Caskey Baking Co. Inc v. Commonwealth

• Decision Date: 05 September 1940
• Citation: 10 S.E.2d. 535
• Court: Virginia Supreme Court
• Parties: CASKEY BAKING CO., Inc. v. COMMONWEALTH.

10 S.E.2d. 535

CASKEY BAKING CO., Inc.

v.COMMONWEALTH.

Supreme Court of Appeals of Virginia.

Sept. 5, 1940.

Rehearing Denied Oct. 16, 1940.

Error to Corporation Court of Winchester; Philip Williams, Judge.

The Caskey Baking Company, Inc., was convicted of peddling without a license, and it brings error.

Judgment affirmed.

Argued before CAMPBELL, C. J., and HOLT, HUDGINS, GREGORY, BROWNING, EGGLESTON, and SPRATLEY, JJ.

Martin, Seibert & Beall, of Martinsburg, and R. Gray Williams and J. Sloan Kuy-kendall, both of Winchester, for plaintiff in error.

Abram P. Staples, Atty. Gen, and W. W. Martin, Asst. Atty. Gen., for the Commonwealth.

HUDGINS, Justice.

Caskey Baking Company, Incorporated, was convicted on the charge of peddling without first having secured a license from the Commonwealth as required by section 192b of the Tax Code, Code Supp.1938, p. 258. To that judgment of conviction this writ of error was allowed.

Plaintiff in error is a West Virginia corporation and domesticated in Virginia. It has no place of business in this state except a statutory office in the office of R. Gray Williams, an attorney, at Winchester. It manufactures bakery products (not injurious to health nor damaging to morals) in West Virginia, and sells these products in Virginia to grocers and other retail dealers. The sales are made by employees of the plaintiff in error from a stock of manufactured goods carried by trucks from place to place. These trucks are operated by it over regular routes in Virginia at regular intervals. Sales and deliveries of the bakery products are made at one and the same time and without having secured previous orders from the customers. In other words, plaintiff in error is in Virginia nothing more nor less than an itinerant peddler of merchandise manufactured by it in West Virginia.

The same arguments made in this court were presented to the trial judge, the Honorable Philip Williams, who, after mature consideration, prepared and filed an opinion that so fully and ably discusses the question's raised that we are content to adopt it as our own. This opinion, in part, is as follows:

"The defense asserted is that the statute, upon which the conviction rests, is unconstitutional because it contravenes the commerce clause (Article 1, Sec. 8, cl. 3) and the equal protection of the law clause (Fourteenth Amendment) of the United States Constitution.

"The defendant admittedly engaged in peddling bakery products in Virginia after transporting them from its bakery in West Virginia.

"This statute imposes 'an annual State license tax on every person, firm and corporation (other than a distributor and/or vendor of motor vehicle fuels and petroleum products, tobacco, or seafood, a farmer, a farmer's co-operative association, a producer of agricultural products, or a manufacturer taxable on capital by this State, or a distributor of manufactured goods paying a State license tax on his purchases) who or which shall peddle goods, wares or merchandise by selling and delivering the same at the same time to licensed dealers or retailers at other than a definite place of business operated by the seller.' It provides that it shall not apply 'to wholesale dealers regularly licensed by this State, and who shall at the same time sell and deliver merchandise to retail merchants.' The amount of the tax imposed is $100 for each vehicle used in the peddling. It is also provided that this license confers authority to peddle throughout the state as a state license, but that towns and cities may impose license taxes for peddling within their corporate limits. See 192b, the Tax Code of Va. 1938, Acts 1932, c. 193, p. 376, 1938, c. 305, page 439, Code Supp. 1938, p. 258.

"This and related sections of the Tax Code show that vendors who engage in peddling, such as that covered by this section, are thus classified and taxed:

"1. Vendors solely engaged in peddling. These (with certain exceptions) are taxed as provided by this section, and may be also required to pay city and town taxes. Sees. 192a and 192b, Tax Code of Va. 1938, Code 1936, p. 2458, Code Supp.1938, p. 258 "2. Manufacturers taxable on capital by the state. These are exempt from license tax, state, city, town and county, for peddling their manufactured.goods, but they are taxed on their capital. Sees. 188, 192b, 73, Tax Code Va.1938, Code 1936, pp. 2416, 2451, Code Supp.1938, p. 258.

"3. Distributors of manufactured goods and wholesale dealers licensed by the state. These are exempt from state license tax for such peddling (192b, Tax Code) but are taxable on their purchases (188, Tax Code) by the state, and are also subject to city and town license taxes. (188, 192a, Tax Code.)

"4. Distributors and vendors of motor vehicle fuels and petroleum products, tobacco, or seafood, a farm, a farmer's cooperative association, a producer of agricultural products. These are exempt from this state license tax. (192b, Tax Code.)

"The terms of this statute limit it to domestic commerce --peddling in Virginia; they do not invade the sphere of interstate commerce; they do not discriminate as between the origin of the peddler nor as to where the peddled wares originate. The defendant, a West Virginia corporation, is required to pay a tax for peddling and so is a Virginia corporation; the tax applies to all peddlers, regardless of where they or their goods came from.

"Emphasis should be focused upon the fact that the defendant seeks to engage in domestic commerce within the state, and that it attacks a tax imposed upon that commerce which the state has the right to regulate and to tax. The defendant, it must be remembered, is not affected by this law in its interstate commerce. This statute does not attempt to impose a tax, for instance, upon deliveries made by defendant in Virginia for merchandise it has sold on orders. The defendant wishes to transport its merchandise into the state and peddle it there; each of its trucks then becoming a travelling store in Virginia. That is the business which this statute taxes.

"It has long since been settled that peddling is domestic, not interstate commerce; and that it may be taxed by the state. Howe Machine Co. v. Gage, 100 U.S. 676, 26 L.Ed. 734; Emert v. Missouri, 156 U.S. 296 , 39 L.Ed. 430; Wagner v. Covington, 251 U.S. 95 [104, 40 S.Ct. 93, 94], 64 L.Ed. 157 [168].

"In the case last cited above this statement epitomized the decisions on this subject:

" 'We have then, a state tax upon the business of an itinerant vendor of goods as carried on within the state--a tax applicable alike to all such dealers, irrespective of where their goods are manufactured, and without discrimination against goods manufactured in other states. It is settled by repeated decisions of this court that a license regulation or tax of this nature, imposed by a state with respect to the making of such sales of goods within its borders, is not to be deemed a regulation of or direct burden upon interstate commerce, although enforced impartially with respect to goods manufactured without as well as within the state, and does not conflict with the "commerce clause." '

"•In Emert v. Missouri, supra, in which the opinion by Mr. Justice Gray reviews this subject, this is said of the peddler: 'The only business or commerce in which he was engaged was internal and domestic, and, so far as appears, the only goods in which he was dealing had become part of the mass of property within the state. Both the occupation and the goods, therefore, were subject to the taxing power, and to the police power, of the state.' [156 U.S. 296, 15 S.Ct. 370.]

"It is contended, however, that the exemption in the statute, in favor of manufacturers taxable on capital, has the effect of exempting resident manufacturers and their products from this taxation; and that this is discriminatory as to non-residents and results in a direct burden upon interstate commerce. Cited, is a line of cases holding that state taxation which discriminates against foreign, products or persons is violative of the commerce clause. Webber v. Virginia, 103 U.S. 344, 26 L.Ed. 565; Welton v. Missouri, 91 U.S. 275, 23 L.Ed. 347; Morrill v. Wisconsin, 154 U.S. 626, 14 S.Ct. 1206, 23 L.Ed. 1009; Minnesota v. Blasius, 290 U.S. 1 , 78 L.Ed. 131; Brown v. Maryland, 12 Wheat. 419, 6 L.Ed. 678; Commonwealth v. Myer, 92 Va. 809, 23 S.E. 915 [31 L.R. A. 379].

"But that line of cases is based upon the holding that the laws in question, either in terms or effect, imposed a direct burden upon interstate commerce. Certainly, in terms, this statute does not do that; nor, in effect, does it appear to do so. Rather, it seems, this case is to be ruled by the principles of Armour & Co. v. Virginia, 246 U.S. 1 , 62 L.Ed. 547; and [Commonwealth v. Armour & Co.], 118 Va. 242, 87 S.E. 610; Reymann Brewing Co. v. Brister, 179 U.S. [445], 446 , 45 L.Ed. 269; New York v. Roberts, 171 U.S. 658 , 43 L.Ed. 323.

"In Armour & Co. v. Virginia [246 U.S. 1, 38 S.Ct. 269, 62 L.Ed. 547], the statute exempted from a merchants' license tax, manufacturers taxed on capital by the state, who offered for sale at the place of manufacture goods, wares, and merchandise manufactured by them. Armour and Company, a corporation of New Jersey and qualified to do business in Virginia, had no manufactory in Virginia but did have distributing houses for marketing its merchandise. These were required to pay the merchants' license tax. The constitutionality of the taxing statute was challenged upon the same grounds asserted in the case now before this court. Armour and Company contended that the exemption noted discriminated against the foreign manufacturer because, having no place of manufacture within the state, it could not have advantage of the exemption enjoyed by the domestic manufacturer. The Supreme Court of Appeals of Virginia held that here was no such discrimination and that the statute was constitutional. The opinion cited, on this question, the cases last above...