Great Atlantic & Pacific Tea Co. v. Maxwell

• Decision Date: 17 September 1930
• Docket Number: 250.
• Parties: GREAT ATLANTIC & PACIFIC TEA CO. et al v. MAXWELL, State Com'r of Revenue.
• Court: North Carolina Supreme Court

154 S.E. 838

199 N.C. 433

GREAT ATLANTIC & PACIFIC TEA CO. et al v. MAXWELL, State Com'r of Revenue.

No. 250.

Supreme Court of North Carolina

September 17, 1930

Appeal from Superior Court, Wake County; Nunn, Judge.

Action by the Great Atlantic & Pacific Tea Company and others against Allen J. Maxwell, Commissioner of Revenue of North Carolina. Judgment for defendant, and plaintiffs appeal.

Affirmed.

The above-entitled action was begun in the superior court of Wake county, on August 29, 1929, to recover sums of money paid by the plaintiffs to the defendant, commissioner of Revenue of North Carolina, as license taxes for the privilege of engaging in business in this state as branch or chain store operators, for the twelve months beginning on June 1, 1929 and ending on May 31, 1930. The taxes were levied and collected by defendant from each of the plaintiffs under and by virtue of the provisions of section 162 of chapter 345, Public Laws of North Carolina, Session 1929. In accordance with the provisions of the statute, a state license was issued to each of the plaintiffs, under which said plaintiff has engaged in the business in this state authorized thereby.

Chapter 345, Public Laws of North Carolina, Session 1929, is entitled "An Act to Raise Revenue." The said act contains a section which is in the following words:

"Sec 443. State Taxes. No ad valorem tax on any property in the State shall be levied for any of the uses of the State Government. The taxes levied in this act are for the expenses of the State Government, the appropriations to its educational, charitable, and penal institutions, pensions for Confederate soldiers and widows, the interest on the debt of the State, an equalizing fund for public schools, and other specific appropriations made by law, and shall be collected and paid into the general fund of the State Treasurer."

Section 162 of said act is included in schedule B, which is article 2 of said act, entitled "License Taxes." It is provided in said article that "taxes in this article or schedule shall be imposed as a State License Tax for the privilege of carrying on the business, exercising the privilege, or doing the act named." The said section is in words as follows:

"Sec. 162. Branch or Chain Stores. Every person, firm or corporation engaged in the business of operating or maintaining in this State, under the same general management, supervision, or ownership, two or more stores or mercantile establishments where goods, wares, and/or merchandise is sold or offered for sale at retail shall be deemed a branch or chain store operator, shall apply for and obtain from the Commissioner of Revenue a State license for the privilege of engaging in such business of a branch or chain store operator, and shall pay for such license fifty dollars ($50.00) on each and every such store operated in this State in excess of one."

Each of the plaintiffs, whether a person, a firm, or a corporation, is a branch or chain store operator as defined in said section, and as such, at the time payment of the tax was demanded by the defendant, was, by the terms of said section, liable for the sum demanded as a license tax for the privilege of carrying on said business in this State. Payment of the sum demanded was made by each of the plaintiffs, under protest in writing, on the ground that the statute, under the provisions of which the tax was demanded, is void for that it was enacted in violation of both section 3 of article 5 of the Constitution of North Carolina, and section 1 of the fourteenth Amendment to the Constitution of the United States.

This action was thereafter begun to recover of the defendant the sums paid by the plaintiffs, respectively, under the provisions of section 464, chapter 345, Public Laws of North Carolina, Session 1929. It was agreed by and between plaintiffs and defendant that plaintiffs might join in one action, instead of bringing numerous separate actions, and that defendant would waive compliance by plaintiffs with certain provisions of said section, with respect to demand for the refund of said sums, prior to the commencement of this action.

When the action was called for trial, it was stipulated and agreed by and between the parties that all issues of fact arising on the pleadings should be determined by the court, without the intervention of a jury. The court thereupon heard the evidence offered by the plaintiffs, and, defendant having offered no evidence, from this evidence found the facts set out in the judgment. Upon these facts, the court was of opinion, and so found: "The classification of plaintiffs' business for the purpose of the license, business or occupation tax imposed by section 162, Chapter 345, Public Laws of North Carolina, Session 1929, is neither arbitrary nor unreasonable, is not a violation of the State or Federal Constitution, but said license, privilege or occupation tax is imposed by uniform rule, does not deprive plaintiffs of their property without due process of law or deny them the equal protection of the law."

It was, thereupon, considered, ordered, and adjudged that section 162, Public Laws of North Carolina Session 1929, is not void, but is valid and constitutional; that plaintiffs take nothing by this action, and that defendant go hence without day, and recover his costs to be taxed by the clerk of the court.

From this judgment, plaintiffs appealed to the Supreme Court.

Sullivan & Cromwell, of New York City, and Tillett, Tillett & Kennedy, of Charlotte, for appellant Great Atlantic & Pacific Tea Co.

Pender, Way & Foreman, of Norfolk, Va., and McLean & Stacy, of Lumberton, for appellant David Pender Grocery Co.

Perry & Kittrell, of Henderson, for appellant Rose's 5, 10 & 25 Cents Stores.

Davies, Auerbach & Cornell, of New York City and Pou & Pou, of Raleigh, for appellant F. W. Woolworth Co.

Gwinn & Pell, of New York City, and Pou & Pou, of Raleigh, for appellant J. C. Penney Co.

Douglas, Armitage & McCann, of New York City and Pou & Pou, of Raleigh, for appellant G. R. Kinney Co., Inc.

Gwinn & Pell, of New York City, and Pou & Pou, of Raleigh, for appellant W. T. Grant Co.

Pou & Pou, of Raleigh, for appellant Carolina Stores, Inc.

Murray Allen, of Raleigh, for appellant Milner Stores Co.

A. S. Jayne, of Chicago, Ill., and Pou & Pou, of Raleigh, for appellant Montgomery Ward & Co.

Tillett, Tillett & Kennedy, of Charlotte, for appellant Merit Shoe Co.

Moses & Singer, of New York City, and Tillett, Tillett & Kennedy, of Charlotte, for appellant National Bellas Hess Co.

Peacock & Dalton, of High Point, for appellant McLellan Stores Co.

Robert H. Sykes, of Durham, for appellant M. Samuels & Co., Inc.

Smith & Joyner, of Raleigh, for appellant L. B. Price Mercantile Co.

Smith & Joyner, of Raleigh, for appellant Acorn Stores, Inc.

Lederer, Livingston, Kahn & Adler, of Chicago, Ill., and Pou & Pou, of Raleigh, for appellant Sears-Roebuck & Co.

Pou & Pou, of Raleigh, and Tillett, Tillett & Kennedy, of Charlotte, for appellant A. C. Fite.

Gwinn & Pell, of New York City, and Pou & Pou, of Raleigh, for appellant Melville Shoe Corporation.

Dennis G. Brummitt, Atty. Gen., and Frank Nash, and Walter D. Siler, Asst. Atty. Gen., for appellee.

CONNOR J.

The principal question presented by this appeal, as stated in the brief filed for plaintiffs in this court, is whether section 162 of chapter 345, Public Laws of North Carolina, Session 1929, was enacted by the General Assembly of this state in violation of provisions of the Constitution of North Carolina, or of the Constitution of the United States, as contended by plaintiffs. If there was error in the opinion of the court below that the section is valid and constitutional, the judgment in accordance with said opinion must be reversed; otherwise, the judgment must be affirmed. The questions presented by plaintiffs' assignments of error based on their exceptions with reference to the findings of fact by the court are not determinative of the appeal, and, in the view which we take of the principal question presented for decision, need not be discussed or decided. It is admitted in the answer filed by the defendant that the section of the statute involved in this action was enacted by the General Assembly solely for the purpose of raising revenue for the use of the state. An examination of chapter 345, Public Laws of North Carolina, Session 1929, which includes this section, shows clearly and unmistakably, we think, that defendant properly admitted the allegation of the complaint that ""said statute is a revenue act, pure and simple. It was not intended to promote morality, health, or public order." There is nothing on the face of the statute, or in the findings of fact made by the court and pertinent to a decision of the question involved in this action, which shows or tends to show that the statute, or any section thereof, was enacted by the General Assembly in the exercise of the police power inherent in the government of this state. Nor is there anything in the record from which a purpose can be inferred on the part of the General Assembly, by the enactment of section 162, Public Laws of 1929, to subject operators of branch or chain stores in this state to the police power. It is therefore immaterial for the purpose of deciding the question presented by this appeal whether chain stores are beneficial to the public or not. The question is whether operators of such stores may be lawfully taxed for the privilege of engaging in business in this state, as provided in section 162 of Chapter 345, Public Laws 1929.

The policy of the state of North Carolina with respect to raising revenue for state purposes is well settled. It is provided in section 3 of article 5 of the Constitution...