Bickell v. Lee

• Decision Date: 24 January 1934
• Citation: 5 F. Supp. 720
• Parties: BICKELL et al. v. LEE, Comptroller of Florida.
• Court: U.S. District Court — Northern District of Florida

5 F. Supp. 720

BICKELL et al. v. LEE, Comptroller of Florida.

District Court, N. D. Florida.

January 24, 1934.

Shutts & Bowen, of Miami, Fla., for plaintiffs.

Cary D. Landis, Atty. Gen., and Robert J. Pleus and J. V. Keen, Asst. Attys. Gen., for defendant.

Before BRYAN, Circuit Judge, and SHEPPARD and AKERMAN, District Judges.

SHEPPARD, District Judge.

The plaintiffs, who comprise two copartnerships and who are engaged in the business of stockbrokers, seek injunctive relief against the comptroller of the state of Florida by a bill to restrain the enforcement of the Stamp Tax Act (chapter 15787, Laws of Florida, 1931 (Ex. Sess.), on the ground that the same violates the Constitution of the United States (article 1, § 8, cl. 3) by laying an undue burden on interstate commerce, and that such enforcement of the act deprives plaintiffs of their property without due process of law (Amendment 14, § 1).

The act assailed levies a tax of 10 cents per $100, inter alia, upon "all sales, agreements to sell, or memoranda of sales or deliveries of, transfers of legal title to shares, or certificates of stock * * * whether made upon or shown by the books of the corporation, or by any assignment in blank, or by any delivery, or by any paper or agreement or memorandum or other evidence of transfer or sale * * *." Also, "promissory notes, non-negotiable notes, written obligations to pay money, * * * made, executed, delivered, sold, transferred, or assigned in the State of Florida * * *." Section 1.

While plaintiffs are not citizens of Florida, they maintain branch offices in the state through which they act as agents for their Florida customers in the capacity of commission brokers by making purchases and sales of stock on the New York Stock Exchange and on other exchanges outside of the state of Florida. The practice and procedure followed by the two firms in representing their customers on the stock exchanges is set out in extenso in the bill of complaint, and is that substantially followed by all stockbrokers. It is sufficiently disclosed by the bill that all purchases and sales of stock and the actual delivery is made in the state of New York, or other state in which the exchange is located, between the floor members or brokerage firms who take part in such transactions simultaneously with full payment for the stock. The brokerage firm, acting as agent for its Florida customers, completes the transaction outside of the state of Florida. Prior to the completion of the transaction the only written documents passing between the brokerage firm and the customer in Florida are the written requests of the customer that the firm purchase or sell for his account, and copies of telegraphic communications from the New York office of the broker advising the customer that such requests have been complied with.

Defendant's motion to dismiss is upon general grounds: That the bill is without equity, plaintiffs having their remedy at law; that it is not alleged that each of the plaintiff brokerage firms will be damaged in an amount in excess of $3,000; that there is a misjoinder of causes of action and of parties plaintiff. After argument, counsel for plaintiffs were allowed to amend so as to sufficiently allege damages to each party in the jurisdictional amount.

The jurisdictional amount for each party plaintiff, and diversity of citizenship being properly averred, all questions of jurisdiction may be disposed of by our holding that plaintiffs' remedy at law is not plain, adequate, and complete. It is alleged in the bill that the payment of each tax...