American Manufacturing Co. v. City of St. Louis
| Decision Date | 13 February 1917 |
| Citation | 192 S.W. 402,270 Mo. 40 |
| Parties | AMERICAN MANUFACTURING COMPANY v. CITY OF ST. LOUIS, Appellant |
| Court | Missouri Supreme Court |
Appeal from St. Louis City Circuit Court -- Hon. Wilson A. Taylor Judge.
Reversed and remanded (with directions).
Charles H. Daues and Truman P. Young for appellant.
(1) The license tax of one dollar per thousand upon sales levied by the ordinances of the city is an occupation tax, and not a tax upon property. In this respect it is distinguishable from the ad valorem taxes. American Union Express Co. v. St Joseph, 66 Mo. 681; Clark v. Titusville, 184 U.S. 333; Society for Savings v. Coite, 73 U.S. 608; Maine v. Grand Trunk Ry. Co., 140 U.S. 227-8; Home Insurance Co. v. New York State, 134 U.S. 600; Aurora v. McGannon, 138 Mo. 48; St. Louis v United Railways Co., 210 U.S. 279; St. Louis v. United Railways Co., 263 Mo. 441; State ex rel. American Mfg. Co. v. Alt, 224 Mo. 493; Jarman v. School District, 264 Mo. 654. (2) The occupation tax levied upon sales is a tax upon the privilege of manufacture. It is a manufacturer's license and not a merchant's license. The amount of the tax is graduated by the amount of sales, but is in no sense a tax upon sales nor a tax upon the goods sold. The city may collect an ad valorem tax upon property used in a business and at the same time impose a license tax upon the pursuit of that business. St. Louis v. Ernst, 95 Mo. 367; St. Louis v. Green, 70 Mo. 562; State ex rel. v. Tracy, 94 Mo. 217; Brookfield v. Tooey, 141 Mo. 625; and cases cited above. (3) A license tax levied upon a manufacturer and graduated in accordance with the amount of sales made by such manufacturer should include a tax on account of all sales of goods manufactured, even though such goods are destined for interstate commerce or have been shipped into other States and there warehoused pending sale. A State may tax all occupations and all businesses carried on within its borders, and all privileges and franchises derived from the State. Such a tax is not a tax upon interstate commerce, though the amount is arrived at by considering the sale of products which are destined for such commerce. United States v. Stowell, 133 U.S. 16; Coe v. Errol, 116 U.S. 524; Car Co. v. Pennsylvania, 141 U.S. 18; Ferry Co. v. Pennsylvania, 114 U.S. 196; Tel. Co. v. Attorney-General, 125 U.S. 549; Railroad v. Knight, 192 U.S. 21; Match Co. v. Ontonagon, 188 U.S. 82; Hopkins v. United States, 171 U.S. 578; Galveston Ry. Co. v. Texas, 210 U.S. 225; Ficklin v. Shelby County, 145 U.S. 1; Hatch v. Reardon, 204 U.S. 152; State v. Brodnax & Essex, 228 Mo. 25, 219 U.S. 285; Am. Mfg. Co. v. St. Louis, 238 Mo. 277; State v. Applegarth, 28 L. R. A. 816. (4) The taxes considered in the third paragraph of the opinion in the case of American Manufacturing Co. v. St. Louis, 238 Mo. 278, were on account of sales of products manufactured at a factory in New York. Such sales should be clearly distinguished from the sales in controversy here, which were of the products of the St. Louis factory.
Barclay & Wallace for respondents.
(1) The city ordinance in evidence under the supposed authority of which was extorted the payment of one dollar on each thousand dollars of the sales of goods manufactured in St. Lous (but sold and delivered while same were outside of Missouri) furnishes no justification for the exaction in question. The effect of that ordinance has already been construed by this court in accord with respondents' contention on that point. Am. Mfg. Co. v. St. Louis, 238 Mo. 278. (2) Said ordinance is a personal property tax; and had it been intended to provide for a tax on such sales it would, as to the same, be clearly invalid under the Federal Constitution, for such a tax on such sales, as such, would be a direct interference with and burden on interstate commerce; and the city could not indirectly accomplish the same result by clothing this tax in the garb of an occupational license. Nature of tax: State ex rel. v. Alt, 224 Mo. 506; Jarman v. School Dist., 264 Mo. 654. Validity of ordinance: Welton v. Missouri, 91 U.S. 275; Crinshaw v. Arkansas, 227 U.S. 389; Barrett v. New York, 232 U.S. 14; D. E. Foote & Co. v. Stanley, 232 U.S. 494; Davis v. Virginia, 236 U.S. 697.
OPINION
In Banc.
This case, like the one numbered 18185 decided at this term, is to recover license taxes paid the city of St. Louis by the plaintiff, a corporation of West Virginia of the same name as, and successor to, the plaintiff in the other case, in the manufacture of Jute bagging.
The questions raised in this appeal are the same as those raised in the other case, with the addition that in this case the tax exacted for manufacturer's license was extended upon sales of goods manufactured in the city of St. Louis, and warehoused outside the State of Missouri, and sold and delivered from such warehouses to customers outside the State, for which, with other items not now in dispute, judgment was rendered for the plaintiff with interest at six per cent from the date of payment.
The sales in dispute were described in the plaintiff's return as follows: "Sales made through St. Louis office and filled from stock made in St. Louis, but shipped from points other than St. Louis to States other than Missouri." In its evidence its bookkeeper and cashier explained this by saying that the company had a dozen warehouses in St. Louis; that he did not know how many there were in New York, and that the bagging is stored in St. Louis as long as the company can find a warehouse to take it, and when the local capacity is exhausted it ships to Memphis or points like New Orleans, from which places orders are filled from goods made in St. Louis, which may lie there for a year.
In its letter June 23, 1910, transmitting a check tendered as payment of its license tax, the respondent wrote: "In explanation of the small aggregate amount of our sales for the year ending June 1, 1910, we would say that during that year the principal selling office of this company has not been in the city of St. Louis, as had been the case in prior years;" and in a letter of July 21, 1910, made the following additional explanation: "Since our report for year ending June 30, 1909, was made, we made a very material change in our method of doing business with our home office in New York, so that substantially all our sales, though negotiated here, of merchandise stored in this and other cities, are confirmed by and are not effective until they are confirmed by the home office in New York. We are advised by our counsel that sales so made are not taxable in the city of St. Louis.
The matters at issue in this appeal are: (1) whether the circumstances under which the payment was made were voluntary or involuntary with respect to the right to recover it back; (2) whether interest was recoverable; and (3) whether the city had the right to levy the license tax based on the amount of these sales.
We have stated these questions in the order named because the first two are decided by us in the other case, in which they were presented upon precisely similar facts and with the same arguments, and we see no reason to modify the opinion there expressed.
The important question relates to the nature of the tax, for the defendant city has not the right to levy a direct tax upon subjects of taxation outside the State from which it holds its powers. These subjects are persons, property and business, and each must be situated within the jurisdiction of the taxing power to authorize its exercise. The vital difference between these parties is whether the tax in question is a tax upon business done in the city of St. Louis or upon property situated in States other than Missouri. The dividing line must be definite however; for if a part of the subject upon which the tax is sought to be imposed is situated in another State we have no data by which it can be apportioned,...
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