American Harrow Co. v. Shaffer

• Decision Date: 26 January 1895
• Citation: 68 F. 750
• Parties: AMERICAN HARROW CO. v. SHAFFER et al.
• Court: U.S. Court of Appeals — Fourth Circuit

68 F. 750

AMERICAN HARROW CO. v. SHAFFER et al.

United States Circuit Court, W.D. Virginia.

January 26, 1895

Blair &amp Blair, for complainant.

R Taylor Scott, Atty. Gen. for Va., for defendants.

PAUL District Judge.

This is a motion to dissolve an injunction awarded on the 3d day of August, 1892, on behalf of the complainant against Joseph B Shaffer, commissioner of the revenue for Wythe county, Va G. W. Repass, treasurer; J. L. Gleaves, commonwealth's attorney; and J. R. Harkrader, sheriff of said county,--restraining said officers from proceeding in the circuit court of Wythe county to collect the statutory penalty for nonpayment of certain license taxes alleged to be due the commonwealth of Virginia by the complainant and its agents. The tax complained of was assessed under the tax law of Virginia (Acts 1889-90, p. 240, Secs. 108, 109), which provides as follows:

'Sec. 108. Any person who shall sell or offer for sale manufactured implements, or machines by retail, other than sewing machines, unless he be the owner thereof and duly licensed as a merchant, or takes orders therefor on commission or otherwise, shall be deemed to be an agent for the sale of manufactured articles, and shall not act as such without taking out a license therefor. No such person shall, under his license as such, sell or offer to sell such articles through the agency of another, but a separate license shall be required for any agent or employe who may sell or offer to sell such articles for another. For any violation of this section the person offending shall pay a fine of not less than fifty dollars nor more than one hundred dollars for each offense.

'Sec. 109. Every agent for the sale of manufactured implements or machines, other than sewing machines, shall pay for the privilege of transacting such business the sum of thirty dollars, and this shall give to any party licensed under this section the right to sell the same within the county or corporation in which he shall take out his license. And if he shall sell or offer to sell the same in any other of the counties or corporations of the state, he shall pay an additional sum of ten dollars in each of the counties or corporations where he may sell or offer to sell the same: provided that any person who shall pay an annual tax to the commonwealth upon capital actually employed by him in the manufacture of these articles or machines mentioned in this section of not less than thirty dollars per annum, may without anything further being paid for the privilege by himself or his agents, employ agents to sell said articles or machines manufactured by him in any of the counties or corporations of the state; and the certificate of the treasurer of the county or corporation in which said tax shall be paid by such person on the capital so employed by him in the manufacture of such articles or machines shall be evidence of the fact and the amount of tax so paid by him to the state thereon.'

The bill alleges that the complainant is a corporation organized under the laws of the state of Michigan, and a citizen of that state, engaged in the business of selling implements and machines manufactured by it in the state of Michigan, by retail and otherwise, by its agents; that it manufactures a combined harrow, cultivator, and seeder; that on the 16th day of July, 1892, it sent its agents into Wythe county to sell said implements by sample, and to deliver the same; that while its agents were so engaged the tax complained of was assessed against them; that its mode of doing business was as follows:

'Your orator, by its agents, travels through the country with its wagons containing samples of its implements, and its agents solicit orders for the sale of the same, and when said orders are given and said orders are approved by your orator, or its general manager here (Wythe county), then the order is filled, and the implements delivered to the purchaser, who either pays cash for it or executes his note for the same.'

The defendants answer the bill under oath, and in their answer say:

'Respondents deny all, each, and every allegation of the bill touching complainant's business in the county of Wythe, and the manner in which said business is and was carried on and conducted.'

Further answering, these respondents say the--

'American Harrow Company brought and had shipped to the county of Wythe manufactured articles, such as harrows, etc., commingled said articles with the property of the county, stored them in houses, depots, and other places, and then proceeded to sell and offer for sale said articles without having first obtained the license prescribed by law for the business in the manner and form set out in the revenue laws enacted by the general assembly of Virginia.'

And, in consequence of the complainant's agents failing to obtain such license, actions were instituted in the circuit court of Wythe county.

The defendants Gleaves and Shaffer file a statement of facts which counsel for complainant agree may be read and used as affidavits, without notice, and with the same effect as though in the form of depositions. The statement is as follows:

'The following statement of facts is submitted by counsel for defendants as the facts in the above suit: In the year 1892 there came to Wythe county, Virginia, eight or ten men, bringing with them eight pairs of horses and wagons. That in a few days afterwards there arrived at the Wytheville depot one or more car loads of American harrows. That these harrows were taken from the cars by these eight or more men, who represented themselves to be agents of the American Harrow Company, and stored in a building in said town. That they then loaded their eight wagons with two harrows each, and proceeded to sell and offer to sell the same throughout the said county of Wythe, and, when a sale was made, delivering one of the harrows upon the wagons. That when a license tax was demanded by Jos. B. Shaffer, commissioner of the revenue, they declined to pay the same, saying they were exempt from said tax by the interstate commerce law, the said harrows being manufactured in the state of Michigan. That afterwards, when told by the said commissioner of the revenue that unless the tax, as prescribed by section 109, Acts Assem. 1889-90, regulating the amount of tax to be paid by agents for the sale of manufactured implements, was paid, that he would be compelled to collect the same by law, said agents declined to pay the said tax, but expressed a willingness to pay the license tax prescribed by section 28 of same act, imposing a tax upon merchants, which said tax the commissioner was unwilling to accept.'

The complainant has taken no testimony to sustain the bill. It filed the ex parte affidavits of some of its agents, which the court cannot consider as evidence; being taken without notice to the defendants, and defendants not consenting that they may be read as evidence. The cause, as presented to the court, stands upon the bill and exhibits filed therewith, showing the pendency of the proceedings in the state court, the answer of the defendants, under oath, and the statement of facts by the defendants Gleaves and Shaffer, which, by consent of complainant's counsel, is to be read with the same effect as if it were in the form of depositions of said defendants.

The first ground relied on by counsel for complainant to sustain the injunction in this case is that the license tax law (section 109, above quoted) is unconstitutional, in that it discriminates in favor of home manufactures of implements and machines, and against the manufacturers of other states; that the discrimination consists in this: That section 109 provides that any person who shall pay an annual tax to the commonwealth upon capital actually employed by him in the manufacture of articles or machines mentioned in said section, of not less than $30 per annum, may, without anything further being paid for the privilege by himself or his agents, employ agents to sell said articles or machines manufactured by him in any of the counties or corporations of the state. But it is contended that additional licenses are imposed upon persons who sell or offer to sell these goods, who do not pay to the state of Virginia tax to the amount of $30 upon the capital invested in manufactures; such persons being required to pay a specific license tax of $30, which gives them only the right to sell within one county or corporation in which the license is taken out, and if they wish to sell or offer for sale in other counties or corporations of the state, and by other agents, they are required by said section 109 to pay $10 for each additional county and for each additional agent, and that this is a discrimination against manufacturers of other states. The provision of the constitution of the state of Virginia that is invoked to nullify the act in question is section 1 of article 10, which provides that: 'Taxation, except as hereinafter prescribed, whether imposed by the state, or county or corporate bodies, shall be equal and uniform, and all property, both real and personal, shall be taxed in proportion to its value, to be ascertained as prescribed by law. No one species of property from which a tax may be collected shall be taxed higher than any other species of property of equal value.'

Section 4 of article 10 provides, 'the general assembly may levy a tax upon incomes,' and upon certain licenses, among others, commission merchants, persons selling by sample, brokers, pawnbrokers, and all other businesses which cannot be reached by the ad valorem system. It further provides, 'The capital invested in all business operations shall be assessed and taxed as other property.'

The argument of counsel is based on...