Caskey Baking Co. v. Commonwealth

• Citation: 176 Va. 170
• Decision Date: 05 September 1940
• Docket Number: Record No. 2300.
• Court: Supreme Court of Virginia
• Parties: CASKEY BAKING COMPANY, INC. v. COMMONWEALTH OF VIRGINIA.

Page 170

176 Va. 170

CASKEY BAKING COMPANY, INC. v. COMMONWEALTH OF VIRGINIA.

Record No. 2300.

Supreme Court of Virginia, Staunton.

September 5, 1940.

Present, All the Justices.

1. INTERSTATE COMMERCE — State Taxation — Peddling. — Peddling is domestic, not interstate commerce, and it may be taxed by the State.

2. LICENSES — Interstate Commerce — Section 192b of the Tax Code — Exemptions Not Discriminations Rendering Statute Violative of Commerce Clause — Case at Bar. — In the instant case, an appeal from a conviction on a charge of peddling without having first secured a license, appellant was a West Virginia corporation and domesticated in Virginia, with no place of business in the State except a statutory office. It manufactured bakery products and sold these products in Virginia to grocers and other retail dealers. Sales and deliveries of the bakery products were made at one and the same time and without having secured previous orders from customers. The defense was based upon the ground that section 192b of the Tax Code, upon which the conviction rested, was unconstitutional because it exempted from the license requirement manufacturers taxable on capital by the State, distributors of manufactured goods and wholesale dealers licensed by the State.

Held: That the exemptions in the statute were not such discriminations as to render the statute in contravention of the commerce clause (art. 1, sec. 8, cl. 3) of the Constitution of the United States.

3. LICENSES — Constitutionality — Section 192b of the Tax Code — Exemptions Not Amounting to Denial of Equal Protection of Law — Case at Bar. — In the instant case, an appeal from a conviction on a charge of peddling without having first secured a license, appellant was a West Virginia corporation and demesticated in Virginia, with no place of business in the State except a statutory office. It manufactured bakery products and sold these products in Virginia to grocers and other retail dealers. Sales and deliveries of the bakery products were made at one and the same time and without having secured previous orders from customers. The defense was based upon the ground that section 192b of the Tax Code, upon which the conviction rested, was unconstitutional because it exempted from the license requirement manufacturers taxable on capital by the State, distributors of manufactured goods and wholesale dealers licensed by the State.

Held: That the exemptions in the statute did not constitute a denial of the equal protection of the law in violation of the Fourteenth Amendment to the Constitution of the United States.

4. TAXATION — Equal Protection of Law — Reasonable Classification Permissible. — Inequalities or exemptions in State taxation are not forbidden by the equal protection clause of the Fourteenth Amendment to the Constitution of the United States. That clause does not limit the power of the State to make any reasonable classification of property, occupations, persons or corporations, for purposes of taxation. It merely forbids inequality caused by clearly arbitrary action, particularly such as is attributable to hostile discrimination against particular persons or classes.

5. TAXATION — Equal Protection of Law — Classification to Equalize Tax Load Permissible. — The equal protection clause of the Fourteenth Amendment to the Constitution of the United States does not forbid exemption or classification based upon a principle of equalization of the tax load, whereby a class is exempted from an additional tax because it is taxed in another way.

6. TAXATION — Exemptions — Section 192b of the Tax Code — Exemptions Not Rendering Statute Unconstitutional. — The exemption contained in section 192b of the Tax Code, making the tax on peddlers not applicable to distributors and vendors of motor vehicle fuels and petroleum products, tobacco, seafood, etc., does not render the statute unconstitutional.

Error to a judgment of the Corporation Court of the city of Winchester. Hon. Philip Williams, judge presiding.

The opinion states the case.

Martin, Seibert & Beall, R. Gray Williams and J. Sloan Kuykendall, for the plaintiff in error.

Abram P. Staples, Attorney-General, and W. W. Martin, Assistant Attorney-General, for the Commonwealth.

John T. Wingo, amicus curiae.

HUDGINS, J., delivered the opinion of the court.

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 questions 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 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 $100.00 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, ch. 193, p. 376; 1938, ch. 305, p. 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. (Secs. 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. (Secs. 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 farmer, a farmer's co-operative 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. Gage, 100 U.S. 676, 26 L.Ed. 734; Emert Missouri, 156 U.S. 296 15 S.Ct. 367, 39 L.Ed. 430; Wagner Covington, 251 U.S. 95 104, 40 S.Ct. 93, 94...