Argument for Defendant in Error. entire business of the company, interstate as well as internal, and for that reason it was void. Mr. Henry Craft filed a brief for plaintiffs in error. Mr. S. P. Walker for defendant in error. It appears by the bill that all the principals of Ficklen & Co. are residents of other States; and that nine-tenths of the business of Cooper & Co. is done for principals of other States. Upon this state of facts it was held by the chancellor that Ficklen & Co. were not liable, either for the fixed charge of $50, or the 2 per cent on commission; and that Cooper & Co. were liable for the fixed charge of $50 and for one-tenth of the 24 per cent on commissions. This ruling, based on the doctrine of non-interference with interstate commerce, was reversed by the Supreme Court of the State, and the plaintiffs in error adjudged liable for the whole tax, as fixed by the statute. This court from the case of Brown v. Maryland, 12 Wheat. 419, to the very recent cases of Robbins v. Shelby County Taxing District, 120 U. S. 489; Leloup v. Port of Mobile, 127 U. S. 640; and Crutcher v. Kentucky, 141 U. S. 47, has so frequently considered the question involved in this case, that it is not our purpose to attempt an extended review or discussion of the authorities. We shall only, therefore, as briefly as possible, undertake to show that the tax in question is not a regulation of interstate commerce. I. The tax in question is (as was held by the state court) a privilege tax, graduated by the amount of commissions received. If, as complainants contend, they were not taxable, then they did not need and should not have taken out the license. Having taken it out they must pay what they in. effect agreed to pay for it. It appears from the bill that complainants are, and hold themselves out ás, general merchandise brokers. For 1887 they took out license as such. For 1888 they applied for the same character of license. The fact that their principals are non-residents of the State Argument for Defendant in Error. is a fact which, though true on the day the bill was filed, might not be true the next day. If, therefore, plaintiffs are right in their contention, the true method of procedure by them would have been simply to have contented themselves with private agencies of given non-resident principals, instead of assuming the rôle of general "commission merchants." The case is not within the principles of the opinion in Robbins v. Shelby County, 120 U. S. 489. (a) Robbins was the representative of one non-resident firm, and the case was treated as if his principals had come into the State to make sales, and the State had undertaken to seize and tax them. (b) The tax was held to be in effect not a tax on Robbins, but on his principals. Here the reverse is clearly true. So, too, it is distinguishable from Cook v. Pennsylvania, 97 U. S. 566. In that case, the State of Pennsylvania exacted a certain percentage of the proceeds of foreign goods sold at auction, for the privilege of thus selling them; and the tax was held to be a duty on imports, and unconstitutional, under the principles of the leading case of Brown v. Maryland, 12 Wheat. 419. In this case the State of Tennessee requires that every person pursuing the vocation of merchandise broker, shall pay a vocation tax of two and one-half per cent of the commissions earned. Can the tax be disputed, on the fact that the goods sold were, at the time of the sale, in another State, and that, as between the principals - buyer and seller -the transaction was one of interstate commerce? Is the State's exaction so directly connected with the commerce as to make it a burden upon or a regulation of interstate commerce? We submit that it is not a tax upon the commerce between the States, but that it is what it purports to be- a tax upon the broker himself, graduated by the amount realized by him from the transaction, and that, except in that indirect and remote way, which this court has never allowed to affect the validity of state taxation, it has no tendency to prevent or burden the interstate commerce itself. The ultimate question being whether or not the power of the State to lay a vocation tax on one of its resident citizens, graduated according to the profits realized by him from the Argument for Defendant in Error. pursuit of that vocation, can be denied on the ground that the citizen is engaged, wholly or partially, in negotiating sales between resident and non-resident merchants of goods situated in another State, we will examine such of the decisions of this court as seem to bear most pertinently on the question, without in the least attempting an exhaustive citation or analysis of all the cases arising under the interstate commerce clause of the Constitution. This court has often ruled that the State has power to tax all property having a situs within its limits, and that property employed in interstate commerce is not on that account withdrawn from the power to tax. There must not, however, be any discrimination against such property because it is so used, nor against property brought from other States or countries because of that fact. Gloucester Ferry Co. v. Pennsylvania, 114 U. S. 196, 206; Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 18; Maryje v. Baltimore & Ohio Railroad, 127 U. S. 117; Woodruff v. Parham, 8 Wall. 123. In the latter case the court said: "The merchant of Chicago who buys his goods in New York and sells at wholesale in the original packages, may have his millions employed in trade for half a lifetime and escape all state, county and city taxes; for all that he is worth is invested in goods which he claims to be protected as imports from New York. Neither the State nor the city which protects his life and property can make him contribute a dollar to support its government, improve its thoroughfares or educate its children. The merchant in a town in Massachusetts who deals only in wholesale, if he purchase his goods in New York, is exempt from taxation. If his neighbor purchase in Boston he must pay all the taxes which Massachusetts levies with equal justice on the property of all its citizens. These cases are mentioned as illustrations. But it is obvious that if articles brought from one State into another are exempt from taxation, even under the limited circumstances laid down in Brown v. Maryland, the grossest injustice must prevail, and equality of public burdens in all our large cities is impossible." Conceding that this case is not in harmony with later utter Argument for Defendant in Error. ances of the court upon the exact point decided, the language above quoted is fully supported by such cases, so far as concerns the general proposition that the States have full power of taxation over all property within their limits, subject only to the qualifications already shown. The subjects of commerce are not exempt from state taxation, provided they be not taxed as such -taxed in such manner as that the burden is unequal because of the use to which they are put. II. Advancing from the question of the power to tax property to that of taxing vocations, business, franchises, we first notice the case of Wiggins Ferry Co. v. East St. Louis, 107 U. S. 365, 374. In that case the municipality imposed an annual license fee of $100 on the ferry company, whose boats plied between East St. Louis and St. Louis. The company was chartered by the State of Illinois and domiciled in East St. Louis, the case differing in that respect from the case of Gloucester Ferry Co. v. Pennsylvania, 114 U. S. 196. The court said: "The exaction of a license fee is an ordinary exercise of the police power by municipal corporations. When, therefore, a State expressly grants to an incorporated city, as in this case, the power to license, tax and regulate ferries, the latter may impose a license tax on the keepers of ferries, although therr boats ply between landings lying in two different States, and the act by which this exaction is authorized will not be held to be a regulation of commerce." The cases of Asher v. Texas, 128 U. S. 129, and Stoutenberg v. Hennick, 129 U. S. 141, were identical, in all essential particulars, with that of Robbins v. Shelby County. In the case of McCall v. California, 136 U. S. 104, 113, the tax was "for every railroad agency, $25 per quarter." McCall became personally involved merely by reason of his representation of the railroad company, and the effort to enforce the tax against him personally by fine and imprisonment. The court, in the opinion in that case, commented upon the case of Smith v. Alabama, 124 U. S. 465, where the statute in question was one imposing a license tax on locomotive engineers, and said: "We held, however, that the statute in question was not in its nature a regulation of commerce; VOL. CXLV-2 Argument for Defendant in Error. that so far as it affected commercial transactions among the States its effect was so indirect, incidental and remote as not to burden or impede such commerce, and that it was not therefore in conflict with the Constitution of the United States or any law of Congress." The California tax on the railroad agency, an agency that was instituted "to increase, and [that] doubtless did increase, its interstate passenger traffic," was held invalid, for the reason that "according to the principles established by the decisions of this court [it was] a tax upon a means or an occupation of carrying on interstate commerce, pure and simple.". Perhaps the doctrine of the State's power to tax and its proper limits are found best stated in Philadelphia Steamship Co. v. Pennsylvania, 122 U. S. 326, 341, 342. This court there said: "The tax in the present case is laid upon the gross receipts for transportation as such. Those receipts are followed and caused to be accounted for by the company, dollar for dollar. It is those specific receipts, or the amount thereof, (which is the same thing,) for which the company is called upon to pay the tax. They are taxed, not only because they are money, or its value, but because they were received for transportation. No doubt a ship-owner, like any other citizen, may be personally taxed for the amount of his property or estate, without regard to the source from which it was derived, whether from commerce, or banking, or any other employment. But that is an entirely different thing from laying a special tax upon his receipts in a particular employment. If such a tax is laid, and the receipts taxed are those derived from transporting goods and passengers in the way of interstate or foreign commerce, no matter when the tax is exacted, whether at the time of realizing the receipts, or at the end of every six months or a year, it is an exaction aimed at the commerce itself, and is a burden upon it and seriously affects it. A review of the question convinces us that the first ground on which the decision in State Tax on Railway Gross Receipts was placed is not tenable; that it is not supported by anything decided in Brown v. Maryland; but, on the con trary, that the reasoning in that case is decidedly against it. |