State v. Mobley, 73

• Decision Date: 17 July 1951
• Docket Number: No. 73,73
• Citation: 234 N.C. 55,66 S.E.2d 12
• Court: North Carolina Supreme Court
• Parties: State v. Mobley.

Page 12

66 S.E.2d 12

234 N.C. 55

State v. Mobley.

No. 73.

Supreme Court of North Carolina.

July 17, 1951.

Harry McMullan, Atty. Gen. and John R. Jordan, Jr. Member of staff, Raleigh, for the State.

Battle, Winslow, Merrell & Taylor, Rocky Mount, (Joe Van Derveer, Chattanooga, Tennessee, of counsel), for defendant, appellant.

JOHNSON, Justice.

Decision here rests on the Commerce Clause of the Federal Constitution. In disposing of the appeal on that ground, these two questions are posed: (1) Was the defendant, in soliciting orders for photographs, engaged in interstate commerce? (2) If so, does the challenged statute place an undue or discriminatory burden upon such interstate commerce in violation of the Federal Constitution?

1. The question of whether the defendant was engaged in interstate commerce.--The defendant insists that in soliciting orders for photographs to be processed and manufactured in the State of Tennessee she was engaged in interstate commerce. It is her contention that the series of connected in-and-out-of-state events necessary to consummate each sale, beginning with the solicitation of the order, constitutes an integrated chain of interstate commerce. She insists that the act of soliciting the order in this state and the work of processing the negatives and that of first making the proofs and later manufacturing and finishing the photographs in the out-of-state studio, is each an essential, component part of the series of events making up one composite transaction in interstate commerce. She therefore claims the protective benefits of the Commerce Clause of the Federal Constitution, Article I, Section 8, Clause 3, which provides that: "The Congress shall have Power To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes; * * * "

In support of her position, the defendant cites and relies upon the long line of "drummer" decisions of the Supreme Court of the United States beginning with Robbins v. Taxing Dist. of Shelby County, 120 U.S. 489, 7 S.Ct. 592, 30 L.Ed. 694, and running through the decision in Nippert v. City of Richmond, 327 U.S. 416, 66 S.Ct. 586, 90 L.Ed. 760.

The defendant's position appears to be well taken. It is firmly established by the "drummer" decisions that where an order is solicited by an agent and the filling of the order and delivery of the goods require their transportation from one state to another, the solicitation transaction is one of interstate commerce. Nippert v. City of Richmond, supra, 327 U.S. 416, 66 S.Ct. 586, 90 L.Ed. 760; Real Silk Hosiery Mills v. City of Portland, 268 U.S. 325, 45 S.Ct. 525, 69 L.Ed. 982; Sonneborn Bros. v. Cureton, 262 U.S. 506, 43 S.Ct. 643, 67 L.Ed. 1095; Cheney Bros. Co. v. Com. of Massachusetts, 246 U.S. 147, 38 S.Ct. 295, 62 L.Ed. 632; Crenshaw v. State of Arkansas, 227 U.S. 389, 33 S.Ct. 294, 57 L.Ed. 565; Dozier v. State of Alabama, 218 U.S. 124, 30 S.Ct. 649, 54 L.Ed. 965; Rearick v. Com. of Pennsylvania, 203 U.S. 507, 27 S.Ct. 159, 51 L.Ed. 295; Caldwell v. State of North Carolina, 187 U.S. 622, 23 S.Ct. 229, 47 L.Ed. 336; Stockard v. Morgan, 185 U.S. 27, 22 S.Ct. 576, 46 L.Ed. 785; Brennan v. City of Titusville, 153 U.S. 289, 14 S.Ct. 829, 38 L.Ed. 719; Asher v. State of Texas, 128 U.S. 129, 9 S.Ct. 1, 32 L.Ed. 368; Corson v. State of Maryland, 120 U.S. 502, 7 S.Ct. 655, 30 L.Ed. 699; Robbins v. Taxing Dist., 120 U.S. 489, 7 S.Ct. 592, 30 L.Ed. 694. See Annotations: 60 A.L.R. 994; 101 A.L.R. 126; 146 A.L.R. 941.

All the more is the act of solicitation an integral part of interstate commerce where, as in the instant case, the order obtained is subject to acceptance or rejection by the out-of-state principal. Stockard v. Morgan, supra, 185 U.S. 27, 22 S.Ct. 576, 46 L.Ed. 785. See Annotation: 60 A.L.R. 994, p. 1000 et seq.

The State, in urging that the defendant's activities in soliciting the orders for photographs may be treated as a purely local incident having no substantial relation to interstate commerce, cites and relies upon Lucas v. City of Charlotte, 4 Cir., 86 F.2d 394, 396, 109 A.L.R. 297. That case, however, is not controlling. There the plaintiffs owned a studio in St. Paul, Minnesota, and were engaged in operating a transient photographic business, with salesman and photographers operating in North Carolina under a plan of operation similar to that in the instant case. The plaintiffs brought suit in the United States District Court asking for injunctive relief against the collection of state and municipal license taxes sought to be collected as against both the convassers and photographers, alleging that their dual-state operations amounted to interstate commerce and that the taxes complained of were unduly burdensome and discriminatory. The district court dismissed the bill. 14 F.Supp. 163. On appeal, the Circuit Court in its opinion stated: "We do not think that the fact that the negatives of the photographs, after the taking, are sent away to Minnesota to be finished, makes the transaction one of interstate commerce. The actual work of the photographer is done in the state and the mechanical finishing of the negative does not change the fact that the photographer is carrying on his business in the City of Charlotte and the State of North Carolina." The court then, on finding that the amount of taxes involved did not exceed $75 per annum, held that "this amount was inadequate to confer jurisdiction upon the court," and thereupon affirmed the action of the lower court in dismissing the bill. It may be significant that the lower district court in dismissing the bill had rested its decision, in part at least, on the ground that the plaintiffs had an adequate remedy at law, and also that the bill was defective for misjoinder of parties, it appearing that both municipal and state taxing authorities had been joined in one action. Consequently, in the light of these background facts, it may well be that the Circuit Court in reaching its decision gave only oblique consideration to the interstate commerce phase of the case. Also, in the cited Lucas case it appears that the facts in respect to the details of the out-of-state processing and finishing work may not have been developed before the court so as to show, as in the instant case, the importance of these phases of the picture making business. Hence, the facts there may have been treated as being different from those in the instant case. But be that as it may, on the evidence disclosed by this record we are constrained to treat the out-of-state activities of processing the negatives and the actual making of the photographs of sufficient importance to make the composite transaction one of interstate commerce. Here it has been made to appear that the details of the work surrounding the development of the negatives, the processing of the proofs, and the manufacturing of the portraits in the studio, after developing the raw negatives, are among the most vital phases of the picture making business. To appraise these out-of-state events other than as essential parts of an interstate commercial transaction would be to ignore natural logic and the practical import of these essential phases of picture making.

While Lucas v. City of Charlotte, supra, 4 Cir., 86 F.2d 394, 109 A.L.R. 297, was decided in 1936, according to Shepard's Citation Service it has been cited with approval in only one case,--Craig v. Mills, 203 Miss. 692, 33 So.2d 801, 802 (decided in January, 1948), which is a photography case involving substantially the same plan of in-and-out-of-state operations as the instant case. The Craig case is also cited and relied upon by the State in support of its contention that the incident of solicitation should be treated as a purely local activity, not involving interstate commerce. A study of the Craig case reveals, however, that while it cites and approves the Lucas case on the principle of dissecting integrated interstate commercial transactions, nevertheless the court declined to enforce the Mississippi license tax against the studio's solicitors. In the cited Craig case, the State of Mississippi had levied a license tax as follows: "Upon each person engaged in the business of selling, delivering or handling photographic coupons, certificates, or other devices used as or in exchange on photographs, or making or developing such photographs so procured to be made, the word person herein meaning, or limited to, an individual human being or person taking photographs in this state and developing same outside this state, as follows:" (Rates, $10 to $25, depending on size of municipality in which operations were conducted).

The partnership of Olan Mills brought suit against the state tax collector to restrain the attempted collection of license taxes from each of its canvassers, photographers, and proof-passers. It was the contention of the plaintiff Studio that the collection of a separate tax from each of the members of these three groups of its employees would unduly burden the business. The Mississippi court, acknowledging that there was "considerable merit in the contention," interpreted the taxing statute as being inoperative as to the canvassers and proof-passers, thus leaving the statute to apply only to the photographers. It follows, therefore, that since the canvassers were relieved of the tax, the decision is only collaterally relevant to the question involved in the instant case dealing only with canvassers. The decision in the Craig case concedes that the plaintiff's business operations were of an interstate character. However, in sustaining the tax on the photographers, the court held that "The interstate commerce does not begin until after the work of the photographer in taking the negative is completed."

Thus, the two decisions, Lucas v. City of Charlotte, supra, and Craig v. Mills, supra, relied upon by the State, are fundamentally inconsistent. The Lucas case treats the out-of-state...