118 Tenn. 717 | Tenn. | 1907
delivered the opinion of the Court.
Complainant, a commercial corporation created and organized under the laws of the State of Illinois; with its domicile, chief office, and place of business in the city of Chicago, and engaged in selling merchandise directly to consumers through its agents in this and other States, filed this bill in the chancery court of Weakley county against E. E. Tansil and others, officers of Weak-ley county and the town of Sharon, to enjoin the collection of privilege taxes imposed by those municipali
The contention of the complainant is that the business conducted by it in Sharon and Weakley county is interstate commerce and within the protection of the commerce clause of the constitution of the United States. If this contention is supported by the facts, the tax cannot be legally collected. If the business conducted is commerce within the State, complainant must pay the tax as other merchants doing business in Sharon and Weakley county.
Complainant’s method of doing business in the several States other than that of its domicile is as follows:
A representative or salesman goes into a community and solicits orders from the inhabitants for merchandise, to be paid for on delivery at some place in the community if found as represented. The orders obtained are reduced to writing in duplicate, and contain a list of the articles desired by a customer and the prices to be paid for them; one copy being given to the customer, and the other retained by the salesman. These orders generally call for several different articles, and in many instances several customers order articles of the same kind and in the same quantities. When the canvass of the community is completed, the salesman classifies the merchandise called for in the several individual orders obtained, ascertains the number or quantity of each article, and sends to his employer one general order covering the aggregate number or quantity of articles
When the boxes and barrels containing the aggregate order arrive at the place for delivery, the salesman receives and opens them at some convenient place, and separates and arranges the goods for delivery, by placing all articles of a kind together.
When a customer appears, the written order given by him is examined, and the articles therein called for are taken out of the several piles of merchandise and
This was the manner in which complainant did business in Sharon and Weakley county. The orders obtained in Sharon were for family groceries, and aggregated about three hundred dollars.
We are of the opinion that this was commerce within the State, and not interstate commerce. The boxes and barrels in which this merchandise was packed by complainant and delivered to the carrier in Chicago, to be transported to Sharon, Tennessee, there to be delivered to its salesman, were original packages within the meaning of the commerce clause of the constitution of the United States, and when complainant’s salesman broke them, and classified and assorted the contents, they became commingled with and a part of the common mass of the property of-the State, and were subject to its police regulations and revenue laws. The several small packages of different articles contained in the boxes and barrels were not of such a character as are ordinarily and according to the usages of trade and commerce prepared and delivered by dealers to carriers for transportation. They were not put up or consigned for any particular customer to fulfill a contract or sale which the
No sale was consummated' until the original packages in which the merchandise was shipped were broken, their contents classified, and segregation and appropriation made; the whole remaining the property of complainant until then. These facts clearly establish that complainant was engaged in the business of a retail merchant in Sharon and Weakley county, and in our opinion rendered it liable for the privilege taxes imposed upon merchants, which the defendants were attempting to collect by proper proceedings. We do not deem it necessary to indulge in an elaborate discussion of the adjudged cases upon the subject of interstate commerce, but will content ourselves with referring to a few, which we think fully sustain our conclusion in this one. They are Austin v. State, 101 Tenn., 563, 48 S. W., 305, 50 L. R. A., 478, 70 Am. St. Rep., 703; Kimmell v. State, 104 Tenn., 184, 56 S. W., 854; Croy v. Obion County, 104 Tenn., 525, 58 S. W., 235, 51 L. R. A., 254, 78 Am. Rep., 931; Austin v. Tenn., 179 U. S., 343, 21
Tie material facts of the case last cited (May v. New Orleans) are substantially the same as those of this, and the conclusions of the court upon them are, we think, decisive of it.
The system of doing business adopted by the complainant is a thinly veiled scheme, under the guise of interstate commerce, to evade the revenue laws of the several States and obtain an unfair and unjust advantage over local dealers in competition in the sale of goods and merchandise. If such a scheme can be sustained, it will greatly demoralize all police regulations of the sale of merchandise and eventually destroy a large part of the revenues of the several States. We do not think the framers of the constitution intended or contemplated that the clause here invoked shonld have this effect, or be abused in the manner here attempted.
We do not think this case controlled by that of Rearick v. Commonwealth of Pennsylvania (lately decided by the supreme court of the United States), 203 U. S., 507, 27 Sup. Ct., 159, 51 L. Ed., 295, the opinion being delivered by 'Mr. Justice Holmes. The sales involved in that case were made by an Ohio corporation, with domicile in that State, to consumers in Pennsylvania, npon orders obtained by a traveling salesman, and anumber of articles for different customers were shipped in one box or package to the agent in the latter State to be delivered; but in
The case of Rearick v. Commonwealth of Pennsylvania, we think, carries the protection of the commerce clause of the constitution to its utmost limit. We do not believe that it will be further extended, certainly not to cover a case of this kind.
We are therefore of the opinion that there is no error in the decree of the chancellor dismissing complainant’s bill, and it is affirmed, with costs.