ties Persons cannot be made to assume the reation of partners, as between themselves, when their purpose is that no partnership shall exist. There is no reason why they may not enter into agreement whereby one of them shall participate in the profits arising from the management of particular property without his becomnga partner with the others, or without his soquiring an interest in the property itself, so to affect a change of title. As the charge to the jury was in accordance with these principes, and as the evidence conclusively showed that Arndt did not, prior to the loss, acquire an interest in, or any control of, the property asured, but was only entitled to participate in the profits arising from its management after a amed date, there is no reason to disturb the judgment.

It is therefore affirmed.

True copy. Test:

James H. McKenney, Clerk, Sup. Court, U. S.

SAMUEL A. WALLING, Piff. in Err.

อ.

PEOPLE OF THE STATE OF MICHIGAN.

(See S. C. Reporter's ed. 446-481.) Ctitutional law-regulation of commerce ate laws which discriminate against the citi na or products of other States invalid.

A state law which imposes a specific tax on gervine engaged in the business of selling liquors sale, or of soliciting or taking orders for quors to be shipped into the State from out of the State, not having their principal ace of business in the State, without imposing a ear upon persons engaged in the like business rence to liquors manufactured in the State, xtstitutional and void; because such a law inates unfavorably against the citizens and act of other States and, therefore, is a regulacommerce repugnant to the Constitution of

favor of their own citizens, nor intermeddle
with commerce between the States.
Cooley, Tax. p. 64; Hinson v. Lott, 8 Wall.
148 (75 U. S. bk. 19, L. ed. 387); Guy v. Bal-
timore, 100 U. S. 438 (Bk. 25. L. ed. 744); Ward
v. Maryland, 12 Wall. 418 (9 U. S. bk. 20, L.
ed. 449); Welton v. Mo. 91 U. S. 275 (Bk. 23,
L. ed. 347); Webber v. Va. 103 U. S. 344 (Bk.
26, L. ed. 565); Daniels v. Richmond, 78 Ky.
544; Higgins v. 300 Casks of Lime, 130 Mass. 1;
State v. Furbush, 72 Me. 495; McGuire v. Par
ker, 32 La. Ann. 832; Pierce v. State, 13 N. H.
582; Cransom v. Smith, 37 Mich. 311; Re Ru-
dolph, 6 Sawy. C. C. 295; State v. North, 27
Mo. 467; State v. Browning, 62 Mo. 591; County
of Mobile v. Kimball, 102 U. S. 691 (Bk. 26, L.
ed. 238); Wiley v. Palmer, 14 la. 627; Scott v.
Watkins, 22 Ark. 556, 564; liver v. Washing-
ton Mills, 11 Allen, 268.
Mr. J. J. Van Riper, Atty-Gen. of Michi-
gan, for defendants in error:

State legislation taxing or prohibiting the sale of intoxicating liquors is not a regulation of commerce but the exercise of the police power of the State.

Commonwealth v. Kimball, 24 Pick. 363; BarL. ed. 929); License Cases, 5 How. 504 (46 U. S. temeyer v. Iowa, 18 Wall. 129 (85 U. S. bk. 21, bk. 12, L. ed. 255); Gibbons v. Ogden, 9 Wheat. 205 (22 U. S. bk. 6, L. ed. 72): Passenger Cases, 7 How. 283 (48 U. S. bk. 12, L. ed. 702).

2. In the License Cases almost every phase of the liquor question, and the powers of the several States to legislate thereon was fully discussed, and their absolute control over the subject settled by this court.

3. There is no unjust discrimination against citizens of other States, but the statute is applicable alike to all persons, residents or nonresidents, who engage in this particular traffic. 4. The tax is not upon commerce but upon occupations.

McCulloch v. Md. 4 Wheat. 428 (17 U. S. bk. 4, L. ed. 606); Brown v. Md. 12 Wheat. 444 A law subsequently passed, imposing a greater (25 U. S. bk. 6, L. ed. 687).

United States.

arpon all persons engaged in any city, township The right of a State to tax occupations gen

are in the business of manufacturing or sell-erally cannot be questioned.

ons in the State, does not have the effect of

the first law of its objectionable charac

Nathan v. La. 8 How. 80 and Peirce v. N. H.

being imposed upon the same class of per- 5 How. 593 (46 U. S. bk. 12, L. ed. 995, 296); but being imposed on the principal dealers Hinson v. La. 8 Wall. 148 (75 U. S. bk. 19, L. on their servants, clerks or drummers. Efect of the commerce clause of the Constitued. 387); Machine Co. v. Gage, 100 U. S. 676 Sen giving Congress exclusive power to regu- (Bk. 25, L. ed. 754). merce among the several States in cases adtag and requiring one uniform rule, etc. [No. 741.]

Arpad and submitted Dec. 3, 1884. Decided
Jan. 18, 1886.

ERROR to the Supreme Court of the State

The history and facts of the case appear in

on of the court.

0. W. Powers, for plaintiff in error: State Legislatures must not discriminate in

'mad notes by Mr. Justice BRADLEY.

-Constitutional law; regulation of comNate See Gibbons v. Ogden, 22 U. 8. (9 Tbk 621 note: Brown v. Maryland, 25

bat) 419, bk. 6, 678, note.

of stea to tax. See Providence Bank v. 5.8. 14 Pet.), 514, bk. 7, 939, note; Dobbins

5. In this case there is no importer of foreign goods taxed and no foreign imports to be affected thereby.

6. The terms "imports" and "exports" do not refer to goods brought from one State into another.

Brown v. Maryland, supra; Woodruff V. Parham, 8 Wall. 123 (75 U. S. bk. 19, L. ed. 382); License Cases, 5 How. 593 (46 U. S. bk.

12, L. ed. 296).

7. It has been held that a State may require a license to sell ardent spirits of foreign as well

as of domestic manufacture, and that a law au-
thorizing such a tax would not be a regulation
of commerce, but within the police power of
the State.

L. ed. 702); Gibbons v. Ogden, 9 Wheat. 208 (22
Passenger Cases, 7 How. 283 (48 U. S. bk 12,
U. S. bk. 6. L. ed. 73).

of Erie County, 41 U. S. (16 Pet.), 435, bk.third of the License Cases, the power of a State

8. In Peirce v. New Hampshire, supra, the

[446]

"Sec. 1. The People of the State of Michigan enact: That every person who shall come into, or being in this State, shall engage in the busi-ation of the Business of Manufacturing and ness of selling spirituous and intoxicating, malt, brewed or fermented liquors to citizens or residents of this State, at wholesale, or of soliciting or taking orders from the citizens or residents of this State for any such liquors to be shipped into this State, or furnished, or supplied at wholesale to any person within this State, not having his, their or its principal [447] place of business within this State, shall, on or before the fourth Friday of June in each year, pay a tax of $300 if engaged in selling, or soliciting, or taking orders for the sale of, such spirituous and intoxicating liquors, and $100 for malt, brewed or fermented liquors. Such tax shall be paid to the Auditor-General and be

ing or offering for sale spirituous or intoxica- | respondent (Walling) was engaged in. The re-
ting liquors, or mixed liquors, by retail, or any spondent objected to the giving of testimony
mixture or compound, excepting proprietary under the complaint, on the ground that the
patent medicines, which in whole or in part Act of 1875 is repugnant to the Constitution of
consists of spirituous or intoxicating liquors, the United States, and therefore void; that it
the sum of $300 per annum; upon the business is in conflict with paragraph 3 of section 8,
of selling or offering for sale, by retail, any article 1, giving Congress power to regulate
malt, brewed or fermented liquors, $200 per commerce, etc.; paragraph 2 of section 10, arti-
anum; upon the business of selling brewed or cle 1, prohibiting ex post facto laws and laws
malt liquors at wholesale, or at wholesale and impairing the obligation of contracts; and par-
retail, $200 per annum; upon the business of agraph 1 of section 2, article 4, which declares
sing spirituous or intoxicating liquors at that "The citizens of each State shall be en-
wholesale, or at wholesale and retail, $500 per titled to all the privileges and immunities of
num; upon the business of manufacturing citizens in the several States." The defendant
trewed or malt liquors for sale, if the quantity also objected to the admission of any testimony,
manufactured be less than fifteen hundred because the law referred to is in conflict with
barrels, $65 per annum, and $25 upon each ad- the State Constitution. All the objections
ditional thousand barrels, or part thereof; upon were overruled, and exceptions were duly
the business of manufacturing for sale spiritu- taken. The witness then testified that Wall-
ous or intoxicating liquors, $500 per annum. ing, on June 1, 1883, and before and since that
No person paying a tax on spirituous or intox- time, was engaged as a traveling salesman for
rating liquors, under this Act, shall be liable the firm of Cavanaugh & Co., of Chicago, Illi-
to pay any tax on the sale of malt, brewed or nois (shown to be wholesale liquor merchants
fermented liquors. No person paying a man- residing in Chicago), and that his business was
facturer's tax on brewed or malt liquors, un- that of selling liquor at wholesale for that firm;
der this Act, shall be liable to pay a wholesale that the place of business of Cavanaugh & Co.
dealer's tax on the same.
Howell's Annotated was in Chicago and that the firm had no place
Statutes of Mich. 378.
p.
of business in Michigan; that on the first of
It is not contended that this Act alters or af- June, 1883, Walling solicited the witness' or-
fects the Act of 1875, on which the prosecu- der for a barrel of whisky to be shipped to him
against Walling is based, except so far as by Cavanaugh & Co. from the City of Chica-
may have the effect of removing the discrim- go, and from without the State of Michigan;
tation against the citizens or products of other that witness gave his order for a barrel of
es, which would be produced by the Act whisky, and the same was shipped to him by
f1975 standing alone. The counsel for the said firm from Chicago, and he paid for the
Se contend that the effect of the Act of 1881 same, and that Walling exhibited to witness no
not only to annul any such discrimination receipt from the Auditor-General of Michigan
But to create a discrimination against the citit show that he had paid the tax required by
teas and products of Michigan in favor of the t..e statute. It was also shown that Walling
Tizens and products of other States. Wheth- had never paid any such tax nor received any
Lis is so is a question to be discussed fu- such receipt.

.

The evidence being closed, the respondent,
on the ground of the alleged conflict of the law
with the Constitution of the United States,
made various distinct applications to the court:
first, to strike out the evidence and grant him
a discharge; second, to charge the jury that the
Statute of 1875 is in conflict with the Constitu
tion of the United States and therefore void,
and, therefore, that their verdict should be not
guilty; third, to charge that under the facts
disclosed, the jury should find the respondent
not guilty. These applications were severally
refused and exceptions taken. The court then
charged the jury that the Act in question must
be regarded as within the power of the Legis-
lature, and as being a valid statute; and that
if they should find that the evidence sustained
the allegations of the complaint, they must find
the respondent guilty; to which charge the re-
spondent excepted.

La June, 1883, Walling, the plaintiff in error,
prosecuted under the Act of 1875, No.
24 being charged in one count of the com-
Tant with selling at wholesale without license,
is another count with soliciting and taking
fers for the sale, without license, and at
esale, of spirituous and intoxicating
ors, to be shipped from out of the State, to
from Chicago, in the State of Illinois, into
State of Michigan, and furnished and sup-
d to citizens and residents of said State by
ataugh & Co., a firm doing business in
Caro, not residents of Michigan and not
az its principal place of business therein.
The prosecution was instituted in the Police
Cart of Grand Rapids, and Walling was con-
Ted and sentenced to pay a fine, and to be
poned in default of payment. He ap-
pened to the county circuit court, in which the
was tried by a jury, who, under the charge The single question therefore is, whether the
the court, rendered a verdict of guilty. Ex- statute of 1875 is repugnant to the Constitution
uns being taken, the case was carried to of the United States. Taken by itself and with-
Supreme Court of Michigan, which ad-out having reference to the Act of 1881, it is
red that there was no error in the proceed- very difficult to find a plausible reason for hold-
25 and directed judgment to be entered ing that it is not repugnant to the Constitution.
the respondent. The decision of the It certainly does impose a tax or duty on per-
eze court is brought here by writ of er- sons who, not having their principal place of
and is now before us for consideration. business within the State, engage in the busi-
By the bill of exceptions it appears that one ness of selling, or of soliciting the sale of, cer-
Pease was called as a witness for the tain described liquors, to be shipped into the
section, and was asked what business the State. If this is not a discriminating tax levied

[451]

[454]

[455]

[456]

Congress to leave this intercourse free, there fore it has not been regulated, and each State may put as many restrictions upon it as she pleases?" And one of the four propositions with which the opinion concludes is as follows, to wit: "4th. That Congress has regulated commerce and intercourse with foreign nations and between the several States, by willing that it shall be free; and it is, therefore, not left to the discretion of each State in the Union, either to refuse a right of passage to persons or property through her territory, or to exact a duty for permission to exercise it."

against persons for selling goods brought into
the state from other States or countries, it is
difficult to conceive of a tax that would be dis-
criminating it is clearly within the decision
of Welton ▼. Mimuri, 91 U. S. 273 (Bk. 23, L.
ed 347], where we held a law of the State of
Missouri to be void which laid a peddler's li-
cense tax upon persons going from place to
place to sell patent and other medicines, goods,
wares or merchandise, not the growth, product
or manufacture of that State, and which did
not lay a hike tax upon the sale of similar ar-
ticles, the growth, product or manufacture of
Missouri. The same principle is announced in The argument of these eminent judges, that
Hinson v. Lott, 8 Wall. 145 (75 U. S. b. 19, where Congress has exclusive power to regu-
L. ed. 387); Ward v. Maryland, 12 Wall 418 late commerce, its nonaction is equivalent to a
[79 C. S. bk. 20, L. ed. 449]; Guy v. Balti-declaration that commerce shall be free (and
more, 100 U. S. 438 (Bk. 25, L. ed. 744]; County
of Mobile v. Kimball, 102 U. S. 691, 697 [Bk.26,
L. ed. 238, 239]; Webber v. Fa. 103 U.S. 344
[Bk. 26, L. ed. 565].

we quote their opinions for no other purpose), seems to be irrefragable. Of course the broad conclusions to which they arrive, that the pow er is exclusive in all cases, are subject to the modifications established by subsequent decis ions, such as Cooley v. Board of Wardens, 13 How. 299 [53 U. Š. bk. 13, L. ed. 996], and others.

A discriminating tax imposed by a State operating to the disadvantage of the products of other States when introduced into the first mentioned State is, in effect, a regulation in restraint of commerce among the States, and as The law is well summarized in the opinion such is a usurpation of the power conferred by of this court delivered by Mr. Justice Field in the Constitution upon the Congress of the Unit-County of Mobile v. Kimball, supra, where it is ed States.

We have so often held that the power given to Congress to regulate commerce with foreign nations, among the several States and with the Indian Tribes, is exclusive in all matters which require or only admit of general and uniform rules, and especially as regards any impediment or restriction upon such commerce, that we deem it necessary merely to refer to our previous decisions on the subject, the most important of which are collected in Brown v. Houston, [ante, 257], and need not be cited here. We have also repeatedly held that so long as Congress does not pass any law to regulate commerce among the several States, it thereby indicates its will that such commerce shall be free and untrammeled; and that any regulation of the subject by the States, except in matters of local concern only, is repugnant to such freedom. Welton v. Mo. 91 U. S. 282 [Bk. 23, L. ed. 350]; County of Mobile v. Kimball, 102 U. S. 697 [Bk. 26, L. ed. 239]; Brown v. Houston [supra]. In Mr. Justice Johnson's concurring opinion in the case of Gibbons v. Ogden, 9 Wheat. 222 [22 U. S. bk. 6, L. ed. 76], his whole argument, which is a very able one, is based on the idea that the power to regulate commerce with foreign nations and among the several States was by the Constitution surrendered by the States to the United States, and, therefore, must necessarily be exclusive; and that where Congress has failed to restrict such commerce, it must necessarily be free. He says: "Of all the endless variety of branches of foreign commerce, now carried on to every quarter of the world, I know of no one that is permitted by Act of Congress, anv otherwise than by not being forbidden." *** “The grant to Livingston and Fulton interferes with the freedom of intercourse among the States." The same sentiment was expressed by Mr. Justice Grier in his opinion in the Passenger Cases, 7 How. 462 [48 U. S. bk. 12, L. ed. 777], where he says: And to what weight is that argument entitled, which assumes that because it is the policy of

said: "The subjects indeed upon which Congress can act under this power are of infinite variety, requiring for their successful management different plans or modes of treatment. Some of them are national in their character, and admit and require uniformity of regulation, affecting alike all the States; others are local, or are mere aids to commerce, and can only be properly regulated by provisions adapted to their special circumstances and localities. Of the former class may be mentioned all that portion of commerce with foreign countries or be tween the States which consists in the transportation, purchase, sale and exchange of commodities. Here there can of necessity be only one system or plan of regulation, and that Congress alone can prescribe. Its nonaction in such cases with respect to any particular commodity or mode of transportation is a declaration of its purpose that the commerce in that commodity or by that means of transportation shall be free. There would otherwise be no security against conflicting regulations of different States, each discriminating in favor of its own products and citizens, and against the products and citizens of other States. And it is a matter of public history that the object of vesting in Congress the power to regulate commerce with foreign nations and among the States was to insure uniformity of regulation against conflicting and discriminating state legislation."

Many state decisions might also be cited in which the same doctrine is announced. Thus, in the case of Higgins v. 300 Casks of Lime, 130 Mass. 1, it is said: "The result of all these decisions is, that the several States have no authority to prescribe different regulations in relation to the commerce in certain articles, dependent upon the State from which they are brought. This rule in no manner controls or limits the power of a State to enact appropriate health or inspection laws; for such laws are necessarily uniform, and are not dependent upon place." In State v. Furbush, 72 Maine,495, construing a statute of Maine, the supreme

The counsel for the State suppose that the
Act of 1881 imposes a heavier tax on Michigan
dealers in liquors of domestic origin than that
imposed by the Act of 1875 on those who deal
in liquors coming from outside of the State,
and, hence, that if there is any discrimination
it is against the domestic and in favor of the
foreign dealer or manufactured article. We do
not think that this position is correct. Let us
compare the two Acts!

ourt of that State says: "The Act is unconsti- so. We will briefly state our reasons for this
utional. It allows goods manufactured in this conclusion.
Sate to be peddled free; and exacts a license
lee from those who peddle similar goods which
are manufactured out of the State. Such a dis-
crimination in favor of goods manufactured in
State, and against goods manufactured in
other States, violates the Federal Constitution."
In State v. North, 27 Mo. 464, where an Act of
souri imposed a tax upon merchants for all
pods purchased by them, except such as might
be the growth, product or manufacture of that
State, and manufactured articles the growth or Of course the Act of 1875 does not assume to
product of other States, it was held by the Su- tax nonresident persons or firms for doing busi-
preme Court of that State that the law was un-ness in another State. They are subject to tax-
nstitutional and void. The court says: "From ation in the States where they are located. It
The foregoing statement of the law and facts of is the business of selling for such nonresident
by case it will be seen that it presents the ques- parties, or soliciting orders for them for sale
of the power of the States, in the exercise in Michigan of liquors imported into the State,
the right of taxation, to discriminate between that is the object of taxation under the law;
products of this State and those manufactured and any person engaged in those employments,
our sister States." And after an examina- or either of them, is subject to the tax of $300
of the causes which led to the adoption of per annum. Now, is such a tax, or any tax
Federal Constitution, one of the principal imposed upon those who are engaged in the
which was the necessity for the regulation like employment for persons or firms located
commerce and the laying of imposts and du- in Michigan, selling or soliciting orders for the
es by a single government, the court says: sale of liquors manufactured in that State?
But, whatever may be the motive for the tax, Clearly not. The tax imposed by the Act of
hether revenue, restriction, retaliation or pro- 1881 is a tax on the manufacturer or dealer.
cn of domestic manufactures, it is equally He is taxed in the city, township or village in
regulation of commerce, and in effect an ex- which his distillery or principal place of busi-
se of the power of laying duties on imports; ness is situated. He is subject to a single tax
de exercise by the States is entirely at war of $500 per annum. No tax is imposed on
the spirit of the Constitution, and would his clerks, his agents or his drummers who sell
der vain and nugatory the power granted to or solicit orders for him. They are merely his
aress in relation to these subjects. Can any servants and are not included in the law. It is
ver more destructive to the union and har he and not they whose business is the manu-
ay of the States be exercised than that of im- facture or sale of liquors and who is subject to
g discriminating taxes or duties on im- taxation under the law; whereas, the drum-
from other States? Whatever may be the mers and agents of the foreign manufacturer
ove for such taxes, they cannot fail to beget or dealer, located in Illinois or elsewhere, are
ation and to lead to retaliation; and it is not all and each of them subject to the tax of $300
t to foresee that an indulgence in such a per annum. In the one case it is a single tax
of legislation must inflame and produce on the principal; in the other it is a tax, not on
e of feeling that would seek its gratifica- the principal, for he cannot be taxed in Mich-
any measures regardless of the conse-igan, but on each and all of his servante and
See also Norris v. Boston, 4 Met. 282, agents selling or soliciting orders for him. The
A&C. in error among the Passenger Cases, 7 tax imposed by the Act of 1875 is not imposed
283 [48 C. S. bk. 12, L. ed. 702]; Oliver v. on the same class of persons as is the tax im-
gton Mills, 11 Allen, 268; Pierce v. State, posed by the Act of 1881. That this must give
H. 582; McGuire v. Parker, 32 La. Ann. an immense advantage to the product manu-
ey. Parmer, 14 Ala. 627; Scott v. Wat- factured in Michigan, and to the manufactur-
22 Ark. 556, 564; State v. McGinnis, 37 ers and dealers of that State, is perfectly mani-
State v. Browning, 62 Mo. 591; Dan- fest.
↑ Amond, 78 Ky. 542.

Ew of these authorities, especially the of this court on the subject, we have station in saying that the Act of 1875, which the prosecution against Walling auted, if it stood alone, without any Tent law of Michigan imposing a like tax which it imposes upon those engaged in -liciting the sale of liquors the prothat state, would be repugnant to that of the Constitution of the United States a confers upon Congress the power to a commerce among the several States. question then arises whether the Act of mended by that of 1881, has removed on to the validity of the Act of 1875. late carefully examined that Act, and me to the conclusion that it has not done

It is suggested by the learned judge who delivered the opinion of the Supreme Court of Michigan in this case, that the tax imposed by the Act of 1875 is an exercise by the Legisla ture of Michigan of the police power of the State for the discouragement of the use of intoxicating liquors, and the preservation of the health and morals of the people. This would be a perfect justification of the Act if it did not discriminate against the citizens and products of other States in a matter of commerce between the States, and thus usurp one of the preroga tives of the National Legislature. The police power cannot be set up to control the inhibi tions of the Federal Constitution, or the powers of the United States Government created thereby. Gas Light Co. v. Light and Heat Co. [ante, 516.]

[459]

[460]