FERT. co. V.BOARl> OF AGRICULTURE, NORTH CAROLINA.
AMERICAN FERTILIZING CO.
BOARD OF AGRICULTURE OF NORTH CAROLINA et al.
August 14, 1800.)
(Oircuit Oourt, E. D. North Oarolina.
CIROUIT COURT-JURISDICTION:...-AMOUNT IN CONTROVERSY;
In a suit to enjoin the enforcement of a state tax, claimed to be unconstitutional, the subject of controversy is not limited to $500, the tax imposed for a sin&,le year; nor can it be determined, on a motion to dissolve the temporary injunctIon, that the damages will be less than $2,000, the sum required to give the court jurisdiction, where plaintiff asks to be relieved from threatened penalties and interference with its business, the damage to result from which it places at $10,000. '
CoNSTITUTIONAL LAW-TAXATION-DUTIES ON !MPORTS..,...!NllPECTION LAWi".
Code ]S'. C. § 2190, as amended by Act March 7. 1877, § 8, declares that no commercial fertilizers shall be sold or offered for sale until the manufacturer or importer obtain a license from the trE\asurer of the state. for which shall be paid a privilege tax of $500 per annum for each separate brand. Sections 22 and 23 appropriate the revenues arising from the tax to an industrial association and other purposes. HeW,. that the statute is void, in that it violates Const. U. S. art. 1, § 10, providing that "no state shall, without the consent of congress, lay any imposts or duties on imports, * * * except what may be absolutely necessary for executing its inspection laws, " and is also an interference with interstate commerce. The act is not unconstitutional as abridging the privileges and immunities of the citizens of other states.
BAME-PRIVILEGES OP CITIZENS.
In Equity. Before BOND and SEYMOUR, JJ. SEYMOUR, J .. The plaintiff, a citizen and resident of Virginia, brings this suit pgaillst the board of agriculture of Carolina, to perpetually enjoin the latter from enforcing against itthe state tax on fertilizers.' The act in litigation (Code, § 2190, amended and re-enacted in the statute of March 7, 1877) provides, in section Sof the last-mentioned statute, IlS well as in the act which it amends, brought forward in the Code, that no commercial fertilizers shall be' sold or offered for sale until the manufacturer or importer obtain a license from the treasurer of the state, for: which shall be paid a privilege tax of $500 'per annum for each separate brand. The plaintifl'ilJleges that. it is engaged in the manufacture and sale of commercial fertilizers; that it has a large 'and profitable business in North Carolina, amounting annuaJly,to-ovet:$25,OOO; that it has on hand in the state more than $2,000 worth of fertilizers; that defendants have, under the pretext that they are subjept to forfeiture, for non-payment of such tax, seized a car-load of its fertilizers, and that they threaten that they will seize all fertilizers which plaintiff has shipped, or shall ship, into the state; and will prosecute its agents for misdemeanor in selling its fertilizer without having obtained the license reqUired by. the statutes above cited. Plaintiff further avers that, unless defendants are restrained, its business will be entirely destroyed, and it willba damaged in a sum exceeding $2,000, and that its goods in excess of$2,000 will be seized by defendants under the provisions of such legislation. Defendants by their answer admit the seizure of the fertilizer, as alleged in the complaint, and aver that the cause of such seizure is the failure and rafnsal of plaintiff to pay a license tax of $500, as required by the la WB of the state. They' v.48F.no.l0-89
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also admit that, unless restrained by this court, they will continue to make seizures, fi;D,dinstitute prosecutions against plaiQtiff's agents, etc., and insist that the tax in question is vaJid, both as a tax on the trade of selling commercial fertilizers, and further as a police regulation of the state. The case has been at .the present term on llo, motion made by defendant upon the pleadings to dissolve the injunction heretofore granted by,the circu.itjudge. Ins; at the outset, that the court has no jurisdiction, on the gltound that the amount in controversy is less than 82,000. . We do the subject of the contt:oversylirnited to the sum of $500, the tax hnposed. The tax is an annual one, and the value· topll\;intiff of the injunction cannot be measured by the tax of a single year. MoreOver, plaintiff asks to be relieved from threatened penalties a.nd, from interference with; its business" illegal this tax, upon its brand or fertUizers iflunconstitutional, the.damage to result from'which it places at·alargesuIIl. ,this stage of the' case,determine that such damages will less than the sum required to give it jurisdiction. Railroad Co. v. Ward, 2 Black, 485, seems to us in point. It was anacUoli brought for the abatement of a bridge as a public nuisance. To the objection that the damages sustained by plaintiff were not sufficient to give the court jurisdiction, CATRON, J., says: "The character of the nuisance and the sUffioiencyof the' damage sustained is to be judged by the courts; but the want of a sufficient amount of damage having been. to give the. federal court jurisdiction will not defeat as. the of theobstluction is the matter in· controversy, th!l .vallie of the mustgovern.,t '" . . In the southern district of New York, a suit brought to restrain the of an awning over a par.t of Great Jones street, having been remoyed to the circuit court,s motion to remand was made, on the ground that in dispute did not exceed $500. The court in denying the mQtion said: "The matter in dispnte Is thevall1e of the right to maIntaIn the awning. noUbe ·amount of damaRes d()n6 by.it to plaintiff. This apptlars to be more t!lall ,HUbbell, 30 Fed. Rep. 81. 'And' in the same court, in an action for infringement of atrade-mark, WHEEl!.ElR, J., says: ' "Theta .ould bediftidnltY.in tt1'aintaining the jurisdiction if the profits tobe'reeov.ered were ·the measure of the orator's rights involved; but that is An:Jn1unetion maybe of much to the orator hims.elf entitled to, and it cannot be said now that,s.Hch the J.·mit req Symonds v." Greene, 28 ., , ,We,ar¢ th.erefore oftheppiniQD that the ,amount in controversy is not belo;wthat required' tpgive jurisdiction" , is whether or not. the tax ,as unconstitutional. No d<mht, may fotthe privilege of.doing any particular business therein,unJess prevented by some section of the constituti?n .of McOulloCfl,v:. Maryland, 4 Wheat. 316, 429.'
The contention ofthe plaintiff is that it cannot be taxed, under the provisions of the legislatiouabove set forth, because (1) such taxation infringes upon the rights of citizens of other states,' arid therefore violates article 4,§ 2; of the constitution, which provides that "the citizens· of each state shall be entitled to all privileges and immunities of citizens in the several states;" and also article 14, § l,of the amendments to the constitution, which provides, among other things, that "no state shall make any law which shall, abridge the privilegos or immunities of citizens of the United States." (2) 'Because such taxation is an impost on imports, and therefore violates article 1, § lO,of the constitution, which provides,.among other things, that "no state shall, without the consent of the congress, lay anyimposte or duties OD imports * * * except what may be absolutely, necessary for executing its inspection laws." (3) Because such taxation is an interference with interstate commerce, and therefore violates article 1, § 8, which provides that the congress shall have power "to regulate commerce * * * among the several states." 1. We do not find 'anything in the legislation in question which brings it within the inhibitions in either section 2, art. 4, of the constitution, or in the fourteenth amendment thereto. No priviiege with regard to the sale of commercial fertilizers seems given by the act to any citizen of North Carolina which is denied to the plaintiff, and, unless this be attempted, it can hardly be said that it is deprived of any privilege or immunity which it is entitled to under the constitution, within the meaning of these constitutionai provisions. 2. Although the statute in question does not in words impose a tax on fertilizers imported into the state, but one on the privilege of selling or offering them for sale only, it is not now admissible to argue that the latter is not equivalent to the former. That question was settled in Brcrwn v. Maryland, 12 Wheat. 419. A statute of Maryland required all importers of foreign articles, or other persons selling the same by wholesale, to pay a license tax. The question was whether the imposition of such a tax was a viola tion of the two first-mentioned provisions of the constitution. MARSHALL, C. J., in deliverinp; the opinion of the court, defined an impost as "a tax levied on articles brought into the country," and held that a tax on the sale of an article is a tax on the article itself, and that a tax on the occupation of the importer is a tax on importation. The tax under consideration is a tax on the privilege of selling; that is, R tax levied and collected in advance upon the occupation of selling commercial fertilizers. It is therefoN a tax on the fertilizers. This case, however, differs from Brown v. Maryland, supra, for in that case the license was for selling foreign articles, and in this the articles sold are brought, not from without the United States, but from the sister state of Virginia., The question then arises whether or not the term "imports" in article 1, § 10, includes as well articles brought into one state from another as those imported from abroad. MARSHALL, C. J., inconcluding the opinion in the last-cited case, holds that it does. He says, (Brcrwn 12 Wheat., at page 449:)' "It may be proper to add that we suppose the principles laid down in this caae to apply equally to
importations from another state'.» The contrary is expressly held by Mr. Justice MILLER, delivering the prevailing opinion in Woodruff v. Parham, 8 Wall. 123, and implied by TANIDY, C. J., in Peirce v. New Hampshire, 5 How. 554. Both of these cases may be considered overruled in Leisy v. Hardin,: 135 U. S. 100, 10 Sup. Ct. Rep. 681, (The Original Package Oase.) Certainly the latter is. :But whatever Dlay be thEl result of the reasoning of the chief justice in Leisy v. Hardin, it is not expressly decided in that case that the term "import" applies to an article brought from one state into another. Were it not for the decision in Woodruff v. Parham we wpuld not hesitate to say that it included, as Chief Justice MARSHALL evidently supposed that it did, goods brought from one state into another. Before the adoption of the constitution, and therefore at the time when it was framed, and its phraseology discussed, an article brought from Pennsylvania to, North Carolina would have been said to be imported into North Carolina, and a tax on it 'would have been called an "import tax." It is difficult to say by what other name such a tax, if it could be laid, would be now styled. But, excepting in its relation to the power of congress to allow the levying by a state of a tax like the one ,under discussion, it is immaterial whether such a tax is an import tax or not; for, beyond doubt, if it be not a tax on imports it is a tax on interstate commerce. 3. It is therefore a violation of article 1, § 8, of the constitution. Precisely the same reasoning and the same authority as that used in the preceding paragraph prove that a tax on the privilege of selling or offeringto sell fertilizers bearing a particular brand, and brought into North Carolina from another state, is a tax on commerce between the states. ,Being a tax on "commerce among the several states," the power to levy. it must be denied to a state; OD the reasoning of MARSHALL, C. J., in McOulwch,v. Maryland,supn., which.has ever since the rendition ofthat opinion been uniformly acquiesced in by the profeSsion. It is there held ,that the ,power to tax involves' the power to destroy, and therefore that its uncontrolled exiRtence in the stutes is incompatible with the power of the federal government to regulate such comm$rce. It may perhaps be said that :the argument does not apply to a case where the taxation makes DO to discriminate injuriously against. the products of other states, and that such is the case with the statute sub lite. It is true that the North Carolina statute does tax all manufactured fertilizers offered for sale in the state, whether manufactured there or elsewhere; but, as is said by BRADLEY, J., in Robbins v. Taxing-Dist., 120 U. S. 489, 7 is immaterial that no discrimination is made; Sup. Ct. Rep. 592: .* . interstate commerce cannot be taxed at all, even though the same amount of tax should be laid on domestic commerce." The question of the equality of taxation is in terms excluded, if we consider the statute; from the point of view of section 10, for that says that no tax on imports shall be levied. It seems equally immaterial with reference to section 8, for a'tax U1ustinterfere. with commerce if it in any degree has the effect of its volume; and that .must necessarily be in of any taxation Qn an article, whether
AMERICAN FERT. CO. 11. BOARD OF AGRICULTURE, NORTH CAROLINA.
it be at discrirnimlting or at an equal rate. In either case it diminishes sales, and therefore importations. The only conceivable case in which the amount of importations would not be reduced would arise were a state to tax its own productions more largely than imported goods. But even that would be only an apparent exception. The impost would still Lave. the direct effect of checking importations, although the state tax on its own productions, having a still greater effect in reducing their consumption, might more than counteract the reduction of importations caused by the impost. Passing, however, from this view, drawn from the express words of the constitution, and returning to Judge MARSHAU,'S celebratE)d argument that the power to tax necessarily includes the power to destroy, and is therefore inconsistent with the power of the United States to pre" serve commerce between the states, it may be remarked that, if the power were given to a state to tax all imports from other states without control, provided equal taxation were laid upon the same articles if prO'duced or made in the state, the states would practically have the power to prohibit the introduction of any article not made in the state. North Carolina might tax the importation 'of manufactured cloths, and Massachusetts that of cotton or tobacco. If this tax can be sustained, it is certain that a license tax in these words would be constitutional: "No manufactured cotton shall be sold or offered for sale in this state until the manufacturer or person importing the same shall first obtain a license therefor," etc., "and pay a tax of five hundred dollars." A similar tax upon the different brands of tobacco might be levied in any state that does not manufacture tobacco; But it is needless to trations which everyone can supply for himself. It must be evident that a requirement of equality of taxation on the imported and hpme article would be no protection against such taxation as would seriously check, if it did not destroy, commerce between the. states, and would impair, to the point almost of rendering its benefits nugatory, the 00mestic good results of the union of the states. 4. Pefendants contend that this taxation can be sustained as a part of the police power of the state. Without attempting, what is perhaps impossible, to accurately define what does and what does not come der t11e term "police power," it is evident that the in question does not come within the ordinary use of the phrase. "Unwholesome trades, operations offensive to the senses, the deposits of powder, the cation of steam-power to propel cars, the building with combustible materials; and the burial of the dead, may all be interdicted by law in th9 midst of dense masseR of population." 2 Kent, Comm. 340; cited by MILLER, J., in the Slanghter-House Cases, 16 Wall. 62. This is called the" police power." If the legislation in question can properly be re.. ferred to that power, it will be because the right to pass inspection laws may be deemed to have its foundation in the police power of a state; Certainly ifitbe anything but what the act itself seems to contemplate, tax on an occupation or a privilege tax,-it is because it is used to secure an inspection ·of commercial fertilizers before they can he sold in North .Carolina. Such a tax would be constitutional, only within
& Co. et al.
Where a p,roper bond and petition have been filed in thestBte court, tbe omission to ask that court to act on the petition is no ground for rema1;ldlng the cause, espec.lallY whe.re n. 0 term of the stateconrt Intervenes between'the filing of the petition andthemotion to remand, and the jUdge of that court has refused to consider the petition until the court is, in Bession. Whet:etbie controversy is between the oomplalnantandthe remoVing defendant, who are citizens of different states, th.e faot thll,t there Bre other defendants, citizens of state, does not prevent the case from being removable, where the interest of one C)f such co-defendantll Is Identical with tbatof complainant, and ilIe other co-defeDrjlantB merelYnomlnal parties.
In On motion to x:emand. Willard <t' Willard and L. L. Delano, for complainant. Berryhill Henry and R. G. Phelp8, for defendants. SHtRAs, From the record in this cause it appears that in November, Nelson & Co., a corporation created under the laws of the state of Illinois, entered into a written contract with C. E.Myers & Co., of the state of Iowa, doing at Atlantic, Iowa, in regard to purchasing, .cril)bing, shelling, and forwarding, a large quantity 0fp9;tC-n, the said Murray Nelson & Co. agreeing to at;lv.ance the money needed. to make tlle :PUrcQasfl of said Qorn,the quantity to be purchased not to exceed 100,OQO that. on the 12tb day of May, ;1.890,. said C. K Myers & CQ.; in writing, assigned the said contract and allrights thereunder Brown, a citizen of Iowa; that dis-