D. E. Foote & Co. v. Clagett

Pearce, J., delivered thé opinion of the Court. This case originated in a bill of complaint filed by D. E. Foote and Company, a corporation under the laws of Delaware, and William H. McGee, trading as William H. McGee & Co., in the Circuit Court of Baltimore City, against William B. Clagett, Comptroller of the State of Maryland, and Thomas M. Jaxnart, a constable of the City of Baltimore, to restrain the collection by them of a tax or charge of two cents per bushel upon certain quantities of oysters in the shell, bought by said plaintiffs at their respective factories for the packing of oysters in Baltimore City, during the oyster season of 1910 and 1911, and prior to December 10th, 1910; which tax or charge was imposed by Chapter 735 of the Acts of 1910. Subsequently, J. Langrall and Company, a corporation; The O. L. Applegarth Company, a corporation, and William H. Killian, trading as W. H. Killian & Co., were, upon their respective petitions, made parties plaintiffs, and prayed for similar injunctions upon like grounds, they being oyster packers in like condition as the original plaintiffs, and preliminary injunctions were accordingly granted to the original plaintiffs. ²³⁰ The hill alleged that the plaintiffs were each oyster packers in Baltimore City, and large buyers of oysters in the shell taken from oyster beds located within the States of Maryland, Virginia and Few Jersey, and brought therefrom in vessels and cars to said factories. The bill then set out the material provisions of Chapter 735 of 1910, as follows: Chapter 735 of the Acts of the General Assembly of Maryland passed at the Session of 1910, entitled “An Act to increase the productivity of the natural oyster beds or bars of the State, and for that purpose to repeal section 69 of Article 72 of the Code of Public General Laws and to re-enact said section with amendments and to add to said article a new section, to come in after section 69, aud to- be known as section 6 9A.

And to add five other new sections to said article to come in after section 119, and to be known as sections 120, 121, 122, 123 and 124 respectively,” provides in part as follows: ' “Sec. 69. It shall be thé duty of the Commander of the State Fishery Force, at the commencement of or during the' oyster season in each yeav, to appoint from the counties producing oysters for packing purposes in the State, not exceeding twenty special inspectors to be appointed as follows: Two each from Anne Arundel, St. Mary’s, Talbot and Wicomico Counties; three each from Dorchester, Somerset and Queen Anne’s Counties, and one each from Kent, Calvert and Charles Counties, at a salary of forty-five dollars per month, during the oyster season, and they shall be' stationed at such places as in the judgment of the Commander of the State Fishery Force their services may be needed. Before assuming the duties of their offices the said special inspectors shall take an oath, to be administered by said Commander, to diligently and faithfully discharge the duties of their said offices. The said special inspectors shall inspect all oysters in the district to which he is assigned upon the inspection of any such oysters each special inspector shall make a certificate of the number of bushels in triplicate, one of which shall be given to the purchaser; one to the seller and the other daily to the general measurer and inspector of the district where such inspection occurred.' A charge of two cents per ²³¹ bushel is hereby levied, one-half of which is to help defray the expense of such inspection (of oysters), and the other expenses of the State Fishery Force, and the other half of which is to be expended in re-shelling and otherwise cultivating and improving the natural oyster beds and bars in the waters of the State, to be charged equally to the buyer and seller, but to be paid weekly to the Comptroller of the State Treasury, or his agent, by the buyers, the certificate given the General líeasurer and Inspector shall be by him mailed weekly to the Comptroller, or his agent, and in case the amounts of money shown to be due, not paid in one wreek thereafter to the Comptroller, or his agent, which is hereby required to be done, the properties of the parties so indebted may be levied on and sold by the said Comptroller, or his agent, as in cases of taxes in default, without other process of law.

The tax of two cents per bushel hereby levied is also made a charge on oysters sold by commission merchants and others selling by less than the cargo, and also a tax of six cents per barrel containing not more than three bushels, on oysters in bag, a tax of four cents per bag, containing not more than two bushels, and all transportation companies carrying oysters in the shell consigned to Baltimore shall furnish to the oyster inspector or collector of oyster tax a copy of his manifest, showing the number of bushels on board on arrival of steamer and to whom consigned, and the special inspectors are charged with the duty of seeing that proper returns are made for the purpose of this Act, by such commission merchants or retailers, and in the performance of the duty the said special inspectors are authorized and directed to visit the places where oysters less than cargoes are sold and get from such sellers a statement, under oath, as to the number of bushels sold from time to time, and to return to the general measurers and inspectors a certificate thereof to be forwarded to the Comptroller, as is required in the case of the certificates for cargoes. And the payments of the amounts so found to be due shall be similarly enforced. All such special inspectors may be removed at any time by the Commander for neglect or malfeasance in office, and said Commander shall report to the Governor any neglect of a general measurer or inspector. The Commander of the State of Fishery Force shall furnish to each of said special inspectors certificates ²³² in book form supplied with carbon paper, so that each of said triplicate certificates shall be exactly the same.

The form of the certificate shall be as follows: 19-. I hereby certify that I have this day inspected for Captain Schooner a cargo of oysters, sold to-;-and found the same to contain-bushels of merchantable oysters. Signed- 69A. The Comptroller of the State Treasury shall pass one-half of the amounts paid in by the buyers, as provided in section 69, to the credit of a'fund to be known as a ‘FTatural Oyster Bed Re-Shelling Fund.’ ” The bill then avers that said act is unconstitutional and void: (u) Because it is in violation of Article 1, section 8, of the Constitution of the United States, which vests in Congress exclusive power to regulate commerce between the States.

(5) Because it violates Article 1, section 10, oBthe Constitution of the United States, which prohibits any State, without the consent of Congress, from laying any duties upon imports or exports, except such as are absolutely necessary for executing its inspection laws. (c) Because the title of the act is insufficient under Article 3, section 29, of the Constitution of the State of Maryland. (d) Because it violates Article 15 of the Bill of Rights of Maryland, in imposing a direct tax upon property, and not upofx the owner thereof, the same not being laid with a political view for the good government and benefit of the community. (e) Because it is in other respects repugnant to the Constitution of the United States and to the Constitution of the State of Maryland, respectively.

(/) Because said act has been repealed by Chapter 413 of the Acts of 1910, approved by the Governor on the same day (April 13th, 1910), as Chapter 735. ²³³ The bill further avers that the Comptroller of the State, acting through said constable, and in pursuance of said Chapter 735, has levied upon certain valuable property of the plaintiffs to enforce the collection of said tax or charge, and is about to remove and sell said property for the payment of said tax or charge; And that part of the oysters so purchased by said plaintiffs respectively were taken and brought in vessels and cars from the waters of Virginia and Hew Jersey, and the remainder from the waters of Maryland. The defendants both answered, admitting all the allegations of fact contained in the hill, but alleging that the validity, operation and effect of the Acts of 1910, Chapters 735 and 413, are matters of law to he determined by the Court, and insisting upon all matters of defence to the bill which might have been availed of by demurrer, and praying the Court to retain jurisdiction, and ascertain the amount which the answer alleges to he due from th'e plaintiffs, respectively, under said Chapter 735, and to enter a decree therefor against the said respective plaintiffs. An agreement of counsel was also filed submitting the case for decree upon the hill, answer, and the facts contained in said agreement. This agreement details the history of the enactment of Chapters 735 and 413 as bearing upon the averment of the hill that the former was repealed by the latter.

It shows that each of the plaintiffs had paid the special license tax of $25.00 prescribed in section 77 of Article 72 of the Code of Public General Laws of Maryland, up to and including the- season of 1910 and 1911, and that each plaintiff was regularly assessed for miscellaneous stock at the factory, and had each paid State and city taxes annually on such assessments. It, also states the number of bushels of oysters in the shell purchased by each plaintiff from the waters of Maryland, Virginia and Hew Jersey, respectively, during the season ²³⁴ of 1910 and 1911, and delivered at their respective factories in vessel loads, or in barrels and bags, and statements were attached to said agreement of facts, showing the amounts claimed by the defendants, and admitted by the plaintiffs to be due from each of them on account of said tax or charge, if the same should be determined by the Court to be enforceable under the provisions of Chapter 735 of 1910. , The Circuit Court sustained said act as constitutional and valid; and dissolved the injunctions and dismissed the bill, and this appeal is from that decree. The first and most serious objection urged to the validity of this act is that it violates that provision of the Constitution of the United States which declares that “Congress shall have power to regulate commerce with foreign nations and among the several States.” In approaching the consideration of this question, it may be well to recall the language of Judge Alvey, in State v. C. & P. R. R. Co., 40 Md. 44 , where the taxing power of the State was challenged upon the ground mentioned above. The Court said: “It is proper to say, that the taxing power of the State is of vital importance to it; indeed, so essential is the power, that the very existence of the State depends upon the right to exercise it.

All persons and property, therefore, within the jurisdiction of the State, are liable to it; and the power is conferred upon the State for the benefit of the entire body politic. The power resides in the State as an attribute of its sovereignty, and the right of the legislature, as the representatives of the people, to exercise it, should never be questioned, except in plain cases, where the power is relinquished for valid consideration, or where to prevent its abuse, it has been placed under restriction, either as to the subjects liable to it, or the mode and manner of its exercise. That the State’s power of taxation has been restrained made subject to limitation by the Federal Constitution as to certain subjects, is clear, and it is equally clear, that with respect to the mode and manner of exercising the power of the Legislature, it has been ²³⁵ restrained by the Constitution of this State.” The ultimate questions for our determination, therefore, are (1) whether the transportation of oysters out of this State into another State, or their transportation from another State into this State, constitutes commerce within the -meaning of the Constitution of the United States; and (2) if it does, then whether Chapter 735 is an invasion of the right of Congress to regulate such commerce. But preliminary to these, is the question of whether the power to regulate commerce is exclusively vested in Congress, or whether it can be exercised by the State when Congress has not exerted its power.

In Gibbons v. Ogden, 9 Wheaton, 1 , it was declared that this power “comprehends every species of commercial intercourse between the United States and foreign nations, * * * and among the several States; * * * that it does not stop at the external boundary line of each State; * * * and that the grant of this power carries with it the whole subject, leaving nothing for the State to act upon.” In Robbins v. Taxing District of Shelby County, 120 U. S. 489 , it was said that “this power is necessarily exclusive whenever the subjects of it are national in their character, or admit only of one uniform system or plan of regulation. * * * That where the power of Congress to regulate is exclusive, the failure of Congress to make express regulations, indicates - its will that the subject shall be left free from any restrictions or impositions, and that any regulation of the subject by the States, except in