The appellees, complainants in the court below, have brought this suit against the appellant, the comptroller of the state of Florida, to restrain the enforcement of a Florida statute for the levy and collection of stamp taxes upon the documents described in the bill of complaint.
Their contention has been and is that the statute, properly construed, does not apply to the transactions stated in the bill, and that, if so applied, it is in conflict with the due process and commerce provisions of the Constitution of the United States. Amendment 14; art. 1, § 8.
A District Court of three judges granted an interlocutory injunction (5 F.Supp. 720), which thereafter was made permanent. The case is in this court upon an appeal by the state comptroller. Judicial Code, § 266, 28 U.S.C. § 380 (28 USCA § 380).
The Florida statute (chapter 15787, Laws of Florida 1931 (Ex. Sess.)) imposes a stamp tax upon all bonds or certificates of indebtedness issued in Florida; upon each original issue of certificates of stock; and upon all sales of stock or certificates of stock, agreements to sell, memoranda of sales or deliveries, or transfers of title, the stamps to be placed upon the certificates if the assignment of the certificate is to a person named therein, and upon a written memorandum which the seller is required to execute and deliver to the buyer if there is either an agreement to sell or a transfer of title by delivery of a certificate assigned in blank. The provisions of the statute so far as material are printed in the margin.
The appellees are stockbrokers engaged in business in the city of New York with branch offices in Florida. Orders to buy or sell received from Florida customers are transmitted by the Florida branches, and are executed in New York in accordance with the customs of the Stock Exchange. The comptroller does not contend that any document signed by the brokers in New York is subject to the tax. To the contrary, there is a concession that the stamp taxes applicable to such transactions are those imposed by the New York statute (New York Tax Law (Consol. Laws c. 60), § 270) and by a statute of the United States (26 U.S.C. § 901(3), 26 USCA § 901(3), which are substantially the same as the stamp tax law of Florida. What the comptroller contends is this, that after the transaction is executed in New York, where certificates and memoranda are stamped under the New York and federal statutes, there are certain supplementary papers, copies of the original memoranda, or receipts, or entries in the books, which are signed by the managers or employees of the Florida branches, or on occasion by the customers. These, it is said, are memoranda of sales or deliveries within the meaning of the Florida statute. A tax is also claimed where a written order for the sale of shares is signed by a Florida customer and delivered to the Florida agent for transmission to the central office.
The application of the statute to these and similar situations will be determined more easily when the course of business, first in respect of purchases, and next in respect of sales, has been traced in greater detail. What that course of business is appears very clearly from the stipulated facts.