Alexander Film Co. v. State

• Decision Date: 19 January 1950
• Docket Number: 3 Div. 561
• Citation: 253 Ala. 439,44 So.2d 581
• Parties: ALEXANDER FILM CO. v. STATE.
• Court: Alabama Supreme Court

Page 581

44 So.2d 581

253 Ala. 439

ALEXANDER FILM CO. v. STATE.

3 Div. 561.

Supreme Court of Alabama.

Jan. 19, 1950.

Rehearing Denied March 9, 1950.

Rushton, Stakely & Johnston, Montgomery, for appellant.

A. A. Carmichael, Atty. Gen., and Gardner F. Goodwyn, Jr., Asst. Atty. Gen., for appellee.

FOSTER, Justice.

The question on this appeal is whether appellant is liable for the State license tax prescribed by section 456, Title 51, Code, on one engaged in the business of billposting or advertising by making displays in public places.

Appellant was incorporated under the laws of Delaware with its principal place of business in Colorado Springs, Colorado. Its activity in this State is thus summarized by appellant:

'The defendant has a traveling representative who goes through the various states, including the State of Alabama. The representative contacts places of business in the various communities, and suggests the furnishing of a film to advertise the business of the particular customer. If the prospect desires film advertising, a written contract is entered into under the terms of which the customer agrees to pay for the rental of the film and the display space on the screen of the theatre in his community. The contract is sent to the home office in Colorado, and must be accepted by the home office before it becomes a binding contract. After the contract has been entered into, the representative calls on a theatre in that community to arrange for space and time on behalf of the customer for the showing of the film. A written contract is entered into between the theatre and Alexander Film Company, wherein the theatre agrees to show the film on behalf of the customer at a certain agreed rate per week. This contract must also be sent to the home office in Colorado for acceptance before it becomes binding.

'Thereafter, in accordance with the contract, the film is shipped from Colorado Springs direct to the theatre where it is used as a display on the screen of the theatre for the specified period of time and the film is then returned direct to Alexander Film Company, in Colorado Springs. The film at all times remains the property of Alexander Film Company. This statement constitutes the general manner in which the business of Alexander Film Company is handled in the State of Alabama and in all other states. * * *

'Between October 1, 1941 and September 30, 1946, Alexander Film Company had at different times four representatives who worked on commission in the State of Alabama and other states, and who lived in the State of Georgia. The company had only one representative at any one time. * * *

'The contract is signed by the representative but is not binding on the film company until signed in Colorado. * * *

'Ordinarily the first rental installment is delivered to the salesman by check payable to Alexander Film Company, at the same time that the subscription contract is signed in Montgomery County, and the check is then mailed to the home office in Colorado. * * *

'The sales representative has no authority, and it is not his duty to collect any delinquent installments. In some few instances he will pick up an installment payment whether delinquent or not if he happens to be in the community and is soliciting additional business from that customer. If he does make a collection, the checks are made payable to Alexander Film Company and mailed to the home office in Colorado. * * *

'The sales representative has made some collections, but the records do not disclose whether they were delinquent or regular installment payments. In each instance, the funds were transmitted to Alexander Film Company in Colorado by the salesman. * * *

'The advertising film was shipped from Colorado Springs to the theatre. Payment was made to the exhibitor by check mailed from Colorado Springs at the end of each month. * * *

'Library films with the name plate of the advertiser (called a trailer) attached were shipped to the theatre in accordance with the contract. The advertiser sent his payments to Alexander Film Company. Alexander Film Company paid the theatre. * * *

'The films used were what are known as Library Films, which are sixty feet in length including the name plate. Many prints are made from the same film, and the film advertising the particular type of business, such as a grocery store, drug store, garage, or any other retail or wholesale business; and the library films are changed each week in the theatre so that there is no more than a week's time of repetition of the same film. Each of the films has the name trailer of the advertiser attached.'

The question of appellant's liability for the license tax here involved is dependent upon whether or not appellant is transacting the business of displaying advertisements in public places in this State within the meaning of section 456, supra. In order for appellant to be so engaged, it is necessary that it be present in Alabama by some authorized instrumentality acting for it. If appellant carries on no business within the State by a duly authorized instrumentality, it is not subject to a license tax under section 456, supra. James v. United Artists Cor., 305 U.S. 410, 59 S.Ct. 272, 83 L.Ed. 256.

The question we are concerned with is not altogether the same as that which is controlling in determining whether a foreign corporation is conducting some of its corporate functions in Alabama so as to be subject to those laws of this State which specify the conditions upon which such business may be done by a foreign corporation. If appellant was conducting a form of business in this State as prescribed in section 456, supra, it is liable for the tax regardless of whether or not such form of business was one of its corporate functions. But the cases on that subject are directly in point in determining whether or not such foreign corporation is engaged in a particular activity within the State, which activity is the subject of controversy, and whether that activity is so related to interstate commerce as to be exempt from local taxation.

In our case of Alabama Western R. Co. v. Talley-Bates Construction Co., 162 Ala. 396, 50 So. 341, the appellee was a construction company which had made a contract for the building of a railroad in Alabama and was suing the railroad on the contract for so doing. The railroad company claimed that the appellee, plaintiff in the case, had not complied with the law applicable...