Gardner-White Co. v. Dunckel

• Decision Date: 07 January 1941
• Docket Number: No. 63.,63.
• Citation: Gardner-White Co. v. Dunckel, 296 Mich. 225, 295 N.W. 624 (Mich. 1941)
• Parties: GARDNER-WHITE CO. et al. v. DUNCKEL, State Treasurer, et al.
• Court: Michigan Supreme Court

296 Mich. 225

295 N.W. 624

GARDNER-WHITE CO. et al.

v.DUNCKEL, State Treasurer, et al.

No. 63.

Supreme Court of Michigan.

Jan. 7, 1941.

Petition by the Gardner-White Company and another against Miller Dunckel, State Treasurer, and others for declaration of rights under the General Sales Tax Act.From an adverse decree, the plaintiffs appeal.

Affirmed.Appeal from Circuit Court, Wayne County, in Chancery; Joseph A. Moynihan, Judge.

Argued before the Entire Bench, except BOYLES, J.

Arthur T. Iverson, of Detroit, for appellants.

Thomas Read, Atty. Gen., and Edmund E. Shepherd and T. Carl Holbrook, Asst. Attys.Gen., for appellees.

SHARPE, Chief Justice.

Plaintiffs filed their petition for declaration of rights under Act No. 36, Pub.Acts 1929, 3 Comp. Laws 1929, § 13903, requesting construction of ActNo. 167, Pub.Acts 1933, as amended byActNo. 313, Pub.Acts 1939, Stat.Ann. and Supp. § 7.521 et seq., known as the General Sales Tax Act.

The facts are not in dispute.Appellants are Michigan corporations engaged in the business of selling at retail tangible personal property for consumption or use within the State and, as such, are licensees and taxpayers under the above act.The plaintiffGardner-White Company is engaged in the business of selling household furniture at retail in the City of Detroit and for such purpose operates three stores located at 6309 Mack avenue, 7000 Fenkell avenue, and 5607W. Fort street, respectively.In the sale of furniture and other items of merchandise, the predominant method of selling by plaintiffGardner-White Company is upon title-retaining contract by which it retains title to the merchandise until the terms of the contract are complied with.A substantial portion of Gardner-White Company's gross business is conducted in such manner.PlaintiffHolmberg Lumber and Supply Company is engaged in the business of selling at retail, lumber and other building supplies, within the City of Detroit and the said place of business is located at 8341 Epworth boulevard in the City of Detroit.It was stipulated that the plaintiffGardner-White Company has for the last past one year and upwards paid sales tax on the approximate basis of receipts from various of such sales as received and has deducted from its sales tax returns from time to time so-called credit losses on bad debts when the same have been found by them to be entirely uncollectible; and that the Holmberg Lumber and Supply Company, since its organization, has paid tax to the State of Michigan upon the basis of its receipts as and when actually received as payment on accounts resulting from sales at retail.

Plaintiffs filed a petition in the circuit court of Wayne county and asked the chancery court for the following relief:

‘A.That the balance due on title retaining or other purchase money contracts resulting from sales at retail under the (general sales tax) act, constitutes no part of the ‘gross proceeds' upon which said tax is based.

‘B.That the amount of ‘bad debts' or ‘credit losses' of the plaintiffs and other taxpayers, not actually collected by the plaintiffs and other taxpayers as a result of sales at retail under said Act, constitutes no part of the ‘gross proceeds' upon which said tax is based.

‘C.That in case of sales at retail made upon a deferred payment basis, the amount due upon such deferred payments constitutes no part of the ‘gross proceeds' until such time as the same is actually collected by these plaintiffs and other taxpayers.’

The trial court held that under the term ‘gross proceeds' as defined by the legislature, the tax to be computed on plaintiffs' sales as retail became due and payable forthwith; and that no deductions were allowable for ‘bad debts,’‘credit losses' or unpaid installments on title-retaining contracts or other credit extensions.

The particular section of the General Sales Tax Act to be construed is subdivision (g) of section 1, which reads as follows: ‘The term ‘gross proceeds' means the amount received in money, credits, property or other money's worth in consideration of sales at retail within this state, without any deduction on account of the cost of the property sold, the cost of materials used, the cost of labor or services purchased, amounts paid for interest or discounts, or any other expenses whatsoever, nor shall any deduction be allowed for losses.Credits or refunds for returned goods may be deducted: Provided, however, That after original sale at retail of tangible property, upon which the full tax has been paid, when used tangible personal property of like kind and nature is taken in exchange or part payment of the consideration of a sale at retail, and such property is, or is to be held by the taxpayer for the purpose of resale in the form of personal property, the credit allowed on account of such trade-in shall not be included as part of the gross proceeds of sale: Provided, That said taxpayer shall be liable for the privilege tax, imposed under this act, on the full credit allowed, such liability to attach at the time of the resale of the property, so taken, and the resale of said property shall be considered a sale at retail under the provisions of this act.’

In our discussion of this case and the construction of the above statute, we have in mind that tax laws are to be construed liberally in favor of the taxpayer.SeeStandard Oil Co. v. State of Michigan, 283 Mich. 85, 276 N.W. 908.

The primary rule governing the interpretation of statutes is to ascertain and give effect to the intention of the legislature.

In City of Grand Rapids v. Crocker, 219 Mich. 178, 182, 189 N.W. 221, 222, we said: ‘All others serve but as guides to assist the courts in determining such intent with a greater degree of certainty.If the language employed in a statute is plain, certain, and unambiguous, a bare reading suffices, and no interpretation is necessary.’

In Boyer-Campbell Co. v. Fry, 271 Mich. 282, 297, 260 N.W. 165, 171, 98 A.L.R. 827, we said:

“Where the language of a statute makes its meaning obscure, it is the duty of the courts to construe, giving it a reasonable...