71 So. 2d 7 | Ala. | 1954
The question in this case is whether or not appellant as a commission merchant or merchandise broker is liable for a state license of $25 and a county license of $12.50, section 493, Title 51, Code, by reason of the interstate nature of his business.
Complainant (appellant) filed a bill for a declaratory judgment in that respect. Respondent (appellee), the state license inspector, demurred to the bill on the ground that it shows that complainant is not relieved of liability on account of the interstate nature of his business. The trial court sustained the demurrer and dismissed the bill, and complainant appealed.
The nature of appellant's business is thus expressed in the ninth paragraph of the bill:
"Complainant avers that he is not liable for the license claimed for any of the years and avers that the true facts as to his manner of doing business are as follows: Complainant is what is commonly known as a manufacturer's agent. As such agent, he represents a number of manufacturers whose places of business are located out of the state of Alabama; that complainant's entire business consists of soliciting and securing orders from customers in Alabama for the products manufactured by the out-of-state manufacturers whom complainant represents; that complainant secures an order from a customer in Alabama and transmits it, usually by United States mail but occasionally by telegraph or telephone, to the home office located outside the state of Alabama of the manufacturing company which sells such product. Such order when received by the home office is subject there to acceptance by the company. If the order is accepted by the company, shipment of the product is made by common carrier from a point outside the state to the purchaser in the state of Alabama, said shipment being made direct to purchaser, and not to complainant. Such purchaser remits payment for such merchandise directly to the company outside the state and complainant does not take any part or have anything to do with its collection.
"Upon the acceptance of such order, the company advises complainant that the same has been accepted and pays complainant a certain commission on such orders as are accepted. Complainant maintains an office in Birmingham and his name is listed in the telephone directory at such office. The office is maintained as a matter of headquarters and general convenience. No *357 stock of goods is carried there or elsewhere by complainant in the state of Alabama. No sales are concluded at such office or elsewhere in the state of Alabama. No books are kept by complainant, other than a memorandum nature, showing orders which have been transmitted to the various companies. The great majority of the orders secured by complainant are by personal solicitation, which are promptly transmitted to the home office of the particular company as above described; that an occasional order is telephoned to complainant's office and transcribed, but such orders are promptly forwarded to the home office of the particular company selling the product desired for acceptance or rejection. Complainant is without authority to close any sale, but his entire business consists of taking orders, forwarding them to the home office of the particular company, where they are accepted or rejected, and if accepted, complainant is paid a commission. Complainant does not pass on or determine the credit of any person from whom he secures orders, but such matters are determined by the home office; that complainant's manner of operation for each of the years involved was as set out hereinbefore.
"Complainant avers that his business consists entirely of interstate commerce and that under the holding of the Supreme Court of the United States, the imposition of the license claimed by the said Bradley G. Brown is unconstitutional and void."
The decisions of the United States Supreme Court have been careful not to sustain a state tax laid on interstate commerce, though it may sometimes approve a non-discriminatory tax which affects commerce. The decisions particularly here in point extend from Robbins v. Taxing District of Shelby County,
In our case of Stratford v. City Council of Montgomery,
There has been nothing to qualify the effect of that decision unless it is the case of State v. Stein,
On the other hand, the extract which we quoted above from the Stratford case was also quoted by the Supreme Court of the United States in the case of Stockard v. Morgan,
It was said in McGoldrick v. Berwind-White Coal Mining Co.,
Another line of cases considered by the Supreme Court of the United States and based on the Robbins case, supra, very clearly holds that one who goes from house to house or person to person and solicits and accepts orders for the purchase of goods to be sent in interstate transportation from an out-of-state principal of such solicitor direct to the customer within the state, who (customer) pays the price of the same directly to the principal, is engaged in interstate commerce and his business cannot be subject to a state tax. Real Silk Hosiery Mills v. City of Portland,
It also seems to be settled that a law or ordinance which taxes such interstate transaction cannot be sustained simply because it is non-discriminatory. Joseph v. Carter Weekes Stevedoring Co.,
In the case of J. E. Raley Bros. v. Richardson,
Our courts has two later cases on the subject. One is the case of State v. W. M. Meador Co.,
In the Stein case, supra [
"Stating generally the effect of the agreed statement of facts, it will be noted that Stein has been engaged in the brokerage business in the city of Mobile since October, 1937, under the firm name or style of 'Stein Brokerage Company, Merchandise Broker.' Stein negotiated contracts with bona fide wholesale grocers, with certain definite principals, all of whom have their place of business without the State of Alabama. Stein represented only such principals as were satisfactory to him, and for his services received a commission based on the sale price of goods purchased, which said commission was remitted at the conclusion of each month for business done during that month by the said Stein in the City of Mobile, Alabama."
This shows that Stein's business was not confined to certain out-of-state principals with whom he had a contract. The court held that the taxpayer was not engaged in interstate commerce and that if he were the license tax upon him was non-discriminatory and, therefore, was not inconsistent with the commerce clause of the Constitution. The opinion relied upon the cases of Graybar Electric Co. v. Curry,
It may be that in the Stein case the court reached the correct result in view of the fact that Stein was said to be engaged in the brokerage business in the city of Mobile, and apparently not confined to out-of-state principals, although it is said he represented only certain definite principals outside of the state. It does not show that he did not hold himself out as being willing to represent principals located within the state. In other words, the report of the case does not show that he was not engaged in the general business, as defined in the cases supra, and if so he was subject to a license tax in a lump sum on his brokerage business, although, for the time being, it consisted only of representing out-of-state principals.
It is apparent that to be subject to the merchandise broker's license tax, one must be a broker as defined in the Stratford case, supra, and not merely an agent. If he is a broker as there defined, he is liable for the tax unless his business is so limited as only to include representation of out-of-state principals, and therefore not to be an invitation to local dealers as well. For "he might, as he did, confine himself to interstate business, and still be a 'broker,' without becoming liable to the tax." Stratford case, supra, [110 Ala. at page 628, 20 So. at page 129].
It will be observed by referring again to paragraph nine of the bill that it is alleged that appellant was a "manufacturer's agent" (not a broker) and that "his entire business consists of soliciting and securing orders from customers in Alabama for the products manufactured by theout-of-state manufacturers whom complaint represents".
The fact he is a manufacturer's agent and that his entire business consists of representing his out-of-state principals is sufficient to show not only that he has heretofore dealt solely with out-of-state principals, but that his business is confined to them as their agent. If it is confined to them, it excludes local dealers to whom he might have extended his business. His allegations also imply that he has a contract with his out-of-state principals. It is with that understanding of the meaning of the allegations of the bill, we think it shows that appellant is not liable to a tax on "merchandise brokers" as set out in the statute. That status might be the subject of further pleading and evidence. Appellant is not a "commission merchant", in that, he is not entrusted with the possession of goods to sell on commission. 12 C.J.S., Brokers, § 2, page 8.
As a result, the judgment of the circuit court should be reversed and one here rendered reinstating the cause in that court, overruling the demurrer to the bill and remanding the cause, with an allowance of thirty days in which to answer the bill.
The foregoing opinion was prepared by Foster, Supernumerary Justice of this Court, while serving on it at the request of the Chief Justice under authority of Title 13, section 32, Code, and was adopted by the Court as its opinion.
Reversed, rendered and remanded.
LIVINGSTON, C. J., and LAWSON, STAKELY AND MERRILL, JJ., concur. *361