This is an appeal from the decree of a specially constituted District Court perpetually enjoining the appellants from enforcing against the appellee the provisions of chapter 207 of Acts of 1929 of the General Assembly of the state of Indiana. The appellee, by bill filed on behalf of himself and all others similarly situated, charged that the statute violates the Fourteenth Amendment of the Federal Constitution and two sections of the Constitution of Indiana. It averred, and the answer admitted, that, unless enjoined, appellants would institute prosecutions against appellee under certain sections of the act. After hearing, the District Court entered a perpetual injunction, holding the law offensive to the Federal and to the State Constitution.
The statute provides that it shall be unlawful for any person, firm, association, or corporation, foreign or domestic, to establish or operate any store within the state without first obtaining from the appellants a license, which must be renewed annually. It makes the operation of a store without a license a misdemeanor punishable by a fine of not less than $25 nor more than $100 for each day it is so operated.
'Every person,firm , corporation, association or copartnership opening, establishing, operating or maintaining one or more stores or mercantile establishments, within this state, under the same general management, supervision or ownership, shall pay the license fees hereinafter prescribed for the privilege of opening, establishing, operating or maintaining such stores or mercantile establishments. The license fee herein prescribed shall be paid annually, and shall be in addition to the filing fee prescribed in sections 2 and 4 of this act.
'The license fees herein prescribed shall be as follows:
'(1) Upon one store, the annual license fee shall be three dollars for each such store; '(2) Upon two stores or more, but not to exceed five stores, the annual license fee shall be ten dollars for each such additional store;
'(3) Upon each store in excess of five, but not to exceed ten, the annual license fee shall be fifteen dollars for each such additional store;
'(4) Upon each store in excess of ten, but not to exceed twenty, the annual license fee shall be twenty dollars for each such additional store;
'(5) Upon each store in excess of twenty the annual license fee shall be twenty-five dollars for each such additional store.'
It is this section which appellee asserts renders the act unconstitutional as applied to him.
The bill of complaint alleges, and it is admitted, that the appellee is engaged in the business of selling groceries, fresh vegetables, and meats at wholesale and retail in Indianapolis, and has been so engaged for more than ten years, has capital invested in his business in excess of $200,000, and annual sales of over $1,000,000. He operates two hundred and twenty-five stores in the said city, and more than five hundred persons, firms, associations, and corporations, foreign and domestic, are engaged in the operation of two or more stores in the state.
The bill charges that the graduation of the tax per store according to the number of stores under a single ownership and management is based on no real difference between a store part of such a group and one individually and separately owned and operated, or between the business transacted in them; that the number of stores conducted by one owner bears no relation to the public health, welfare, or safety, none to the size of the enterprise as a whole, to its capital, its earnings, or its value; that the classification made by the statute is without basis in fact, is unreasonable and arbitrary, and results in depriving him of his property without due process, and denying him the equal protection of the laws.
In the court below appellants defended on the grounds that the statute was an exercise of the police power and was also a revenue measure which levied an ordinary occupation tax. They offered no evidence to sustain the first ground mentioned, and do not press it here. They now stand only upon the power of the Legislature in prescribing an occupation tax, to classify businesses, so long as its action is not unreasonable and arbitrary. They say that the act fulfills the constitutional requirement that, in so classifying, the lawmaking body shall apply the same means and methods to all persons of the same class, so that the law will operate equally and uniformly, and all similarly circumstanced will be treated alike. The District Court held that the statute failed to conform to this standard.
