Sears, Roebuck & Co. v. Roddewig

• Decision Date: 29 August 1938
• Docket Number: No. 4646.,4646.
• Citation: 24 F. Supp. 321
• Parties: SEARS, ROEBUCK & CO. v. RODDEWIG et al.
• Court: U.S. District Court — Southern District of Iowa

24 F. Supp. 321

SEARS, ROEBUCK & CO. v. RODDEWIG et al.

No. 4646.

District Court, S. D. Iowa, Central Division.

August 29, 1938.

Joseph G. Gamble, of Des Moines, Iowa (Ralph L. Read, Alden B. Howland, and Joseph F. Rosenfield, all of Des Moines, Iowa, on the briefs), for complainant.

Charles Bookin, Sp. Asst. Atty. Gen., and Charles W. Wilson, Asst. Atty. Gen. (John M. Mitchell, Atty. Gen., on the briefs), for defendants.

Before SANBORN, Circuit Judge, and DEWEY and BELL, District Judges.

DEWEY, District Judge.

This suit came on for hearing in open court at Des Moines, Iowa, on June 20, 1938, before a statutory three-judge court duly assembled, to hear the application for a temporary injunction. By agreement the motion to dismiss was submitted to be determined at the time the court considered the evidence on the merits. Evidence was introduced, arguments had and on June 21, 1938, also by agreement, the suit was submitted to be determined, subject to the motion, as a final hearing.

The court is abidingly convinced that the suit will have to be dismissed for lack of jurisdiction presented in the motion, but for the purpose of perfecting the record in the event an appellate court would care to pass upon the merits, this court by reference makes the following findings of fact:

The Facts.

Part of the evidence was by stipulation and those facts are accepted as established facts in the case. Oral and record evidence was also introduced and there is little, if any, dispute in that evidence. Also, to shorten the record, the court adopts as its findings of fact the following facts which were at the suggestion of the court kindly presented by the parties. Of these facts in the nature of requested findings of fact, we adopt the following submitted by the complainant and of record in the case:

Paragraphs or Items 1, 2, 4, 5, 7, 8, 9 and 10.

We also adopt as true and correct the copy of the Personal Property "Use Tax" Act attached to complainant's original petition and marked Exhibit A.

The short facts are:

The complainant is a corporation organized under the laws of the State of New York, engaged in the business of retail merchandising. For many years it had sold property under a catalogue system of advertising its wares by mail through its principal operating office in the city of Chicago, Ill. Later it established retail stores and now has in the State of Iowa approximately 13 retail establishments, but conducts its mail order business as heretofore. Its main distributing places of business for such sales by catalogue are at Chicago and Minneapolis, Minn. The method of its mail order sales is set out in a stipulation and agreement of facts, as follows:

"Type 3. Mail Order Sales. In this type of sale the purchaser, a resident or person in Iowa, after preparing his order or having it prepared for him, sends to one of complainant's mail order establishments located outside of Iowa a written order for the purchase and delivery to him in Iowa of one or more items of tangible personal property listed and priced in complainant's mail order catalogue, the order being accompanied by the remittance of the purchase price plus transportation being charges, and the means of transportation being customarily specified by the purchaser. The order is accepted or rejected, as the case may be, at the mail order establishment of complainant which receives the order; and if the order is accepted it is filled by the direct shipment of the property purchased from said mail order establishment to the purchaser in the State of Iowa, delivery being accomplished through the United States mails or some common carrier of goods, such as specified by the purchaser."

In 1937 the State of Iowa reenacted a retail sales tax act, Acts 47th Gen.Assem. Iowa, c. 196, which was effective by publication on April 1, 1937, providing for a tax of 2 per cent. on sales of tangible personal property made within the State of Iowa, and the same general assembly also passed as a complement thereto a "Use Tax" Act, Acts 47th Gen.Assem. Iowa c. 198, effective by publication on April 16, 1937. This latter act provides for a similar tax to that provided by the sales tax in amount on the use of any tangible personal property purchased on or after the effective date of the Act, but exempts from such tax property which has already paid the tax to Iowa or any other state with respect to its sale and use. Section 8 of the Act provides as follows:

"Sec. 8. Every retailer maintaining a place of business in this state and making sales of tangible personal property for use in this state, not exempted under the provisions of section three hereof nor collectible under the provisions of section six hereof, shall at the time of making such sales, whether within or without the state, collect the tax imposed by this act from the purchaser, and give to the purchaser a receipt therefor in the manner and form prescribed by the board, if the board shall, by regulation, require such receipt. Each such retailer shall list with the board the name and address of all his agents operating in this state, and the location of any and all his distribution or sales houses or offices or other places of business in this state."

And Section 21 is as follows:

"Sec. 21. Whenever any retailer maintaining a place of business in this state, or authorized to collect the tax herein imposed pursuant to section nine hereof, fails to comply with any of the provisions of this act or any orders, rules, or regulations of the board prescribed and adopted under this act, the board may, upon notice and hearing as hereinafter provided, by order revoke the permit, if any, issued to such retailer under section eleven (11) of Senate File 316, acts of the Forty-seventh General Assembly, or if such retailer is a corporation authorized to do business in this state under chapter three hundred eighty-six (386), code 1935, may certify to the secretary of state a copy of an order finding that such retailer has failed to comply with certain specified provisions, orders, rules or regulations. The secretary of state shall, upon receipt of such certified copy, revoke the permit authorizing said corporation to do business in this state, and shall issue a new permit only when such corporation shall have obtained from the board an order finding that such corporation has complied with its obligations under this act. No order authorized in this section shall be made until the retailer is given an opportunity to be heard and to show cause why such order should not be made, and he shall be given ten days notice of the time, place, and purpose of such hearing. The board shall have the power in its discretion to issue a new permit pursuant to section eleven of senate file 316, acts of the Forty-seventh General Assembly, after such revocation."

By Section 22 the Iowa State Board of Assessment and Review is charged with the enforcement of the provisions of the Act.

Sears, Roebuck and Company entered the State of Iowa about the year 1928 and commenced to operate its retail merchandise business therein, and prior to commencing such business duly qualified as a foreign corporation by paying the license fee then exacted in complying with the act as a non-resident corporation.

One of the statutes of the State of Iowa in force at the time complainant entered the State of Iowa provided as follows: "8376. Legislative control. The articles of incorporation, by-laws, rules and regulations of corporations hereafter organized * * * shall at all times be subject to legislative control, * * * and every franchise obtained, used, or enjoyed by such corporation may be regulated, withheld, or be subject to conditions imposed upon the enjoyment thereof, whenever the general assembly shall deem necessary for the public good." Code of Iowa, 1935.

The complainant has not attempted to or collected the use sales tax on its catalogue business as described above and has refused to comply with the law insofar as it affects such catalogue business. By reason of such act or failure to act on the part of the complainant, the Iowa State Board of Assessment and Review passed a resolution at its meeting held on the 30th day of March, 1938, wherein, after reciting the failure and neglect of the company to make such collection, it...