General Electric Co. v. Board of Assessors

• Decision Date: 16 March 1908
• Docket Number: 16,691
• Citation: 46 So. 122,121 La. 116
• Court: Louisiana Supreme Court
• Parties: GENERAL ELECTRIC CO. v. BOARD OF ASSESSORS et al

46 So. 122

121 La. 116

GENERAL ELECTRIC CO. v. BOARD OF ASSESSORS et al

No. 16,691

Supreme Court of Louisiana

March 16, 1908

Rehearing Denied April 13, 1908.

Appeal from Civil District Court, Parish of Orleans; Thomas C. W Ellis, Judge.

Action by the General Electric Company against the board of assessors and others. Judgment for defendants, and plaintiff appeals. Affirmed.

Hall &amp Monroe, for appellant.

George Hitchings Terriberry, for appellee board of assessors.

Francis Charles Zacharie (Harry Prentiss Sneed, of counsel), for appellee state tax collector.

Henry Garland Dupre, Asst. City Atty., for appellee city of New Orleans.

PROVOSTY J. NICHOLLS, J., concurs in the decree. MONROE, J., dissents. LAND, J. concurs in the decree on the ground that the tax is on capital invested in this state. BREAUX, C. J. For the reasons assigned in my dissenting opinion this day handed down in the case of National Fire Insurance Company v. Board of Assessors et al. (No. 16,745), 46 So. 120, I dissent.

OPINION

PROVOSTY, J.

This is a suit to set aside an assessment. The plaintiff, the General Electric Company, is a New York corporation, with its domicile at Schenectady, N. Y. It has in New Orleans a local agent and an office, and also a warehouse, where it keeps a stock of goods in its line of business. From this warehouse it sells goods for cash, and also on a credit. The credit sales, however, are made only to such customers as have had a line of credit allowed them by the home office in Schenectady; the local agent being without authority to decide whether to extend credit or not. The volume of the cash business is not given. The number of credit customers is fixed at approximately 30 in the city of New Orleans and 50 in other parts of the state, with an average line of credit of $ 1,500 to each, and one other customer in the city of New Orleans with a line of $ 15,000 or more. The agent keeps no books, or accounts, or records, except copies of letters. All billing is done from the home office, and also all collections. When a customer is delinquent in his payments, however, the agent is required to jog his memory or prod him. The receiving of payments does not necessarily enter into the agent's functions. If, however, payment is tendered him, he receives it and at once transmits the money. When the payment is by check, he transmits the same check that is given him, even though on a local bank. For the payment of freights and other minor local expenses he keeps a bank account of not exceeding $ 500. He solicits business. He is without authority to approve contracts, but bargains for them, and draws them up, and transmits them to the home office for acceptance or rejection. His only further connection with the contracts which he thus transmits is in case any payments due under them are not forthcoming, when he is required, as in the case of credit sales made from the local warehouse, to look up the customer and ascertain the cause of his tardiness.

The revenue law (Act No. 170, p. 346, of 1898, § 1) enumerates among the property subject to taxation "all rights, credits, bonds, and securities of all kinds, promissory notes, open accounts, and other obligations," and after a long and exhaustive enumeration of every possible and imaginable kind of property, rights and credits, it concludes with the following generalization:

"And all movable and immovable, corporeal and incorporeal articles or things of value, owned and held and controlled within the state of Louisiana by any person in any capacity whatsoever."

Section 7 of the same act, after declaring that "it is made the duty of the tax assessors throughout the state to place upon the assessment list all property subject to taxation," proceeds as follows:

"Provided, further, that in assessing mercantile firms the true intent and purpose of this act shall be held to mean, the placing of such value upon the stock in trade, all cash, whether borrowed or not, money at interest, open accounts, credits, etc., as will represent in their aggregate a fair average of the capital, both cash and credit, employed in the business of the party or parties to be assessed. And this shall apply with equal force to any person or persons representing in this state business interests that may claim a domicile elsewhere, the intent and purpose being that no nonresident, either by himself or through an agent shall transact business here without paying to the state a corresponding tax with that exacted of its own citizens; and all bills receivable, obligations or credits arising from the business done in this state are hereby declared assessable within this state, and at the business domicile of said non-resident, his agent or representative. It shall be the duty of the assessor to examine into and to acquaint himself with the insurance carried upon the property, and in determining the value of said stock or assets the average amount of insurance carried by the assured during the twelve months preceding the date of valuation of same shall be by the assessor considered in determining the value of said property.

"Every insurance company doing business in this state shall, on or before the first day of March in each year, render to the Secretary of State a report, signed and sworn to by its president and secretary, of its condition upon the preceding thirty-first day of December, which shall include a detailed statement of its assets and liabilities on that day, the amount and character of business transacted in this state, moneys received and expended during the year and such other information and in such form as he may require."

Section 91 of the same act provides as follows:

"The term 'credit' includes every claim and demand for money, labor, merchandise, and other valuable things. The word 'person' or 'persons,' 'taxpayer' or 'taxpayers,' shall be held to include firms, companies, associations and corporations."

Acting under this statute, the board of assessors of the parish of Orleans, in making the assessment of the plaintiff for the year 1904, added $ 25,000 for credits on open account. The credits thus assessed were not any particular credits, but represented the average credits due to plaintiff in the course of the year in its business.

The plaintiff corporation, as already stated, has brought this suit to set aside the assessment. Plaintiff alleges that all its business is done at Atlanta, Ga., where it has a branch establishment, and at Schenectady, N. Y., its home, and that it has no credits in Louisiana for which taxes are due.

If all the credit customers of plaintiff's office and warehouse in the city of New Orleans utilize their line of credit constantly to the full limit (and the probability is that they approximately do, and nothing shows that they do not), the plaintiff has constantly due to it by the residents of this state and arising out of its business done in this state a matter of $ 135,000. Therefore, by denying that it has any credits in this state for which a tax is due, plaintiff cannot mean to deny that the credits are due, but simply that they are in this state, or that a tax is due on them.

The first contention of the plaintiff is that the Legislature, by the above-transcribed statute, has not intended to impose a tax upon credits of the kind here in question.

Counsel's first argument in support of this contention is founded on the fact that section 1 of said statute, after naming the different kinds of property intended to be taxed, concludes "and all articles or things of value owned and held and controlled within the state," using the copulative, and not the disjunctive, conjunction, and that "therefore a thing, to be assessed, must be owned and held and controlled within the state of Louisiana."

We assume that counsel mean by this nothing more than that the thing to be taxed must be situated here -- a proposition no one will quarrel with. Taken as it is expressed, the argument would mean that a thing situated here -- a plantation or a stock of goods, for instance -- would not be taxable here unless owned here. Certainly nothing of that kind can be meant.

The next argument in support of the contention that the Legislature has not intended to tax these open accounts is that open accounts are not included among the kinds of property upon which taxes are levied. The best possible answer to this argument is: Read the statute. The word "open accounts" is there printed in plain type among the kinds of property upon which taxes are levied; and in equally plain type the duty is imposed upon the assessor to include "open accounts" in his assessment. Therefore the argument merely says "no" to the plain "yes" of the statute.

Next, counsel say that "open accounts" are required to be taxed only when due to mercantile firms, and that the plaintiff is not a mercantile firm. The plaintiff sells goods for cash and on a credit out of a stock of goods constantly kept replenished, and for all the court knows may be the largest wholesale and retail dealer in its line of goods in the city of New Orleans. If this does not make plaintiff a mercantile concern, it is not easy to conceive what would. But, apart from this, how can counsel say that section 7 of the statute applies only to mercantile firms, when immediately following the first proviso, which in terms applies to mercantile firms alone and requires open accounts to be taxed, comes the second proviso, viz.:

"And this shall apply with equal force to any person or persons representing in this state business interests that may claim a domicile elsewhere," etc.

Moreover this section 7 is the general law prescribing the duties of assessors, and necessarily applies alike to all persons and all things...