Smith v. Wilkins

AlleN, J.

In S. v. Worth, 116 N. C., 1010, tbe Court defines tb© term “trades” as including “any employment or business embarked in for gain or profit,” and while tbe Constitution, Art. V, sec. 3, is mandatory upon tbe General Assembly , to levy a tax upon.all properly and by a uniform rule, tbe authority to tax trades is permissive only, and no rule as to tbe method is prescribed.

It has, however, been held that tbe rule of uniformity applies to tbe tax on trades, but only to tbe extent that it must be equal upon all persons belonging to tbe class upon which it is imposed. Gatlin v. Tarboro, 78 N. C., 122; Lacy v. Packing Co., 134 N. C., 571.

Tbe Legislature can lay a franchise or license tax on some callings, and it will not be illegal because some other occupations are not taxed. It can lay a fixed tax on some occupations and graduate tbe tax on others by tbe volume of business, or in any other mode it may deem fit. Cobb v. Commissioners, 122 N. C., 307; S. v. Stevenson, 109 N. C., 730; S. v. Carter, 129 N. C., 560; S. v. French, 109 N. C., 722; Albertson v. Wallace, 81 N. C., 479.

It is within the legislative power to define the different classes upon which license taxes are to be levied,, and fix tbe tax required of each class. All tbe licensee can demand is that be shall not be taxed at a different rate from others in tbe same occupation, as “classified” by legislative enactment. S. v. Stevenson, 109 N. C., 730; Rosenbaum v. New Bern, 118 N. C., 83, bold-ing that a sejiarate license tax may be imposed on merchants and thosé dealing in second-hand clothing; Schaul v. Charlotte, 118 N. C., 733, bolding brokers and pawnbrokers different classes upon which distinct license taxes may be imposed. Con-nor and Cheshire, p. 270.

Varying amounts may be assessed npon vocations or employments of different kinds (Worth v. R. R., 89 N. C., 291; S. v. Worth, 116 N. C., 1007), and tbe Legislature may make selection and is not required to tax all trades. Lacy v. Packing Co., 134 N. C., 571.

Tbe tax levied is presumed to be reasonable, and its reasonableness is usually .witbin tbe discretion of tbe General Assembly. S. v. Danenberg, 151 N. C., 720.

Many illustrations of tbe exercise of tbis power in tbis State will be found in Connor and Cheshire on tbe Constitution, 263.

In R. R. v. Matthews, 174 U. S., 106, tbe Court, after recognizing tbe right to classify, says: “It is tbe essence of classification that upon tbe class are cast duties and burdens different from those resting upon tbe general public. Tbe very idea of classification is inequality, so that it goes without saying that tbe fact of inequality in no manner determines tbe matter of constitutionality.”

It was held in Life Association v. Mutter, 185 U. S., 327, that placing life companies in a different class from mutual benefit associations was not arbitrary, and rested on sufficient reason, and in Field v. Asphalt Co., 194 U. S., that it was not tbe purpose of tbe fourteenth amendment to prevent tbe States from classifying tbe subjects of taxation.

In tbe Kentucky Railroad Tax cases, 115 U. S., 337, tbe Court said, in sustaining a classification of property: “There is nothing in tbe Constitution of Kentucky that requires taxes to be levied by a uniform method upon all descriptions of property. Tbe whole matter is left to tbe discretion of tbe legislative power, and there is nothing to forbid tbe classification of property for purposes of taxation and tbe valuation of different classes by different methods. Tbe rule of equality, in respect to tbe subject, only requires that tbe same means and methods be applied impartially to all tbe constituents of each class, so that tbe law shall operate equally and uniformly upon all persons in similar circumstances. There is no objection, therefore, to tbe discrimination made as between railroad companies and other corporations in the methods and instrumen-talities-by which the value of their property is ascertained.

It is also said in Gundling v. Chicago, 177 U. S., 188 : “Regulations respecting the pursuit of a lawful trade or business are of very frequent occurrence in the various cities of the country, and what such regulations shall be, and to what particular trade, business, or- occupation they shall apply, are questions for the State to determine, and their determination comes within the proper exercise of the police iiower by the State, and unless the regulations are so utterly unreasonable and extravagant in their nature and purpose that the property and personal rights of the citizen are unnecessarily, and in a.manner wholly arbitrary, interfered with or destroyed without due process of law, they do not extend beyond the power of the State to pass, and they form no subject for Federal interference.”

It must appear, however, that the classification has been made, and it must be based on some difference which bears a just and proper relation to the attempted classification. R. R. v. Ellis, 165 U. S., 165; Lacy v. Packing Co., supra; S. v. Danenberg, 151 N. C., 718.

The rule -which should guide the courts in determining whether the legislative department has transcended its powers is also well established. In Ency. U. S. S. C. Reports, vol. 4, pp. 254-5, the author cites many authorities in support of the principle that, “The theory that parties have an appeal from the Legislature to the courts, and that the latter are given an immediate and general supervision of the constitutionality of the acts of the former, is not true.- Whenever, in pursuance of an honest and actual antagonistic assertion of rights by one individual against another, there is presented a question involving the validity of any act of any Legislature, State or Federal, and the decision necessarily rests on the competency of the Legislature to so enact, the court must, in the exercise of its solemn duties, determine whether the act be ■'constitutional or not. But such an exercise- of power is the ultimate and supreme function of courts. It is legitimate only in the last ■ resort, and as a necessity in tbe determination of a real, earnest, and vital controversy between individuals. . . . Tbe judicial cannot prescribe to tbe legislative department of tbe Government limitations upon tbe exercise of its acknowledged powers. Tbat power bas been or may be abused, or tbat it bas not been wisely exercised, or tbat tbe measures adopted are untimely and inexpedient and not tbe wisest, -best, or most appropriate means to a desired end, is no ground for declaring them void, so long as tbe Legislature bad tbe power to do wbat it actually did. 'Within tbe limits of its powers, its discretion is absolute and subject to no review by tbe courts. Courts do not sit in judgment on tbe wisdom of legislative or constitutional enactments. Tbis is a general principle; but it is especially true of Federal courts wben tbey are asked to interpose in a controversy between a State and its citizens.”

We deduce from these authorities:

(1) Tbat tbe plaintiff is engaged in a trade within tbe meaning of tbe-Constitution.

(2) Tbat tbe General Assembly bas tbe power to tax trades.

(3) Tbat in tbe exercise of tbis power tbe General Assembly is not required to tax all trades, but may tax some and refuse to tax others.

(4) Tbat tbe General Assembly bas tbe power to make classifications subject to tbe limitation tbat tbe tax must be equal on those in tbe same class, and tbat there must be some reason for tbe difference between tbe classes.

(5) That it bas tbe power to provide regulations determining tbe different classes, and tbat these will not be interfered with unless utterly unreasonable.

. (6) That if tbe General Assembly bas exceeded its power, it is the duty of tbe courts to so declare, but tbat every presumption is in favor of tbe proper exercise of tbe power of tbe General Assembly, and tbe courts will not declare otherwise except in extreme, cases and from necessity.

Applying these principles, we are of opinion tbat tbe differences between peddlers on-foot,, and with vehicle, peddlers of proprietary medicines with free attractions and those without, itinerant salesmen wbo expose for sale on the streets or in a bouse rented- temporarily for that purpose, and tbe other salesmen mentioned, furnish reasonable grounds for the classifications made in the statute. A similar statute was considered in Servonitz v. State, 133 Wis., 231, where the Court gives the reasons underlying the classifications made: “No reason which appeals very strongly to our judgment is advanced why peddlers should not be classified, as in the law in question, according to their facilities for going from place to place and carrying their wares. The perils to be guarded against in respect to the occupation and the contributions that may reasonably be required to the public revenue) strongly suggest, if they do not demand, such classification. Certainly the Legislature, within the boundaries of reason, may well have thought that a person traveling about the country plying the vocation of a peddler with an equipment consisting of a span of horses and a wagon should, both as a matter of police regulation and taxation, pay a greater license fee than a person plying the same trade, but traveling about from place to place on foot. Not because the former would be more liable to be dishonest than the latter, but because of the greater opportunity and liability thereof in the one case than in the other, and the corresponding greater liability in the one case than in the other of the harm, if committed, being difficult of redress or going entirely without remedy; again, not because the person, as such, traveling with a team should be taxed more than one traveling on foot, but since the one in all reasonable probability would conduct a much greater .business than the other, the tax exaction should bear some practical relation thereto.”

The first and fourth exceptions or exemptions may be considered together.

Keeping in mind that the General Assembly has the power to classify, and that it is not required to tax all trades, these exceptions or exemptions amount to no more than the exercise of the power of classification.

In other words, if the General Assembly has the power to classify, based on the difference in the business engaged in, it may place proprietary medicines in one class, and books, fuel, etc., in another; it may tax one of these classes one amount and the other a different amount; or it may tax one and refuse to tax the other.

It will also be observed that no one engaged in selling the articles enumerated in these exceptions can come in competition with .the plaintiff, who is licensed to sell medicinal and proprietary medicines.

The same reasoning applies to the fifth exception or exemption, and further as to this, that “drummers selling by wholesale” do not come within the definition of the term “peddler” and would not have been included if not specially exempted.

The second, third, and sixth exemptions will be considered together. • •

In 21 Cyc., 365, the author says: “It is generally held to be allowable to exempt from the operation of the statute certain persons who peddle their own products or manufactures, such as farmers, butchers, and manufacturers; persons under physical disability, and soldiers. So it is held to be proper for the Legislature in the enactment of such statutes to discriminate in favor of certain articles by not requiring a license to peddle them,” and many cases are cited in the note to support the text; but there is also much authority to the contrary, which is referred to and discussed in the learned brief'of the appellant, notably S. v. Garbroski, 111 Ill., 496; S. v. Sherdoi, 75 Vt., 277; S. v. Whitcomb, 122 Wis., 110, holding the exemption of Union soldiers from a peddler’s tax to be void; and Laurens v. Anderson, 75 S. C., 62, where there is a like holding as to Confederate soldiers. But it is not necessary for us to determine the constitutionality of these provisions, as we are of opinion they are not so intimately connected with the other parts of the statute that they determine the validity of the whole, and courts, out of deference to a coordinate department of Government, always refrain from passing on a constitutional question except from necessity.

In Riggsbee v. Durham, 94 N. C., 800, the Court approves the doctrine stated by Judge Cooley, that- “the unconstitutional do not affect tbe constitutional parts of a statute, ‘unless all tbe provisions are connected in tbe subject-matter, depending on eacb other, operating together for tbe same purpose, or other-' wise so connected together in meaning that it cannot be presumed that tbe Legislature would have passed tbe one without tbe other.’ Const. Lim., 178, 215, with cases cited in notes 2 and 3.”

Tbe same principle is declared in Supervisors v. Stanly, 105 U. S., 312, where tbe Court says: “The general proposition must be conceded, that in a statute which contains invalid or unconstitutional provisions, that which is unaffected by these provisions, or which can stand without them, must remain. If the valid and invalid are capable pf separation, only the latter are to be disregarded. In R. R. Companies v. Schutte (103 U. S., 118), decided at the last term, this point was pressed upon us with much earnestness, and its decision was necessary to the judgment of the Court. ‘It is contended,’ said the Court, ‘that as the provision of the act in respect to the execution and exchange of the State bonds is unconstitutional, the one in relation to the statutory lien on the property of the company is also void and must fail. We do not so understand the law.’ And yet this was a case in which the scheme of exchanging the bonds of the State for the bonds of the company, in order that the company might get the benefit of the better credit of the State, was accompanied by a mortgage created alone by the statute in favor of the State as her security; and the Court, while holding that the exchange of bonds was void, as being in conflict with the Constitution of the S.tate of Florida, held that the mortgage which secured the bonds of the company, and which was only a mortgage by operation of the same statute, was valid.”

The Confederate soldier is entitled to consideration and recognition at the hands of the General Assembly, and of the State; but it is now nearly fifty years since the close of the war, and the gray line has grown so thin that those in it bear so small a proportion to the population of the State that we cannot think the General Assembly would have refrained from taxing all peddlers because to do otherwise might impose a tax on the few soldiers who might wish to follow the occupation of a peddler; and the same may be said of the infirm and blind.

We are also of opinion that there is no interference with the commerce clause of the Federal Constitution, as it appears from the agreed facts that the articles were shipped in large packages to the plaintiff, which were opened and the separate articles disposed of. Machine Co. v. Gage, 100 U. S., 675; May v. New Orleans, 178 U. S., 497; Austin v. Tenn., 179 U. S., 352; Cook v. Marshall, 196 U. S., 269.

In the Machine Company case a Connecticut corporation, manufacturing sewing machines in that State, maintained an office in the State of Tennessee. The company sent out, for the purpose of selling or peddling machines, an agent who traveled through the country exhibiting and offering for sale the company’s machines, and it was held that the agent was liable for the payment of a peddler’s license tax. The distinctive fact in •that ease was that the agent would either sell the machine he was exhibiting or would send an order to be filled from stock in the possession of the State agency within the State of Tennessee. The machine being within the State at the time of the •sale or contract of sale, the transaction was not one of interstate commerce.

In the May case May & Co., merchants at New Orleans, were engaged in the business of importing goods from abroad and selling them. In each box or case in which they were brought into this country there would" be many packages, each of which was separately marked and wrapped. The importer sold each package separately. The city of New Orleans taxed the goods after they reached the hands of the importer (the duties having been paid) and were ready for sale. Held, that the box, case, or bale in which the separate parcels or bundles were placed by the foreign seller, manufacturer, or packer was to be regarded as the original package, and when it reached its destination for trade or sale and was opened for'the purpose of using or exposing to sale the separate parcels or .bundles, the goods lost their distinctive character as' imports and each parcel or bundle became part of the general mass of property in the State and subject to local taxation.

Jn the Austin cáse it was held that cigarettes, put up ten to the package and shipped in a large package or basket, became the subject of State tax and regulation when the large package reached its destination, and this is approved in the Ooolc case.

The discretion vested in the commissioners is necessary in the administration of statutes- like the one before us, and will not be interfered with unless exercised arbitrarily; but the plaintiff cannot complain of this feature of the statute, as license- has been issued to him.

The questions presented have not been free from difficulty, but upon the whole record we are of opinion that the judgment must be affirmed.

Affirmed.

Case Details

Case Name: Smith v. Wilkins

Court Name: Supreme Court of North Carolina

Date Published: Dec 3, 1913

Citation: 164 N.C. 135

Court Abbreviation: N.C.