Gay v. Inter-County Tel. & Tel. Co.

• Decision Date: 18 July 1952
• Docket Number: INTER-COUNTY
• Citation: 60 So.2d 22
• Parties: GAY, Comptroller, et al. v.TEL. & TEL. CO.
• Court: Florida Supreme Court

Page 22

60 So.2d 22

GAY, Comptroller, et al. v. INTER-COUNTY TEL. & TEL. CO.

Supreme Court of Florida, Division B.

July 18, 1952.

Rehearing Denied Aug. 18, 1952.

Richard W. Ervin, Atty. Gen., and T. Paine Kelly, Asst. Atty. Gen., for appellants.

Henderson, Franklin, Starnes & Holt, Parker Holt, and Lloyd G. Hendry, Fort Myers, for appellee.

MATHEWS, Justice.

This is a suit in equity to enjoin the enforcement and execution of a tax warrant issued by the Comptroller of the State of Florida for taxes allegedly due under Chapter 201 F.S.A. for documentary excise taxes on account of shares of stock of the appellee, a domestic corporation.

The issues were made by the complaint and answer and the amendments thereto. The parties stipulated as to certain facts and that the questions involved might be submitted to the Court for adjudication upon the record as made by the pleadings, stipulation and exhibits. The Court below found that the documentary excise taxes, covered by the warrant and sought to be collected, was not a legal obligationed of the appellee and perpetually enjoined the Comptroller and the Sheriff from attempting to enforce collection thereof. This appeal is prosecuted from that decree.

Before stating the questions involved we will first briefly state the material facts as disclosed by the record.

In April, 1925, the stockholders of the corporation amended the charter as provided by the laws of Florida and authorized the corporation to issue 5,000 shares of stock without nominal or par value. Thereafter the company issued various certificates of stock aggregating the entire 5,000 shares authorized. Later these certificates were surrendered and cancelled and Certificate No. 21 was issued on March 26, 1928, to Barron G. Collier for the entire 5,000 shares of stock. At that time there was no Documentary Stamp Tax Law in effect in Florida.

On April 24, 1931, the charter was again amended to authorize the issuance of 10,000 shares of stock without nominal or par value. On April 17, 1931, the company issued an additional 5,000 shares of its stock which together with the 5,000 shares outstanding constituted all of the stock the company was authorized to issue. There was no Documentary Stamp Tax Law in effect at the time of the issuance of this new stock. The Documentary Stamp Tax Act became a law July 28, 1931.

From the effective date of the Documentary Stamp Tax Act to August 14, 1941, there were transferred upon the books of the corporation certificates of shares of stock of the aggregate number of 25,100, some of them to a trustee. It is obvious that these transactions did not constitute an original issue of stock but did constitute the transfer of stock certificates and all of these transfers were shown upon the books of the company. All of the original issue of stock was issued by the corporation prior to the effective date of the Documentary Stamp Tax Act. It is admitted by the parties that certificates transferred to a trustee or from a trustee regardless of the beneficial ownership are taxable under Section 201.04 F.S.A. All of these transfers of stock stand on the same basis. The difference is that the appellants claim the corporation is liable for the tax and the appellee claims that the sellers or the transferors are liable for the tax.

This Documentary Stamp Act is similar to the Federal Act 26 U.S.C.A. § 1800, et seq., and therefore takes the same construction in the Florida courts as given to the Federal Act in the Federal courts. State ex rel. Packard v. Cook, 108 Fla. 157, 146 So. 223.

All sections of this tax law having any bearing upon the contentions of the parties must be construed together in order to arrive at the intent of the Legislature.

As there can be no question that the original issue of stock certificates prior to the enactment of the law in question were not taxable, it is only necessary to consider at this time Section 201.01, F.S.A., and Section 201.04, F.S.A., and they are as follows:

'201.01 Documents taxable, generally

'There shall be levied, collected and paid the taxes specified in this chapter, for and in respect to the several documents, bonds, debentures or certificates of stock and indebtedness, and other documents, instruments, matters, writings, and things described in the following sections, or for or in respect of the vellum, parchment, or paper upon which such document, instrument, matter, writing, or thing, or any of them, are written or printed by any person, who makes, signs, executes, issues, sells, removes, consigns, assigns, or ships the same, or for whose benefit or use the same are made, signed, executed, issued, sold, removed, consigned, assigned, or shipped in the State of Florida.'

'201.04 Tax on bills of sale, agreements, transfers, etc., of personal property and interests therein.

'On all sales, agreements to sell, or memoranda of sales or deliveries of, transfers of legal title to shares, or certificates of stock or profits or interest in property or accumulations in any corporation, or to rights to subscribe for or to receive such shares or certificates, whether made upon or shown by the books of the corporation, or by any assignment in blank, or by any delivery, or by any paper or agreement or memorandum or other evidence of transfer or sale, whether entitling the holder in any manner to the benefit of such stock interests rights or not, on each one hundred dollars of face value or fraction thereof the tax shall be ten cents; and where such shares are without par or face value, the tax shall be ten cents on the transfer or sale or agreement to sell on each share; provided, that in case of sale, where evidence of transfer is shown only by the books of the corporation, the stamps shall be placed upon such books of the corporation; and where the change of ownership is by transfer of the certificate, the stamps shall be placed upon the certificates; and in case of an agreement to sell or where the transfer is made by delivery of the certificate assigned in blank, there shall be made and delivered by the seller to the buyer a bill or memorandum of such sale, to which the stamp shall be affixed; and every bill or memorandum of sale or agreement to sell before mentioned, shall show the date thereof, the name of the seller, the amount of the sale, and the matter or things to which it refers. Any person or corporation liable to pay the tax as herein provided, or anyone who acts in the matter as agent or broker for such person or corporation, or who makes any such sale, or who in pursuance of any such sale, delivers any certificate or evidence of the sale of any stock, interest or right, or bill or memorandum thereof, as herein required, without having the proper stamps affixed thereto, with intent to evade the foregoing provisions, shall be deemed guilty of a misdemeanor, and upon conviction shall be punished accordingly.' (Italics supplied.)

When we read these two sections together with many of the cases from the United States Courts construing the Federal Statute, we are forced to the inescapable conclusion that the transfer of the shares of stock in question from the effective date of the Documentary Stamp Tax Act until August 14, 1941, is not only taxable, but that the corporation is liable for the tax.

The corporation is a Florida corporation organized under the laws of the State of Florida. It cannot seek and obtain the benefits from the laws of the State of Florida and escape the liabilities imposed by the laws of Florida.

Under the agreed statement of facts the corporation was not a party to the transfers of the stock except that it was the practice of the corporation to keep a record of the owners of the stock. This record was accomplished by having the vendee bring in the stock certificate he had purchased from a previous stockholder and report such transfer to the company. The company then entered these facts upon its stock books and gave to the new owner of the stock another certificate and cancelled the old one, and the new certificate evidence the fact that the new stockholder was the owner of so many shares. The stubs were kept by the company showing the issuance of the new stock and who the owners were. The new certificates prepared by the company contained an assignment form to facilitate the new owner in selling and transferring his stock. Notwithstanding the fact that it it contended and may have been stipulated as a conclusion that the corporation was not a party to the transfer, the actual facts stipulated do show that the corporation was a party to the transfer. It kept the stock books and the stubs. It had prepared the certificates. They were signed by the officers of the corporation. New certificates were delivered by the corporation to new stockholders upon the surrender of the old certificates.

The appellants have cited the cases of Lander v. Pennroad Corp., 3 Cir., 97 F.2d 10, 118 A.L.R. 1289; Founders General Corp. v. Hoey, 300 U.S. 268, 57 S.Ct. 457, 81 L.Ed. 639; California Electric Co. v. U. S., 57 F.Supp. 957, 102 Ct.Cl. 497; Hollister v. United States, D.C., 38 F.Supp. 7; and many other federal cases, in support of its contention that the corporation is liable for the payment of the tax. The appellee attempts to distinguish these cases by claiming that in each of them two elements are present...