C. D. Kenny Co v. Town Of Bervard

• Decision Date: 20 March 1940
• Docket Number: No. 167.,167.
• Citation: 7 S.E.2d 542,217 N.C. 269
• Court: North Carolina Supreme Court
• Parties: C. D. KENNY CO. et al. v. TOWN OF BERVARD.

217 N.C. 269

7 S.E.2d 542

C. D. KENNY CO. et al.

v.TOWN OF BERVARD.

No. 167.

Supreme Court of North Carolina.

March 20, 1940.

Appeal from Superior Court, Transylvania County; Wilson Warlick, Judge.

Action by C. D. Kenny Company and others against the Town of Brevard, a municipal corporation, to restrain the enforcement as to plaintiffs, of an ordinance imposing a privilege tax. From judgment holding the ordinance invalid and enjoining its enforcement, the defendant appeals.

Affirmed.

Plaintiffs instituted action against the Town of Brevard to restrain the enforcement as to them of an ordinance imposing a privilege tax upon "wholesale dealers or merchants, not otherwise taxed, using streets for delivery, per truck, $15.00, " on the ground of invalidity of the ordinance. The case was heard upon agreed statement of facts, the pertinent portions of which are as follows: The plaintiffs are wholesale merchants in Buncombe County, North Carolina, each with a regular place of business in that county and maintaining no place of business in Brevard.

"From time to time, usually about once a week, and at no times more than twice a week a traveling salesman of each of said plaintiffs visits the Town of Brevard in an automobile, in some instances the automobile being owned by the plaintiff and in some instances, being owned by the traveling salesman, at which time the said traveling salesman solicits and receives orders for merchandise from a merchant or merchants in Brevard, subject to the approval and acceptance of said order at its place of business at Asheville, North Carolina, by the plaintiff to whom the order is directed; that all of said orders are for future delivery. If and when such an order is so accepted, the goods so ordered are delivered to the customer in Brevard in a truck operated by the plaintiff whose goods are ordered. Such truck is operated by a truck driver employed by said plaintiff. No one in, or connected with said truck, either solicits or takes orders for merchandise, nor makes any collection except in case of C.O.D. shipment. The only goods which are carried in said truck are goods for which orders have beenpreviously received and accepted by the plaintiffs at their place of business in Asheville. No goods are carried for sale by said truck, nor any sale made from said truck. All the accounts, except C.O.D. accounts, are handled as follows:

"Generally purchasers mail checks to the plaintiff to whom the debt is owing at its place of business at Asheville, but occasionally purchasers make payments to the traveling salesman of said plaintiff upon some subsequent visit of said traveling salesman to Brevard. Various merchants in the Town of Brevard also go to Asheville and purchase wholesale merchandise from each of the plaintiffs at their place of business in Asheville and the said purchasers carry said merchandise back to Brevard."

The Town of Brevard was chartered by Chap. 113, Private Laws, 1903. The ordinance imposing privilege tax levy was adopted, effective July 1, 1939.

The court below held the ordinance imposing the privilege tax quoted was invalid, and enjoined its enforcement. Defendant appealed.

Williams & Cocke, of Asheville, for plaintiffs.

Ralph H. Ramsey, Jr., of Brevard, for defendant.

DEVIN, Justice.

The power of the General Assembly to tax trades, professions and franchises (Const. Art. V, sec. 3) was by Chap. 62 of the Code, sec. 3800, (now C.S. § 2677), delegated to municipal corporations, and they were empowered to "lay a tax on all trades, professions and franchises carried on or enjoyed within the city, unless otherwise provided by law." State v. Worth, 116 N.C. 1007, 21 S.E. 204; Rosenbaum v. New Bern, 118 N.C. 83, 24 S.E. 1, 32 L.R.A. 123; Guano Co. v. Tarboro, 126 N.C. 68, 35 S.E. 231; Rodman-Heath Cotton Mills v. Waxhaw, 130 N.C. 293, 41 S.E. 488; Lenoir Drug Co. v. Lenoir, 160 N.C. 571, 76 S.E. 480; State v. Bridgers, 211 N.C. 235, 189 S.E. 869.

The power of the town by proper ordinance to levy a tax on wholesale dealers or merchants doing business in the town is not controverted, but it is contended by plaintiffs that the tax ordinance herein attacked is so qualified as to destroy its uniformity, and that it attempts to impose a privilege tax on merchants in another county on business transactions beyond the limits of the town and in excess of its powers, and that the ordinance by its terms attempts to impose a tax on the plaintiffs for the use of the streets of the town.

It may be regarded as an established principle that in the exercise of taxing powers by a municipal corporation the requirement of uniformity must be observed, and that the classification of different subjects of taxation shall have some rational basis for the distinction, and that all persons similarly circumstanced shall be treated alike. Roach v. Durham, 204 N.C. 587, 169 S.E. 149; Southern Grain & Provision Co. v. Maxwell, 199 N. C. 661, 155 S.E. 557; Great Atlantic & Pacific Tea Co. v. Doughton, 196 N.C. 145, 144 S.E. 701; Greene v. Louisville & I. R. R., 244 U.S. 499, 501, 37 S.Ct. 673, 61 L.Ed. 1280, Ann.Cas. 1917E, 88; 99 A.L.R. 711.

To lay a tax on merchants using streets for delivery by truck would exempt from tax obligation all merchants who use other means of transportation and delivery than by trucks, or other means of ingress than over streets. In Bellingrath v. Town of Georgiana, 23 Ala.App. 111, 121 So. 458, where an ordinance, which undertook to levy a license tax upon the...