Southern Fruit Co. v. Porter
| Decision Date | 29 November 1937 |
| Docket Number | No. 526.,526. |
| Citation | 21 F. Supp. 1011 |
| Court | U.S. District Court — District of South Carolina |
| Parties | SOUTHERN FRUIT CO., Inc., et al. v. PORTER et al. |
Charles W. McTeer, of Chester, S. C., for petitioners.
Williams, Stewart & Williams, of Lancaster, S. C., Spencer & Spencer, of Rock Hill, S. C., O. F. Thornton, of Clover, S. C., and Hart & Moss, of York, S. C., for respondents.
This is a suit in equity brought by the petitioners to enjoin certain cities and towns in the Western District of South Carolina, from enforcing as against them certain ordinances levying a license tax on trucks delivering goods, wares, merchandise, and produce within the limits of said cities and towns and prohibiting their operation within such limits without prior payment of the license tax so assessed. The relief sought is based upon the claim by petitioners that as applied to them the ordinances violate the Commerce Clause of the Federal Constitution (article 1, § 8, cl. 3) and the equal protection clause contained in the Fourteenth Amendment thereof. Respondents assert that there is no federal or equity jurisdiction, and insist that the ordinances are valid and not in violation of any constitutional inhibitions; that the ordinances are reasonable regulatory measures requiring contribution of the amount fixed therein, and were enacted for the purpose of requiring petitioners and others in a like class to pay for the use of improved streets, and that the license was levied for the purpose of imposing upon them as users of the streets their proper prorata share of the costs of the establishment and maintenance of the same.
The facts involved have been stipulated and such as are necessary for this opinion are taken from the stipulation as follows:
The Southern Fruit Company, Inc., was chartered under the laws of the state of North Carolina, with its principal place of business in Charlotte, N. C. It maintains no place or places of business, or warehouse or warehouses in the state of South Carolina. The company has invested the sum of $150,000 in its business, of which sum $20,000 has been invested in trucks for delivery of goods and merchandise to customers in certain cities and towns in South Carolina. It is required to pay to the South Carolina highway department from thirty to sixty dollars for a license for the operation of said trucks for the years 1936 and 1937. This petitioner has been selling its goods and merchandise to its customers in York, Clover, Rock Hill, Heath Springs, Lancaster, and other cities and towns in South Carolina during the past twenty years and has built up a substantial business with customers in this state. All deliveries of goods to customers in said cities and towns are made pursuant to and in fulfillment of orders previously given to the company's salesmen by its customers, and forwarded to the company's place of business in Charlotte, N. C. No goods are sold directly from the trucks. During the calendar year 1936, the Southern Fruit Company, Inc., sold the following amounts of goods to its customers in South Carolina, and that said sales for the year 1937 will equal or exceed the sales for the year 1936:
Heath Springs, S. C., gross sales, $31,420.67, gross profit $3,142.07
Rock Hill, S. C., gross sales, 52,800.00, gross profit 5,280.00
Lancaster, S. C., gross sales, 47,076.62, gross profit 4,707.66
Clover, S. C., gross sales, 32,405.00, gross profit 3,245.00
York, S. C., gross sales, 41,974.62, gross profit 4,198.00
This petitioner has previously been notified that unless a license tax has been paid to the above-named cities and towns its drivers will be subject to arrest and fine or imprisonment for each delivery made without a license. It is agreed that the payment of license in each city and town in which this company does business of delivering its goods in South Carolina is a burden on said company.
The stipulation further shows that the investment of the several petitioners in trucks used to deliver goods and merchandise to customers in South Carolina is an investment in trucks used to deliver said merchandise in some ten or twelve cities and towns in South Carolina, and that no petitioner has an investment exceeding $2,900 in delivery equipment used exclusively to deliver goods and merchandise in any one city or town in South Carolina.
The stipulation of facts as to the other petitioners is substantially the same, except as to the remaining petitioners the amount of gross sales and gross profits is less than those of the Southern Fruit Company, Inc.
It is agreed that thousands of dollars had been expended by the several respondents at the time of the adoption of the ordinances complained of in the establishment, maintenance, repair, and upkeep of hard-surfaced streets, gutters, and curbs within the said cities and towns; and many thousands of dollars have been expended since the passage of the ordinances and much money is still being expended upon the establishment, maintenance, repair, and upkeep of said streets.
The provisions of the several ordinances are not exactly the same. The Rock Hill ordinance provides substantially that any person, firm, or corporation operating any truck or other vehicle, and using the streets of Rock Hill for the purpose of delivery and/or reception of freight, goods, wares, and merchandise for transportation upon and over the streets of Rock Hill, and conducting such business from town to town, and upon fixed dates or approximately fixed dates, and whether the operation of such trucks or other vehicles be for hire, or for the transportation and delivery of goods, wares, and merchandise belonging to the owner of such truck or other vehicle, are hereby declared to be engaged in business within the city of Rock Hill, and are constituted a class within themselves. This ordinance makes it unlawful for any person, firm, or corporation to engage in such business, or to operate in, over, and upon the streets and highways of the city of Rock Hill, any truck, or other vehicle in delivery of freight, goods, wares, and merchandise in the city of Rock Hill in the manner as above provided, without first obtaining from the city treasurer of said city a license to do business, for which license such person, firm, or corporation shall pay to the city treasurer certain sums graduated according to the tonnage of the trucks, and upon the payment of said sum or sums such person, firm, or corporation shall be licensed to do business for a period of one year, and said license shall not be transferable. The third section provides punishment for the violation of the ordinance not to exceed a fine of $100, or imprisonment for more than thirty days.
The ordinance passed by the city of Lancaster provides: "That the following licenses shall be paid in advance on or for the following vocations, business or privileges, as below specified and hereinafter mentioned, and it shall be unlawful for any of the following business or vocations or to exercise any of the following privileges within the corporate limits of the said Town of Lancaster, without first paying the license hereinafter stated for said calling or business; * * * The following are the rates fixed for the several vocations, business and privileges below specified: * * * Trucks from within or without the corporate limits of the Town, delivering goods, ware, merchandise and produce within the Town, each per year.. 50.00." The ordinance makes provision for the issuance of license upon the payment of the sums fixed therein and for punishment by fine or imprisonment for carrying on such business, calling, or vocation without paying and obtaining license, as provided in the ordinance.
The provisions of the ordinances and the amounts required to be paid for the licenses of Clover and York are not sufficiently dissimilar from the provisions of the foregoing ordinances to require a full statement thereof.
Diversity of citizenship is admitted, and the case arises under the Constitution of the United States. The bill seeks an injunction to protect the rights of petitioners to engage in interstate commerce without unlawful interference. Respondents contend, nevertheless, that the amount in dispute is less than $3,000, and for this reason there is no federal jurisdiction. Where a statute or ordinance merely seeks to impose a tax and nothing more, the only thing involved is the amount of the tax, and in such a case federal jurisdiction is tested by the amount of such tax; but where the statute or ordinance, in addition to the imposition of the tax, forbids the carrying on of the business without the payment of the tax, and the issuance of the license, the right to do business without unlawful interference is the subject of the controversy and in such case the jurisdictional amount is tested not by the amount of the tax, but by the value of the business to be protected, and the wrong to the property rights which petitioner seeks to have recognized and enforced. In this case the cities and towns have not only assessed a tax but have prohibited the operation of the trucks without the payment of the license, and have threatened to harass petitioners by prosecution of their truck drivers for each delivery made within the limits of such cities and towns. The value of the business and the property rights sought to be protected is in excess of $3,000. The amount involved, therefore, is sufficient to give this court jurisdiction. Nutt v. Ellerbe et al. (D.C.) 56 F.(2d) 1058, 1062; Station WBT, Inc. v. Poulnot, Sheriff et al. (D.C.) 46 F.(2d) 671; Hunt v. New York Cotton Exchange, 205 U.S. 322, 27 S.Ct. 529, 51 L.Ed. 821; Bitterman v. L. & N. R. Co., ...
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