Gen. Motors Acceptance Corp. v. Hulbert

• Decision Date: 17 February 1942
• Docket Number: Case Number: 30733
• Parties: GENERAL MOTORS ACCEPTANCE CORP. et al. v. HULBERT, County Assessor
• Court: Oklahoma Supreme Court

1942 OK 78

125 P.2d 975

190 Okla. 568

GENERAL MOTORS ACCEPTANCE CORP. et al. v. HULBERT, County Assessor

Case Number: 30733

Supreme Court of Oklahoma

Decided: February 17, 1942

Syllabus

¶0 1. TAXATION--CONSTITUTIONAL LAW--1941 amendment to Intangible Personal Property Tax Law fixing taxable situs of such property as conditional sales contracts in counties where sales made held constitutional.

Subsection (e) of section 6, art. 4, ch. 66 Session Laws 1939, as amended by section I of chapter 33, Title 68, Session Laws 1941, does not violate the 14th Amendment to the Constitution of the United States, nor section 2, art. 2, nor section 5, art. 10, nor section 59, art. 5, of the Oklahoma Constitution.

2. SAME.

Said subsection, as amended, does not constitute an arbitrary and unreasonable classification of intangible personal property insofar as it fixes its situs for tax purposes, and does not contravene section 5, art. 10, of the Oklahoma Constitution.

3. SAME.

Said subsection, as amended, does not contravene the provisions of section 20, art. 10, of the Oklahoma Constitution.

Appeal from District Court, Canadian County; Lucius Babcock, Judge.

Injunction by the General Motors Acceptance Corporation against Sam Hulbert, County Assessor of Canadian County; Jim Bodine, County Assessor of Oklahoma County, and the International Harvester Company intervening. Judgment for defendant, and plaintiff and interveners appeal. Affirmed.

W. F. Wilson and Pierce, McClelland, Kneeland & Bailey, all of Oklahoma City, for plaintiff in error General Motors Acceptance Corporation.

Lewis R. Morris, County Atty., of Oklahoma County, and B. C . Logsdon, Asst. County Atty., both of Oklahoma City, for intervener Jim Bodine, County Assessor of Oklahoma County.

Keaton, Wells & Johnston, Roy C. Lytle, and Clarence Black, all of Oklahoma City, for intervener International Harvester Company.

W. L. Funk, County Atty., of Canadian County, Mac Q. Williamson, Atty. Gen., and Randell S. Cobb, First Asst. Atty. Gen., for defendant in error.

OSBORN, J.

¶1 Plaintiff in error, plaintiff below, challenges the constitutionality, on several grounds, of subsection (e) of section 6, art. 4, Ch. 66, Session Laws 1939, as amended by House Bill No. 456, Session Laws 1941, relating to the taxation of intangible personal property. Plaintiff is a foreign corporation organized under the laws of the State of New York and authorized to do business in this state. It maintains two branch offices within the state, one at Oklahoma City and one at Tulsa. At and from these branches plaintiff conducts, performs, and directs its business and business operations in this state. Its business is that of purchasing and discounting from automobile dealers throughout the state conditional sales contracts arising out of the time or installment sales of automobiles, refrigerators, and radio equipment, and of collecting the amounts due under such conditional sales contracts as the installments thereon become due and payable. The total volume of business thus transacted by plaintiff within the state amounts to from ten to fifteen million dollars per year, and about 65 per cent of said volume is handled through the Oklahoma City branch office and about 35 per cent thereof through the Tulsa office. Generally speaking, the Oklahoma City office purchases and handles conditional sales contracts from dealers in the western portion of the state and the Tulsa office handles and purchases said contracts in the eastern portion of the state. Plaintiff has no place of business in Canadian county, does not retain possession within Canadian county of said contracts, but all of such contracts purchased from dealers having places of business in Canadian county are kept at the Oklahoma City branch office. The conditional sales contracts involved herein are those which have been purchased by plaintiff from automobile dealers residing in and having their places of business in Canadian county and (quoting from the brief of plaintiff in error) "which would have been taxable in said Canadian county had said automobile dealers retained title thereto."

¶2 Plaintiff instituted this action to enjoin the defendant in error (defendant below) Sam Hulbert, as county assessor of Canadian county, from proceeding to list and assess to plaintiff as of January 1, 1942, conditional sales contracts owned by plaintiff and held at its Oklahoma City branch office of the value of some $65,000 or $70,000, which contracts plaintiff concedes were purchased from automobile dealers residing and having their places of business in Canadian county. Plaintiff purchases similar contracts from automobile dealers in practically all of the 77 counties of the state.

¶3 International Harvester Company, which transacts a similar business, filed an intervening petition, by permission of the court below, and joins plaintiff in this attack. Jim Bodine, as county assessor of Oklahoma county, filed an intervening petition in the court below asserting the taxability of said conditional sales contracts held by the Oklahoma City branch office within Oklahoma county.

¶4 The trial court held that House Bill No. 456 was constitutional and denied the petition of plaintiff and interveners for an injunction and enjoined, upon application of defendant, the county assessor of Oklahoma county from assessing to the plaintiff in Oklahoma county the receivables which were assessable as against it in Canadian county. Plaintiff, joined by interveners, appeal, presenting separate petitions in error, but all filed a joint brief.

¶5 For clarity, we set forth certain pertinent provisions of the Act of 1939, supra. Section I of the act defines "accounts and bills receivable" as intangible personal property. Section 2 provides:

"Section 2. Intangible personal property, as defined in Section I of this Act, is hereby classified for the purpose of taxation. For the fiscal year beginning June 1, 1940, and for each succeeding fiscal year, there is hereby levied a tax, in lieu of the regular ad valorem taxes on such intangible personal property at the following rates:

"(a) Two mills upon each dollar of money on hand, money on deposit, and other cash items as defined in subdivisions (a) and (b) of Section I of this Act.

"(b) Four mills upon each dollar of other intangible personal property as defined in subdivisions (c) to (h), inclusive, of Section 1 of this Act.

"Such intangible personal property shall be assessed at its fair cash value, estimated at the price it would bring at a fair voluntary sale as of January first of each year.

"The tax provided for in this Act, is hereby levied and collected for the following specific purposes, to wit:

"First, for the general fund of the county in which such tax is paid, onehalf (1/2) of such amount collected.

"Second, for aid of the common schools of the county in which such tax is paid, one-half (1/2) of such amount collected. . . ."

¶6 Section 6 of the original act was amended by subsection (e), ch. 33, Title 68, Session Laws 1941, to read as follows:

"(e) In all cases where merchandise or other tangible personal property or service, has been sold on credit or on the installment plan by any merchant, dealer or agent, and the notes, conditional sales contracts or other choses in action arising out of such transaction are sold, assigned or otherwise transferred by such merchant, dealer or agent, such notes, conditional sales contracts or other choses in action shall, unless prohibited by federal laws, be listed and assessed in the county where they would have been taxable if such merchant, dealer or agent had retained title thereto, even though the purchaser thereof may be a nonresident of such county and not have a place of business therein."

¶7 It is conceded that the intangible personal property sought to be listed and assessed against plaintiff is located within the State of Oklahoma and is properly taxable within the state, and it is further conceded that if subsection (e) of the amendment, supra, is constitutional, said receivables are taxable in Canadian county, but it is urged that subsection (e), supra, contravenes various provisions of the State and Federal Constitutions to which we shall now direct our attention.

¶8 The plaintiff presents four propositions in its brief for reversal of the judgment of the trial court. The first two propositions are presented together in the brief, and, summarizing, plaintiff asserts that subsection (e), supra, violates the 14th Amendment to the Constitution of the United States, and section 2, art. 2, and section 5, art. 10, and section 59, art. 5, of the Constitution of this state, in that thereby plaintiff's property is taken for public use without just compensation and without due process of law and plaintiff is denied the equal protection of the laws, and that thereby the uniformity of taxes upon the same class of subjects is destroyed, and uniform operation of the intangible personal property tax law throughout the state is prevented.

¶9 The 14th Amendment to the Constitution of the United States, in part, provides: ". . .nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws."

¶10 Section 2, art. 2, Oklahoma Constitution, provides:

"All persons have the inherent right to life, liberty, the pursuit of happiness, and the enjoyment of the gains of their own industry."

¶11 Section 5, art. 10, Oklahoma Constitution, provides:

"The power of taxation shall never be surrendered, suspended, or contracted away. Taxes shall be uniform upon the same class of subjects."

¶12 Section 59, art. 5, Oklahoma Constitution, provides:

"Laws of a general nature shall have a uniform operation throughout the state, and where a general law can be made applicable, no special law shall be enacted."

¶13 Let us keep firmly in mind that the situs of the intangible personal property sought to be taxed in...