Smith v. Wilkins

• Decision Date: 03 December 1913
• Citation: 80 S.E. 168,164 N.C. 135
• Parties: SMITH v. WILKINS, SHERIFF.
• Court: North Carolina Supreme Court

80 S.E. 168

164 N.C. 135

SMITH v. WILKINS, SHERIFF.

Supreme Court of North Carolina

December 3, 1913

Appeal from Superior Court, Cleveland County; Webb, Judge.

Controversy without action between A. P. Smith and D. D. Wilkins Sheriff. From a judgment for defendant, plaintiff appeals. Affirmed.

This is a controversy without action, submitted on an agreed statement of facts, and involving the validity of the peddlers' license statute. Section 44 of the Revenue Act; chapter 201, Public Laws of 1913. The plaintiff paid the tax under protest, and has brought this action against the sheriff to recover the amount paid.

The statement of facts shows that the plaintiff is engaged in Cleveland county in the business of selling proprietary medicines manufactured by the W. T. Rawleigh Medical Company of Freeport, Ill. The goods are put up by the manufacturer in small bottles and packages for use, as is usual in the case of proprietary articles, and shipped in bulk to the plaintiff, who opens the packages, and sells the small bottles and packages direct to his customers, traveling from place to place.

A correct analysis of the statute is given in plaintiff's brief as follows:

"First. Those who travel on foot, $25.

Second. Each peddler with horse, ox, or mule, with or without vehicle, or with a vehicle propelled by any other power, $75.

Third. Peddlers of medicinal and proprietary medicines, whether on foot or with a horse, mule, or ox, with or without a vehicle, or with a vehicle propelled by any other power, and no free or paid attraction, $100.

Fourth. Those who peddle medicinal and proprietary preparations who have a free or paid attractions, $150.

Fifth. Every itinerant salesman who exposes for sale upon the street or in a house rented temporarily for that purpose goods, wares, or merchandise, whether as principal or for another person, $100.

Sixth. Each person other than a bona fide citizen of the county who shall expose for sale goods, wares, or merchandise in any building rented for such purpose for a period of less than one year shall be liable to the tax herein imposed upon itinerant dealers, provided, however, that this sum shall be refunded to him if he continues to do business in the county for a period of one year.

Exemptions or exceptions in the section:

First. It provides that: 'This section shall not apply to those who sell or offer for sale books, periodicals, printed music, ice, fuel, fish, vegetables, fruits or any article of the farm or dairy, or any articles of their own individual manfacture except medicines or drugs.'

Second. The board of county commissioners shall have power, at their discretion, to exempt from tax under this section 'any poor and infirm person.'

Third. And 'shall exempt Confederate soldiers, and such license shall be good in any county in the state.'

Fourth. Provided this section shall not apply to persons, or their agents, engaged in exchanging woolen goods for wool."

"Sixth. To bona fide residents who are blind."

The plaintiff contends that the statute is void in that:

(1) The various classifications of peddlers made in said section are unjust, without reasonable grounds therefor, and are arbitrary selections made, whereby the plaintiff in this case was required to pay a prohibitive license fee for doing a legitimate business.

(2) That the exceptions made, whereby certain persons were relieved from the payment of said license fee, are unconstitutional in that they grant special privileges to persons engaged in the business of peddling, thereby relieving them of the burden of paying a license fee for peddling without any just or reasonable grounds therefor.

(3) Sections 44 and 89, when enforced together, are unconstitutional and void because they authorize the county commissioners of the various counties of the state to levy a peddler's license tax, in their discretion, of $100 for the state, and $100 for the county, which said sum of $200 is excessive, confiscatory, prohibitive, and not warranted by the Constitution of the state of North Carolina as a revenue measure or as a police measure.

(4) Said section is unconstitutional and void in that it delegates to the county commissioners of the various counties of the state power, in their discretion, to issue the license upon payment of the tax to the sheriff, as this clause in said section is obnoxious to the limitations on the legislative power contained in the Constitution of the state of North Carolina.

(5) Sections 44 and 89, when enforced together, are unconstitutional and void as repugnant to that part of section 8, art. 1, of the Constitution of the United States, known as the "Commerce Clause," because said sections, when so enforced together, permit the commissioners of the various counties of the state of North Carolina to levy a peddler's license tax so high that it operates directly in restraint of trade, and the plaintiff in this case, A. P. Smith, charges that the sum of $200 levied upon him as a peddler's license tax by the commissioners of Cleveland county, N. C., is so excessive, prohibitive, and confiscatory that it restrains him from carrying on his businesss, which is the sale, in original packages, direct to the customer, of goods manufactured by the W. T. Rawleigh Medical Company of Freeport, Ill., in compliance with the Pure Food and Drug Laws of the United States, and shipped to him in unbroken packages, in accordance with the Interstate Commerce Laws of the United States.

Judgment was rendered in favor of the defendant, and the plaintiff excepted and appealed.

John A. Barnes and Ryburn & Hoey, of Shelby, for appellant.

D. Z. Newton, Atty. Gen., and T. H. Calvert, Asst. Atty. Gen., for appellee.

ALLEN J.

In State v. Worth, 116 N.C. 1010, 21 S.E. 204, the court defines the term "trades" as including "any employment or business embarked in for gain or profit," and, while the Constitution, art. 5, § 3, is mandatory upon the General Assembly to levy a tax upon all property and by a uniform rule, the authority to tax trades is permissive only, and no rule as to the method is prescribed. It has, however, been held that the rule of uniformity applies to the tax on trades, but only to the extent that it must be equal upon all persons belonging to the class upon which it is imposed. Gatlin v. Tarboro, 78 N.C. 122; Lacy v. Packing Co., 134 N.C. 571, 47 S.E. 53.

The Legislature can lay a franchise or license tax on some callings, and it will not be illegal because some other occupations are not taxed. It can lay a fixed tax on some occupations, and graduate the tax on others by the volume of business, or in any other mode it may deem fit. Cobb v. Com'rs, 122 N.C. 307, 30 S.E. 338; State v. Stevenson, 109 N.C. 730, 14 S.E. 385, 26 Am. St. Rep. 595; State v. Carter, 129 N.C. 560, 40 S.E. 11; State v. French, 109 N.C. 722, 14 S.E. 383, 26 Am. St. Rep. 590; Albertson v. Wallace, 81 N.C. 479.

It is within the legislative power to define the different classes upon which license taxes are to be levied, and fix the tax required of each class. All the licensee can demand is that he shall not be taxed at a different rate from others in the same occupation, as "classified" by legislative enactment. State v. Stevensen, 109 N.C. 730, 14 S.E. 385, 26 Am. St. Rep. 595; Rosenbaum v. Newbern, 118 N.C. 83, 24 S.E. 1, 32 L. R. A. 123, holding that a separate license tax may be imposed on merchants and those dealing in second-hand clothing; Schaul v. Charlotte, 118 N.C. 733, 24 S.E. 526, holding brokers and pawnbrokers different classes, upon which distinct license taxes may be imposed; Connor & Cheshire, p. 270. Varying amounts may be assessed upon vocations or employments of different kinds (Worth v. Railroad, 89 N.C. 291, 45 Am. Rep. 679; State v. Worth, 116 N.C. 1007, 21 S.E. 204), and the Legislature may make selection, and is not required to tax all trades. Lacy v. Packing Co., 134 N.C. 571, 47 S.E. 53. The tax levied is presumed to be reasonable, and its reasonableness is usually within the discretion of the General Assembly. State v. Danenburg, 151 N.C. 720, 66 S.E. 301, 26 L. R. A. (N. S.) 890. Many illustrations of the exercise of this power in this state will be found in Connor & Cheshire on the Constitution, 263.

In Atchison, etc., R. R. v. Matthews, 174 U.S. 106, 19 S.Ct. 613 (43 L.Ed. 909) the court, after recognizing the right to classify, says: "It is the essence of classification that upon the class are cast duties and burdens different from those resting upon the general public. * * * The very idea of classification is that of inequality, so that it goes without saying that the fact of inequality in no manner determines the matter of constitutionality."

It was held, in Fidelity Mut. Life Ass'n v. Mettler, 185 U.S. 327, 22 S.Ct. 662, 46 L.Ed. 922, that placing life companies in a different class from mutual benefit association was not arbitrary, and rested on sufficient reason, and, in Field v. Barber Asphalt Co., 194 U.S. 618, 24 S.Ct. 784, 48 L.Ed. 1142, that it was not the purpose of the fourteenth amendment to prevent the states from classifying the subject of legislation.

In the Kentucky Railroad Tax cases (115 U.S. 337, 6 S.Ct. 63 ), the court said, in sustaining a classification of property: "There is nothing in the Constitution of Kentucky that requires taxes to be levied by a uniform method upon all descriptions of property. The whole matter is left to the discretion of the legislative power, and there is nothing to forbid the classification of property for purposes of taxation and the valuation of different classes by different methods. The rule of equality in respect to the subject only requires the same means and methods be applied impartially to all the constituents of each...