Craig v. Federal Land Bank of New Orleans

• Decision Date: 04 March 1940
• Docket Number: 34026
• Citation: 189 Miss. 309,194 So. 589
• Court: Mississippi Supreme Court
• Parties: CRAIG v. FEDERAL LAND BANK OF NEW ORLEANS et al

194 So. 589

189 Miss. 309

CRAIG v. FEDERAL LAND BANK OF NEW ORLEANS et al

No. 34026

Supreme Court of Mississippi, Division B

March 4, 1940

Suggestion Of Error Overruled June 10, 1940.

APPEAL from the chancery court of Hinds county HON. V. J. STRICKER Chancellor.

Suit by Carl N. Craig, in revivor, as successor to J. B. Gully, State Tax Collector, against the Federal Land Bank of New Orleans and others to recover gasoline taxes. From an adverse decree plaintiff appeals. Affirmed.

Affirmed.

W. E Gore, of Jackson, T. N. Gore, of Marks, and Forrest B Jackson, of Jackson, for appellant.

This suit involves taxes for the use and sale of gasoline from October, 1932, to October, 1937. Therefore, Chapter 93, Laws of 1932, and Chapter 162, Laws of 1936, govern. The case presents no controversy as to the fact that each of the defendants is a distributor of gasoline, as defined by Section 1(c), Chapter 93, and Section 5(e), Chapter 162, supra. This forecloses the question that they are taxable, under Section 6, Chapter 93, and Section 8, Chapter 162, at the rate of six cents per gallon. Liability for its payment is established, unless the defendants are exempt from its payment.

The statutes relied on to sustain an exemption by express grant are parts of Section 7, Chapter 93, Laws of 1932, and Section 31, Chapter 162, Laws of 1936.

The pertinent part of Section 7 reads as follows: "Where gasoline or other petroleum products on which the tax has been paid is sold to the federal government, or any of its departments, agencies, or instrumentalities, the distributor shall file a written report thereof with the auditor, accompanied by a United States Government Form No. 44 or 1066, or such other form as may be substituted for said form, which report shall be duly signed by the officer, agent or other employee of the federal government, making such purchase, to the effect that such gasoline was purchased for the use of the federal government, or some one or more of its departments, agencies, or instrumentalities."

The principle is well settled that the power of exemption, as well as the power of taxation, is an essential element of sovereignty and can only be surrendered or diminished in plain and explicit terms.

2 Sutherland on Statutory Construction 1002, sec. 539; Knoxville & Ohio R. R. Co. v. Harris, 99 Tenn. 684, 43 S.W. 115; Adams v. R. R. Co., 75 Miss. 275; Currie-Finch Brick & Lbr. Co. v. Miller, 123 Miss. 850; Barnes v. Jones, 139 Miss. 575; State v. Simmons, 70 Miss. 485, 12 So. 477; Greenville Ice & Coal Co. v. Greenville, 69 Miss. 86, 10 So. 574; Gulfport Bldg. & Loan Assn. v. Gulfport, 155 Miss. 498, 124 So. 658; Magnolia Bldg. & Loan Assn. v. Miller, 128 So. 585, appeal dismissed 282 U.S. 805, 51 S.Ct. 86; Bd. of Sup'rs of Bolivar County v. Merck & Alston, 120 So. 839, 153 Miss. 346; Bailey v. Maguire, 22 Wall. 215; Vicksburg, Shreveport & Pacific R. R. Co. v. Dennis, 116 U.S. 665; 2 Cooley on Taxation (4 Ed.), 1407; New Standard Club v. McGowan, 111 Miss. 92, 71 So. 289, Ann. Cas., 1918E, 274; Adams County v. National Box Co., 125 Miss. 598, 88 So. 168; Y. & M. V. R. R. Co. v. Thomas, 65 Miss. 553, 132 U.S. 174, 10 S.Ct. 68, 33 L.Ed. 302; Frantz v. Dobson, 64 Miss. 631; Teche Lines v. Forrest County, 165 Miss. 594, 142 So. 24, 143 So. 486; Leaf Hotel Corp. v. City of Hattiesburg, 168 Miss. 304, 150 So. 779; Hollandale Ice Co. v. Washington County, 171 Miss. 515, 157 So. 689; Jackson Fertilizer Co. v. Stone, 173 Miss. 183, 162 So. 170; Chapman v. State, 179 Miss. 507, 176 So. 391; Parker v. State Tax Com., 178 Miss. 680, 174 So. 567, certiorari denied 302 U.S. 742, 82 L.Ed. 574, 58 S.Ct. 144; Y. & M. V. R. R. Co. v Adams, 180 U.S. 1, 45 L.Ed. 395, 21 S.Ct. 240; Morris Ice Co. v. Adams, 22 So. 944, 75 Miss. 410; State v. Simmons, 70 Miss. 485, 12 So. 477; 26 R. C. L., Sec. 274, note 20; New Colonial Ice Co. v. Helvering, 292 U.S. 435, 54 S.Ct. 788, 78 L.Ed. 1348; Botany Worsted Mills v. U.S. 278 U.S. 282, 73 L.Ed. 378; 8 R. C. L. 5750, Perm. Supp., and 1939 pocket part, pp. 1901, 1902.

When the legislature adopted the statutes and referred to these forms by numbers, the forms, the restrictions, the limitations and conditions embodied therein and in the regulations of officers of the United States became a part of the statute.

The statutes limit the exemption to those who use, by authority, of course, Forms 44 and 1066, by literally designating them, and 1094, because it was substituted for them, all being, in all material provisions, identical, and the use of all being restricted to employees of the government itself, exercising governmental, as distinguished from public, functions, that is to say, those whose connection with, and duty to, the government are direct, with no intermediate agency, such as the land bank.

The statute further provides that the receipt "shall be duly signed by the officer, agent or other employee of the federal government making such purchase."

Elaborate argument is made to the effect that the land bank is a federal instrumentality. We admit this. There never has been any controversy in this case about it. Our position, as it has been throughout this suit is that it is not of the kind of instrumentality which the legislature had in mind when the exemption was granted. The bank is not entitled to use the forms which are an indispensable prerequisite to credit, and that they were not used by the oil company defendant has never been denied. Substitute forms were used but they were based on an opinion of General Lauderdale, which was planted on his erroneous interpretation of the federal constitution, that it prohibited taxation of the land bank, because such taxation encroached upon, burdened, impeded and interfered with the government in the exertion of federal power.

Lyell & Lyell, of Jackson, and E. F. Steiner and Beverly C. Adams, both of New Orleans, La., for appellees.

Rule of strict construction is not applicable where statute is not ambiguous.

61 C. J. 395, Sec. 396; State v. Leuch, 144 N.W. 290, 156 Wis. 121; South Carolina Produce Assn. v. Com'r of Internal Revenue, (C. C. A.), 50 F.2d 742; Flannagan v. Providence Life and Acc. Ins. Co. (C. C. A.), 22 F.2d 136; Ruggles v. Ill., 108 U.S. 536, 27 L.Ed. 812; Hamilton v. Rathbone, 175 U.S. 414, 44 L.Ed. 219.

The law plainly exempts federal agencies and instrumentalities.

Sec. 7, Chap. 93, Laws of 1932; Sec. 31, Chap. 162, Laws of 1936.

The Federal Land Bank is an agency and instrumentality of the federal government.

Fed. Land Bank of N. O. v. Tatum, 163 So. 319, 174 Miss. 264; Fed. Land Bank of Columbia v. State Highway Dept., 173 S.E. 284, 172 S.C. 174; M. G. West Co. v. Johnson (Cal.), 66 P.2d 1211; Smith v. Kansas City Title and Trust Co., 255 U.S. 180, 41 S.Ct. 243, 65 L.Ed. 577; Fed. Land Bank of N. O. v. Crosland, 261 U.S. 374, 43 S.Ct. 385, 67 L.Ed. 703, 29 A. L. R. 1; Fed. Land Bank of Columbia v. Gaines, 290 U.S. 247, 54 S.Ct. 168, 78 L.Ed. 298; Fed. Land Bank of St. Louis v. Priddy, 295 U.S. 229, 79 L.Ed. 1408; Knox Nat. Farm Loan Assn. v. Phillips, 300 U.S. 194, 57 S.Ct. 418, 81 L.Ed. 599, 108 A. L. R. 738.

It is a well settled rule that the practical interpretation of a statute by the executive department charged with its administration or enforcement is entitled to the highest respect and, though not controlling, will not be disturbed except for very cogent and persuasive reasons.

Attorney General's Opinions, 1931-33, page 92; 25 R. C. L. 1043, Sec. 274; I. C. R. R. Co. v. Middleton, 68 So. 146, 109, Miss. 199; State v. Wheatley, 74 So. 427, 113 Miss. 555; Robertson v. Tex. Co., 106 So. 449, 141 Miss. 356; Briscoe v. Buzbee, 143 So. 407, 887, 163 Miss. 574; Conrad Furniture Co. v. Miss. State Tax Com., 133 So. 652, 160 Miss. 185; Gully v. Jackson International Co., 145 So. 905, 165 Miss. 103.

Legislative intent will be ascertained and enforced.

City of Holly Springs v. Marshall, 61 So. 703, 104 Miss. 752; Abbott v. State, 63 So. 667, 106, Miss. 340; Roseberry v. Norsworthy, 100 So. 514, 135 Miss. 845; Canal Bank and Trust Co. v. Brewer, 114 So. 127, 147 Miss. 885; Money v. Wood, 118 So. 357, 152. Miss. 17; Sartin v. Prentiss Cty., 125 So. 563, 156 Miss. 46; Gift v. Love, 144 So. 562, 164 Miss. 442, 86 A. L. R. 63; Rawlings v. Ladner, 165 So. 427, 174 Miss. 611; Alexander v. Graves, 173 So. 417, 178 Miss. 583; Maris v. Lindsey, 87 So. 12, 124 Miss. 742; In re Validation of Road Protection Bonds of Hancock Cty. (Miss.), 184 So. 815; Gandy v. Public Service Corp., 140 So. 687, 163 Miss. 187.

Rule of strict construction of tax exemption yields to legislative intent.

25 R. C. L. 1093, Sec. 309; 26 R. C. L. 314, Sec. 274; Adams Cty. v. Catholic Diocese of Natchez, 71 So. 17, 110 Miss. 890; Bd. of Sup'rs of Warren Cty. v. Vicksburg Hospital, 162 So. 382, 173 Miss. 805; Leaf Hotel Corp. v. City of Hattiesburg, 150 So. 779, 168 Miss. 304; 61 C. J. 395, Sec. 396; Ritchie v. City of Green Bay (Wis.), 254 N.W. 113, 95 A. L. R. 1081; Y. M. C. A. of Lincoln v. Lancaster Cty., 106 Neb. 105, 182 N.W. 593, 34 A. L. R. 1060; Trotter v. State of Tenn., 290 U.S. 354, 54 S.Ct. 138, 78 L.Ed. 358; Bistline v. Bassett (Idaho), 272 P. 696, 62 A. L. R. 323; Pan American Petroleum Co. v. Miller, State Tax Collector, 122 So. 393, 154 Miss. 565; St. Paul's Church v. Concord, 75 N.H. 420, 75 A. 531, 27 L. R. A. (N. S.) 910; Bottum v. Knudtson (N. D.), 276 N.W. 150.

The gasoline tax of Mississippi is a direct tax on the bank and as such is an unauthorized tax on a federal instrumentality.

Panhandle Oil Co. v. State of Miss., 277 U.S. 218, 72 L.Ed. 857; McCulloch v. Maryland, 4 Wheat. 316, 4 L.Ed. 579; Indian Motorcycle Co. v. U.S. 283 U.S. 570, 75 L.Ed. 1277; Graves v. Texas Co., 298 U.S. 393, 80 L.Ed. 1236.

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