This case comes here on appeal from a decree of the Court of Appeals for the First Circuit, affirming a decree of the District Court for New Hampshire, which enjoined appellant, the chief of police for the city of Manchester, from enforcing the Hawkers' and Peddlers' Act, chapter 102, New Hampshire Laws of 1931, as an infringement of the Fourteenth Amendment. An appeal taken directly to this Court from the District Court, three judges sitting, was dismissed for want of jurisdiction here since, in the lower court, appellee had waived his prayer for temporary relief. 289 U.S. 701, 53 S.Ct. 522, 77 L.Ed. 1459; see Smith v. Wilson, 273 U.S. 388, 391, 47 S.Ct. 385, 71 L.Ed. 699.
The act, effective April 14, 1931, requires payment of an annual license tax or fee for every hawker or peddler, defined to be 'any person, either principal or agent, who goes from town to town or from place to place in the same town selling or bartering, or carrying for sale or barter or exposing therefor, any goods, wares or merchandise.' Section 1. The tax is $50 for a state-wide license. Local licenses are obtainable at a rate graduated according to population. That for Manchester is stated to be $85 for each license. Violation of the act is punishable by a fine of not more than $200. Appellee's chief ground of attach upon the statute, sustained by both the courts below, is that it denies the equal protection of the laws by excepting from its operation certain classes of hawkers and peddlers, in which appellee and his agents are not included.
The bill of complaint alleges that, until the effective date of the act, appellee, a resident of Massachusetts, was engaged in Manchester and elsewhere in New Hampshire in the distribution of vacuum cleaners through their sale and delivery to purchasers by traveling salesmen; that the business was conducted in such a manner as to subject the salesmen to the tax, which they were unwilling or unable to pay; and that their arrest and prosecution, which appellant threatens if they continue to sell without paying the tax, would destroy appellee's business. The value of his business and his loss on account of the enforcement of the act are each alleged to be more than $3,000. Appellant's answer and motion to dismiss the cause, as not within the jurisdiction of the District Court, admit the facts stated in the complaint, so far as now material, except that they deny the allegation that the matter in controversy exceeds $3,000, the jurisdictional amount.
On this issue a trial was had, in the course of which evidence was given to show the extent of appellee's business in Manchester and elsewhere in New Hampshire and in adjoining states, and the profits derived from it in New Hampshire both before and after the enactment of the taxing statute. No interlocutory injunction was sought, and after the effective date of the statute appellee changed the method of doing his business in New Hampshire in a way to avoid the necessity of a license, sales being made by sample, with later delivery by shipping the merchandise directly to the purchaser from outside the state. The business was carried on in this manner in 1931 at a loss. It appeared that the total number of salesmen employed in conducting appellee's business in Manchester during 1931, when the statute was enacted, was six, and that in earlier years a larger number had been employed. During those years from twenty-two to twenty-seven salesmen were employed elsewhere in the state.
It is appellee's contention that the matter in controversy is either the tax which he would be required to pay annually in order to continue his business in New Hampshire, or his right to conduct the business there without payment of the tax, and that the value of each exceeds $3,000. He argues upon the evidence that the expenditure for payment of the tax which he would be obliged to bear in order to continue his business in Manchester is at least $350 per annum, and that the capitalized value of this expenditure would exceed $3,000.
The District Court concluded that, as the tax which would be imposed for the conduct of appellee's business in Manchester would amount to at least $300 per annum, its capitalized value, which would exceed $3,000, satisfies the jurisdictional requirement. The Court of Appeals thought that the matter in controversy was appellee's right to do business throughout the state, which it valued at more than $3,000.