Earl Warren: Number 80, Scripto, Incorporated, etcetera, Appellant, versus Dale Carson, as Sheriff of Duval County, Florida, et al. Mr. Haley, you may proceed.
George B. Haley, Jr.: Mr. Chief Justice, may it please the Court. This is an appeal from a judgment of the Supreme Court of the State of Florida which so interpreted the Florida Sales and Use Tax Act as to require Scripto Incorporated, the appellant here, to act as a dealer and collect the use tax of that State on sales of its Adgif products, which is its advertising specialty line, to consumers in the State of Florida. Having so held, the Supreme Court of Florida, then held that the statute as thus construed and applied did not violate either the Commerce Clause or the Due Process Clause of the Constitution of the United States. Scripto Incorporated is a Georgia corporation which has its principal office and place of business in the City of Atlanta, where its manufacturing plant is located also. Scripto has not qualified to do business in the State of Florida. It has in the State of Florida, no office, warehouse, distributing room or other place of business. It owns no property, no inventory, no stock of goods and no bank account in the State of Florida. Adgif Company is not a separate corporation, but is a division of Scripto Incorporated and Adgif likewise has its office in Atlanta. Adgif devotes its activity to the sale and distribution of mechanical writing instruments with advertising material imprinted thereon. There are no employees of Scripto and no activity of Scripto in the State of Florida which has any relation, whatever, to the distribution or sale of the Adgif line of merchandise. The sole activity in Florida which generates orders resulting in Adgif sales is the activity of independent commission brokers who represent not only the Adgif division of Scripto, but other manufacturers as well.
William O. Douglas: Is Adgif a -- it's not a separate corporation?
George B. Haley, Jr.: It is not a separate corporation.
William O. Douglas: It's a division or department of Scripto.
George B. Haley, Jr.: That's right, sir. Those advertising specialty brokers have a brief form of written contract with Adgif Company and that contract is -- is in the record in this case at page 19 of the record. By the terms of that contract, Adgif Company exercises no control whatever over these advertising specialty brokers. The contract merely provides for the rate of commission to be paid, the brokers, the conditions under which the commission is to be paid, is -- does not require that they devote any particular amount of their time to the solicitation of orders to Adgif sales or that they not represent others as well as Adgif. It provides expressly that the intention of the parties is that the broker shall not represent or hold himself out as a representative of Adgif Company, that he has no authority to make any collections or deliveries or to incur any debts for Adgif, that his sole authority is to solicit orders subject always to the right of Scripto, Adgif Company in Atlanta, to either accept or reject those orders when they are received. The contract expressly states that no relationship of employer and employee is intended that the salesman is an independent contractor. When this advertising specialty broker receives an order and forwards -- forwards it to Adgif in Atlanta, if Adgif, in its discretion, sees fit to accept that order, the order is consummated by delivery of the merchandise to an interstate carrier in Atlanta and delivery is completed at that time, therefore, be Atlanta that has expressly provided in the order forms which is the next exhibit following that contract. That title shall pass in the City of Atlanta when property is delivered to the carrier. Shipment is made directly to the customer in Florida. The advertising specialty broker has nothing to do with any deliveries. Payment for the merchandise is made directly to Adgif in Atlanta. The broker is not permitted and does not make collections. Now, Scripto in addition to its Adgif sales, sells its regular line of merchandise through wholesalers throughout the country for resale. That is the line of merchandise which you see at the -- at the corner drugstore. Now, those -- the distribution and sale of Scripto's regular lines which I would like to refer to it here, is completely separate and distinct from the distribution and sale of its Adgif line. Scripto does employ one employee salesman who resides in the City of Jacksonville, Florida and whose sole authority and function is to solicit orders and promote business by these wholesale jobbers for the regular Scripto line. It is a stipulated fact in this case that Adgif sales do not arise by reason of any activity of this employee salesman and that those sales arise solely by reason of the solicitation activity of the independent brokers who solicit the Adgif orders. That is a -- a stipulated fact and I might mention that there are no disputed facts actually in this case. The case was tried on -- on a stipulated -- stipulated facts.
Speaker: Is that issue on the case as the one you've been describing?
George B. Haley, Jr.: I -- I think not, Your Honor. I think that -- and the Supreme Court of Florida in deciding that Scripto was a co-dealer, within the meaning of Section 212.06 (g) of the Florida statute, said that, “It is so only because of this solicitation activity of these independent brokers and not by reason of this completely unrelated and unconnected activity of the Scripto employee salesman.” It is our position that -- that amounts to a construction of the Florida statute to that effect by the Supreme Court of that State and that it is binding on this Court. And that the only question before this Court is whether a state may constitutionally require an interstate seller who has no place of business, no employees within a state, whose interstate sales arise solely by reason of solicitation activity of independent brokers who represents other sellers as well, whether such a state under those circumstances may constitutionally require this out-of-state seller to act a tax collector for the use tax arising out of those sales to Florida consumers. It is appellant's further contentions that this statute as construed and applied in this case, imposes a direct burden on interstate commerce. Now, we concede that it is a use tax which we're dealing with here, rather than a sales tax. In other words, that the incidence of the -- of the tax imposition is on the Florida residents who uses or consumes the product. We concede that the State of Florida has the constitutional right to tax used by its citizens of tangible personal property. This Court has long ago decided that, but what we challenge is the direct imposition upon Scripto of the duty of acting as a tax collector and we submit that from the Florida statute, it is abundantly clear that this is a burden which is imposed for the privilege of engaging in business in the State of Florida. And I would like to direct the Court's attention in that connection to Section 212.12 of the statute -- on page 29 of the statute which is in the appendix of our brief. The pages of the appendix are separately numbered from the brief.
Felix Frankfurter: Does the -- does the burden of the imposition permanently rests with Scripto? I mean, you say -- you said a minute ago that this makes Scripto a tax collector for -- well, does it merely -- is it merely using Scripto as an agency for collecting or does it has paid us out of its own pocket?
George B. Haley, Jr.: Well, Mr. Justice Frankfurter, Scripto is required as all dealers are by the statute.
Felix Frankfurter: Yes.
George B. Haley, Jr.: To pass the tax on to the consumer. That's true whether it's a sales tax or a use tax.
Felix Frankfurter: It's required to pass it on.
George B. Haley, Jr.: It's required.
Felix Frankfurter: You cannot absorb it?
George B. Haley, Jr.: He cannot absorb it, cannot hold its -- hold out to the public that he will absorb it. It's a crime and to do so. That applies to the sales tax made by --
Felix Frankfurter: So that it maybe is a conduct, merely as a -- is that all it is?
George B. Haley, Jr.: I think as -- as this Court pointed out in -- in Miller Bros., Mr. Justice Frankfurter, it's more than just a question of Scripto being a conduit. It's requiring Scripto to collect a tax which is due by another.
Felix Frankfurter: Yes, but is it --
George B. Haley, Jr.: And --
Felix Frankfurter: What -- what does it matter to Scripto in dollars and cents? That's what I want to know.
George B. Haley, Jr.: Well, there are no facts in this record stating it in dollars and cents, Mr. Justice Frankfurter.
Felix Frankfurter: I don't mean the exact dollar and cents, but --
George B. Haley, Jr.: It means that Scripto will have to act as tax collector for 32 other States which imposed similar taxes.
Felix Frankfurter: But if --
George B. Haley, Jr.: They will have to maintain detailed book -- bookkeeping records separate and apart for each state. That those records will have to be made available for inspection and audit by the various revenue departments of those various states.
Felix Frankfurter: Well, can't they -- if -- if the money finally, if the amount of the use tax finally doesn't come out of Scripto's treasury, as I understand from your answer does not or cannot, is that right?
George B. Haley, Jr.: That's right, the amount of the tax itself.
Felix Frankfurter: Or could it -- pardon me?
George B. Haley, Jr.: The amount of the tax itself.
Felix Frankfurter: The amount of the tax itself. Could it not include the cost of being a tax collector and put that onto the consumer?
George B. Haley, Jr.: Mr. Justice Frankfurter, I don't think it is a question.
Felix Frankfurter: Can it -- can it add that on to the price of the commodity?
George B. Haley, Jr.: It can and probably would as any -- anyone in business may --
Felix Frankfurter: So then the --
George B. Haley, Jr.: -- if it -- if it --
Felix Frankfurter: If the burden is not --
George B. Haley, Jr.: (Voice Overlap) --
Felix Frankfurter: The burden is not of monetary burden, but a nuisance burden, is that it?
George B. Haley, Jr.: The burden is a direct impediment on interstate commerce which this Court said in Freeman against Hewit, “Will not be tolerated regardless of the fact that a like burden is imposed on intrastate business.”
Felix Frankfurter: Freeman and Hewit, it was cash out of their pocket.
George B. Haley, Jr.: But --
Felix Frankfurter: Wasn't it?
George B. Haley, Jr.: This Court has not only --
Felix Frankfurter: I'm not only -- I'm trying to find out what the nature of the burden is.
George B. Haley, Jr.: Well, I'm sure, Mr. Justice Frankfurter, that the manufacturer in Freeman against Hewit passed that cost on to the consumer as any manufacture does for the --
Felix Frankfurter: Well, the -- you can't always compare his own taxes.
George B. Haley, Jr.: If you can compare it, you -- you do. But let me point out this -- what this Section 212.12 provides and -- and because it bears directly on this question. It says, “Taxes imposed by this chapter upon the privilege of the use, consumption or storage for consumption or sale of tangible personal property shall be collected upon the basis of an addition of 3% to the total price, total sale price of such article or articles that are purchased, sold or leased at any one time to a customer or buyer.” And then this was the part that I want to call particular attention of the Court to. “And the dealer or person in charge herein, is required to pay a privilege tax of 3% on the total of his gross sales of tangible personal property and such personal or dealer shall add 3% to the price, rental or admissions and collect the total sum from the purchaser (Inaudible) lessee or consumer.” In other words, the tax -- the imposition imposed on the dealer is expressly stated to be a privilege tax of 3% of the total of his gross sales in this Section 212.12.
Felix Frankfurter: Did -- did your -- your difficulty with the statute or the difficulties, the considerations that I indicated in my dissent in the Cement case which didn't find much favor with this Court --
George B. Haley, Jr.: The -- the Cement case --
Felix Frankfurter: Is that the only thing that you're saying?
George B. Haley, Jr.: The Cement case --
Felix Frankfurter: And is that what you're talking about?
George B. Haley, Jr.: -- the Cement case is entirely a --
Felix Frankfurter: Well, I don't mean the result in the Cement case. The result -- there it is, but I found difficulties. I thought that they were advertent because you have set up a separate accounting system. You got to have a separate staff and get some period for accounting? That's what you're talking about now.
George B. Haley, Jr.: Well, Mr. Judge Frankfurter, I think that this imposition --
Felix Frankfurter: Well, I just want to know whether what's you're talking about?
George B. Haley, Jr.: That is one thing I'm talking about --
Felix Frankfurter: All right.
George B. Haley, Jr.: -- but that is not the only ground for the burden. I mean this Court has stricken down impositions or exactions imposed by a state rather than tax exactions. I mean a state regulatory measure maybe invalid because it imposes a direct imposition on interstate commerce. But --
Felix Frankfurter: Are you arguing that the Constitution places the power to regulate commerce in Congress and not in the State?
George B. Haley, Jr.: Primarily, until the Congress has --
Felix Frankfurter: It says, “Congress shall have power to regulate.” It doesn't say the States had that power.
George B. Haley, Jr.: No, that's exactly the point I'm making. That -- that the states here -- that this State is by this construction of its statute regulating and impeding interstate commerce. Even if the Court, however, should consider that this is not a direct imposition on interstate commerce, we would like to point out that the burden imposed by this from tax collection duty here is unreasonable and that it bares no relationship whatever to any privilege or benefit derived by Scripto from the State of Florida. There is no need for relationship whatever to any need of the State of Florida to collect its taxes in this manner and that the imposition on the appellant, Scripto, is beyond all proportion to any benefit derived by the State of Florida from collecting its taxes in this manner. This Court has recognized that there must be some local incident, some local activity however minute, from which the obligation which the State seeks to impose arises. And as a result of which the out-of-state corporation derives some benefit from the State before that State has the power to burden the interstate transaction. For example, in General Trading Company and in the International Shoe Case, this Court found that solicitation of orders by employee salesman even though a very minimum connection with the State imposing the obligation, was nevertheless, a sufficient nexus or connection to permit the State to impose an obligation arising directly out of that specific activity which the Court clearly pointed out in the International Shoe Case or as the basis for that decision. But here, there is no activity of Scripto in the State of Florida in relation to its Adgif sales. It is not there. The only activity there in relation to those sales is the activity of independent brokers who are themselves, Florida business, who are themselves protected by and derived benefit from the laws of the State of Florida and who maybe and presumably, are required to discharge certain obligations in return for those benefits. I would like to point out that this statute expressly conflicts that a broker who represents an out-of-state merchant who refuses to register and collect this tax, is himself made the dealer and required to collect the tax. Therefore, the State of Florida here under the terms of its own statute has a means of collecting this tax from the 10 independent advertising specialty brokers who solicit the Adgif orders. They are by the terms of the statute, required to register as dealers and collect the tax and Scripto does not do so, so far has not lost anything by the interstate -- by reason of the interstate immunity of Scripto. I would also like to point out that the danger and in fact the existence of possibility of discrimination against interstate commerce is inherent in this statute. The various section of the Florida act which defines the term dealer and which was the definition which the Florida court held to apply here, which appears -- appears at page 15 of the appendix to our brief, “At the defining dealer to mean and include every person who solicits business by representatives or by the distribution of catalogs or other advertising matter and by a reason thereof, receives and accept orders from consumers.” And this -- as it goes on to say. “And such dealers shall collect the tax imposed by this chapter from the purchaser and no action either in law or in equity on a sale or transaction as provided by the terms of this chapter maybe held in the State by any such dealer, unless it would be affirmatively shown that the provisions of this chapter had been fully complied with.” And that is the only class of dealer against whom the Florida statute imposes this penalty of denial of access to the Florida courts, is the dealer defined in that section which is obviously out-of-state dealers, because it as a dealer who gets business by reason of solicitation of orders by representatives, catalogs and so forth.
Charles E. Whittaker: Mr. Haley, may I ask you please, do you concede that these independent contractors are representatives of Scripto?
George B. Haley, Jr.: We do not concede that, Mr. Justice Whittaker. In fact, that was the point we made in the Supreme Court of Florida and in the Circuit Court of Florida. Our first contention was that we were not a dealer within the meaning of this statute because these brokers were not “representatives.” But the Circuit Court and the Supreme Court of Florida expressly held that they are representatives within the meaning of the statute.
Charles E. Whittaker: Well, what about --
George B. Haley, Jr.: We do not concede it, but we're --
Charles E. Whittaker: (Voice Overlap) --
George B. Haley, Jr.: -- bound by that -- that finding here.
Charles E. Whittaker: Well, the word “representative” may have several meanings. You don't concede that it means agent, do you?
George B. Haley, Jr.: I don't think the term that this case need turn on whether they are -- the term agent or representative should be applied to these brokers. I think the -- the crucial question is the extent of their authority, the extent to which they are authorized to and do represent this out-of-state seller. I don't think the label is of any consequence. For example -- for example, in the case of -- in the case of Felt & Tarrant, which the California case, there we had an agent, true. But it bore -- that agent bore no resemblance to their agent involved in this case, if this be an agent because there was a general agent who devoted his entire term to the out-of-state seller who is required to do so, who is required to make periodic reports, who's expenses were reimbursed by his principal, who made local deliveries. He was the alter ego of the out of state -- possible leave to a greater extent than the employee salesman in General Trading. And yet, he was called an agent. Here, we -- these brokers maybe agents, but only to the limited extent of being authorized to solicit orders and to that extent only.
Charles E. Whittaker: Maybe I'm wrong about it, because I had always thought that an independent contractor was nobody's agent and represented no one but himself. Is that -- is that wrong?
George B. Haley, Jr.: Well, that -- that's true. That's true.
Charles E. Whittaker: Then, may the State of Florida by mere epithet fasten a relationship of representative or agent, if it can do one, it can do the other upon the concern that has no presence there?
George B. Haley, Jr.: No, sir. Not under the Constitution of the United States. It can't deprive a party of its constitutional rights merely by -- by fixing a label and this Court has -- has so recognized in numerous cases.
Hugo L. Black: How can they, I suppose, deprive the state of its constitutional right by giving one name rather than another to somebody doing business with, by fiction wouldn't count either way, would it?
George B. Haley, Jr.: No, fiction does not count in -- either way, Mr. Justice Black. But I submit that it -- that our relationship to this independent broker is not fiction, is not to be governed by any label, but we're willing to submit it on -- on the actual fact, the contents of that relationship, that namely, that he represents other manufacturers, he's not controlled by us in anyway. He merely and his freewill and discretion solicits orders for our products which are subject to our acceptance or rejection when received in Atlanta.
Felix Frankfurter: Mr. Haley, have you in mind the act of Congress passed last summer?
George B. Haley, Jr.: Yes, Mr. Justice Frankfurter. I --
Felix Frankfurter: And under that act, would the State be -- would Scripto be liable for its apportioned income tax in that (Voice Overlap) --
George B. Haley, Jr.: No, under that act, it would not. That act expressly defines the term independent contractor. First of all, it says that an independent contractor is not a representative.
William O. Douglas: Of course.
George B. Haley, Jr.: And then it goes on to define independent contractor and it defines independent contractor to be any person who represents more than one principal. And I think the term principal is used which of course implies (Voice Overlap) --
William O. Douglas: Is that -- is that act applicable here?
George B. Haley, Jr.: I think it is, at least to this extent, Mr. Douglas --
Felix Frankfurter: But that I felt -- felt --
George B. Haley, Jr.: -- Mr. Justice Douglas.
Felix Frankfurter: -- concerned income tax. Is that what it is?
George B. Haley, Jr.: It's -- it's limited to income tax.
Felix Frankfurter: Well, that -- well, that it is not immediately.
George B. Haley, Jr.: Not directly.
Felix Frankfurter: No.
George B. Haley, Jr.: Not directly.
William J. Brennan, Jr.: You didn't -- you didn't cite it in your brief.
George B. Haley, Jr.: Yes, sir.
William J. Brennan, Jr.: Oh, you did?
George B. Haley, Jr.: Yes, sir.
William J. Brennan, Jr.: Yes. Tell me where -- where can I find --
George B. Haley, Jr.: It's at page 25, I believe.
William J. Brennan, Jr.: Thank you. (Voice Overlap) --
George B. Haley, Jr.: I cited it and quoted only that section which dealt with the definition of independent contractor because it is our contention that that definition is merely declaratory of existing law. That this Court, in several cases involving jurisdiction for purposes of service of process and bringing of suits has held that the doing of business by an independent contractor on behalf of an out-of-state concern does not constitute the doing of business by the out-of-state concern. And this Court has held that that is true even though the -- the local business be a wholly owned subsidiary, even of the out-of-state business. The cases of Bank of America against Whitney Central National Bank and they are also cited there. There are two other cases also which is cited at that same place in the brief. If there are no other questions at this time, I'd like to reserve the remainder -- remainder of my time.
Earl Warren: You -- you may, Mr. Haley. Mr. Jacobs.
Joseph C. Jacobs: Mr. Chief Justice, may it please the Court. The appellant has fairly stated the facts in this case. I think as they were stipulated to -- in the court below. We would like to challenge certain conclusions of law which were reached as a result of some of those facts. The case which is present and before the Court comes somewhere between the Miller Bros. case and the General Trading case, both of which were subject to extensive study in both of the briefs and which the appellant has referred to in his argument. The Court well recalls that the -- the distinction between the Miller Bros. case and the General Trading case. Now, the only distinction between the case which is presently before the Court and the General Trading case is the fact that the agents, the solicitors, the salesmen in Florida in the case presently before the Court are not the employees of the -- of the merchant, the Georgia merchant who is selling his products in Florida. The question necessarily comes as to whether or not the contact is -- is completed which would give Florida jurisdiction to require this person to collect the tax and to remit. This is the only material fact which is before the Court in this case which was not before the Court in the General Trading case.
Felix Frankfurter: Why is -- you will, in due course, tell us why you think you're in a more favorable position than the Court found in Miller Bros.?
Joseph C. Jacobs: Yes, sir. I will right now, sir.
Felix Frankfurter: Well, suit yourself.
Joseph C. Jacobs: [Laughs] Thank you, sir. The -- there was no contact in the Miller Bros. case, as I recall the facts in the Miller Bros. case, the -- there -- let me see, the States were Delaware and Maryland. There was a Delaware corporation as I recall it, in which did business in Delaware and who sold to certain Maryland citizens. The only contact with the Maryland citizens were -- was as a result of certain advertisement in newspapers and radio and (Inaudible) direct mail advertising. The persons then came across the state line, purchased the product and the product was presumably, ultimately consumed or used in the state of residence of the purchaser. Now, in the case that we have before us today, we have 10 jobbers who admittedly are employed by other people or who are -- who are out presumably selling. And we call the Court's attention likewise to the contract of agreement, the memorandum of agreement between these jobbers and the Scripto Inc. operating through its Adgif division. And what does provide? It provides that these people have a -- area in which they are the exclusive salesmen for Scripto Inc. or Adgif, whatever you want to call them, it's -- it is the alter ego, one or the other. These are not separate corporations as it had been pointed out. As long as he places one order every six -- every 60 days, he -- he remains an active salesman of the Scripto Inc. You will note the difference --
Felix Frankfurter: Of course on that -- may I ask whether under your statute -- supposed their concern, Singer sewing machine, a typewriter, any kind of national manufacturing concern, raises its -- makes an arrangement whereby only a single -- a single dealer has given him exclusive opportunity to sell its commodity to a single dealer in Tallahassee or in -- were not be further. Would that come within that statute?
Joseph C. Jacobs: I don't know, sir. But I believe that it would.
Felix Frankfurter: It would.
Joseph C. Jacobs: It would be my view that it would.
Felix Frankfurter: I think if a -- if a concerned select -- some few concerns to that and say, “The land company should -- is sold exclusively by -- but wouldn't all therefore. It's probably as a whatnot. That would make them -- that would make sales by those concerns who have the exclusive opportunity of carrying a particular line of goods for an outside manufacturer, either have nothing but ships in the goods. But makes an arrangement that there -- there should be an exclusive opportunity to sell those goods or that specie of goods. That would make him a -- and that bring him under your statute.
Joseph C. Jacobs: That would be my view. Yes, sir. Because as I recall, the California case wasn't -- there was only two solicitors or salesmen in -- in that --
Tom C. Clark: Instance.
Joseph C. Jacobs: But -- excuse me sir?
Tom C. Clark: Anywhere?
Joseph C. Jacobs: I believe it was the West Publishing or there was another California case. I believe it was the West case where there was two.
Felix Frankfurter: Well, that's where that he went out to get orders for the company.
Joseph C. Jacobs: Yes, sir.
Felix Frankfurter: But I'm not supposing that. I'm supposing merely an exclusive sales arrangement between some records, a record concerned, sell it exclusively to one shop rather than another as the -- as the dealer.
Joseph C. Jacobs: Yes, sir.
Felix Frankfurter: For that particular goods -- for those particular goods.
Joseph C. Jacobs: I believe it would be my view that they could put --
Felix Frankfurter: But that's all within the outside company --
Joseph C. Jacobs: I'm --
Felix Frankfurter: -- that there's nothing else except ship in.
Joseph C. Jacobs: Yes, sir. I believe it would be my view that -- that he would come within -- come within the statute.
William O. Douglas: In the --
Joseph C. Jacobs: Although --
William O. Douglas: In the --
Joseph C. Jacobs: -- I don't think there's any case as to that.
William O. Douglas: In the -- in the Miller case, there was a provision I think in the statute which allowed the vendor a certain percentage of the -- of the tax.
Joseph C. Jacobs: Yes, sir. That's --
William O. Douglas: (Voice Overlap) compensation.
Joseph C. Jacobs: -- the same thing is do employ. Yes, sir, 6%.
William O. Douglas: Is that -- is that true in Florida? It's a --
Joseph C. Jacobs: My -- the last time I saw it, it was six. I --
William O. Douglas: That on --
Joseph C. Jacobs: -- I will not vouch for the percentage.
William O. Douglas: No, but the --
Joseph C. Jacobs: But they do receive a fee for the collection of the tax. Yes, sir, a percentage of it.
William O. Douglas: If that -- well, in -- in that respect, it's like the tax in Maryland?
Joseph C. Jacobs: Yes, sir.
William O. Douglas: In the Miller case?
Joseph C. Jacobs: Yes, sir. They -- they do -- they do -- they -- and also an exemption if they can show that the tax has been paid in any other State in the other general provisions of the sales and use tax.
Charles E. Whittaker: Isn't that true, Mr. Jacobs, that also in the Miller case, a Delaware Store actually made physical deliveries on occasions in Maryland with their own trucks?
Joseph C. Jacobs: Mr. Justice Whittaker, if you say so, it's -- I -- I believe you'd -- that's not my recollection of the facts in the case. My recollection of the facts in the case was that they -- well, the deliveries were by -- by interstate commerce by giving it to an interstate commerce carrier.
Charles E. Whittaker: I think you'll find that this is so. I read the case --
Joseph C. Jacobs: Yes, sir.
Charles E. Whittaker: -- last night. That's my recollection.
Joseph C. Jacobs: Yes, sir. I read it this morning, that's not my recollection. [Laughter] May it please the Court, we would desire to go further in this distinction which we want to take issue with the appellant as to this one general salesman which Scripto has in Jacksonville, Florida. Now, the Florida Supreme Court held that these 10 jobbers, independent commissioners or commissioned merchants were sufficient to make contacts which would be sufficient to meet the requirement of the Due Process Clause of the Constitution. However, we certainly say and we do -- we do not say to this Court that -- that it should ignore the fact that they had a one man who was stationed in Jacksonville who was working for Scripto Inc., which is the corporation of which Adgif is nothing more than a department. And this man was -- although he was not and we stipulated that this man did not make -- can't make a -- accept orders for the advertisement specialties which are -- which are handled by Adgif. He did accept orders and -- and made sales for Scripto Inc. And we take the position that if the Florida court had jurisdiction, it must have jurisdiction of Scripto Inc., the cooperate -- the Corporation, not over any department or any part or any individual, because the jurisdiction is of the corporation. The jurisdiction is certainly not of the individual transaction or any part of the transaction.
Charles E. Whittaker: And now, that -- you address that argument, as I understand it, to the due process features.
Joseph C. Jacobs: Yes, sir. I do.
Charles E. Whittaker: But does that have to do with Mr. Haley's argument of undue burden on commerce in imposing a liability on Scripto for use taxes on goods sold in Georgia and that are delivered through as orders or in filling orders obtained in for or by independent contractors?
Joseph C. Jacobs: No, sir. Our response to that argument is that there is no undue -- there is no direct burden, there is no -- no direct burden at all, because the -- the Florida sales tax is a 1949 act. It's a sales and use tax. The Court is well acquainted with the history of the use tax, how that -- the sales tax was -- was initially passed and it became obvious immediately that a burden was placed upon the merchant in the -- in the State that had a tax in competing with the merchant across the state line in the State that had no tax, because here is the merchant in the taxing state who -- who sells a -- the -- the gentleman the product and he charges him with 3% sales tax for the product. But, by the independent jobber who can walk right by -- right -- right behind this salesman and sell the same product to the same person for the same use and say, “No, I don't have to collect the tax, because I am across the state line.” Obviously, that -- that was the purpose that -- that brought into existence, the use tax. The use tax is a complement to the -- to the sales tax. It is to protect the -- the merchant in the State that has the tax against the merchant across the state line where there is no tax and that is the very basis. This case puts in crystal clear the very basis for the use tax. Let's -- let's presume the appellant to be correct.Let's presume that he is -- he is entirely correct. Scripto Inc. through Adgif division or department goes to a Florida citizen and he sells him 100 pens with his name on them to give to the public. He charges him a price for it. He says, “What do I have to -- what about the sales tax? No. There is no sale or use tax on this product because I am an independent jobber for a Georgia concern.” Now, the Florida citizen walks right behind him, makes the same sale to the same person, the same transaction exactly and we tell them -- him that it is a crime unless he collects 3% and remits that 3% to the State of Florida, excluding what he receives for the service.
Charles E. Whittaker: Now then, may I ask you? Does your statute allow credit against the liability imposed on the nonresident seller to the extent of payments made by the resident?
Joseph C. Jacobs: Yes, sir.
Charles E. Whittaker: So, you do recognize then your right to collect the sales tax from your own citizen?
Joseph C. Jacobs: Oh, yes, sir.
Charles E. Whittaker: Is there any effort made to do that?
Joseph C. Jacobs: There is -- there is an effort made consistent with -- with economies. We are not able to -- that would put an -- an unreasonable and impossible administrative burden on a state to go to the each purchaser and -- and collect the tax from them.
Charles E. Whittaker: It's easier to make the nonresident seller collect for (Voice Overlap) --
Joseph C. Jacobs: It's the only way to do it, sir.
Felix Frankfurter: But (Voice Overlap) --
Joseph C. Jacobs: -- administrative --
Felix Frankfurter: (Voice Overlap) store, they could bring up, couldn't they?
Joseph C. Jacobs: Sir?
Felix Frankfurter: Your -- your consumers in Florida must buy their figures from somebody?
Joseph C. Jacobs: Yes, sir.
Felix Frankfurter: And therefore, you could make that somebody the intermediary to collect, couldn't you?
Joseph C. Jacobs: I don't believe --
Felix Frankfurter: You have to go to a shoe store or a drug store --
Joseph C. Jacobs: Yes, sir.
Felix Frankfurter: -- and therefore, instead of having the consumer --
Joseph C. Jacobs: Not in the case of Adgif here, because you see, these jobbers and this is another point, these jobbers as long as they remain active, as long as they send one sale in every two months, then -- then, although these people may -- they may directly order, reorder or order new products from the company and he still gets his fee. He gets his percentage as long as he remains active.
Felix Frankfurter: That -- that if he doesn't pay all the purchase price to the jobber?
Joseph C. Jacobs: Oh, no, sir. That is collected in Georgia and -- and the jobbers' commission comes from Georgia. Now, we say again, another point here, how crystal clear and how easy it would be if we say that because he's an independent jobber, he can now -- he -- he is now free of the tax. Look how simple it would be to draw a contract, just exactly and I'm glad Mr. Justice Brennan brought up the question of this statute which was passed recently relating to that subject. As the Court is well familiar, that statute relates purely to income taxes and we, in Florida, do not have any income tax. I'd like that clearly indirect, but this -- and that's all that the statute related to, was to income taxes. It did as pointed out. And the appellant's argument defined certain terms. But I'd like to direct your attention to the -- and I'm a little bit concerned because Mr. Justice Frankfurter suggested at the case just prior to this one that they would not take judicial notice, but I refer to --
Felix Frankfurter: Well, I -- I hope I didn't say that.
Joseph C. Jacobs: You did in a -- take judicial notice of certain document, sir.
Felix Frankfurter: Of everything in the word.
Joseph C. Jacobs: Yes, sir. Well, in Senate Report Number 658, relating to this bill on the income tax, the Committee admitted that the bill rose as a result of this Court's decision in the Northwestern States Portland Cement Company versus State of Minnesota and Williams versus Stockham, 1959 cases.
Charles E. Whittaker: Stockham Valves.
Joseph C. Jacobs: Sir?
Charles E. Whittaker: That's the Stockham Valves case.
Joseph C. Jacobs: Thank you, sir. I can't read them right. The Committee specifically referred to this language of the Court, “We conclude that net income from the interstate -- intrastate operation of -- intrastate operation of a foreign corporation maybe subjected to state taxation providing the levy is not discriminatory and properly apportional -- apportionable to local activities within the taxing state, forming sufficient nexus to support the same.” Then, the -- the Committee Report went on to say that there was some confusion as to what this language meant and the statute came from that confusion. We take the position that the Court varies -- very fairly and very -- very clearly stated the law in those two cases. And that the statute was written with the obvious intent of -- of changing that -- those decisions. So, we now say that the general law is exactly as it was, except as it relates to the income taxes and this -- and the Congress, the United States took it upon itself to --
Felix Frankfurter: Do orders from Florida go directly to Sripto in Georgia?
Joseph C. Jacobs: As I understand it, it would not.
Felix Frankfurter: If an individual in Jacksonville send in an order to Scripto without any intervening jobber.
Joseph C. Jacobs: Yes, sir. It would go directly to Scripto.
Felix Frankfurter: No. I mean, would -- would there be a use tax on -- would you levy -- I mean use tax on -- on there?
Joseph C. Jacobs: I would levy a use tax on it, but for the -- the simple --
Felix Frankfurter: No jobber at all, no jobber. Just the citizen of Jacksonville (Voice Overlap) --
Joseph C. Jacobs: Oh --
Felix Frankfurter: -- Scripto.
Joseph C. Jacobs: -- oh, of course. That would come within the Miller case, if -- if there is no jobber, if there is no operation and if he just sends an order, he can send an order anyway he wants to. And of course, there would be no tax on it.
Felix Frankfurter: The Miller case had more than that. The Miller case had some other extras to amend.
Joseph C. Jacobs: Yes, sir.
Felix Frankfurter: Isn't it?
Joseph C. Jacobs: Yes, sir. But I say the Miller case would be authority for it, if not charging the tax in the -- in the hypothetical case which -- which you brought up.
William J. Brennan, Jr.: (Inaudible)
Joseph C. Jacobs: Yes, sir.
William J. Brennan, Jr.: I'm sorry. I didn't catch all you said about the activity of the Scripto employee in Florida. You said there was one.
Joseph C. Jacobs: There was one full-time employee of Scripto.
William J. Brennan, Jr.: Now, what did he -- what were his functions in relation to this Adgif?
Joseph C. Jacobs: None. In relation to -- you understand that the Scripto Inc. is a pen company. They make mechanical pens and they sell them, irrelatively inexpensive from $25 to about a $1.50 each. Now, the -- not a separate corporation, but a division of the corporation is the Adgif Company who makes a somewhat cheaper pen, but it -- they do not sell that on retail. That one is sold -- I mean, the Adgif sells these as an advertising gimmick, put your name or your company's name on it. Now, the Scripto sales market is an employee of Scripto Inc. We stipulated that he made no sales of Adgif products, but we do say that he was a representative of Scripto that he makes sale, that -- that if -- that the jurisdictional contact is of the corporation, Scripto Inc. and not of the individual nor of the individual transaction. And we say that if that gave us jurisdiction over Scripto Inc., it gave us the jurisdiction over every department of Scripto Inc.
William J. Brennan, Jr.: Is this the way that you use General Trading?
Joseph C. Jacobs: Sir?
William J. Brennan, Jr.: Is this what your reliance on general trading as --
Joseph C. Jacobs: Yes.
William J. Brennan, Jr.: -- satisfied by this?
Joseph C. Jacobs: As to -- yes, sir, as to that -- as to that part. Now, the Florida Supreme Court went on to hold that these 10 jobbers, that in the view of the Court, that those 10 jobbers gave the jurisdictional contact sufficient.
William J. Brennan, Jr.: Well, do you -- do you need to rely on that aspect or you -- do you think it's sufficient if they had the salesman in Florida?
Joseph C. Jacobs: I -- I -- no -- no, sir. I think that we can rely on the Court's decision as written, but I think that that -- that had that not been true that the -- that the one full-time employee gave the -- gave the Florida court jurisdiction to require them to --
Felix Frankfurter: What was he doing in Florida? He (Voice Overlap) --
Joseph C. Jacobs: (Voice Overlap) --
Felix Frankfurter: -- this way.
Joseph C. Jacobs: Sir?
Felix Frankfurter: What were his business activities in Florida for Scripto?
Joseph C. Jacobs: He's a full-time --
Felix Frankfurter: As to what --
Joseph C. Jacobs: -- general salesman. Yes, sir.
Felix Frankfurter: What -- other products of the company.
Joseph C. Jacobs: Sir?
Felix Frankfurter: He sold other products of the company.
Joseph C. Jacobs: Of the company, yes, sir. Other product of the same company and if we have jurisdiction over the company, we have jurisdiction over --
Felix Frankfurter: What was the use --
Joseph C. Jacobs: -- all of the companies.
Felix Frankfurter: -- does he sell commodities as to which your use tax applied?
Joseph C. Jacobs: No, sir. He sold -- but I'm convinced that he sold products as -- as to which our sales tax apply which is all a part of one statute --
Felix Frankfurter: Well, I --
Joseph C. Jacobs: -- the sales of use tax.
Felix Frankfurter: Are -- are the -- the taxes or the levies on Scripto for what that salesman performed in Florida in question?
Joseph C. Jacobs: No, sir.
Felix Frankfurter: And -- and in fact, taxes were imposed by your State for activities of his.
Joseph C. Jacobs: This one salesman?
Felix Frankfurter: Yes.
Joseph C. Jacobs: No, sir.
Felix Frankfurter: One must --
Joseph C. Jacobs: Was -- as a result of the 10 jobbers to --
Felix Frankfurter: But why not?
Joseph C. Jacobs: Because he sold no -- no products that were subject to the use tax --
Felix Frankfurter: I see.
Joseph C. Jacobs: -- with which we were familiar.
Felix Frankfurter: I see.
Tom C. Clark: Did the Scripto man have any connection with the jobbers when he supervised them or anything like that?
Joseph C. Jacobs: Not -- none that -- none that I know of, sir. And the record would not -- does not reveal it.
William J. Brennan, Jr.: Well, let me see, Mr. Jacobs, I gather, the products that he sold were subjected to your sales tax collected --
Joseph C. Jacobs: Yes, sir.
William J. Brennan, Jr.: -- by the retailers who sold --
Joseph C. Jacobs: Yes, sir. That's correct.
William J. Brennan, Jr.: What --
Joseph C. Jacobs: We can presume not to.
William J. Brennan, Jr.: -- the order -- those for which he had taken orders from them? Isn't that it?
Joseph C. Jacobs: Yes. Yes, sir.
William J. Brennan, Jr.: And so, Scripto is not involved in -- in the sales of those pens and in that sense, as far as your tax law is concerned?
Joseph C. Jacobs: You -- you will recall that there was another element of the case before the Florida Supreme Court, something to do with that.
William J. Brennan, Jr.: Yes, I will --
Joseph C. Jacobs: But that was --
William J. Brennan, Jr.: That is not here.
Joseph C. Jacobs: -- that is not the subject. No, sir. It's not here. It's not subject to appear.
Felix Frankfurter: Well, that -- so that the salesman, this single salesman, the purpose -- the purpose that this single salesman served you is that by his presence, you say Scripto is localized in Florida.
Joseph C. Jacobs: I say that because of --
Felix Frankfurter: So far as the corporation can exist. Scripto existed in Florida because that salesman was there. Is that your point?
Joseph C. Jacobs: That is eminently correct, sir.
Charles E. Whittaker: Or -- you --
Joseph C. Jacobs: Yes --
Charles E. Whittaker: Really?
Joseph C. Jacobs: Sir?
Charles E. Whittaker: That is domesticated there just because they have a salesman there?
Joseph C. Jacobs: No, sir.
Charles E. Whittaker: Or do you mean that within International Shoe, it has -- as you contacted (Voice Overlap) --
Joseph C. Jacobs: That's exactly (Voice Overlap) --
Charles E. Whittaker: -- due process?
Joseph C. Jacobs: Yes, sir. Yes, sir, that the requirements of due process are met.
Charles E. Whittaker: Now -- now, then, may I ask you please, sir.
Joseph C. Jacobs: Yes, sir.
Charles E. Whittaker: Is under your -- is there any liability under your sales and use tax law upon these independent contractors who make these sales?
Joseph C. Jacobs: You mean --
Charles E. Whittaker: Do you understand? Independent contractors involved here. They are the persons who solicit as I understand these -- these orders.Does your statute impose any liability on them for sales or use taxes?
Joseph C. Jacobs: Yes, sir. I believe the requirement would be on them to pay it, if it was not -- if it was not collected previously.
Charles E. Whittaker: And there, they are present aren't they, as independent contractors operating in making these --
Joseph C. Jacobs: Yes, sir.
Charles E. Whittaker: -- solicitations.
Joseph C. Jacobs: Yes, sir. That's correct.
Charles E. Whittaker: And to the extent they pay, there could be no liability on the nonresident seller, do they?
Joseph C. Jacobs: That's correct, sir.
Felix Frankfurter: Could you subject that single salesman for Scripto to a license tax?
Joseph C. Jacobs: Possibly, we do. We charge him a $1 registration fee, every dealer who qualifies. The -- the requirement is that he --
Felix Frankfurter: And you -- you think you can license a drummer who comes into the State merely to show examples and then all the orders have to be transmitted outside the State and everything else is been outside the State?
Joseph C. Jacobs: I believe this Court has found on that --
Felix Frankfurter: Yes, this Court found on that --
Joseph C. Jacobs: -- (Voice Overlap) yes, sir.
Felix Frankfurter: -- found in a good word. [Laughter]
Earl Warren: Does this salesman have any -- any contact at all [Laughs] with the -- with the brokers?
Joseph C. Jacobs: None -- none that the record reveals nor that I am aware of, no, sir. And as far as I'm -- as far as I'm concerned, he had nothing.
Earl Warren: Yes.
Joseph C. Jacobs: As far as I know, he had nothing to do with it. And may I -- may I close with these -- these remarks that there is no requirement placed on Scripto through the use tax that there is not in a corresponding requirement placed on Florida merchant under the sales tax, this is one bill. The sales and use tax passed in about the same session of the legislature, then administered by the same man. And if, the -- in the administration of that Act as has been suggested by the appellant, some unreasonable or some unrelated benefit was given to the local citizen that was not given to the foreign -- foreign citizen of the foreign merchant. I know that this Court would strike that down and there is none to my knowledge. We feel that the operation of the sales and use tax is a complementary tax and that -- that there is no unreasonable, there is no distinction made.
Potter Stewart: How about the capacity to sue in the State of Florida?
Joseph C. Jacobs: I was most concerned about the statement that was made that that related only to out-of-state merchants, if that is -- I'm not aware of any opinion to that effect. I do not believe that it -- that it would be construed that way and if it was, it would be unconstitutional.
Felix Frankfurter: How do you enforce this -- how do you enforce the acts against the Georgia corporation?
Joseph C. Jacobs: How do we enforce this -- the Use Tax --
Felix Frankfurter: Yes.
Joseph C. Jacobs: -- Act? We would -- we would periodically audit the books of --
Felix Frankfurter: Where, in Georgia?
Joseph C. Jacobs: Wherever we could get them. Yes, sir.
Felix Frankfurter: Suppose they won't let you?
Joseph C. Jacobs: Our order to the statute requires --
Felix Frankfurter: Yes.
Joseph C. Jacobs: -- to do so. And if they (Inaudible) they don't, their -- their permit to do business and --
Felix Frankfurter: Do they need a permit to do business?
Joseph C. Jacobs: They have -- they have to -- to qualify under the Sales Tax Act by paying a $1 fee and making an application. And to -- and -- and they must continue to be qualified by -- by collecting tax.
Felix Frankfurter: How do you get to their books? How do you get to their books in Georgia unless, if they have strong notions of not letting you see their books, how do you get to see them?
Joseph C. Jacobs: We -- we get to see them because the statute requires --
Felix Frankfurter: Yes, but I know --
Joseph C. Jacobs: (Voice Overlap) --
Felix Frankfurter: -- but your statute can't govern -- can't control people in Georgia.
Joseph C. Jacobs: It can't control people in Florida either, if they don't want to abide by the law.
Felix Frankfurter: Oh, yes, you can. You can get all sorts of court orders in Florida, not against people who are not resident there.
Joseph C. Jacobs: We feel that we would be entitled under the Act to get an injunction to enjoin them from doing business in the State of Florida, unless they pay the -- their -- their just taxes.
Charles E. Whittaker: Mr. Jacobs, does that mean you're arguing that Scripto, just Atlanta concern, must file some kind of an application and get a little license before it can do interstate commerce in Florida?
Joseph C. Jacobs: No, sir. Not at all. Not at all, sir.
Charles E. Whittaker: What -- what now? Why not then? You say the -- they -- they must get the -- file an application and get a license through.
Joseph C. Jacobs: No, sir. They -- they must -- they must -- the statute provides that -- I don't have a performer, the statute provides that the person must make and must become qualified and -- and there is no -- there's -- there's no -- all the qualification consist of is letting them know who -- who runs the business and sending a dollar. That's what the statute --
Felix Frankfurter: (Voice Overlap) but suppose they don't want to do that, can you prevent it from getting orders from Florida?
Joseph C. Jacobs: No, sir.
Charles E. Whittaker: You said if they --
Joseph C. Jacobs: But if there is a --
Charles E. Whittaker: Excuse me -- excuse me.
Joseph C. Jacobs: Yes. If there is a jurisdictional contact that -- that is sufficient to satisfy the Due Process Clause, then we can -- then we can require them to -- to collect the -- collect the use tax and make an application and -- and make a don't --
Felix Frankfurter: We still don't --
Joseph C. Jacobs: -- remit.
Felix Frankfurter: -- we don't --
Charles E. Whittaker: Then you're in --
Felix Frankfurter: You're troubled, how you get into Georgia, if they don't come into Georgia? They just wanted to do interstate business and do not -- may do not want to do anything of what they call local business. They want -- this Court has said, “Make them free to get business out of Florida and Tennessee and Montana and anywhere else.”
Joseph C. Jacobs: Yes, sir.
Felix Frankfurter: Now, what I want to know is how do you effectuate this tax? You say you can order their books, but they won't let you order their book unless you go to apply at Georgia court and the Georgia court --
Joseph C. Jacobs: We would seek to -- to enjoin them from continuing to do business in the State of Florida.
Felix Frankfurter: But you can't keep them out because you have no right to exact any permission from them to come in.
Joseph C. Jacobs: No, sir. Not in so far as they -- as -- as far as they are doing a business consistent with the Miller case. But suppose they're doing a business with -- consistent with the General Trading case --
Felix Frankfurter: Well that's your (Voice Overlap) --
Joseph C. Jacobs: -- how would we operate?
Felix Frankfurter: But the Florida injunction runs into Georgia?
Joseph C. Jacobs: No, sir.
Felix Frankfurter: Well, how do you get that, then?
Joseph C. Jacobs: No, sir. We would get an injunction in Florida where they -- or where we were -- we find that -- that they have been doing business to keep them from doing business.
Charles E. Whittaker: May I ask you? Would that injunction must (Inaudible) would that injunction be against Scripto from shipping goods from Atlanta into Florida?
Joseph C. Jacobs: No, sir. That -- no, sir. That --
Charles E. Whittaker: What would it -- would -- would enjoin Georgia (Voice Overlap) --
Joseph C. Jacobs: (Voice Overlap) from coming and soliciting and taking sales within -- within the State of Florida.
Felix Frankfurter: But you've said (Voice Overlap) --
Charles E. Whittaker: But I understood it was now doing that. Is it --
Joseph C. Jacobs: But we're -- we're presuming -- we -- we -- I believe that we are -- we are presuming that -- that the facts related would come within the Miller case. Now, I am presuming the facts would come within the General Trading case where -- where there is jurisdictional contact, where the State -- where -- where the taxing State does have the authority to require the out-of-state merchant to collect the tax and to remit.
Felix Frankfurter: And you would get an injunction against somebody who -- isn't it worthy -- the Corporation for the purposes of your law and then you got an injunction or a judgment against them, they don't obey, then you go into the other State and under the Full Faith and Credit clause, you take an enforcement of it. Is that it?
Joseph C. Jacobs: No, sir. Not at all.
William J. Brennan, Jr.: But once you get it, could you -- on the same approach, why couldn't you get a money judgment for the amount of tax?
Joseph C. Jacobs: Because there is no way to -- to prove it unless we can see the books of the company. We have no --
William J. Brennan, Jr.: Well, I -- well, I gather, your idea is that they're in the State for purposes of service of process by reason of the activities of this --
Joseph C. Jacobs: Yes, sir.
William J. Brennan, Jr.: -- solicit, is that so?
Joseph C. Jacobs: Yes, sir.
William J. Brennan, Jr.: Well, and that I take it, would suffice to start to bring them in the State for the purposes of a lawsuit.
Joseph C. Jacobs: Yes, sir.
William J. Brennan, Jr.: Don't you have discovery procedures and things like that under your --
Joseph C. Jacobs: Yes, sir and I presume we would. I -- I'm sorry, I think I've led the Court of Appeal on this injunction speaking about something I had -- knew little about.
Hugo L. Black: You take your chances on the collective ones if you -- if this Court okayed the statute? [Laughs]
Joseph C. Jacobs: Yes, sir. I believe we will. Thank you for that.
Earl Warren: If I must --
George B. Haley, Jr.: If I could comment just on the procedural questions as how -- as to how this case came up. They were threatening to attach or garnish some of our account receivable and we came into Court and asked for an injunction against that Act as to how they get the information or the figures on which to base an assessment the statute provides. You either furnish them in the books, so they make an assessment from the best information available to them and that that assessment is presumptively correct. I would like to point out that this statute does require that we apply to the control of it for a permit as a dealer in the State that we pay this minimum dollar registration fee that we appoint an agent for service or process upon us in the State at least as to liabilities arising under this Act that we maybe required in the discretion of the Comptroller to put up a cash or a collateral bond to secure the performance of our obligations under this contract, under the statute which is certainly a provision which is more likely to be administered by the Comptroller to require the State concerns to put up such deposit. And I'd like to point out that in Miller Bros., there was far more involved than mere advertising. The furniture store, in that case, delivered 67% of its -- its sales to Mount -- Maryland residence in its own trust. 21% of its total sales were consummated by delivery by interstate carrier. Both of those cases then, he would know the destination of the sale, the -- that the purchaser was a resident of Maryland. 12% only of its total sales were consummated by delivery to the purchaser in the store. And even in those cases, if the purchaser bought on credit which the -- under the stipulation of facts was commonly done, the seller would know the destination ultimately of the sale. Now, I'd like to point out also that it's not only --
Potter Stewart: There was no -- there was no mail order business in Miller, was there? I mean, the -- the --
George B. Haley, Jr.: There was.
Potter Stewart: -- the purchase was negotiated at -- on the premises of the store in Delaware.
George B. Haley, Jr.: There may have been some limited mail order business. There -- there were some ads mailed out to regular account customers.
Potter Stewart: Advertising.
George B. Haley, Jr.: And in some cases, they may have --
Felix Frankfurter: That was --
George B. Haley, Jr.: -- they may have had a coupon or something. I am not familiar to --
Felix Frankfurter: -- advertising solicitation, wasn't there?
George B. Haley, Jr.: There was advertising solicitation, definitely.
Potter Stewart: But on the facts --
George B. Haley, Jr.: Yes.
Potter Stewart: -- that purchasers went to -- to Delaware and -- and into the store --
George B. Haley, Jr.: That's right.
Potter Stewart: -- and makes (Voice Overlap) --
George B. Haley, Jr.: That's right, but they didn't always take delivery there.
Potter Stewart: I understood.
Felix Frankfurter: What do you make of this drummer or salesman in -- in your case?
George B. Haley, Jr.: You mean Nippert -- such as the Nippert case?
Felix Frankfurter: No, no, Scripto salesman --
George B. Haley, Jr.: Oh.
Felix Frankfurter: -- in this case.
George B. Haley, Jr.: Oh. In this case, it is a stipulated fact that he has no connection whatever with the Adgif sales. I say that under Norton Company against Department of Revenue, since we have satisfied the burden of separating his activity from the activity in question -- from the sales in question, the Commerce Clause would forbid the imposition of this duty with respect to Adgif sales by virtue of the activity of that salesman --
Felix Frankfurter: Mr. Jacobs --
George B. Haley, Jr.: -- which is unconnected.
Felix Frankfurter: But, Mr. Jacobs' argument is that the corporation is there, figuratively speaking, because they've got a salesman there.
George B. Haley, Jr.: This --
Felix Frankfurter: And Scripto has seen fit not to differentiate by way of corporations this business for which their job. What do you say to that?
George B. Haley, Jr.: Mr. Justice Frankfurter, this Court has never held that mere solicitation of orders subjects a corporation to the jurisdiction of a state for all purposes. In International Shoe, this Court was careful to point out that the liability imposed, that is the State unemployment tax, arose out of that very limited activity, namely the employment of employees in the State (Inaudible). And that the cause of action in -- in that suit arose out of that same activity. And therefore, that the State -- State have the jurisdiction to tax and the Court had jurisdiction over the corporation. But this Court has not gone further than that under the Due Process Clause.
Earl Warren: Very well. Thank you, gentlemen.