The State v. Brodnax

• Decision Date: 13 May 1910
• Citation: 128 S.W. 177,228 Mo. 25
• Parties: THE STATE v. THOMAS J. BRODNAX and FRANK E. ESSEX, Appellants
• Court: Missouri Supreme Court

128 S.W. 177

228 Mo. 25

THE STATE v. THOMAS J. BRODNAX and FRANK E. ESSEX, Appellants

Supreme Court of Missouri

May 13, 1910

Appeal from Jackson Criminal Court. -- Hon. Ralph S. Latshaw, Judge.

Affirmed.

R. F Walker, Percy Werner, Kimbrough Stone and Frank Hagerman for appellants.

(1) The statute is a revenue measure. (2) Meaning of the statute. Ins. Co. v. State, 86 Tex. 265; 6 Am. and Eng. Ency. Law 230. (3) The tax provided for by the statute is not uniform. Federal Const., Fourteenth Amendment; sec. 3 of art 10, sec. 4 of art. 10, sec. 53 of art. 4, and sec. 30 of art 2, Constitution of Missouri; State ex rel. v. Ashbrook, 154 Mo. 375; Kansas City v. Grush, 151 Mo. 128; St. Louis v. Spiegel, 75 Mo. 145; St. Louis v. Spiegel, 90 Mo. 587; People v. Mensching, 187 N.Y. 8. (4) The statute is an interference with interstate commerce. Federal Const., sec. 1, art. 8; 17 Am. and Eng. Ency. Law, 78; Robbins v. Taxing Dist., 120 U.S. 489; State v. Bockstruck, 136 Mo. 335; St. Louis v. Railroad, 14 Mo.App. 221, 89 Mo. 44; State ex rel. v. Field, 119 Mo. 593; State v. Kring, 74 Mo. 612; Railroad v. Railroad, 19 F. 679; State ex rel. v. Oil Co., 120 Ind. 575; Baldwin v. Franks, 120 U.S. 678; Poindexter v. Greenhow, 114 U.S. 270; U. S. v. Reese, 92 U.S. 214; Griffin v. State, 119 Ind. 520; Smith v. Maryland, 59 U.S. 71; N. Y. v. Miln, 36 U.S. 102; Railroad v. Husen, 95 U.S. 465; Lyng v. Michigan, 135 U.S. 161; Express Co. v. State Auditor, 166 U.S. 185; Crutcher v. Kentucky, 141 U.S. 47.

Elliott W. Major, Attorney-General, and John M. Atkinson, Assistant Attorney-General, for the State.

(1) The act in question is presumed to be constitutional until the contrary is clearly shown. Ex parte Loving, 178 Mo. 203; State v. Cantwell, 179 Mo. 261; State v. Aloe, 152 Mo. 477; State ex rel. v. Railroad, 48 Mo. 471; Atchison v. Andrews, 174 U.S. 96. (2) Appellants' first contention is that the act under consideration is a "revenue measure." The act does not provide a direct or property tax in any form whatever, but only an excise tax or occupation license requiring a written memorandum of such purchases and sales to be made as named in the act, and the placing on such memorandum of contracts a twenty-five cent stamp, to be bought from the State and furnished by the State Auditor. In a measure the act does produce revenue for the State, as all excise, privilege or occupation license laws do. (3) (a) Appellants' second contention is that the excise or license tax provided for by the act is not uniform, and therefore the act violates both the State and Federal Constitutions, and for that reason is void. Section 3 of article 10 of the Constitution of Missouri is clearly construed by Judge Gantt in the case of Kansas City v. Grush, 151 Mo. 135. The classification by the Legislature of all sales of the said named articles on "margins" is reasonable. Classification of sales on "margins," or what is most commonly called "futures," is not arbitrary. There is much good reason to have a record made of such sales as a police regulation. Otis v. Parker, 187 U.S. 609. Optional sales in grain were entirely prohibited by statute in Illinois. Booth v. People, 186 Ill. 43; Booth v. Illinois, 184 U.S. 425. We wish to keep before the court our contention that the excise tax of twenty-five cents provided for by the act, is not imposed upon the property sold at such sale, or on the broker making the sale, but is an excise or license tax upon the right to make such sale, and on the sale itself. People ex rel. v. Reardon, 184 N.Y. 442. There is no express restriction upon this power in our State Constitution and no implied restriction, except by the primary guaranties relating to life, liberty, property and due process of law. The same is true of the Federal Constitution, except as to certain subjects of national interest under the control of Congress, such as imports, patent rights and agencies used to carry the powers of Congress into execution. Subject to these restraints, the Legislature has supreme control of the power to tax, and its action, even if arbitrary, discriminating and unreasonable, is binding upon all persons and property within the boundaries of the State. United States v. Thomas, 192 U.S. 363; Nicol v. Ames, 173 U.S. 509; People ex rel. v. Reardon, 204 U.S. 152. (b) The excise tax is uniform on all persons and corporations coming within the classification made by the act. Each person or corporation making a sale of such articles named in the act on "margins," when the same is not delivered and paid for at the time of sale, is required to pay a stamp tax of twenty-five cents. The Legislature had a perfect right to fix the amount of the stamp tax on the number of sales made by each broker instead of on the amount of each sale. Hatch Case, supra, 446; Hagar v. Reclamation District, 111 U.S. 701. The rule as to classification does not require absolute equality in taxation even in the same class. Absolute equality in an excise or occupation tax law is a physical impossibility. Magoun v. Bank, 170 U.S. 300; Clark v. Titusville, 184 U.S. 330; Matter of Keeney, 194 N.Y. 285; Beers v. Glynn, 211 U.S. 477; Railroad v. Powers, 201 U.S. 301; Knowlton v. Moore, 178 U.S. 41; People ex rel. v. Reardon, 204 U.S. 160; State v. Seebold, 192 Mo. 731; Commonwealth v. Wright, 79 Ky. 22; State ex rel. v. Currens, 111 Wis. 431. (4) Appellants further contend that the act is an interference with interstate commerce, and for that reason the same is void as being in conflict with the Federal Constitution. This same contention was made against the New York transfer stamp law in the Hatch Case, supra. See, also, the following authorities: Ware v. Mobile Co., 209 U.S. 405; Ware v. Mobile Co., 146 Ala. 153; Coal Co. v. Louisiana, 156 U.S. 590; Plumley v. Massachusetts, 155 U.S. 473; Alexander v. State, 86 Ga. 246. (5) A final complaint made by appellants is that the title to the act is defective when measured by the requirements of our Constitution. The title sufficiently expresses the subject-matter of the act and is not subject to the criticism made by appellants. State v. Doerring, 194 Mo. 398; Coffey v. Carthage, 200 Mo. 616; O'Connor v. Railroad, 198 Mo. 622; Taylor v. Railroad, 198 Mo. 715; State ex rel. v. Delmar Jockey Club, 200 Mo. 34.

FOX, C. J. Gantt, Burgess, Valliant and Lamm, JJ., concur; Graves, J., dissents; Woodson, J., not sitting.

OPINION

In Banc.

FOX, C J. --

This is a prosecution of the defendants begun in the criminal court of Jackson county, Missouri, for a violation of an act of the Legislature passed in 1907 (Laws 1907, p. 392), and commonly known as the "Stamp Act." This act was approved March 8, 1907.

The indictment upon which the judgment in this cause rests, omitting formal parts, is as follows:

"The grand jurors for the county of Jackson, State of Missouri, being duly impaneled, upon their oath present and charge that at the county of Jackson, State of Missouri, on the .... day of January, 1908, Thomas J. Brodnax and Frank E. Essex, officers and agents of the Board of Trade of Kansas City, Missouri, a voluntary association, did then and there willfully and unlawfully keep and cause to be kept a place commonly called the trading floor of the Board of Trade of Kansas City, wherein was then and there permitted the buying and selling of grain, provisions and other commodities, on margins and otherwise, and where at the time of such sales, so permitted as aforesaid, the grain, provisions and other commodities, so sold as aforesaid, were not then and there actually paid for and delivered, and at such time and place the sellers, or any of them, whose names are to the grand jury unknown, of the grain, provisions and other commodities, so sold on margins and otherwise, as aforesaid, did not then and there cause to be made a complete record of the grain, provisions and other commodities sold, the purchasers and the time of delivery in a book kept for that purpose, and at said time and place the sellers, or any of them, whose names are to the grand jury unknown, did not then and there deliver to the purchasers of said grain, provisions and other commodities, so sold as aforesaid, a written or printed memoranda of said sales, on which they, the said sellers, or any of them, had placed or caused to be placed a stamp of the value of twenty-five cents, which they, the sellers, had purchased of the State Auditor and had on hand before making such sales; contrary to the statutes in such case made and provided, and against the peace and dignity of the State."

To this indictment the defendants interposed a demurrer, in which the constitutionality of the act upon which the indictment is predicated is challenged. Such demurrer, in substance, alleged that said indictment does not state facts which constitute an offense against the State of Missouri, and that the statute, the violation of which is alleged in said indictment, is null and void, being in violation of sections 20 and 30 of article 2, and sections 28 and 53 of article 4, and of sections 3 and 4 of article 10, of the Constitution of the State of Missouri, and of the Interstate Commerce provisions of section 8 of article 1, and of the Fourteenth Amendment to the Constitution of the United States.

The defendants were duly arraigned and entered each for himself a plea of not guilty.

By consent of the parties to this proceeding a jury was waived and the cause was submitted to the court for trial. Before the introduction of any evidence defendants objected to the introduction of any evidence on the following grounds, to-wit:

"1. The statute under which this proceeding is instituted is discriminatory, abridges the privileges and immunities of citizens of the United States, deprives defendants of...