Sperry v. Hill

• Decision Date: 05 October 1915
• Citation: 76 W.Va. 680
• Court: West Virginia Supreme Court
• Parties: Sperry & Hutchinson Co. v. Hill, Sheriff.

76 W.Va. 680

Sperry & Hutchinson Co.

v.Hill, Sheriff.

Supreme Court of Appeals of West Virginia.

Submitted September 7, 1915.

Decided October 5, 1915.

Commerce '' Interstate Commerce'' State License Tax Trading Stamps.

A company carrying on the business of selling to merchants in this state, upon mail orders addressed to it at its place of business in another state, merchants trading stamps, and redeeming same with premiums shipped from such other state as ordered, is engaged in interstate commerce, and can not be required to pay a state license tax for the privilege of conducting such business.

Appeal from Circuit Court, Kanawha County.

Suit by the Sperry & Hutchinson Company against Bonner Hill, Sheriff, etc. From decree for plaintiff, defendant appeals.

Affirmed.

Fred, O.Blue and John T. Simms, for appellant.

Mollohan, McClintic & Mathews and John Hall Jones, for appellee.

"Williams, Judge:

Claiming that plaintiff was engaged in a merchants trading stamp business in the counties of Preston and Mineral, during the fiscal year beginning July 1, 1913, and ending June 30, 1914, for which it is required by law to pay an annual license tax of $500 in each of said counties, the state tax commissioner issued license taxes for each of said counties, adding thereto the statutory penalty for failure to pay promptly, and placed them in the hands of the respective sheriffs of said counties for collection They were later returned, with the officer's statements endorsed thereon that plaintiff had no property in said counties. The tax commissioner thereupon placed them in the hands of defendant, sheriff of Kanawha county, who levied them upon plaintiff's property in the city of Charleston, Kanawha county. Plaintiff then filed its bill in the circuit Court of Kanawha county against said sheriff, averring that it had done no business in either of said counties, within the license year above named, for which it is liable to pay a tax, and had made no application to the tax commissioner for such license, and prayed that the sheriff be perpetually enjoined from selling its property, and that the license tax be declared illegal and void. Defendant demurred and answered, denying the allegations of the bill. Plaintiff replied generally, and on the 28th of September, 1914, the cause was heard upon depositions taken by each of the parties to the cause, and a final decree made, in which the court held that plaintiff was not, in any manner, engaged in business in Preston county, and that the business done by it in Mineral county, for the license year named, was done solely by mail orders sent from that county to its branch office in Cumberland, Maryland, and was, therefore, an interstate business, for which plaintiff was not liable to pay a license tax in this state, and perpetually enjoined defendant from selling the property levied on. By this appeal defendant seeks a reversal of that decree.

Plaintiff is a New Jersey corporation authorized by charter to carry on a merchants trading stamp business, which is a peculiar form of advertising the business of retail merchants, having its principal place of business in the city of New York, and branch offices elsewhere.

Sec. 2, clause (j), Ch. 32, Code 1913, provides as follows: "No person without a State license therefore shall * * * (j) sell, offer or expose for sale to merchants, trading stamps, premium stamps or certificates of like nature or character or undertake with merchants to redeem such stamps or certificates in money or goods." By See. 35, same chapter, such license is required for each county in which such business is carried on; by Sec, 101, the annual license tax is fixed at $500; and Sec. 121, provides a penalty of 10% of the tax for each month's default made in the payment thereof.

That the legislature has the right to prescribe a license tax for the privilege of conducting the business in which plaintiff was engaged, when carried on in this state, is not denied. That question was decided in Sperry & Hutchinson Co. v. Melton, 69 W. Ya. 124.

Defendant contends that plaintiff sold stamps to the Offutt-Lakin Company, and also redeemed them in the license year beginning July 1, 1913. This it denies, but admits that it paid a license tax in Preston county for the fiscal year beginning July 1, 1911, and also for the fiscal year next following. But, for the latter year, it claims that it was not legally bound to pay the tax, and did so under protest, and after levy therefor had been made on its goods in Clarksburg. A contract, between it and the Offutt-Lakin Company, retail merchants doing busines at Terra Alta, Preston county, dated June 18, 1912, appears in the record, by which it agreed to sell Offutt-Lakin Company trading stamps, and redeem them from their cash customers. That agreement was for a year from...