Source: https://www.law.cornell.edu/supremecourt/text/116/572
Timestamp: 2019-04-19 03:00:51+00:00

Document:
ROYALL v. STATE OF VIRGINIA.
The plaintiff in error was convicted, in the hustings court of the city of Richmond, of the misdemeanor, under the laws of Virginia, of practicing law as a lawyer without having first obtained a license so to do from the commissioner of the revenue.
The affidavit referred to in the plea set forth the facts of the tender, and the paper marked 'B' was the usual form of an application for a revenue license. To this plea the commonwealth filed a general demurrer, which was sustained by the court, on the ground that the defendant had no right to practice his profession as an attorney at law after the tender of the coupons and money, as described in the plea, without first having obtained a license therefor. The defendant then pleaded not guilty, and a trial was had, resulting in a verdict finding the defendant guilty and assessing his fine at $30.
The supreme court of appeals denied a petition praying for an allowance of a writ of error, and to reverse that judgment this writ of error is prosecuted.
The Virginia Code of 1873, § 60, provides that 'no person shall, without a license authorized by law, practice as an attorney;' and section 61, that 'every attorney at law, in addition to being licensed, sworn and admitted to presecute or defend actions or other proceedings in the courts of this common wealth, on the retainer of clients, shall obtain a revenue license, and no person shall act as attorney at law or practice law in the courts of this commonwealth without a separate revenue license.' This revenue license, it will be observed, is different from and in addition to the license to practice law, given only to such as on examination, as to their character and acquirements, are found to be duly qualified therefor. The amount of this revenue license was fixed by an act of March 15, 1884, at $15 for those who had been licensed to practice for less than five years, and at $25 for all others. Section 86 of chapter 34 of the Virginia Code of 1873 provides that 'any person who shall engage in or exercise any business, employment, or profession, without a license, if a license be required by law, or shall in any manner violate the license or revenue laws of the state, if no specific fine is imposed for such violation, shall pay a fine of not less than thirty dollars nor more than one thousand dollars.' The act of February 7, 1884, (Acts Va. 1883-84, p. 120,) enacts that no application for a license to do any business, or to follow any profession, trade, or calling, in that state, shall be made, and, if made, shall not be considered, except upon compliance with its provisions, which, among other things, require that the amount of the assessment prescribed by law as a condition precedent shall accompany the application, in gold or silver coin, United States treasury notes, or national bank notes. Section 112 of the act of March 15, 1884, (Acts Va. 1883-84, p. 603,) also provides that 'applications for licenses shall be made, and all taxes assessed by chapter one of this act shall be paid in lawful money of the United States, in the mode and subject to the provisions of an act to regulate the granting of licenses, approved the seventh day of February, 1884,' etc.
By the terms of the act of March 30, 1871, the coupons tendered in this case were made receivable for 'all taxes, debts, dues, and demands due the state,' and this stipulation, as has been repeatedly decided by the court of appeals of Virginia and by this court, constituted a contract between the coupon-holder and the state of Virginia, the obligation of which the state is forbidden to impair by the constitution of the United States; and any law of the state which would have that effect, if enforced, is thereby annulled and made void. To this point are the cases of Antoni v. Wright, 22 Grat. 833; Wise v. Rogers, 24 Grat. 169, and Clarke v. Tyler, 30 Grat. 134, in the court of appeals of Virginia; and in this court the cases of Hartman v. Greenhow, 102 U. S. 672; Antoni v. Greenhow, 107 U. S. 769; S. C. 2 Sup. Ct. Rep. 91; and Poindexter v. Greenhow, 114 U. S. 270; S. C. 5 Sup. Ct. Rep. 903. In Hartman v. Greenhow, ubi supra, it was shown that the consideration for this stipulation was a surrender by its creditors of one-third of their claim against the state. In Antoni v. Greenhow, 107 U. S. 769, S. C. 2 Sup. Ct. Rep. 91, it was said: 'The right of the coupon-holder is to have his coupon received for taxes when offered;' and page 771: 'Any act of the state which forbids the receipt of these coupons for taxes is a violation of the state which and void as against coupon-holders.' In Poindexter v. Greenhow, 114 U. S. 270, 281, S. C. 5 Sup. Ct. Rep. 903, no point in which was reopened in the argument of this cause, it was said: 'It is well settled by many decisions of this court that, for the purpose of affecting proceedings to enforce the payment of taxes, a lawful tender of payment is equivalent to actual payment, either being sufficient to deprive the collecting officer of all authority for further action, and making every subsequent step illegal and void,'a proposition founded on the authority of Woodruff v. Trapnall, 10 How. 190; U. S. v. Lee, 106 U. S. 196; S. C. 1 Sup. Ct. Rep. 240; Bennett v. Hunter, 9 Wall. 326; Tacey v. Irwin, 18 Wall. 549; Atwood v. Weems, 99 U. S. 183; and Hills v. Exchange Bank, 105 U. S. 319.
That charges, or, as they are called in the statutes, assessments, made by law as conditions precedent to obtaining licenses for pursuing a business or profession, are included within the meaning of the words 'taxes, debts, dues, and demands due the state,' as used in the act of March 30, 1871, does not seem to admit of reasonable doubt. In Clarke v. Tyler, 30 Grat. 134, it was adjudged by the court of appeals of Virginia that a fine imposed for a violation of law could be discharged under this provision in coupons in lieu of money; so that, upon the authority of that case, the very fine imposed by the hustings court of Richmond upon the plaintiff in error for practicing law without a revenue license may lawfully be paid and discharged in the very coupons which were tendered in payment of the license itself and refused. Surely such an anomaly cannot be justified or admitted. The payment required as a preliminary to the license is in the nature and form of a tax, and is a due to the state, which it may demand and exact from every one of its citizens who either will or must follow some business avocation within its limits to the pursuit of which the assessment is made a condition precedent. It is an occupation tax, for which the license is merely a receipt, and not an authority, except in that sense, because it is laid and collected as revenue, and not merely as incident to the general police power of the state, which, under certain circumstances and conditions, regulates certain employments with a view to the public health, comfort, and convenience. In the latter class of cases the exactions may be either fees or fines, as they are proportioned to the expense of regulation, or laid as a burden upon and a discouragement to the business, and not taxes which are levied for the purpose of raising public revenue by means of a contribution either from the person or the property or the occupation of all citizens in like circumstances. It was therefore in the character of a tax that the payments were required and made for licenses issued under the internal revenue acts of the United States. McGuire v. Com., 3 Wall. 387. Speaking of them in the License Tax Cases, 5 Wall. 462, 471, Chief Justice CHASE said: 'The granting of a license, therefore, must be regarded as nothing more than a mere form of imposing a tax,' etc., and that 'this construction is warranted by the practice of the government from its organization. * * * They were regarded merely as a convenient mode of imposing taxes on several descriptions of business, and of ascertaining the parties from whom such taxes were to be collected. * * * But, as we have already said, these licenses give no authority. They are mere receipts for taxes.' The license under the laws of Virginia, required from the plaintiff in error, cannot be distinguished from those of the class just referred to, issued under the internal revenue laws of the United States.
The law of Virginia, however, on this point was definitely settled in accordance with the view we have here taken, in the case of Ould v. City of Richmond, 23 Grat. 464; followed by Humphreys v. City of Norfolk, 25 Grat. 97, and W. U. Tel. Co. v. City of Richmond, 26 Grat. 1.
That the party complying with the statutory conditions is entitled as of right to the license is conclusive that the payment is a tax laid for revenue, and not an exaction for purposes of regulation. Mayor, etc., v. Second Ave. R. Co., 32 N. Y. 261; State v. Hoboken, 33 N. J. Law, 280; 2 Dill. Mun. Corp. 766,c. 19, § 768. The occupation, which is the subject of the license, is lawful in itself, and is only prohibited for the purpose of the license; that is to say, prohibited in order to compel the taking out a license, and the license is required only as a convenient method of assessing and collecting the tax. Cooley, Tax. 407. Such a license fee was held to be tax by this court in the cases of Brown v. Maryland, 12 Wheat. 419; Ward v. Maryland, 12 Wall. 418; and Wilton v. Missouri, 91 U. S. 295. We think it entirely clear, both from the nature of the case and upon authority, that the payments demandable by the state for the license applied for by the plaintiff in error are taxes within the meaning of the act of March 30, 1871, in discharge of which coupons were receivable by its terms, and that the plaintiff in error must be regarded, after making the tender alleged, in the same situation in law as if he had tendered gold or silver coin or other lawful money of the United States.
In the present case the plaintiff in error has been prevented from obtaining a license to practice his profession, in violation of his rights under the constitution of the United States. To punish him for practicing it without a license thus withheld is equally a denial of his rights under the constitution of the United States, and the law under the authority of which this is attempted must on that account and in his case be regarded as null and void.
As the sum demanded for the license is a tax, the provision for the punishment of one who pursues his profession without a license is a part of the revenue system of the state, and is a means merely of enforcing payment of the tax itself, or of a penalty for not paying it. It is legally equivalent to a civil action of debt upon the statute, and its substantial character is not changed by calling the default a misdemeanor, and providing for its prosecution by information. The present case, therefore, stands precisely, so far as the constitutional questions arising in it are affected, as if it were a civil action, in which the commonwealth of Virginia was plaintiff, seeking to recover the amount due on account of the tax and penalty. In that aspect no one would doubt that it would be a perfect defense that the defendant had previously paid the demand, or, what we have held to be legally equivalent, had tendered the amount in the coupons of the state, receivable in payment by an irrepealable contract, but which the appointed authorities of the state had wrongfully refused to receive. Such, as we conceive it, is the present case. The state of Virginia has sued the defendant for the recovery of a tax which he offered to pay, when it became due, in its own coupons, which by the law of its contract were receivable in satisfaction of the demand. Certainly the state cannot be permitted to recover, against its own contract, from the other contracting party, as to whom the only default alleged is that he has performed the contract on his part.
The judgments of the supreme court of appeals of Virginia, and of the hustings court of the city of Richmond, Virginia, are accordingly reversed, and the cause is remanded to said hustings court, with instructions to take further proceedings therein in accordance with law and in conformity with this opinion.
MCGAHEY v. STATE OF VIRGINIA. BRYAN v. SAME. COOPER v. SAME. ELLETT v. SAME. CUTHBERT v. SAME.
WILLIAM L. SNYDER, Executor, v. BERNARD BETTMAN, Collector.

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