Ex parte Newbern

• Decision Date: 10 July 1970
• Docket Number: 3 Div. 452
• Citation: 286 Ala. 348,239 So.2d 792
• Parties: Ex parte John W. NEWBERN, d/b/a Nationwide Advertising Specialty Co. Etc. In re: STATE of Alabama v. John W. NEWBERN, d/b/a Nationwide Advertising Specialty Co., etc. ,
• Court: Alabama Supreme Court

Page 792

239 So.2d 792

286 Ala. 348

Ex parte John W. NEWBERN, d/b/a Nationwide Advertising Specialty Co. Etc In re: STATE of Alabama v. John W. NEWBERN, d/b/a Nationwide Advertising Specialty Co., etc.

,3 Div. 452.

Supreme Court of Alabama.

July 10, 1970.

M. R. Nachman, Jr., Montgomery, for petitioner.

MacDonald Gallion, Atty. Gen., Willard W. Livingston and B. Frank Loeb, Asst. Attys. Gen., for respondent.

BLOODWORTH, Justice.

We granted a writ of certiorari to the Court of Civil Appeals, 239 So.2d 780, to review its decision reversing and rendering three decrees of the Circuit Court of Montgomery County, in equity, which decrees set aside final assessments made by the State Department of Revenue against petitioner for Alabama use taxes covering periods totalling six years.

Nationwide petitioned for writ of certiorari following the overruling of its motion for rehearing by the Court of Civil Appeals. We granted the writ because the case involved construction of controlling provisions of the Federal Constitution and presented a question of possible conflict with prior decisions of this court on the same point of law. See Act No. 987, § 32, Acts 1969, appvd. Sept. 12, 1969. The case was orally argued May 12, 1970.

The issues presented are three: I. Whether the Court of Civil Appeals erroneously rejected the trial court's findings of fact in this case heard ore tenus; II. whether petitioner is, in the language of Title 51, § 792, Code of Alabama 1940, as last amended, a 'seller engaged in making retail sales of tangible personal property for * * * use * * * in this state, who: * * * (c) solicits and receives purchases or orders by agent or salesman * * *' and thus liable to collect and remit the use tax to the State; III. whether making petitioner a use tax collector under the circumstances of this case violates the Due Process and Commerce Clauses of the United States Constitution. We affirm the decision of the Court of Civil Appeals, having concluded that the answers to I and III are in the negative, and to II in the affirmative.

The facts upon which we base our review of this case, coming here on writ of certiorari, are those contained in the opinion of the Court of Civil Appeals. Clayton v. Ragsdale, 276 Ala. 321, 161 So.2d 804 (1964). Notwithstanding these facts are set out quite extensively in the Court of Civil Appeals' opinion, we think a short summary is appropriate here.

Petitioner Nationwide Specialty Company has been successively a sole proprietorship and a corporation with Texas as its place of business and state of incorporation. It is a jobber in the field of advertising specialties (items such as golf tees, key chains, shoe spoons, and pen and pencil sets) upon which advertising copy can be printed. Upon receiving and accepting in Texas an order for specialties, Nationwide issues a purchase order to a manufacturer, instructing the manufacturer to ship the goods directly to the buyer, at which time Nationwide is billed by the manufacturer. The order forms received by Nationwide state that the goods are purchased from Nationwide.

Nationwide's sole ¹ contacts with Alabama were as follows:

Over 100 salesmen ² in Alabama, to whom Nationwide furnished free samples, catalogs, order blanks, and other sales literature, solicited orders from Alabama customers and sent them to Nationwide. Generally, the buyers made payment directly to Nationwide, and the salesmen received a weekly commission check. Occasionally, the salesmen were asked to collect a tardy payment; and occasionally, they withdrew their commissions directly from customers' payments before sending the balance to Nationwide. The Alabama salesmen who testified said that they had become solicitors for Nationwide as a result of answering its advertisement for 'salesmen' placed in a trade publication. Nationwide frequently referred to them as 'salesmen' in its weekly newspaper 'The Nationwide Pavement Pounder' sent exclusively to their salesmen. These salesmen solicited orders for companies other than Nationwide. The number soliciting in Alabama for Nationwide during the years at issue ranged from 80 to 119; of these, the number who earned in a year more than $600 in commissions varied from 5 to 10. At least one earned as much as $2,000 based on sales of $8,000. ³

I. Nationwide first contends that the Court of Civil Appeals failed to follow our rule that when evidence is heard ore tenus by the trial court without a jury, its findings of fact will not be disturbed on appeal unless plainly erroneous or manifestly wrong.

In Department of Industrial Relations v. Walker, 268 Ala. 507, 510, 109 So.2d 135 (1959), we said that on review by certiorari we would not 'examine the record and determine whether the Court of Appeals failed to give proper consideration to the rule of review that a trial court's findings from evidence taken orally before it is 'to be given the effect of a jury verdict and is not to be disturbed when there is evidence to support it.' It must be remembered that the Court of Appeals is a court of final appellate jurisdiction in this state and its decisions are reviewable by us only by certiorari. Our review is confined to the opinion, although at times we examine the record for a better understanding of the court's holding.' The Court of Civil Appeals having stated the facts in its opinion, we will not look behind those facts to determine whether it erred in concluding that the trial court was plainly and palpably wrong in its findings of fact. Life & Casualty Ins. Co. of Tennessee v. Womack, 228 Ala. 70, 151 So. 880 (1933).

In addition, we note that the trial court's 'findings of fact' which Nationwide contends were erroneously rejected by the Court of Civil Appeals, viz., that Nationwide lacks sufficient nexus with Alabama to be compelled to collect the Alabama use tax and that there was no 'agent or salesman' of Nationwide who solicited and received purchases or orders, are actually mixed questions of law and fact. Although the Court of Civil Appeals stated that it found the trial court's findings of fact 'plainly and palpably wrong,' we think it might well have answered petitioner's contention by saying that it differed with the trial court not on the facts but on the application of settled legal principles to such facts.

Mr. Justice DeGraffenried's observation in Ex Parte Shoaf, 186 Ala. 394, 64 So. 615 (1914), seems pertinent in this connection:

'* * * Sometimes there is a case of mixed law and fact--a case in which a conclusion of fact drawn from admitted evidence must determine the law--and in such a case, where the law is correctly applied by the Court of Appeals to its conclusion of fact, then its judgment in such a case will not be disturbed. It not infrequently occurs that two opposite yet entirely rational conclusions may be drawn, by different minds, from the same state of facts, and in all such cases this court will abide by the conclusions which are drawn by the Court of Appeals from the facts.'

II. Next, Nationwide argues that it is not a 'seller engaged in making retail sales of tangible personal property for * * * use * * * in this state, who: * * * solicits and receives purchases or orders by agent or salesman' within the meaning of Title 51, § 792, supra; and that it therefore cannot be compelled to collect the use tax. Petitioner contends that its 'dealers' are not 'agents or salesmen' apparently on the theory that the statute requires that some 'legal relationship' exist between 'seller' and 'agents or salesmen.' That these salesmen or dealers spend only part of their working time soliciting for Nationwide and that they also solicit for companies other than Nationwide suggests to petitioner that they are self-employed and that there is no 'legal relationship' between them and Nationwide.

We do not think the statute requires a 'legal relationship' between seller and solicitor. The main thrust of Title 51, § 792(c), supra, seems to us simply to require solicitation of orders for the seller by persons within the state who are characterized as 'agents or salesmen.' We do not think that the legislature intended a seller conducting such solicitation to avoid collecting the use tax merely by showing that its salesmen failed to come within some technical definition of 'salesman' or lacked some legal relationship with the out-of-state seller not articulated in the statute.

The Florida Supreme Court in Scripto, Inc. v. Carson, 105 So.2d 775 (1958), affirmed 362 U.S. 207, 80 S.Ct. 619, 4 L.Ed.2d 660, when that case was before it, answered a similar contention in this manner:

'In the instant case appellant Scripto enjoys the privilege of being represented in Florida by numerous commissioned jobbers. In advancing the business enterprise of the appellant these representatives enjoy the benefits and protection of the laws of the State of Florida. It is no answer to point out that the Florida representatives of the appellant operate and own independent businesses as commissioned jobbers. To the extent that they contact Florida consumers in the interest of advancing appellant's business and in bringing about sales of appellant's commodities to Florida customers they are just as much representatives of the appellant under the subject statute as if they were salaried employee solicitors operating pursuant to identical limitations of contract.'

We think here that petitioner's salesmen were just as much its representatives under our statute as if they were salaried employee salesmen.

Nationwide appears to suggest that State v. Lane Bryant, Inc., 277 Ala. 385, 171 So.2d 91 (1965); State v. West Point Wholesale Grocery Company, 284 Ala. 149, 223 So.2d 269 (1969); and Family Discount Stamp Co. of Ga., etc. v. State, 274 Ala. 322, 148 So.2d 218 (1963), place an added requirement in Title 51, § 792, that the out-of-state seller must have a sufficient nexus with Alabama. Though those cases do hold that a 'nex...