ments taken under the confirmation act of the California legislature, the first of which was entered before the bonds were issued, and confirmed the validity of the organization, while the second was entered years after the bonds were issued, and refused to confirm the organization. In the view we take of this case it is unnecessary, and it is therefore needless for us to here discuss or

determine the question of the effect which ought to be given them under other circumstances. The plaintiff below occupies an unassailable position upon the facts of the case as a bona fide purchaser, without reference to either judgment.

We are of opinion there is no error in the record, and the judgment of the court be

low is therefore affirmed.

[27]*B. A. STOCKARD and R. C. Jones, Composing the Firm of Stockard & Jones, et al., Plffs. in Err.,

v.

CLINT MORGAN and J. N. McCutcheon.

(See S. C. Reporter's ed. 27-38.)

Constitutional law-tax on interstate commerce-privilege tax on agent soliciting orders for nonresident principal.

A privilege tax imposed by a state statute upon

residents of that state as merchandise brok ers whose business is exclusively confined to soliciting orders from jobbers and wholesale

NOTE.-On state regulation of interstate or foreign commerce-see notes to Norfolk & W. R. Co. v. Com. (Va.) 13 L. R. A. 107; McCanna & F. Co. v. Citizens' Trust & Surety Co. 24 C. C. A. 13; Ratterman v. Western U. Teleg. Co. 32 L. ed. U. S. 229; Harmon v. Chicago, 37 L. ed. U. S. 216; Cleveland, C. C. & St. L. R. Co. v. Backus, 38 L. ed. U. S. 1041, and Postal Teleg. Cable Co. v. Adams, 39 L. ed. U. S. 311.

Peddlers and drummers as related to interstate

commerce.

This subject is discussed in a note appended to the case of Re Spain (C. C. E. D. N. C.) 14

L. R. A. 97. From the cases there cited it

seems that a state tax on peddlers who carry goods and deliver them when they sell them is not unconstitutional as a regulation of interstate commerce if no discrimination is made against persons or property of other states. Howe Mach. Co. v. Gage, 100 U. S. 676, 25 L. ed. 754; Re Wilson, 8 Mackey, 341, 12 L. R. A. 624; State v. Emert, 103 Mo. 241, 11 L. R. A. 219, 3 Inters. Com. Rep. 527, 15 S. W. 81; Com. v. Gardner, 133 Pa. 284, 7 L. R. A. 666, 19 Atl. 550.

But a sale, by sample or otherwise, of goods not yet brought into the state and owned by a nonresident cannot be subjected to a state tax or license fee, as that would constitute a regulation of interstate commerce. Robbins v. Shelby County Taxing Dist. 120 U. S. 490, 30 L. ed. 695, 1 Inters. Com. Rep. 45, 7 Sup. Ct. Rep. 592; Corson v. Maryland, 120 U. S. 502, 30 L. ed. 699, 1 Inters. Com. Rep. 50, 7 Sup. Ct. Rep. 655; Asher v. Texas, 128 U. S. 130, 32 L. ed. 369, 2 Inters. Com. Rep. 241, 9 Sup. Ct. Rep. 1: Stoutenburgh v. Hennick, 129 U. S. 141, 32 9 Sup. Ct. Rep. 256; Es parte Mur

Statement by Mr. Justice Peckham:

This is a writ of error to the supreme court of the state of Tennessee, brought to review a judgment of that court reversing a judgment of the court of chancery of Hamilton county in favor of complainants, and dismissing their bill.

The complainants sought to enjoin the collection of a tax imposed upon them under a statute of Tennessee, upon the ground that they were not liable for the tax because they were agents and brokers exclusively for the sale of the property of nonresident principals, and did no business of any kind for residents of the state. They also averred that the state statute, properly con

ray, 93 Ala. 78, 3 Inters. Com. Rep. 574, 8 So. 868; McLaughlin v. South Bend, 126 Ind. 471, 10 L. R. A. 357, 26 Ν. Ε. 185; State v. Agee, 83 Ala. 110, 2 Inters. Com. Rep. 21, 3 So. 856; State v. Bracco, 103 N. C. 349, 9 S. E. 404; Ft. Scott v. Pelton, 39 Kan. 764, 18 Pac. 954; Ferraris v. Kyle, 19 Nev. 435, 14 Pac. 529: Simmons Hardware Co. v. McGuire, 39 La. Ann. 848, 2 So. 592; Re Spain, 47 Fed. 208, 14 L. R. A. 97, 3 Inters. Com. Rep. 738; Es parte Stockton, 33 Fed. 95.

And a tax on peddlers of goods manufactured out of the state, not imposed if the goods are of home manufacture, is an unconstitutional regulation of interstate commerce. Rodgers v. McCoy, 6 Dak. 238, 44 N. W. 990: Ex parte Thomas, 71 Cal. 204, 12 Pac. 53: State v. Pratt. 59 Vt. 590, 1 Inters. Com. Rep. 299,9 Atl. 556.

For other cases, see the note referred to su pra.

A review of the more recent cases shows some conflict, due principally to different interpretations put by the various courts upon the decisions of the Federal Supreme Court on this question.

It is well settled that a state can impose no tax upon a person engaged in soliciting orders for goods for his nonresident employer, by whom such goods are to be delivered from without the state. Brennan v. Titusville, 153 U. S. 289, 38 L. ed. 719, 4 Inters. Com. Rep. 658, 14 Sup. Ct. Rep. 829, Reversing Titusville v. Brennan, 143 Pa. 642, 14 L. R. A. 100, 3 Inters Com. Rep. 735, 22 Atl. 893; Louisiana v. Lagarde, 60 Fed. 186; State ex rel. Selliger v. O'Connor, 5 N. D. 629, 67 N. W. 824; McClelland v. Marietta, 96 Ga. 749, 22 S. E. 329; Martin v. Rosedale, 130 Ind. 109, 29 Ν. Ε. 410;

or the manner of conducting the business of each, is and has been as follows:

"The complainant, as the representative of nonresident parties, firms, or corporations, solicits orders for goods from jobbers or wholesale dealers in Chattanooga, Tennessee, and when such orders are obtained sends them to his nonresident principal or principals. If an order is accepted the goods are shipped by such nonresident principal or principals to the local jobber or wholesale dealer. Up to the time of the sale the goods in all instances belong to the nonresident principal or principals, and are shipped to the state of Tennessee from another state.

"In making sales or soliciting orders for the goods the complainant sometimes exhibits samples to the local jobber or wholesale

tion of sales of goods which are not in the

state.

To the same effect is Stratford v. Montgomery, 110 Ala. 619, 20 So. 127, holding that an ordinance requiring a license fee from "local commercial brokers" cannot be applied to a person acting only for nonresident principals in negotiating sales of merchandise which at the time is situated in other states, without an invasion of the commerce clause of the Constitution of the United States.

But persons doing business in a taxing district as general merchandise brokers, who have taken out a license therefor, cannot escape the payment of the privilege tax imposed upon the yearly gross commissions of those engaged in such business because their business chanced for that year to consist wholly or partly in negotiating sales between resident and nonresident merchants of goods situated in another state. Ficklen v. Shelby County Taxing Dist. 145 U. S. 1, 36 L. ed. 601, 4 Inters. Com. Rep. 79, 12 Sup. Ct. Rep. 810.

And persons engaged in a commercial street brokerage business, who take orders for goods to be filled by nonresident dealers, placing these orders at their own option, unless otherwise directed, with any of their correspondents, and reselling any goods rejected after their arrival in the state, are not protected by the commerce clause of the Federal Constitution from a municipal tax Imposed upon commercial street brokers by the authorities of the city in which they do business. Walton v. Augusta, 104 Ga. 757, 30, S. E. 964.

State statutes requiring foreign corporations to comply with certain conditions before doing business in the state have frequently been held inapplicable to a foreign corporation whose only business in the state is selling through traveling agents and delivering goods manufactured outside the state, since any other construction of the statute would render it void as an interference with interstate commerce. Havens & G. Co. v. Diamond, 93 111. App. 557; Coit & Co. v. Sutton, 102 Mich. 324, 25 L. R. A. 819, 4 Inters. Com. Rep. 768, 60 N. W. 690; Toledo Commercial Co. v. Glen Mfg. Co. 55 Ohio St. 217, 45 N. E. 197; Blakeslee Mfg. Co.. v. Hilton, 5 Pa. Super. Ct. 184; Mearshon v. Pottsville Lumber Co. 187 Pa, 12, 40 Atl. 1019: Bateman v. Western Star Mill. Co. 1 Tex. Civ. App. 90, 4 Inters. Com. Rep. 260, 20 S. W. 931; Davis & R. Bldg. & Mfg. Co. v. Dix, 64 Fed. 406; Woessner v. H. T. Cottam & Co. 19 Tex. Čiv. App. 611, 47 S. W. 678.

Só, a contract by which a resident of a state agreed with a foreign corporation to canvass certain territory for the sale of its sewing ma

dealer, and sometimes takes the orders without showing a sample.

"Unless complainant has been previously authorized by the principal or principals to sell at a fixed price, the orders are taken subject to acceptance or rejection by such nonresident principal or principals, who own the goods.

*"At the end of each month, or at stated[29] periods, the complainant is paid a commission by such nonresident principal or principals for goods previously sold on accepted orders. No commission is paid on orders taken but rejected. Complainant does not receive for his services any pay or salary from any local jobber or dealer or resident of Tennessee, nor does he assume to represent or represent or hold himself out as representing, any resident of Tennessee, or nego

chines, which the corporation thereby agreed to sell him on credit and a bond given to secure payment to the corporation of any sum that might become due under the contract, constitute a part of the interstate commerce carried on by the sales of such sewing machines in accordance with said contract, and therefore cannot be affected by a state statute prohibiting business within the state by a foreign corporation which has not complied with certain requirements, such as filing a certificate to designate an agent on whom process may be served. Gunn v. White Sewing Mach. Co. 57 Ark. 24, 18 L. R. A. 206, 4 Inters. Com. Rep. 309, 20 S. W. 591.

How the delivery is to be made has been regarded as unimportant. Thus, a state statute taxing the occupation of sample sellers and solicitors is a tax on interstate commerce as ap plied to an agent negotiating a sale of goods in another state, whether the delivery to a buyer is to be made by a carrier, a postmaster, or by an agent of the seller to whom they are sent for delivery. Hurford v. State, 91 Tenn, 669, 20 S. W. 201.

And an ordinance under which a license fee may be required from a traveling agent engaged in soliciting orders for the enlargement of portraits by a nonresident corporation, which after enlargement are shipped to the place where the orders are taken, addressed to the corporation and delivered by an agent of the company to the persons ordering the same, violates the commerce clause of the Federal Constitution. Tinsman, 95 Fed. 648.

Re

1

And in a number of cases such a license tax has been held to be an unconstitutional regulation of commerce, although the goods are shipped to the soliciting agent for delivery. Thus, in McClellan v. Pettigrew, 44 La. Ann. 356, 10 So. 853, a license tax imposed upon one engaged in soliciting orders for goods for his nonresident employer, to be shipped Into the state by the latter, was held to violate the commerce clause of the Federal Constitution, al, though the goods were shipped directly to the agent to be delivered to the purchaser.

So, traveling salesmen engaged in soliciting orders for goods by sample for their nonresident employer, which are shipped to such salesmen for delivery, are engaged in interstate commerce, and cannot therefore be required by municipal ordinance to pay an occupation or license tax. Baxter v. Thomas, 4 Okla, 605, 46 Pac. 479: People v. Bunker (Mich.) 87 N. Ww

90.

M

And one soliciting orders by sample for a nonresident manufacturer for goods to be shipped to him for delivery and the collection of the

tiate any sales of goods for residents of Ten- | nessee. His principals are all residents of other states of the United States, and the goods sold are shipped from such other state to the state of Tennessee for delivery to buyers who reside in Tennessee.

"The complainant has an office or 'headquarters' in Chattanooga, Tennessee, where he keeps samples, stationery, and other articles; but he travels around on foot daily or frequently in drumming or soliciting orders for goods, as before stated. His principals are specific parties, firms, or corporations, all nonresidents of Tennessee and residents of other states in the United States, and he does not represent or hold himself out as representing the public in general, or negotiate or sell for any resident of Tennessee.

"The defendants and solicitors for the state of Tennessee and Hamilton county

first instalment of the purchase money as a part of his commission cannot be required by municipal ordinance to pay the privilege tax and procure the license required of transient peddlers. Overton v. Vicksburg, 70 Miss. 558, 13 So. 226.

So, a person soliciting orders for goods for his nonresident employers by whom the goods were shipped in response to such orders consigned to themselves, and were unpacked and delivered by him direct from the car to the purchasers, who were notified of the time and place to come for their goods, is engaged in interstate commerce, and is therefore not subject to an occupation tax. Turner v. State (Tex. Crim. App.) 55 S. W. 835.

So, portraits and frames manufactured in another state in compliance with orders taken by a traveling salesman, and shipped into the state consigned to the maker, whereupon the salesman delivers them to the persons ordering them and collects the price agreed upon when the orders are given, are the subject of interstate commerce: and such agent cannot be subjected to a license tax by state authority. State v. Willingham (Wyo.) 52 L. R. A. 198, 62 Pac. 797.

And an occupation tax is a tax on interstate commerce so far as it requires a license fee from a person soliciting orders for lightning rods for a nonresident employer by whom the rods are shipped into the state in obedience to such orders, the soliciting agent collecting the purchase price, and when required to do so assisting in putting up the rods. Talbutt v. State, 39 Tex. Crim. Rep. 64, 44 S. W. 1091.

To the contrary is Racine Iron Co. v. McCommons, 111 Ga. 536, 51 L. R. A. 134, 36 S. E. 866, which holds that a traveling agent for a nonresident principal, who makes executory contracts for the sale of goods, and who, when the goods are shipped into the state to him, receives them in bulk, breaks the original package and distributes the contents among his customers, is not exempt from a state license tax on the ground that he is engaged in interstate commerce. The court disapproved McClellan v. Pettigrew, 44 La. Ann. 356, 10 So. 853, saying that "it appears very plain to us that when a traveling salesman so far departs from the vocation ordinarily pursued by a commercial traveler as to actually vend the goods for which he solicits orders he ceases to be a mere 'drummer' in the sense in which that term is used by Mr. Justice Bradley in Robbins's Case."

So, an ordinance taxing persons engaged in selling or delivering picture frames or pictures has been held not to interfere with interstate

1

contend that, under the facts, the complainants are 'merchandise brokers,' and each of them is bound for privilege taxes under the laws of Tennessee.

"That J. H. McReynolds should pay a privilege tax for 1900 to the state of $20, and to the county of $20.

"That Stockard & Jones should pay to the state $20 for each of the years 1897, 1898, 1899, and 1900, and a like sum for each of said years to the county of Hamilton. "That each of the other complainants owe the same sums as Stockard & Jones.

"That all of the complainants should be held for proper penalties, costs, and attornevs' fees if they are held liable for such taxes.

"The complainants contend that they are engaged exclusively in interstate commerce, and are not bound for such privilege taxes; commerce as applied to the agent of a nonresident portrait company who receives pictures and frames from such company, and, after putting them together, delivers them to customers previously obtained by other agents of the company. State v. Caldwell, 127 N. C. 521, 37 S. E. 138.

And a person soliciting orders in Pennsylvania for a grocery firm in Ohio, which he afterwards fills by delivering the quantity of goods ordered from a carload of such goods consigned by the Ohio firm to themselves after receiving his orders, such deliveries being made either in broken packages or in small packages which were placed in large open boxes for transportation, there being no obligation to accept the goods unless equal to sample, and the purchase price to be paid only upon delivery, cannot be regarded as engaged in interstate commerce, and may therefore be required by municipal or dinance to pay a license fee. New Castle v. Cutler. 15 Pa. Super. Ct. 612.

In several cases the state courts have held, sometimes reluctantly but believing their course necessitated by the decisions of the Supreme Court of the United States, that persons engaged in peddling goods for their nonresident employers were engaged in interstate commerce, although the goods sold were usually de livered to the purchaser at the time of sale.

Thus, an agent of a nonresident organ company, who travels by wagon, carrying an organ with him, which he sells whenever he can do so, or, in lleu thereof, takes an order for a different organ, which, when shipped to him, he delivers to the purchaser, is, in French v. State (Tex. Crim. App.) 52 L. R. A. 160, 58 S. W. 1015, held to be engaged in interstate commerce so as to be exempt from an occupation tax on peddlers under a state law. The court denied that there was any distinction between cases which were sales by sample and of goods carried around by a dealer or drummer and sold or delivered from his wagon, and said. "If interstate commerce protects an article of traffic between states in transit and after its arrival at a warehouse and until it is sold therefrom and delivered thence to the purchaser by the seller who acts as the agent of the foreign company, it is difficult to see how the same article will not be protected while the agent of the foreign company carries it around with him, and, when he finds a purchaser, then sells and delivers it to such purchaser. It is not the vehicle, as we take it, that gives character to the traffic, but it is the fact that the property has not become mingled with the common mass of the property of the citizens of the state; and if this is not done in the

By agreement of the parties two questions only were argued in the state court: (1) Whether or not complainants were merchandise brokers and subject by statute to tax as such; (2) whether or not their business constituted interstate commerce, and there fore was beyond the reach of the state's taxing power.

The chancellor held that the complainants were not liable for the privilege tax and enjoined its collection perpetually, and adjudged the costs against Hamilton county.

one case until a sale and delivery by the foreign company from its warehouse, we fail to see how it becomes mingled with the mass of the property of the citizens of the state until it is sold by the agent of the foreign company to the purchaser from his wagon. If it is a sale in the one case that terminates its character as interstate commerce, we think it equally does so in the other."

And a salaried employee of a nonresident manufacturer engaged in peddling buggies for his employer, usually delivering them to the purchaser at the time of the sale, was, in Kirkpatrick v. State (Tex. Crim. App.) 60 S. W. 762, held to be engaged in interstate commerce, and therefore not liable to an occupation tax.

So, an ordinance Imposing a license tax on occupations is invalid as against a person selling picture frames for his nonresident employer, where he sells them only on pictures made by his employer in another state pursuant to crders theretofore given. Laurens v. Elmore, 55 S. C. 477, 45 L. R. A. 249, 33 S. E. 560.

And even if a state statute against hawkers and peddlers can be construed to apply to the sale of a frame for a portrait made in another state to fill an order taken by a canvasser in the state where it was delivered, where the order for the portrait contained a provision that It should be delivered in a frame which the purchaser of the portrait should have the option of buying at wholesale price, it would be unconstitutional as an interference with interstate commerce. State v. Coop, 52 S. C. 508, 41 L. R. A. 501, 30 S. E. 609.

Salesmen for a New York corporation, engaged in selling from house to house in Pennsylvania articles manufactured by said company, and also in taking orders by sample, are not amenable to a Pennsylvania statute prohibiting peddling. Com. v. Mooney, 12 Lanc. L. Rev. 209.

And a license tax for hawking and peddling cannot be required of a citizen of New York selling goods in Pennsylvania for a New York firm. Com. ea rel. Overfield v. Walker, 3 Pa. Dist. R. 534.

These decisions are manifestly in confilct with Emert v. Missouri, 156 U. S. 296, 39 L. ed. 430, 5 Inters. Com. Rep. 68, 15 Sup. Ct. Rep. 867, in which a state statute making it unlawful to peddle without a license was held not to be an unconstitutional interference with interstate commerce as applied to one who travels from place to place selling sewing machines made in another state by a corporation of that state, which it has sent to him to sell on its account and as its agent.

ment and dismissed the bill, holding the complainant's business was covered by the statute, and that it did not violate the Constitution of the United States.

Mr. Robert Pritchard submitted the cause for plaintiffs in error. Messrs. J. В. Sizer and R. P. Woodard were with him on the brief:

The negotiation of the sale of goods which are in another state, for the purpose of introducing them into the state in which the negotiation is made, is interstate commerce, and a state cannot require a license, or exact a tax, as a condition precedent to negotiating the sale.

Robbins v. Shelby County Taxing Dist.

The Texas court of criminal appeals recognized the existence of this conflict in Saulsbury v. State (Tex. Crim. App.) 63 S. W. 568, and therefore overruled French v. State (Tex. Crim. App.) 52 L. R. A. 160, 58 S. W. 1015, and Kirkpatrick v. State (Tex. Crim. App.) 60 S. W. 762, saying that at the time of deciding those cases its attention had not been called to the distinction between peddlers and drummers which was drawn in Emert v. Missouri, 156.U. S. 296, 39 L. ed. 430, 5 Inters. Com. Rep. 68, 15 Sup. Ct. Rep. 367.

The authorities are numerous which hold that peddlers who carry goods manufactured in another state, and deliver them to the purchaser at the time of sale, are not engaged in interstate commerce.

Thus, resident agents of a nonresident manufacturer, who carry its goods from place to place and deliver them to purchasers at the time of the sale, are not engaged in interstate commerce; and therefore a state statute which requires them, in common with all other agents selling such goods, whether residents of the state or not, to pay a license fee, does not violate the commerce clause of the Federal Constitution. American Harrow Co. v. Shaffer, 68 Fed. 750, 5 Inters. Com. Rep. 336.

And an employee of a nonresident wagon manufacturer who has wagons and parts of wagons shipped to him from his employer, and after unpacking them puts the parts together and proceeds from place to place offering the wagons for sale, is not so engaged in interstate commerce as to be exempt from the payment of an occupation tax, although in some instances he sells wagons on orders which he sends to his employer to be filled. Saulsbury v. State (Tex. Crim. App.) 63 S. W. 568.

And the license fees exacted of hawkers and peddlers by a state statute are not a tax upon interstate commerce as applied to an agent of a nonresident portrait company who attempts, while delivering pictures, orders for which have previously been taken, to sell frames in his possession appropriate to such pictures. State v. Montgomery, 92 Ме. 433, 43 Atl. 18.

So, a state statute prohibiting or restricting hawking and peddling is not an invasion of the exclusive right of Congress to regulate interstate commerce as applied to a person exhibiting and offering for sale from door to door goods sold under the instalment plan. Com. v. Dunham, 191 Pa. 73, 43 Atl. 84.

And an ordinance Imposing a license tax on hawkers and peddlers does not interfere with interstate commerce as applied to a peddler of chairs imported into the state before his em