Albuquerque Lumber Co. v. Bureau of Revenue of N.M.

• Decision Date: 07 December 1937
• Docket Number: No. 4331.,4331.
• Citation: Albuquerque Lumber Co. v. Bureau of Revenue of N.M., 42 N.M. 58, 75 P.2d 334, 1937 NMSC 95 (N.M. 1937)
• Parties: ALBUQUERQUE LUMBER CO.v.BUREAU OF REVENUE OF NEW MEXICO et al.
• Court: New Mexico Supreme Court

42 N.M. 58

75 P.2d 334

ALBUQUERQUE LUMBER CO.

v.BUREAU OF REVENUE OF NEW MEXICO et al.

No. 4331.

Supreme Court of New Mexico.

Dec. 7, 1937.Rehearing Denied Jan. 29, 1938.

Appeal from District Court, Santa Fé County; David Chavez, Jr., Judge.

Action by the Albuquerque Lumber Company, a corporation, against the Bureau of Revenue of the State of New Mexico and John D. Bingaman, as Commissioner. Judgment for the plaintiff, and defendants appeal.

Reversed and remanded with directions.

It is a rule of statutory construction that, in the absence of anything in the context to the contrary, common or popular words are to be understood in the popular sense.

Frank H. Patton, Atty. Gen., and Richard E. Manson, Asst. Atty. Gen., for appellants.

John F. Simms and W. A. Keleher, both of Albuquerque, and J. O. Seth, of Santa Fé, for appellee.

BICKLEY, Justice.

Plaintiff (appellee) conducted a department of its business known as the heating and supply department, and from such department made sales of supplies, including bathtubs, closet combinations, kitchen sinks, laundry tubs and accessories, water pipes, valves, fittings, soil pipes, boilers, radiators, hot water heaters, and accessories thereof. It is alleged that the said articles were sold only to plumbing and heating contractors, also known as master plumbers, who purchased such supplies from plaintiff exclusively for the purpose of placing and installing said merchandise in the buildings, edifices, and premises of others. Plaintiff also made sales of lumber, shingles, roofing materials, insulation, nails, cement, and other building materials to general contractors.

Appellant Bureau of Revenue (defendant) required plaintiff to pay, and plaintiff paid under protest, an amount equal to 2 per cent. of the gross receipts of such business on defendant's theory that plaintiff was engaged in the business of selling such commodities at retail and subject to the tax provided for under the provisions of subsection D of section 201, chapter 73, Laws 1935.

Plaintiff brought suit to recover the difference between one-eighth of one per cent., being the tax required to be paid by persons engaged in the business of wholesale merchandising of goods, wares, materials, and commodities under subsection C of said section, and the 2 per cent. tax which was so paid. The appellant demurred to the complaint on the ground that the face thereof disclosed that the sales in question were retail sales and not wholesale sales as contended by plaintiff. The district court overruled the demurrer and judgment was rendered against the defendant, who appeals.

If the transactions are wholesale sales, the judgment must be affirmed. That is the sole point in the case.

The terms “retail” and “wholesale” are defined in section 103(h) and (i), as follows:

“The term ‘retail,’ except as herein otherwise provided, means the sale of tangible personal property for consumption and not for re-sale in the form of tangible personal property, and ‘retailer’ means every person engaged in the business of making sales at retail.

“The term ‘wholesaler’ or ‘jobber’ means any person who sells tangible personal property for resale and not for consumption by the purchaser, except as herein otherwise provided.”

Section 201, subsection F, of the act, levying a tax of one per cent. upon the gross receipts of all contractors, is as follows: “At an amount equal to one per cent of the gross receipts of the business of every person engaging or continuing in the business of contracting for the construction, reconstruction, repair or improvement, in whole or in part, of any buildings, dwelling, edifices, highways, bridges, dams, canals, pipe-lines, railroads, terminals, the drilling of wells, oil wells, sinking of shafts or driving of tunnels in mines, or any other similar work or performance in which each person covenants or bargains or agrees to perform said work for a stipulated sum, or at cost plus a percentage or additional sum; provided that there shall be deducted from such gross receipts for the purpose of the tax imposed by this subdivision, the cost of all materials used in the performance of any such contract on which the tax imposed by subdivision D of this section has been paid.”

[1][2] It is a familiar rule of statutory construction that in the absence of anything in the context to the contrary, common or popular words are to be understood in a popular sense. Lewis' Sutherland Statutory Construction (2d Ed.) § 389. Since the act in question, at section 103, defines quite a few words and phrases, but omits to define the term “sale,” this circumstance lends support to the rule of construction heretofore adverted to. We attribute to the Legislature, therefore, the intent of using the word “sale” as it is generally and popularly used.

[3][4] A person engaged in the business of wholesale merchandising of goods, wares, and commodities is a “wholesale merchant or dealer,” and one who is engaged in the business of selling goods, wares, and merchandise at retail is a “retail merchant or dealer.” They are engaged in the wholesale and retail trade, respectively.

“A trader is one who sells goods substantially in the form in which they are bought and one who has not converted them into another form of property by his skill and labor.” 26 R.C.L., Taxation, § 212.

[5] In the case of Commonwealth v. Gormly, 173 Pa. 586, 34 A. 282, the court said: “A plumber who, in putting in steam and water heating apparatus, buys the necessary articles and materials from dealers in plumbing materials; works himself, employing other plumbers to help; gets paid by charging for the labor and adding a percentage to the cost of the materials; has no place of business but his workshop, and does not do business as a buyer and seller, -is not a ‘dealer in goods, wares and merchandise,’ within the meaning of the laws imposing mercantile license taxes.” In reaching this conclusion the court said: “In the present case the defendant is neither a ‘manufacturer’ nor a ‘dealer,’ in the strict sense of the latter term. He does not buy to sell the articles he uses; he does not sell them, in the literal sense; and he only buys them when he has a job of work to do for which he requires them. As between the dealer and himself, he is the consumer. He needs the articles in his business. He puts them into buildings, putting his own work upon them; but when they are placed there they are not in the same shape as when he received them, but as a compact whole, composed of all the materials required for the purpose, no matter from what source he obtained them. For instance, a complete steam heating apparatus requires boilers, radiators, pipes, valves, one or more furnaces, and other articles, to make a complete work. Some of these things might be obtained from one dealer and others from other dealers; but the ultimate thing which the defendant supplies to his customer is not the thing he bought. His own work, too, must be added,-a necessary and expensive part of the completed whole, as all persons know who have such bills to pay. How, then, can it be said that such a person is a dealer, when the thing which he sells is not the thing which he buys?” This decision was followed in a later Pennslyvania case, Commonwealth v. Lutz, 284 Pa. 184, 130 A. 410, where it was held: “Plumber, selling materials *** on which he expends no labor, is a ‘dealer’ within statute [Act May 2, 1899 (P.L. 184)], imposing mercantile tax.”

In State v. J. Watts Kearny & Sons, 181 La. 554, 160 So. 77, 78, the taxpayers contended that under the Louisiana Retail Sales Act sales to contractors were wholesale in character. The court rejected this contention, and in a well-considered opinion said:

“A contractor who buys building material is not one who buys and sells-a trader. He is not a ‘dealer,’ or one who habitually and constantly, as a business, deals in and sells any given commodity. He does not sell lime and cement and nails and lumber.

“His undertaking is to deliver to his...