Bluefield Produce & Provision Co. v. City of Bluefield
| Decision Date | 09 April 1938 |
| Docket Number | 8685. |
| Parties | BLUEFIELD PRODUCE & PROVISION CO. et al. v. CITY OF BLUEFIELD. |
| Court | West Virginia Supreme Court |
Submitted January 25, 1938.
Syllabus by the Court.
1. In the administration of an ordinance of a municipality imposing a license tax on the "opening, establishing, operating or maintaining" of stores therein, based on the "gross proceeds of sales of such store," sales made from a store licensed thereunder effected by actual delivery to purchasers outside the municipality, and within this state, may be included in fixing the gross proceeds of sales from which the tax is computed.
2. In the administration of an ordinance of a municipality imposing a license tax on the "opening, establishing, operating or maintaining" of stores therein, based on the "gross proceeds of sales of such store," sales made from a store licensed thereunder effected by actual delivery to purchasers outside the municipality, and outside this state, may not be included in fixing the gross proceeds of sales from which the tax is computed, the same being in violation of sections 8 and 10 of article 1 of the Constitution of the United States.
Appeal from Circuit Court, Mercer County.
Suit in equity by the Bluefield Produce & Provision Company and others against the City of Bluefield to enjoin the City of Bluefield and its board of directors and officers from canceling and revoking the licenses under which the plaintiffs were operating their stores in that city. From a decree dismissing plaintiffs' bill of complaint, they appeal.
Decree affirmed in part, reversed in part, and remanded for further proceedings.
Sanders & Day, of Bluefield, for appellants.
Luther G. Scott, of Bluefield, for appellee.
This suit in equity was instituted in the circuit court of Mercer county by Bluefield Produce & Provision Company, Bluefield Grocery Company, Sublette Feed & Supply Company, Peerless Wholesale Grocery Company, and F. W. Udy v. Co., operators of wholesale grocery and feed stores in the City of Bluefield for the purpose of enjoining the City of Bluefield and its board of directors and officers from canceling and revoking the licenses under which the plaintiffs are now operating their stores in said city.
From a decree dismissing plaintiffs' bill of complaint, they prosecute this appeal. The suit was tried solely on the bill of complaint and answer and there are no disputed facts.
The question here presented involves the construction and validity of an ordinance of the City of Bluefield, requiring a license tax for the operation, maintenance, opening, or establishment of stores within the corporate limits of the city, the pertinent parts of which are as follows:
The defendants claim that subsection (b) of section 4 legally authorizes the application of the license tax imposed on the basis of the gross proceeds of all sales made by the plaintiff corporations, whether made within or outside the corporate limits of the City of Bluefield, or within or outside this state. On the other hand, the plaintiffs say that under a proper construction of the ordinance its terms only apply to sales made solely within the corporate limits of the city; and that, if the ordinance does not lend itself to such construction, it is invalid to the extent that its terms purport to apply to sales made outside the corporate limits of the city.
Bluefield Produce & Provision Company operates a wholesale grocery and feed store in the City of Bluefield, and a like store in the City of Mullens; Bluefield Grocery Company operates one wholesale store in Bluefield and a branch store in Iaeger; and Sublette Feed & Supply Company, Peerless Wholesale Grocery Company, and F. W. Udy & Co. each operate a wholesale grocery and feed store in the City of Bluefield. The plaintiff corporations employ a common method of making sales, delivering merchandise, and collecting accounts. This method of doing business is alleged in the bill of complaint and admitted in the answer as follows:
At each of the stores, a stock of merchandise is kept and salesmen are employed for the purpose of soliciting sales of merchandise. The salesmen travel in various cities, towns, and counties in this and other states, and make sales for their employers of merchandise to be delivered to the purchasers at their respective places of business. Upon making a sale, each salesman notifies the store to which he is attached and, upon the advice of sale having been received, the merchandise, without additional cost, is delivered to the purchaser at his place of business in trucks belonging to the vendor corporations. The cost of such delivery is paid by the vendor. The sale agreements made by the salesman with the purchaser specify the kind and quantity of merchandise to be delivered and do not designate the particular or specific merchandise. All merchandise is shipped from the Bluefield stores of the plaintiffs and paid for at said stores, except that merchandise shipped from the Mullens store of Bluefield Produce & Provision Company is paid for at said store which forwards the purchase price to the principal office of said Bluefield Produce & Provision Company. In like manner, merchandise shipped from the Iaeger store of Bluefield Grocery Company is paid for at said store and the proceeds of sale are remitted to its parent store. The bill of complaint clearly alleges, and the answer admits, that "it is always distinctly understood and agreed by and between" the plaintiffs and their customers that title to the merchandise will not pass until delivery. The allegations in the bill with respect to sales are somewhat confusing. It is alleged that traveling salesmen make sales, and this is followed by the allegation that sales are consummated by delivery. Obviously there can be only one sale. What it all amounts to is that orders for merchandise are taken by the salesmen, which are forwarded to the stores, and delivery and sale consummated.
Plaintiffs' counsel contend that the section of the ordinance under appraisement should be construed to apply solely to sales made within the corporate limits of the city, because (1) a municipal corporation, in the enactment of ordinances dealing with the exercise of its governmental activities, is presumed to act entirely within its corporate limits; (2) to construe the ordinance so as to apply to all sales by the plaintiff corporations would embrace sales which are made in the course of interstate commerce and therefore not subject to the tax; and (3) inasmuch as under the method of doing business, the title does not pass until delivery of the merchandise at the customer's place of business, the sale, therefore, is made at the time and place of delivery; and (4) otherwise a tax could be imposed on the same sale by other municipal corporations, if made within their corporate limits, thereby causing double taxation on the same sale.
The right to impose the license tax sought to be avoided rests in the first instance upon section 1, article 10, of the Constitution, under which the Legislature is given authority to tax privileges, franchises, and incomes of persons and corporations, and to classify and graduate the tax on all incomes according to the amount thereof; and upon the authority of Code, 8-4-13, which provides that ...
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