Adkins v. City Of Richmond

• Decision Date: 08 February 1900
• Citation: 98 Va. 91,34 S.E. 967
• Parties: ADKINS et al. v. CITY OF RICHMOND.
• Court: Virginia Supreme Court

34 S.E. 967

98 Va. 91

ADKINS et al.

v.CITY OF RICHMOND.

Supreme Court of Appeals of Virginia.

Feb. 8, 1900.

APPEAL—CONSTITUTIONAL QUESTION—JURISDICTION — CONSTITUTIONAL LAW — MUNICIPAL ORDINANCE—INTERSTATE COMMERCE.

1. Refusal of instructions intended to invoke the protection of the commerce clause of the federal constitution sufficiently raises a constitutional question to give the appellate court jurisdiction.

2. A city ordinance requiring a resident sales agent for nonresident principals to pay a license tax for the privilege of prosecuting his business, confined exclusively to the negotiation of sales by the exhibition of samples of goods which are in other states, is a regulation of interstate commerce, and therefore void, as repugnant to Const. U. S. art. 1, § 8, el. 3, giving congress the power to regulate commerce among the several states.

Error to hustings court of Richmond.

Action by city of Richmond against Adkins & Co. From a judgment for plaintiff, defendants bring error. Reversed.

S. S. P. Patteson, for plaintiffs in error.

H. R. Pollard, for defendant in error.

RIELY, J. The question involved in this case is the validity of the license tax imposed by the city of Richmond upon the plaintiff in error as a merchandise broker, and for the nonpayment whereof he was prosecuted and fined.

It was objected by the counsel for the city that this court was without jurisdiction of the ease, upon the ground that the record does not specially show that the tax was impugned on constitutional grounds. We are not aware of any requirement that it must specially appear in the record by some appropriate plea or other proceeding that the constitutionality of an act of the legislature, or an ordinance of a municipal corporation, or of any other matter involved in the litigation, was raised and decided by the lower court in order to call forth the jurisdiction of this court upon that ground. On the contrary, the constitutionality of a law has been repeatedly passed upon on a general demurrer to the pleading in the lower court, and even where the question was raised for the first time in the petition to this court for the writ of error. Speer v. Com., 23 Grat 935; McCready v. Com., 27 Grat. 985; Brown's Case, 91 Va. 762, 21 S. E. 357, 28 L. R. A. 110; and Southern Exp. Co. v. Com., 92 Va. 59, 22 S. E. 809, 41 L. R. A. 436.

The jurisdiction of this court must affirmatively appear from the record, but it does so appear when the court can see that the judgment of the lower court necessarily involved the constitutionality of some statute or ordinance, or drew in question some right under the federal or state constitution. Any proceeding which necessarily puts its validity in issue, whether it be a demurrer, plea, instructions, or otherwise, is sufficient to give this court jurisdiction of the case.

The authorities relied upon by the counsel for the city for his contention were all, with a single exception, cases of the supreme court of the United States, where the rule invoked unquestionably prevails, but that is because that court by express statute has jurisdiction to review a judgment of a state court only when the record shows that some right under the federal constitution or authority of the United States was "specially set up or claimed, " and denied by the state court. Chicago & N. W. R. Co. v. City of Chicago, 164 U. S. 454, 17 Sup. Ct. 129, 41 L. Ed. 511; Oxley Stave Co. v. Butler Co., 166 U. S. 648, 17 Sup. Ct. 709, 41 L. Ed. 1149; and Rev. St. U. S. § 709.

Upon the trial of the case the plaintiff in error asked the court to instruct the jury as follows:

"If they shall believe from the evidence that Thomas Adkins, trading under the name of Thomas Adkins & Co., only carried on business as a resident sales agent for nonresident principals, and that his employment is exclusively confined to representing nonresident principals in the negotiations of the sales of goods which are in other states, then they must find for the defendant Adkins." But the court refused so to instruct the jury, whereupon a bill of exceptions was duly taken to its ruling.

While the instruction does not, in terms, refer to the commerce clause of the federal constitution, it is manifest that the defendant intended by the instruction asked for to invoke its protection, and that the court, by refusing to give the instruction, decided that the business of a resident sales agent, though limited exclusively to nonresident principals, was not within the protection of article 1, § 8, cl. 3, of the constitution of the United States. This was the question presented to and decided by the lower court against the contention of the defendant. The record, therefore, shows affirmatively that the validity of the tax was directly drawn in question, and that this court has jurisdiction of the case.

The evidence in the record shows that the plaintiff in error is a citizen and resident of the city of Richmond, Va.; that his occupation is soliciting orders in Richmond by personal application and by the exhibition of samples solely for nonresident merchants, who are his principals; that his employment is confined exclusively to the negotiation of sales of goods which are not in the state of Virginia, but in other states; that for the period for which the license tax was assessed against him, and for a long time prior thereto, he had not conducted any other business; that when he secures an order he reports it to his principal, who, if the sale and credit are satisfactory, fills the order by shippingthe goods to the resident merchant; that no settlements are made through the agent, but by the resident merchant directly with the agent's nonresident principals, who remit to him the small commission which is his compensation for negotiating the sale; and that he has no storehouse or warehouse, but simply rents a room in the city of Richmond, in which he keeps his samples and conducts his correspondence.

The tax which the defendant refused to pay, and for the nonpayment whereof he was prosecuted and fined, was imposed on him under an ordinance of the city prescribing a license tax for the privilege of prosecuting the business of a broker. The ordinance does not define the term "broker, " or explain the sense in which it was used. A commercial broker is defined in the revenue statutes of the state to be. among other things, one who negotiates the sale of merchandise without possession or control of it as commission merchants have of it in their business (Acts 1889-90, p. 226, c. 244, § 64); and a broker, without special designation, is defined in the text-books to be "an agent employed to make bargains and contracts between other persons in matters of trade, commerce, or navigation, for a compensation commonly called 'brokerage.' " Story, Ag. § 28, and 4 Am. & Eng. Enc. Law (2d Ed.) 960.

Tested by these definitions, the defendant was conducting the business of a broker in the city of Richmond, in violation of its ordinance, in that he had not paid, and refused to pay, the license tax required for the privilege of prosecuting such business. The question is, therefore, directly presented whether the ordinance under which the tax was assessed against him is, as respects the special and limited business of a broker, followed by the defendant, a regulation of interstate commerce, and therefore void, on account of its repugnancy to article 1, § 8, cl. 3, of the federal constitution.

The supreme court of the United States, which is the authoritative and final arbiter of all questions arising under the constitution of the United States, has repeatedly declared that "no state has the right to levy a tax on interstate commerce in any form, whether by way of duties laid on the transportation of the subjects of that commerce, or on the receipts from that transportation, or on the occupation or business of carrying it on, for the reason that such taxation is a burden on that commerce, and amounts to a regulation of it, which belongs solely to congress." Lyng v. Michigan, 135 U. S. 165, 10 Sup. Ot. 725, 34 L. Ed. 128, and Leloup v. Port of Mobile. 127 U. S. 640, 648, 8 Sup. Ct. 1380, 32 L. Ed. 311, and cases there cited. It follows, of course, that, as a state cannot levy such a tax, a municipal corporation—a creature and agency of the state—cannot do so.

In Brown v. Maryland, 12 Wheat. 419, 444, 6 L. Ed. 678, in which a law of the state requiring an importer to take out a license and pay $50 before he should be permitted to sell a package of imported goods, was declared unconstitutional, Chief Justice Marshall said: "But, If it should be proved that a duty on the article itself would be repugnant to the constitution, it is still argued that this is not a tax upon the article, but upon the person. The state, it is said, may tax occupations, and this is nothing more. It is impossible to conceal from ourselves that this is varying the form without varying the substance. It is treating a prohibition, which is general, as if it were confined to a particular mode of doing the forbidden thing. All must see that a tax on the sale of an article which is imported only for sale is a tax on the article itself. * * * So a tax on the occupation of an importer is, in like manner, a tax on importation. It must add to the price of an article, and be paid by the consumer, or by the importer himself, in like manner as a direct duty on the article itself would be made."

In Welton v. Missouri, 91 U. S. 275, 278, 23 L. Ed. 347, the same principle was announced. It was there said by Mr. Justice Field: "Where the business or occupation consists in the sale of goods, the license tax required for its pursuit is, in effect, a tax upon the goods themselves. If such a tax be within the power of the state to levy, it matters not whether it be raised directly from the goods or indirectly from them through the license to the dealer; but, if such tax conflict with any power vested in congress by the constitution of...