such value may not exceed the limit required. ' Symonds v. Greene, 28 F. 834.

We are therefore of the opinion that the amount in controversy is not below that required to give jurisdiction.

The main question is whether or not the tax is unconstitutional. No doubt a state may tax any person for the privilege of doing any particular business therein, unless prevented by some section of the constitution of the United States. McCulloch v. Maryland, 4 Wheat. 316, 429.

The contention of the plaintiff is that it cannot be taxed, under the provisions of the legislation above set forth, because (1) such taxation infringes upon the rights of citizens of other states, and therefore violates article 4, Sec. 2, of the constitution, which provides that 'the citizens of each state shall be entitled to all privileges and immunities of citizens in the several states;' and also article 14, Sec. 1, of the amendments to the constitution, which provides, among other things, that 'no state shall make any law which shall abridge the privileges or immunities of citizens of the United States.' (2) Because such taxation is an impost on imports, and therefore violates article 1, Sec. 10, of the constitution, which provides, among other things, that 'no state shall, without the consent of the congress, lay any imposts or duties on imports * * * except what may be absolutely necessary for executing its inspection laws.' (3) Because such taxation is an interference with interstate commerce, and therefore violates article 1, Sec. 8, which provides that the congress shall have power 'to regulate commerce * * * among the several states.'

1. We do not find anything in the legislation in question which brings it within the inhibitions in either section 2, art. 4, of the constitution, or in the fourteenth amendment thereto. No privilege with regard to the sale of commercial fertilizers seems given by the act to any citizen of North Carolina which is denied to the plaintiff, and, unless this be attempted, it can hardly be said that it is deprived of any privilege or immunity which it is entitled to under the constitution, within the meaning of these constitutional provisions.

2. Although the statute in question does not in words impose a tax on fertilizers imported into the state, but one on the privilege of selling or offering them for sale only, it is not now admissible to argue that the latter is not equivalent to the former. That question was settled in Brown v Maryland, 12 Wheat. 419. A statute of Maryland required all importers of foreign articles, or other persons selling the same by wholesale, to pay a license tax. The question was whether the imposition of such a tax was a violation of the two first-mentioned provisions of the constitution...