Exxon Corp. v. Traigle

• Decision Date: 21 November 1977
• Docket Number: No. 11571,11571
• Citation: 353 So.2d 314
• Parties: EXXON CORPORATION, Plaintiff-Appellee, v. Joseph N. TRAIGLE, Collector of Revenue for the State of Louisiana, Defendant-Appellant.
• Court: Court of Appeal of Louisiana — District of US

Page 314

353 So.2d 314

EXXON CORPORATION, Plaintiff-Appellee, v. Joseph N. TRAIGLE, Collector of Revenue for the State of Louisiana, Defendant-Appellant.

No. 11571.

Court of Appeal of Louisiana, First Circuit.

Nov. 21, 1977.

Rehearing Denied Dec. 28, 1977.

Writ Refused Feb. 17, 1978.

Roger M. Fritchie, Baton Rouge, of counsel for plaintiff-appellee exxon corp.

Edwin M. Callaway, William Steven Mannear, Baton Rouge, of counsel for defendant-appellant Joseph N. Traigle, Collector of Revenue for the State of Louisiana and Secretary of Revenue and Taxation for State of Louisiana.

Before LANDRY, SARTAIN and ELLIS, JJ.

SARTAIN, Judge.

This is a suit for a refund of state sales and services tax paid under protest by Exxon Corporation. The tax in question covers the period January 1, 1969 through December 31, 1971. During this period Exxon did not pay a services tax on the cost of repairs to numerous items of equipment and machinery located at Exxon's refinery, Baton Rouge, Louisiana. When field personnel of the Collector of Revenue discovered this fact they assessed Exxon for a tax deficiency. Exxon paid the alleged deficiency and is now suing for a refund.

Plaintiff Exxon filed a motion for summary judgment with an attached affidavit in the trial court. The motion was granted and the Collector of Revenue is appealing the judgment rendered in plaintiff's favor. The affiant who was the manager of the material's department at Exxon's refinery declared that the property to which the repairs in question were made was either part of Exxon's operating units, part of Exxon's mechanical equipment necessary to operate the complex, or stand-by and back-up property ¹ held in storage and required to maintain the operating units and mechanical equipment in continuous operation. The Collector filed no countervailing affidavits or depositions. The trial court found on the basis of the affidavit that the property in question was immovable by destination. It also held that "tangible personal property" as used in the tax statute must be interpreted in light of Civil Code Property definitions since the tax statute nowhere defines "personal property." Since the property was found to be immovable the tax could not be applied to its repair. Summary judgment was therefore granted. We affirm.

Appellant first alleges that the use of summary judgment was improper because the affidavit of Exxon's materials department manager did not establish that no issue of material fact existed.

"When a motion for summary judgment is made and supported as provided above, an adverse party may not rest on the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided above, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be rendered against him." C.C.P. Art. 967, para. 2.

Since the Collector filed no countervailing affidavits or depositions, our duty is simply to determine if summary judgment was "appropriate." In arguing that there were issues of material fact extant despite the affidavit the Collector is apparently confusing questions of law with questions of fact. His view is apparently that under a correct interpretation of the law more facts would have been necessary to render judgment. He points to no facts necessary to render judgment on the view of the law taken by the trial judge. We will therefore first determine if the trial judge was correct in his interpretation of the law and his application to the undisputed facts. If his interpretation is correct his judgment is likewise correct. If we find that his view of the law is incorrect we must then apply the correct view to the facts and determine if they are still sufficient to sustain a judgment.

Sales of services are taxed by R.S. 47:302 C ² and 321 C. ³ A list of those transactions constituting sales of services is given in R.S. 47:301(14). The type of transaction with which we are concerned is "the furnishing of repairs to tangible personal property, including by way of illustration and not of limitation, the repair and servicing of automobiles and other vehicles, electrical and mechanical appliances and equipment, watches, jewelry, refrigerators, radios, shoes, and office appliances and equipment." R.S. 47:301(14)(g). An attempt is made at defining "tangible personal property" in R.S. 47:301(16). ⁴ It succeeds only in defining "tangible" which is apparently synonymous with "corporeal." C.C. Art. 460. In any event there is no dispute that all the property in question is "tangible."

Our first question is what is meant by the phrase "tangible personal property." Exxon asserts that because this terminology is unknown to Louisiana civil law its meaning should be ascertained by reference to the analogous civilian concept of corporeal movable property. The Collector argues instead that this could not be the intention of the legislature since the legislature is aware of all prior laws. The different wording must mean that a different test is to be used in property classification under the two laws. The Collector does not refer us to any criteria for use in defining personal property if civilian property law is not used. Apparently we could either use authorities from common law states, which have a concept of personal property, or develop our own body of law based on the "usual signification" of the term personal property. C.C. Art. 14.

Our task of discovering the legislative intent of the meaning of the term is made more difficult by the lack of legislative history on Louisiana sales tax. The first sales tax was adopted as Act 75 of 1936. The terminology "tangible personal property" was used therein and has been consistently used in all later reenactments of the sales tax.

In its use of this common law term we do not believe the legislature intended to import the common law into Louisiana for the purpose of sales tax law or to require the court to develop a new body of property law for the purpose of the sales tax. We find it more likely that the legislature desired that this undefined term be defined in accordance with the general property law of Louisiana. Other states use their general property law to explain their sales tax law. See Marsh v. Spradling, 537 S.W.2d 402 (Mo.1976). Therefore we find it only natural to assume that despite using common law terminology, the legislature intended that Louisiana property law be applied to give explanation to Louisiana tax law.

Although we have been unable to find any controlling cases directly holding that personal property as used in the sales tax law is the same as movable property as used in our property law, we are buttressed in our opinion by several authorities. In the definitions given in the ad valorem tax law personal property is treated as synonymous with movable property. R.S. 47:1702(3). ⁵ The correlation of the two terms was first introduced into these definitions by Act 170, § 91 of 1898. The use of the terms as synonyms is not uncommon in Louisiana even today.

The Louisiana Supreme Court has also equated tangible personal property as used in a parish taxing ordinance with corporeal movable property as used in the Civil Code. St. John the Baptist Parish School Board v. Marbury-Pattillo Construction Co., 259 La. 1133, 254 So.2d 607 (1971). The Third Circuit has held to like effect in American Sign and Indicator Corp. v. City of Lake Charles, 320 So.2d 234 (La.App. 3d Cir. 1975). The case there involved the state sales tax as well as school board and city taxes using the same language. The court there equated tangible personal property to corporeal movable property and held that "sales tax is not levied on the sale or use of immovable property."

Having determined that the trial judge was correct in holding tangible personal property to be a synonym of corporeal movable property, we must determine the classification of...