American Mfg. Co. v. City of St. Louis, Mo.

• Decision Date: 21 February 1924
• Docket Number: 6331.
• Citation: 296 F. 899
• Parties: AMERICAN MFG. CO. v. CITY OF ST. LOUIS, MO.
• Court: U.S. Court of Appeals — Eighth Circuit

296 F. 899

AMERICAN MFG. CO. v. CITY OF ST. LOUIS, MO.

No. 6331.

United States Court of Appeals, Eighth Circuit.

February 21, 1924

S Mayner Wallace, of St. Louis, Mo., for plaintiff in error.

Michael J. Hart, of St. Louis, Mo. (George F. Haid, of St. Louis Mo., on the brief), for defendant in error.

Before SANBORN, Circuit Judge, and TRIEBER and MUNGER, District judges.

MUNGER District Judge.

The plaintiff brought suit against the defendant, the city of St Louis, Mo., to recover the amount of a tax that the defendant had levied against it, and which the plaintiff alleged was illegal and was paid by it under legal compulsion. A demurrer was sustained to the petition, and, as the plaintiff declined to amend its petition, its suit was dismissed, and it prosecutes a writ of error.

The question which has been presented is whether the tax as described in the petition, substantially burdens and regulates commerce between the states, in violation of section 8 of article 1 of the Constitution of the United States. The petition alleges the plaintiff to be a corporation organized under the laws of Massachusetts, and that it owns and operates factories, and has warehouses and offices, in a number of states. It alleges that some of the goods manufactured by it at St. Louis, Mo., were sold and shipped directly to purchasers in other states, and that some of them were shipped to its warehouses in other states, from which warehouses the products were sold and shipped to purchasers in other states. These properties were taxed and the taxes paid, and the plaintiff has paid all property, franchise, privilege, and occupational taxes levied under authority of the state of Missouri and the city of St. Louis. The petition does not set out the ordinances under which the tax complained of was levied, but alleges that they related to manufactureres, and required the payment by them, in addition to all other taxes, 'of a further tax of $1 on each $1,000, or fractional part thereof, of the aggregate amount of all sales made by them within the period of a year then last past. Said alleged tax was and is by said ordinances expressly assessed directly upon and against such gross receipts, or upon all of said sales, specifically as such. ' The petition alleges an amount of its sales during a specified year, representing railway shipments made by the plaintiff from St. Louis directly to purchasers in other states, and an amount representing shipments by plaintiff of the goods from St. Louis to warehouses in other states, and sold to purchasers in states other than Missouri, and other than the states where the goods were warehoused. The plaintiff contends that this tax was illegally levied directly upon the sales in, and the gross receipts from, interstate commerce, while the defendant contends that the tax was legally levied against the plaintiff for the privilege of conducting the business of manufacturing in St. Louis.

We are precluded from determining the real nature of the tax as expressed by the ordinances of St. Louis, because we are confined, by reason of the case having been determined on the averments of the plaintiff's petition, to the nature of the tax, as that petition describes it. The petition alleges this percentage tax to have been levied on the amount of all sales made by plaintiff within the year, and that, by the ordinances, it was assessed directly upon plaintiff's gross receipts or sales, specifically as such. The commerce clause of the United States Constitution forbids a state, or a municipal corporation therein, from levying a tax on the business of selling goods in interstate or foreign commerce measured by a percentage of the gross transactions in such commerce, because such a tax is a direct burden on and...