Court Opinion

ID: 3513239
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:24:10.53407+00
Date Added: 2024-06-11T13:45:06.951533
License: Public Domain

The appellee, Flora Drug Company, by its petition for mandamus against the state tax commission, sought to compel the latter to sell to it, as dealer, the stamps required by section 6 of chapter 92, Laws of 1932, to be affixed to its tobacco, bought without the state, from a *Page 31 
dealer who had not affixed the stamps so required. The circuit court of Hinds county held the regulatory provisions of this section to be unconstitutional and void; and from that judgment the cause was appealed to this court.
To my mind it is perfectly clear that the regulatory provisions of section 6 of the above act placed upon retail dealers in tobacco, and products containing tobacco, deprive such dealers of their property without due process of law, thereby violating the Fourteenth Amendment to the Constitution of the United States, and section 14 of the Mississippi Constitution of 1890. And, further, that the requirement of section 6 that appellee, as a retail dealer, shall take its cigars, bought from dealers or factories without the state, to a wholesale dealer within the state, in order to have the stamps affixed, as required by said section 6, denies appellee the equal protection of the law. The requirement is unreasonable, unnecessary, and arbitrary.
By the terms of section 6 of said chapter, unless the retail dealer, within forty-eight hours after the receipt of a shipment of cigars, or other like property, shall take that property to the nearest wholesale dealer operating under a permit from the state, to have the property stamped in accordance with the requirements of the act, he becomes a violator of the law, and his property is thereby rendered worthless to him; the effect thereof being, so far as the retail dealer is concerned, confiscation of his property. The retail dealer has no power over, or control of, the parties beyond the confines of the state with whom he deals. He cannot force such wholesalers to comply with the stamp law any more than could the Legislature — neither one has any control over that situation.
In my opinion, the dealer without the state who sells to retail dealers within the state could not consent to become the agent of the state, affixing the stamps to the *Page 32 
goods sold by him, according to the judgment of such dealer without the state as to the retail price which its customer in Mississippi, the retail dealer, should receive therefor, without at least personal conference and contact with the latter. This act deprives the retail dealer within the state, purchasing such property, of any voice in the fixation of the retail price of his property, lawfully acquired from without the state. Further, it vests in the wholesale dealer within the state an undue and unfair control over those retailers who do not choose to purchase their tobacco or cigars from them. In the first place, it is humiliating to a retail dealer to be forced to apply to one with whom he does not choose to deal to have the stamps affixed to the broken packages, as required under this law.
If the Flora Drug Company should receive cigars or cigarettes from without the state in unbroken packages, with no stamps affixed, it must bear the unusual expense of transporting its property from its place of business, within the forty-eight-hour period, to the nearest wholesale dealer — in the case at bar about twenty-eight miles — and must there await the pleasure of the latter to have the stamps affixed, must unpack the goods, break up the packages, have the stamps affixed by the wholesale dealer at his pleasure and convenience, repack the goods, and take them back to his place of business. He is thereby required to pay this additional cost from the anticipated profits; and, if he undertakes to pass this extra cost to the consumer, he is unable to meet competition in the sale of his goods. The main opinion takes no account of the increased cost or inability to meet competition.
The inconvenience is great, but the majority opinion in this case eliminates from its consideration the absolute tyrannical control vested in the wholesale dealers of this state. It must, of necessity, be a powerful bludgeon in the hands of these dealers. The wholesaler is permitted to operate both a wholesale and a retail business, *Page 33 
and to affix his own stamps to goods bought from without the state. Presumably he could do likewise if he operated a score or more retail stores.
There is a school of thought in the United States, among the merchants and traders and economists, as disclosed by many articles in the trade journals, public prints, and magazines, which holds that the payment of profits to the wholesale dealer is a waste of money, a useless tax upon the retailer and the consumer. There are in this country many large factories which decline to deal with and through wholesalers and jobbers. It is evident that many retail dealers prefer to buy from the factory direct, eliminating in this way transportation and other costs and trade profits.
From the economic standpoint, the continuance of trade relations between the states is just as essential as the predominant establishment of trade relations between nations. If dealers in every state are required by the stringency of the law to deal only within the confine of the state, or else lose their property, or profits, which is property, the time is at hand when the economic situation would be wrecked, should that idea of intrastate, as against interstate, trade be brought to pass.
Since the Boston Tea Party it is doubtful if a more drastic regulatory law has been successfully foisted upon a people living under a republican form of government, with its freedom, and liberty to contract. I have supposed that the people of this country were at liberty to make their contracts to purchase articles from whom and where they found it to their advantage.
In my opinion, there are two classes of retail dealers in cigars and tobacco clearly declared by the act — those dealers who purchase their goods from wholesale dealers within the state, with the stamps affixed; and those retail dealers who purchase these articles from without the state, whether from a factory or a dealer, without the stamps affixed. I think it does not need citation of authorities *Page 34 
to demonstrate, beyond reasonable controversy, that the latter class is made to pay more for their goods by the operation of this act, in the cost of transporting their goods to a wholesaler, opening the original packages, repacking them, and transporting them back to the place of business.
I believe there are large areas in the Mississippi Delta, at this time, where flood waters are rampant, where it would be necessary for the retail dealers to transport their goods by boat to a wholesale dealer, there to be stamped. This seems to me to be entirely unnecessary. It does seem that it would be better that an officer of the state, under obligations to it, and responsible for his official actions to all the people of the state, should exercise that function, seeing to it that the stamps were affixed for the retail dealer. What I have said above in regard to the flood is not a rare occurrence; floods in the Mississippi Delta are fairly regular and frequent.
The effect of the law upon those dealers who are far from the railroad and good roads is to interfere with their dealing freely in merchandise affected by said law, except through purchase from wholesale dealers located within the state. The latter will select those goods which are most profitable to them; and will deal with the sellers of the commodities who will give to him — the wholesaler — the most favors. And the retail dealer is helpless to combat this tyrannical rule, without loss of money, time, and property. He must not only yield to the prices of the wholesalers within the state, but he must accept those articles of merchandise and those brands which suit the fancy of the wholesale dealer with whom he deals.
I have eliminated from my view the question of convenience, although in this case it is a powerful argument. I am basing my judgment that this act is beyond question unconstitutional, on the ground that it causes the retail dealers, situated as the appellee here is, to be mulcted in heavy costs in loss of time and of profits, and loss of *Page 35 
ability to compete with others of that trade; all of which are property, taken without due process of law.
It is not insisted that any other state has enacted so drastic a law or sought so rigidly to control the actions of its retail merchants. The very act itself discloses that the Legislature which passed it doubted the validity of section 6, because they provided in the act itself another plan to be inaugurated in case this section should be declared violative of the federal or state Constitution.
This is unique legislation; a strong expression of the Legislature's construction of its own act, which is more impressive than the declarations of an individual. Much is quoted, in the main opinion, from the declaration of a prominent attorney who filed a brief herein, comparing the Tobacco Act of 1930 (Laws 1930, chapter 90, article 3) with this one. It may be said, in answer to that, that the tax levy, and the property upon which the tax is levied, are quite different, as a comparison of the act of 1930 with the act of 1932 will fully disclose. It might be further said that the vigilance of different officers in the enforcement of a tax law may be clearly discernible. This may or may not be an answer; but it is entitled to some weight in considering the results of a comparison between the two acts.
The cost to the retailer who buys from without the state from one who does not affix the stamps is, in my opinion, arbitrary, oppressive, and cannot be justified upon the theory that the state is now getting much money. I am in full sympathy with the effort to thwart the bootlegging of the commodity involved in this act, as I am in sympathy with all efforts and movements which undertake to thwart the bootlegging of any commodity in violation of law. I cannot bring myself to believe, however, that there is such a vast difference in the honesty of wholesalers as compared with retailers. I believe that the majority of people are honest; and I do not believe so strict a law can be justified on account of the bootlegging *Page 36 
of the article involved. It is a matter of common knowledge that bootlegging of gasoline is carried on along the borders of the state in all directions. There will always be dishonest people; but in my judgment there will always be the great majority who are honest, and who will not smuggle, or undertake to steal from the government. No doubt there will be some who will evade this law, or any other which may be passed. But can it be said, because a few rob the government of its just dues, that the rights and liberties of the great majority shall be endangered? I think not.
The property here involved is of the same kind, used for the very same purposes, and under the same conditions, and ought not to be separated into different classes for taxation; nor should the method of taxation be differently enforced merely for the reason that the property belongs to different owners, the one buying that class of property within the state, the other buying it without the state.
There is no logical, substantial reason for immense disparity in the two methods. Equally inexpensive reasonable regulations for complying with the law should and can be accorded to all alike. In practical effect a law-abiding citizen cannot buy this class of goods from a dealer without the state, without being subjected to appreciable loss, and general impairment of this organized business.
In this case, construing the act in question to be unconstitutional would not leave the taxing powers helpless. They have already unanimously prepared their line of defense and method of taxation, in the event they lose this battle. I think the circuit court correctly held that this act violates the fundamental law, and its judgment should be affirmed.
In conclusion, let me emphasize the fact that this case presents no question of the power of the state to tax; *Page 37 
the complaint here challenges the power of the sovereign to so burden and oppress, capriciously and arbitrarily, this retail dealer in the payment thereof, as to destroy his opportunity for profit. The business is private. The law unduly and harshly requires the dealer to submit himself to his competitor in order that he may comply with it. Under the guise of collection of its revenue, this dealer is caused by legislative fiat to kneel to his competitor as a serf to a satrap. The regulation imposes unnecessary and unreasonable burdens and restrictions upon the retail dealers who purchase tobaccos from without the state. Jay Burns Baking Co. v. Bryan, 264 U.S. 504, 44 S. Ct. 412, 68 L. Ed. 813, 32 A.L.R. 661; Louis Liggett Co. v. Baldridge, 278 U.S. 105, 49 S. Ct. 57, 73 L. Ed. 204.