Dorsett v. Overstreet

The appellant, plaintiff below, is shown to be a citizen and resident of the State of Florida, and maintains an office at Miami and sells goods, wares and merchandise by sample to jobbers at points south of Fort Pierce to Miami. The ad, mitted manner of transacting the business is that the buyer examines the sample, or samples, exhibited to him by the appellant and places an order with the appellant, who, in turn, transmits the same to a non-resident manufacturer, who receives the same, approves the order, or disapproves the same, and, if approved, fills the order and ships the goods directly through interstate commerce to the buyer in Florida, from whom the order, or orders, were taken. It was the view of the Tax Collector of Dade County that the plaintiff below should pay a brokerage license tax, for the purpose of transacting a brokerage business in Florida, as provided for by Section 205.59, Fla. Stats. 1941 (F.S.A.), being Section 5 of Chapter 18011, Acts of 1937, Laws of Florida. The appellant, plaintiff below, was of the view that the brokerage license tax demanded was a burden on interstate commerce. The lower court held against this contention, and plaintiff appealed.

The question presented here for adjudication is whether Section 5 of Chapter 18011, supra, being Section 205.59 Fla. Stats. 1941 (F.S.A.), as applied to appellant, infringes on the commerce clause of the Federal Constitution. Article I, Section 8, grants Congress the power to regulate commerce with foreign nations and among the several States. The constitutionality of Section 5 of Chapter 18011, supra, was sustained by this Court against numerous grounds of attack. *Page 574 See Florida Sugar Distributors, Inc. v. Wood, 135 Fla. 126,184 So. 641, where we, in part, said (text page 135 Fla. 135);

". . . The Legislature certainly has the right to apply different licenses or privilege taxes upon two such radically different businesses as the wholesale business and the retail business. Furthermore, the rule is well settled that where two or more interpretations can reasonably be given to a statute, the one that will sustain its validity should be given and not one that will render it unconstitutional, or defeat its purpose." See State ex rel. Beth v. Burnett, 141 Fla. 870,194 So. 277.

The Act provides that every person engaged in the business of trading, buying, bartering, serving or selling tangible personal property as owner, agent, broker, or otherwise, shall pay a license tax of $10.00, which shall entitle him to maintain one place of business (stationary or moveable) and shall pay $10.00 for each additional place of business. . . . It is conceded that the appellant is engaged in business as a broker and represents non resident clients or customers. It is settled that the Legislature has the power to provide for a tax on licenses. See Section 5 of Article XIV of the Florida Constitution. An excise tax partakes of the nature of a license tax. An excise tax is laid on a license to pursue certain occupations, corporate privileges, sales or consumption of commodities. See Amos v. Gunn, 84 Fla. 285, 94 So. 615. The tax here involved is directed against the occupation of a broker and not the non resident clients or customers of the broker. Numerous persons, firms and corporations residing in the State of Florida pay occupational license taxes. The appellant here is a potential competitor of these several firms paying taxes to support the costs of government of the State of Florida.

The recent case of Sanford v. City of Clanton, 244 Ala. 671,15 So.2d 303, involved an ordinance of the city imposing a license fee of $25.00 per year, $10.00 per week, or $2.00 per day on all persons delivering merchandise in the City of Clanton from all points without the said City. Sanford was a wholesale dealer of fuel oil, with offices at DeFuniak Springs, Florida. Orders came to Sanford at DeFuniak *Page 575 from customers residing in Clanton. It was the fuel oil dealer's contention that the ordinance was a burden on interstate commerce. The Supreme Court of Alabama, in sustaining the ordinance, in part, said: the taxing power of a state is not to be regarded as having been exercised in an unconstitutional manner where the levy is non discriminatory in character, does not materially impede the commerce, and not subject to local levies in some other sovereignty . . . not all state taxation is to be condemned because it in some manner affects commerce between the States."

The case of Dunston v. City of Norfolk, 177 Va. 689,15 S.E.2d 86, involved an ordinance imposing a license tax for the privilege of doing business in the City of Norfolk. The appellant had an office in Norfolk and was the local representative of the International Tailoring Company, with offices in Chicago and New York. Samples of cloth were exhibited to prospective customers at the agent's office in Norfolk. Orders were taken there and transmitted to either Chicago or New York, where the suits were made and sent by interstate commerce to the customers at Norfolk. The defendant Dunston contended that he was engaged in interstate commerce and the ordinance of the City of Norfolk requiring him to pay an occupational license tax, in its application to him, was unconstitutional.

The Supreme Court of Appeals of Virginia, in sustaining the ordinance, in part, said (text 15 S.E.2d 90-91):

"A statute is always presumed to be valid and is not to be declared void unless its nullity and invalidity appear beyond reasonable doubt. Doubts are always resolved in favor of its constitutionality. Cooley, Const. Lim., 7th Ed., page 252, et seq., and cases cited.

"It does not appear to us that the tax ordinance of the city of Norfolk effects any discrimination, actual or potential, against interstate commerce, or adds any burden thereto in the nature of a regulation contrary to the commerce clause. There is no magic in the name by which the tax may be described. It is the effect of its operation that is important. The possibilities of the consequences prohibited by the Constitution are absent. *Page 576

"For the foregoing reasons, we are of the opinion that the provisions of the ordinance of the city of Norfolk do not infringe the purpose of the commerce clause. The purpose of that clause is to secure and preserve equality for national commerce, unfettered by regional legislation."

The early case of Ficklen v. Shelby County Taxing Dist.,145 U.S. 1, 12 S.Ct. 810, 36 L.Ed. 601, involved a license tax on merchant brokers imposed by the Legislature of the State of Tennessee. The merchandise brokers for the year 1887 paid $50.00 for a license to do a general and unrestricted business as merchant brokers. Their customers and clients for the year 1887 were largely non residents. It was contended that the involved license tax was a burden on interstate commerce. The Court held that if the imposed license tax affected interstate commerce in any way, it did so incidentally and so remotely as not to amount to a regulation of commerce. The Court, in sustaining the tax, in part, said (text 145 U.S. 21):

"No doubt can be entertained of the right of a state legislature to tax trades, professions and occupations, in the absence of inhibition in the state constitution in that regard; and where a resident citizen engages in general business subject to a particular tax the fact that the business done chances to consist, for the time being, wholly or partially in negotiating sales between resident and non-resident merchants, of goods situated in another state, does not necessarily involve the taxation of interstate commerce, forbidden by the Constitution."

In the case of United States Express Co. v. Minnesota,223 U.S. 335, 32 S.Ct. 211, 56 L.Ed. 459, the Court said:

"The right of the State to tax property, although it is used in interstate commerce, is thoroughly well settled. Postal Telegraph Co. v. Adams, 155 U.S. 688; Pullman's Palace Car Co. v. Pennsylvania, 141 U.S. 18; Ficklen v. Shelby County,145 U.S. 1, 22. The difficulty has been, and is, to distinguish between legitimate attempts to exert the taxing power of the State and those laws which, though in the guise of taxation, impose real burdens upon interstate commerce as such. . . ." *Page 577

The case of United States Fidelity Co. v. Kentucky,231 U.S. 394, 34 S.Ct. 122, 58 L.Ed. 283, involved an occupational license tax similar to the case at bar. The agent contended that the Act requiring the payment of a license in its application to him was a burden on interstate commerce. That he was an agent of merchants engaged in interstate commerce and the State of Kentucky was precluded from imposing on him the license tax. The tax was sustained despite the contention that it was a burden on interstate commerce. The Court, in part, said: "The tax in question is an excise or privilege tax and undoubtedly within the power of the State, unless it has the effect of directly burdening interstate commerce. . . . In the case of commercial agencies, the thing that is laid hold of as the subject of the excise is a business carried on within the State. . . . To warrant interference with the exercise of the taxing power of the State on the ground that it obstructs or hampers interstate commerce, it must appear that the burden is direct and substantial." (Emphasis supplied).

In the case of Blumenstock Bros. v. Curtis Pub. Co.,252 U.S. 436, 40 S.Ct. 385, 64 L.Ed. 649, the Court, in part, said.

". . . We held in Hopkins v. United States, 171 U.S. 579, that the buying and selling of livestock in the stockyards of a city by members of the stock exchange was not interstate commerce, although most of the livestock was sent from other states. In Williams v. Fears, 179 U.S. 270, we held that labor agents engaged within the State of Georgia in hiring persons to be employed outside the State were not engaged in interstate commerce. In Ware Leland v. Mobile County, 209 U.S. 405, we held that brokers taking orders and transmitting them to other states for the purchase and sale of grain or cotton upon speculation were not engaged in interstate commerce; that such contracts for sale or purchase did not necessarily result in any movement of commodities in interstate traffic, and the contracts were not, therefore, the subjects of interstate commerce. In the recent case of United States Fidelity Guaranty Co. v. Kentucky, 231 U.S. 394, we held that a tax upon a corporation engaged in the business *Page 578 of inquiring into and reporting upon the credit and standing of persons in the State, was not unconstitutional as a burden upon interstate commerce as applied to a non-resident engaged in selecting and distributing a list of guaranteed attorneys in the United States, and having a representative in the State. The contention in that case, which this Court denied, was that the service rendered through the representatives in Kentucky, and other representatives of the same kind acting as agents of merchants engaged in interstate commerce, to furnish them with information through the mails, or by telegraph, or telephone, as a result of which merchandise might be transported in interstate commerce, or withheld from such transportation, according to the character of the information reported, was so connected with interstate commerce as to preclude the State of Kentucky from imposing a privilege tax upon such business."

In the case of Pacific Telephone Tel. Co. v. Tax Commission, 297 U.S. 403, 56 S.Ct. 179, 80 L.Ed. 760, the Court, in part, said:

". . . Taxes for the privilege of doing local business measured by the gross income of such business have frequently been laid upon concerns engaged in both intrastate and interstate business; and have, for half a century, been sustained without enquiry whether withdrawal from the local business would compel discontinuance of the interstate. That an occupation tax upon a foreign telegraph company measured by earnings from its local business is valid, was indicated as early as Telegraph Co. v. Texas, 105 U.S. 460, 464-465; and was definitely held in Ratterman v. Western Union Telegraph Co., 127 U.S. 411, which has been repeatedly cited with approval in cases involving interstate railroads and telegraph companies. Similarly, in Southern Ry. Co. v. Watts,260 U.S. 519, 529-530, a so-called franchise tax for the privilege of doing intrastate business, measured by a percentage of the value of property subject also to an ad valorem tax, was sustained as against both foreign and domestic railroads." . . .

". . . It is true that in Sprout v. South Bend,277 U.S. 163, 171, the Court, when reciting the essentials of a valid license fee for doing local business, said that it must appear 'that the *Page 579 person taxed could discontinue the intrastate business without withdrawing also from the interstate.' But that statement was made in discussing the validity of a that bus license fee, prescribed by an ordinance which made no distinction between buses engaged exclusively in interstate commerce, those engaged in both classes of commerce; and it must be read in that context. The license fee was held void, because Sprout, who was engaged in both classes of commerce, could not escape payment of the tax by confining himself to interstate business. The cases cited by the Court in that connection were of the same character."

The case of Western Live Stock v. Bureau of Revenue,303 U.S. 250, 58 S.Ct. 45, 82 L.Ed. 823, involved a tax asserted to be a burden on interstate commerce. This case alone is abundant authority for the affirmance of the decree of the chancellor below. The Court, in part, said:

"It was not the purpose of the commerce clause to relieve those engaged in interstate commerce from their just share of state tax burden even though it increases the cost of doing the business. 'Even interstate business must pay its way,' Postal Telegraph-Cable Co. v. Richmond, 249 U.S. 252, 259; Ficklen v. Shelby County Taxing Dist., 145 U.S. 1, 24; Postal Telegraph Cable Co. v. Adams, 155 U.S. 688, 696; Galveston H. S. A. Ry Co. v. Texas. 210 U.S. 217, 225, 227, and the bare fact that one is carrying on interstate commerce does not relieve him from many forms of state taxation which add to the cost of his business. . . .

". . . Taxation measured by gross receipts from interstate commerce has been sustained when fairly apportioned to the commerce carried on within the taxing state, Wisconsin M. Ry. Co. v. Powers, 191 U.S. 379; Maine v. Grand Trunk Ry. Co., supra. (142 U.S. 217); Cudahy Packing Co. v. Minnesota, supra (246 U.S. 450); United States Express Co. v. Minesota,223 U.S. 335, and in other cases has been rejected only because the apportionment was found to be inadequate or unfair. . . .

"In the present case the tax is, in form and substance, an excise conditioned on the carrying on of a local business, that of providing and selling advertising space in a published *Page 580 journal, which is sold to and paid for by subscribers, some of whom receive it in interstate commerce. The price at which the advertising is sold is made the measure of the tax. This Court has sustained a similar tax said to be on the privilege of manufacturing, measured by the total gross receipts from sales of the manufactured goods both intrastate and interstate. . .

"As we have said, the carrying on of a local business may be made the condition of state taxation, if it is distinct from interstate commerce, and the business of preparing, printing and publishing magazine advertising is peculiarly local and distinct from its circulation whether or not that circulation be interstate commerce."

The case of McGoldrick v. Berwind-White Co., 309 U.S. 33, S. Ct. 60, 84 L.Ed. 565, involved a sales tax imposed by the City of New York on the purchases of coal delivered to the purchaser's plant or steamboat. The coal was taken from mines situated in Pennsylvania. The Pennsylvania coal miners maintained an office in New York City. Customers residing in New York City signed contracts in New York City to be filled and shipped by interstate commerce and delivered in New York City to the customers according to the contract. It was contended that the sales tax on the deliveries of coal was a burden on interstate commerce.

The Court, in a divided opinion, sustained the tax and, in part, said (text 309 U.S. 49-50):

"If, as guides to decision, we look to the purpose of the commerce clause to protect interstate commerce from discriminatory or destructive state action, and at the same time to the purpose of the state taxing power under which interstate commerce admittedly must bear its fair share of state tax burdens, and to the necessity of judicial reconciliation of these competing demands, we can find no adequate grounds for saying that the present tax is a regulation which, in the absence of congressional action, the commerce clause forbids. This Court has uniformly sustained a tax imposed by the state of the buyer upon a sale of goods, in several instances in the 'original package,' effected by delivery to the purchaser upon arrival at destination after an interstate journey, both *Page 581 when the local seller has purchased the goods extra-state for the purpose of resale, Woodruff v. Parham, supra (8 Wall. 123, 131); Hinson v. Lott, 8 Wall. 148; Banker Bros. v. Pennsylvania; supra, (222 U.S. 210); Wiloil Corp. v. Pennsylvania, supra, (294 U.S. 169): Graybar Electric Co. v. Curry, 308 U.S. 513, 238 Ala. 116; 189 So. 186, and when the extra-state seller has shipped them into the taxing state for sale there. Hinson v. Lott, supra (8 Wall. 148); Sonneborn Bros. v. Cureton, 262 U.S. 506. It has likewise sustained a fixed-sum license tax imposed on the agent of the interstate seller for the privilege of selling merchandise brought into the taxing state for the purpose of sale. Howe Machine Co. v. Gage, 100 U.S. 676; Emert v. Missouri, 156 U.S. 296; Kehrer v. Stewart, 197 U.S. 60; Baccus v. Louisiana, 232 U.S. 334; Wagner v. Covington, 251 U.S. 95. See International Harvester Co. v. Department of Treasury of Indiana, 321 U.S. ___ (opinion filed May 15, 1944); General Trading Co. v. State Tax Commission, 321 U.S. ___, (opinion filed May 15, 1944); McLeod v. J. E. Dilworth Co., 321 U.S. ___ (opinion filed May 15, 1944).

Emphasis has been placed on rulings in the cases of Crump v. McCord, 150 Ga. 147, 113, S.E. 534; Walton v. Augusta,104 Ga. 757, 30 S.E. 964; Raley Bros. v. Richardson. 264 U.S. 157, 68 L.Ed. 615, 44 S.Ct. 250; Sprout v. City of South Bend,277 U.S. 163, 73 L.Ed. 833, 48 S.Ct. 502; East Ohio Gas Co. v. Tax Commission, 283, U.S. 465, 75 L.Ed. 1171, 51 S.Ct. 499. An analytical study of the cited cases fail to establish their applicability to the point in controversy.

The bill of complaint alleges that the plaintiff below was an agent engaged in interstate commerce; that he sold merchandise by sample, accepted written orders, transmitted the same to nonresident manufacturers where the orders were filled, and merchandise shipped to the customers in Florida by interstate commerce. "That plaintiff's business is that strictly of an agent operating under the commerce clause of the Federal Constitution and as such agent operates under the commerce clause of the Federal Constitution; he is exempt from any and all license taxes or fees." The evidence offered by the plaintiff to support the allegations, supra, is wholly *Page 582 insufficient. It is clear that he is a broker as defined by Section 5 of Chapter 18011, supra. The business transacted by the plaintiff as a broker or agent for his non-resident clients or customers does not burden interstate commerce. He simply failed to carry the burden of proof in conformity with the allegations of the bill of complaint and the chancellor correctly dismissed his bill of complaint on final hearing.

The petition for a rehearing should be granted and the decree of the lower court affirmed.

So ordered.

BUFORD, C. J., BROWN and ADAMS, JJ., concur.

TERRELL, THOMAS and SEBRING, JJ., adhere to original opinion.