Dennison Mfg. Co. v. Wright

• Decision Date: 17 November 1923
• Docket Number: 3802.
• Citation: 120 S.E. 120,156 Ga. 789
• Parties: DENNISON MFG. CO. ET AL. v. WRIGHT.
• Court: Georgia Supreme Court

120 S.E. 120

156 Ga. 789

DENNISON MFG. CO. ET AL. v. WRIGHT.

No. 3802.

Supreme Court of Georgia

November 17, 1923

Syllabus by the Court.

The action in this case is not one against the defendant in his official capacity and to enforce a liability against the state, but is one against him individually for an act, which while done in his official capacity, was wholly without lawful authority and beyond the scope of his official power. For this reason the petition was not demurrable, on the ground that the action was one against the state, which could not be brought without its consent.

Payment of a license tax prescribed in paragraph 45, of section 2 of the General Tax Act of 1918 (Acts 1918, pp. 43, 53), by an agent or representative of a foreign corporation engaged wholly in interstate commerce, upon demand therefor by the comptroller general of this state, is not such a voluntary payment of such license tax as will prevent an action for damages against the comptroller general in his individual capacity for the exaction of payment thereof, said act making the failure of such agent or representative to register, or after having registered, his failure to pay said license tax a misdemeanor, upon conviction of which he can be punished as prescribed in section 1065 of the Penal Code of 1910 of this state.

The resident agent or representative of such foreign corporation engaged wholly in interstate business is not subject to the license tax prescribed by said act.

(a) A foreign corporation may come into this state without obtaining leave or license so to do, for all the legitimate purposes of interstate commerce; and this state is without power to levy a license tax upon any resident agent or representative of such corporation, in order to enable it to do such business within the state's borders.

(b) Where a foreign corporation rents and maintains an office in this state, with a stock of samples and a force of office employees and traveling salesmen, merely to obtain orders in this state and other states, subject to approval by its home office, for its goods to be shipped directly to its customers from its home state, such an arrangement is part of its interstate commerce, and not subject to a local excise tax.

The exaction and collection by the comptroller general of such illegal license tax under compulsion from such foreign corporation and its resident agent or representative renders him individually liable to them in damages.

(a) An unconstitutional statute, though having the form and name of law, is in reality no law, and confers no authority upon, and affords no protection to, an officer acting thereunder.

(b) If such an act does not impose a license tax upon the resident agent or representative of such corporation, then the exaction and collection thereof from such company or its resident agent or representative would be an unconstitutional administration of said act, for which the comptroller general would be individually liable.

The court erred in sustaining a demurrer to the petition on the ground that it set forth no cause of action.

Error from Superior Court, Fulton County; Geo. L. Bell, Judge.

Action by the Dennison Manufacturing Company and another against William A. Wright. Judgment for defendant on demurrer, and plaintiffs bring error. Reversed.

Harry F. Christie and the Dennison Manufacturing Company brought suit against "William A. Wright, who is comptroller general of the state of Georgia," and made this case The Dennison Manufacturing Company, a Massachusetts corporation with an authorized capital of $7,000,000, maintains its principal office and place of business and operates its factory in Framingham, Mass., being engaged principally in the business of manufacturing tags and other specialties, and selling articles to dealers in Georgia and throughout the United States. In 1919 this company conducted its entire business and effected all sales at its said principal office. In so doing it employs sales agents, representatives, and traveling salesmen, who solicit and take orders for its products throughout the United States. Each sales agent and representative travels and conducts his employment in a limited territory. The company determined all its sales policies and prices; employed all its sales agents and representatives; defined their duties; received and accepted or rejected all orders for its products secured by them or otherwise from dealers in Georgia and elsewhere in the United States; made all shipments of its products from said factory directly to buyers; sent out all invoices directed to them; and collected all accounts and received all moneys due from sales directly from buyers; and kept all original records relating to sales to Georgia buyers at its said principal office. The company conducted no business in 1919 in Georgia through the agency of Christie other than herein set forth. The company was engaged in interstate commerce alone in 1919 in Georgia. It did not then and does not now operate a factory or manufacturing plant, manufacture any of its products, or own any real estate in Georgia. Christie was employed exclusively by the company as sales agent and representative at an annual salary of $5,000. Christie was engaged in no occupation and was conducting no business in Georgia other than that of soliciting and taking orders for its products, with and without the use of samples, for this company from dealers residing in Georgia, South Carolina, Florida, Alabama, and Mississippi, and forthwith transmitting such orders directly to the company at its said principal office for acceptance or rejection, and conducted said business subject to the supervision and control of the company at said office.

The company maintained an office in the city of Atlanta in its name, from which Christie so conducted his said employment in said state. In making sales of its products to dealers in said states, the company employed six additional sales agents and representatives who conducted their employment under the immediate supervision and direction of Christie, the district manager. None of said additional representatives had a place of business or office in Georgia. They conducted no business in Georgia other than that of soliciting and taking orders for its products with and without the use of samples, which were forthwith transmitted directly to the company at its principal office for acceptance or rejection. In the event of the acceptance thereof, shipments were made by the company directly to the Georgia buyers from without to within the state of Georgia. Of the orders taken by and under the direction of Christie during 1919 from dealers residing in said states in the course of his employment, approximately 70 per cent. were from dealers in South Carolina, Florida, Alabama, and Mississippi, and approximately 30 per cent. were dealers in Georgia. Christie employs one stenographer and one filing clerk in his office. All expense incurred in maintaining said office, including rent, salaries, postage, incidental and traveling expenses incurred by him, and said additional sales agents and representatives, are paid by Christie from a fund provided for that purpose by the company and deposited in a bank in Atlanta, with the exception that the salary of said additional agents and representatives exceeding $1,200 per annum are paid by the company directly from its principal office. Christie's salary is likewise so paid. Christie, in conducting his said office and employment, keeps no books, renders no invoices to buyers, collects no accounts, and receives no money due from sales to Georgia buyers, and maintains no bank account in Georgia as hereinbefore set forth in the name of the company. He keeps on file in said office letters received and copies of letters written by him, a record of orders taken under his direction, and other papers and records necessary to the conduct of his employment. No stock of the products of the company is kept or carried in Georgia in anticipation of future orders and for immediate delivery pursuant thereto. Christie keeps on hand in said office a few salesmen's samples which are not intended or offered for sale or sold, but are used solely in soliciting orders. The company ships no products in Georgia except from its factory directly to Georgia buyers in original packages upon orders therefor received from such buyers, either directly or through the agency of Christie, or otherwise, and accepted at its said principal office.

The Act of August 20, 1918 (Acts 1918, p. 43), known as the General Tax Act, effective January 1, 1919, as amended by the Act of August 19, 1919 (Acts 1919, p. 45), imposes "upon every agent or representative of any foreign or non-resident corporation, said agent or representative having a place of business or office in this state in addition to all other taxes now required of them by law, * * * an annual license or occupation tax fixed in accordance with the capital stock of corporation represented by them," this statute imposing an occupation tax of $600 upon a corporation having a capital of over $2,000,000. It requires every sales agent or representative to go before the ordinary of the county in which he proposes to conduct said business and register his name, the business in which he proposes to engage, the place where it is to be conducted, and to pay in advance said occupation tax. Failure to register and pay said tax is a misdemeanor, and subjects such agent or representative, upon conviction, to the payment of a fine of not less than $1,200 or to imprisonment as prescribed by section 1065 of the Penal Code, or to both. As applied and of force, said act requires this company to likewise register, and in effect pay in advance said...