The construction, by the highest court of a state, that a
license tax imposed on meatpacking houses was exacted from a
foreign corporation doing both interstate and domestic business
only by virtue of the latter, is not open to review in this
Court.
The Fourteenth Amendment was not intended to prevent a state
from adjusting its system of taxation in all proper and reasonable
ways, or
Page 200 U. S. 227
through its undoubted power to impose different taxes upon
different trades and professions, and imposing a license tax on
meatpacking houses is not an arbitrary and unreasonable
classification which will render the tax void under the Fourteenth
Amendment, as denying the equal protection of the laws. Nor is it a
denial of equal protection of the law because the tax is not
imposed on persons not doing a meatpacking house business but
selling products thereof, or because it is not imposed on persons
engaged in packing articles of food other than meat.
Where the highest court of the state has so construed the act, a
foreign corporation selling its products in the state, but whose
packing establishments are not situated in the state, is not for
that reason exempt from such a license tax.
The court will not interfere with the conclusion expressed by
the highest court of the state that, under the provisions of the
state constitution, a tax is uniform when it is equal upon all
persons belonging to the described class upon which it is
imposed.
This was "a controversy without action," submitted in accordance
with the laws of North Carolina in that behalf, in the Superior
Court of Buncombe County, that state, in which B.R. Lacey,
Treasurer of North Carolina, was plaintiff and Armour Packing
Company was defendant.
By the revenue law of North Carolina of March 9, 1903, Public
Laws, N.Car. p. 323, c. 247, it is provided in schedule B:
"SEC. 26.
Defining taxes under this schedule. Taxes in
this schedule shall be imposed as license tax for the privilege of
carrying on the business or doing the act named, and nothing in
this act contained shall be construed to relieve any person or
corporation from the payment of tax as required in the preceding
schedule."
"SEC. 56.
Packing houses. Upon every meatpacking house
doing business in this state, one hundred dollars for each county
in which said business is carried on."
"SEC. 88.
Unless prohibited, county may levy same license
tax as state. In case where a specific license tax is levied
for the privilege of carrying on any business, trade, or
profession, the county may levy the same tax, and no more:
Provided, no provision to the contrary is made in the
section levying the specific license tax. "
Page 200 U. S. 228
Section 107 of chapter 251 of Public Laws of 1903 (p. 407)
reads:
"SEC. 107.
State treasurer to sue for taxes. Upon
failure to pay to the state treasurer within thirty days after the
same shall have become due, any tax which by law is made payable
direct to the state treasurer, it shall be his duty to institute an
action to enforce the same in the County of Wake, or in the county
in which the property taxed is located."
The third section of Article V of the Constitution of North
Carolina provides:
"Laws shall be passed taxing, by a uniform rule, all moneys,
credits, investments in bonds, stocks, joint stock companies, or
otherwise. . . . The general assembly may also tax trades,
professions, franchises, and incomes."
It appeared from the facts agreed, as in substance stated by the
Supreme Court of North Carolina, that the Armour Packing Company
was incorporated in New Jersey, but has its principal office and
place of business in Kansas, that business being "a meatpacking
house business," and that it has property in North Carolina;
that
"a meatpacking house is a place where the business of
slaughtering animals, and dressing and preparing the products of
their carcasses for food and other purposes is carried on; the
products thus prepared consist of fresh and cured meats, such as
hams, dry salt sides, bacon, lard, beef extracts, glue, blood,
tankage, etc."
That the Armour Packing Company
"does not, anywhere within the State of North Carolina,
slaughter, dress, cure, pack, or manufacture any products
hereinbefore set forth, of any animal, for food, or for commercial
use, or for other purposes,"
but that, after the animals are slaughtered, dressed, and
prepared for food or other commercial purposes in Kansas, such
product is shipped in bulk to Wilmington, Greensboro, Asheville,
Charlotte, and Fayetteville, North Carolina, where the company has
cold storage plants and warehouses, and sold from such storage
plants, some of such product to parties in North Carolina and some
to parties outside of that state; that part of said products
shipped to
Page 200 U. S. 229
the cold storage warehouse in Asheville, Buncombe County, remain
there until disposed of in due course of trade on orders taken and
received after said products have been stored or placed in said
warehouse or cold storage plants. At each of said five points in
North Carolina, where the company maintains a warehouse and cold
storage plants, it has one or more employees,
i.e.,
bookkeepers, stenographers, shipping clerks, salesmen, drivers,
laborers who box said meats and who wrap and crate goods for
delivery as they are sold. There are, in Wilmington and other
cities of said state, commission merchants, brokers, and butchers
who sell by wholesale and retail in competition with the Armour
Packing Company, who are not engaged in a meatpacking house
business in North Carolina or elsewhere, fresh, cured, and salt
meats and other products that have been manufactured from the
carcasses of slaughtered animals for food and commercial purposes,
and, under the laws of North Carolina, said commission merchants,
brokers, and butchers are not amenable to the tax levied under
§ 56 of said revenue act of 1903. At all points in North
Carolina where the Armour Packing Company is engaged in business,
and at various other places in said state, there are engaged in
business, as the Armour Packing Company is engaged, packing houses
which pack articles of food other than meat, and offer them for
sale in said state, such as peas, beans, tomatoes, corn, pumpkins,
fruit, fish, oysters, etc. The products of said packing houses are
articles of food and commerce, and are sold in the State of North
Carolina through agents, brokers, wholesale and retail merchants,
just as the products packed by the Armour Packing Company are
sold.
The ruling of the court was invoked on certain points stated,
all of which were adjudged adversely to defendant, and judgment was
rendered against it for the tax and costs, which was affirmed by
the Supreme Court of North Carolina. 134 N.C. 567.
Page 200 U. S. 233
MR. CHIEF JUSTICE Fuller delivered the opinion of the Court.
The Supreme Court of North Carolina stated the contentions of
the Armour Packing Company thus:
"1. That it is not engaged in doing a packinghouse business in
this state; . . .(2) that the tax is an interference with
interstate commerce; (3) that the tax contravenes Section 3 of
Article Y of the Constitution of North Carolina, which requires
taxation 'by uniform rule;' (4) that the tax is forbidden by the
Fourteenth Amendment to the Constitution of the United States; (5)
that singling out 'meatpacking houses' for taxation is arbitrary or
class legislation, and prohibited by both state and federal
Constitutions."
The court said:
"If the business of the defendant was solely that of shipping
food products into this state, consigned directly to purchasers on
orders previously obtained, it is clear that this would be
interstate commerce, and a tax laid by the state upon such business
would be illegal. But the defendant does a large business within
the state -- the selling of products already stored here on orders
received after these products are thus stored. The tax is laid upon
every meatpacking house 'doing business in this state.' The evident
meaning of the legislature is to
Page 200 U. S. 234
tax the agency 'doing business' within this state, and not to
lay any tax upon the interstate commerce of shipping products into
the state, to be directly or indirectly delivered to purchasers
whose orders were obtained before the goods were shipped."
And, after recapitulating from the agreed statement the
particulars of the business transacted in North Carolina, the court
applied the rule that the legislature could prescribe such
conditions as it saw fit on the transaction of business by a
foreign corporation within the state, and held that the license tax
was the condition upon which defendant was permitted to do the
business so described, and cited
Osborne v. Florida,
164 U. S. 650, as
decisive on the question that the license tax applied only to
business within the state, and not to that which was interstate in
its character, and added:
"The defendant doing business in this state, and the license tax
being exacted only by virtue of its intrastate business, the first
two grounds of objection are overruled."
As was said in
Osborne v. Florida, this construction of
a state statute by its highest court is not open to review, and,
accepting it, the case plainly comes within
Kehrer v.
Stewart, 197 U. S. 60. That
was a writ of error to the Supreme Court of Georgia (117 Ga. 969,
115 Ga. 184), involving the constitutionality of a statute imposing
a tax upon packing house agents, and the liability of an agent of
Nelson Morris & Company, a meatpacking firm of Chicago, to pay
it. It was contended that Morris & Company did not slaughter,
dress, cure, pack, or manufacture the products of animals for food
anywhere in the State of Georgia, and that therefore the firm was
not doing a packinghouse business within the state; that the
statute violated the commerce clause of the Constitution, and that
it was invalid in that it denied the equal protection of the laws.
These contentions were overruled by the Supreme Court of Georgia,
and this Court affirmed the judgment. And, among other things, it
was there said:
"The act in question does not deny to the petitioner the
Page 200 U. S. 235
equal protection of the laws, as the tax is imposed alike upon
the managing agent both of domestic and of foreign houses. . . .
There is no discrimination in favor of the agents of domestic
houses, and, while we may suspect that the act was primarily
intended to apply to agents of
ultra state houses, there
is no discrimination upon the face of the act, and none, so far as
the record shows, upon its practical administration. As we have
frequently held, the state has the right to classify occupations,
and to impose different taxes upon different occupations. Such has
been constantly the practice of Congress under the internal revenue
laws.
Cook v. Marshall County, 196 U. S.
261,
196 U. S. 275. What the
necessity is for such tax, and upon what occupations it shall be
imposed, as well as the amount of the imposition, are exclusively
within the control of the state legislature. So long as there is no
discrimination against citizens of other states, the amount and
necessity of the tax are not open to criticism here."
197 U.S.
197 U. S.
69.
This practically disposes of the fourth and fifth contentions,
since the classification of meatpacking houses cannot be said to be
an arbitrary selection or not to rest on reasonable grounds, and
the Fourteenth Amendment was not intended to prevent a state from
adjusting its system of taxation in all proper and reasonable ways,
or, through the undoubted power of classification, to impose
different taxes upon different trades and professions.
"A tax may be imposed only upon certain callings and trades, for
when the state exerts its power to tax, it is not bound to tax all
pursuits or all property that may be legitimately taxed for
governmental purposes. It would be an intolerable burden if a state
could not tax any property or calling unless at the same time it
taxed all property or all callings."
Connolly v. Union Sewer Pipe Co., 184 U.
S. 540,
184 U. S.
562.
And see Cargill Co. v. Minnesota, 180 U.
S. 452;
Kidd v. Alabama, 188 U.
S. 730;
Savannah, Thunderbolt &c. Ry. Co. v.
Savannah, 198 U. S. 392;
Minnesota Iron Co. v.
Kline,
Page 200 U. S. 236
199 U. S. 593;
Cable v. United States Life Insurance Company,
191 U. S.
307.
By the act under consideration, the tax is levied upon every
packing house doing business in the state, which includes by its
terms both domestic and foreign meatpacking houses. It is true that
it appears that, where the Armour Packing Company does business,
certain persons sell, both by wholesale and retail, packinghouse
products, and yet are not subjected to this tax, but also that
those parties are not doing, either in North Carolina or elsewhere,
a packinghouse business. And so it appears that, in North Carolina
at the points where the Armour Packing Company is engaged in
business and at other places in the state, there are establishments
engaged in business which pack articles of food other than meats,
such as peas, beans, pumpkins, etc., and offer them for sale; but
we cannot accept the suggestion that the statute is void as denying
the equal protection of the laws to meatpacking houses because
houses packing vegetables and the like are not included in the same
classification, and subject to the same tax.
As to the contention that the act is in violation of Section 3
of Article V of the state constitution, the state supreme court
held that this tax, although not a property or
ad valorem
tax, was controlled, even if the requirement of uniformity were
applicable, by the rule that "a tax is uniform when it is equal
upon all persons belonging to the described class upon which it is
imposed." And with that conclusion it is not our province, nor are
we disposed, to interfere.
Judgment affirmed.
MR. JUSTICE BROWN, with whom was MR. JUSTICE PECHHAM,
dissenting:
The main, and practically the only, question in this case is
whether the Armour Packing Company was a "meatpacking house doing
business" in the State of North Carolina within
Page 200 U. S. 237
the meaning of the statute. The seventh and eighth items of the
stipulation of facts are as follows:
"7. A meatpacking house is a place where the business of
slaughtering animals, and dressing and preparing the products of
their carcasses for food and other purposes, is carried on. The
products thus prepared consist of fresh and cured meats, such as
hams, dry salt sides, bacon, lard, beef extracts, glue, blood,
tankage, etc."
"8. Said Armour Packing Company does not anywhere, within the
State of North Carolina, slaughter, dress, cure, pack, or
manufacture any products hereinbefore set forth, of any animal, for
food, or for commercial use, or for other purposes."
As one article of the findings defines the meatpacking business
to consist in doing certain things, and the very next article
declares that none of these things are done within the state, it is
difficult to say that, notwithstanding these findings of fact,
there is a conclusion of law that the company is doing a
meatpacking business in that state. The packing company doubtless
falls within the letter of the statute. It does a meatpacking
business in Kansas City. It does a business in North Carolina. But,
as we have said in numerous cases, a thing may be within the letter
of a statute and not be within its spirit.
United
States v. Babbit, 1 Black 55. The letter of the
statute in this case would be satisfied if the packing company did
a furniture or dry goods business in North Carolina, yet it would
clearly not be within the intent of the statute. If, for instance,
the tax were upon breweries, and the beer were all manufactured out
of the state, and then shipped into the state for sale and
distribution, is it possible that the defendant would be liable for
doing business as a brewer? So if the tax were imposed upon the
manufacturers of carriages, and all the manufacturing were done in
Chicago, and the carriages shipped into North Carolina and there
sold, the defendant would be liable as a dealer in carriages, but
certainly not as a manufacturer. The business done at the five cold
storage plants, which consists in packing the meats and wrapping
them for delivery as
Page 200 U. S. 238
they are sold, is not mentioned in the seventh finding even as
an incidental part of the packing business. Much less even is the
business of selling meats at retail, as ordinary butchers do. Yet,
in the opinion of the court, the company was doing a meatpacking
house business within the state. In the view of the minority, the
business done within the state must be a meatpacking business, and
not the business of selling meats, either at wholesale or retail,
and when the meatpacking house is accurately defined in the
stipulation, and no part of the business thus defined appears to
have been done within the state, it is impossible to support the
tax.
The case resembles that of
Kehrer v. Stewart,
197 U. S. 60, in
many particulars, but with the vital difference that the law of
Georgia imposed a tax upon "all
agents of packing houses
doing business within this state, $200, in each county where said
business is carried on." As the tax was imposed upon agents of
packing houses, and not upon the packing houses themselves, the
court was unanimously of the opinion that the managing agents of
foreign packing houses were subject to the tax. But in this case
the act attempts to reach out and tax packing houses doing business
as such exclusively in another state.
With the utmost deference to the opinion of the Court, we are
constrained to dissent from its view.
MR. JUSTICE WHITE and MR. JUSTICE McKENNA also dissented upon
other grounds.
