Gross Income Tax Division of Ind. v. Surface Combustion Corp.

• Court: Indiana Supreme Court
• Writing for the Court: BOBBITT; Butler; EMMERT
• Citation: Gross Income Tax Division of Ind. v. Surface Combustion Corp., 111 N.E.2d 50, 232 Ind. 100 (Ind. 1953)
• Decision Date: 19 March 1953
• Docket Number: Nos. 28834,28835,s. 28834
• Parties: GROSS INCOME TAX DIVISION OF INDIANA et al. v. SURFACE COMBUSTION CORP.

Page 50

111 N.E.2d 50

232 Ind. 100

GROSS INCOME TAX DIVISION OF INDIANA et al. v. SURFACE COMBUSTION CORP.

Nos. 28834, 28835.

Supreme Court of Indiana.

March 19, 1953.

Edwin K. Steers and J. Emmett McManamon, Attys. Gen., John J. McShane, Chief Counsel, Lloyd C. Hutchinson, Joseph E. Nowak and Robert F. Wallace, Deputy Attys. Gen., for appellant.

Arthur L. Gilliom, Robert D. Armstrong, Elbert R. Gilliom and Richard L. Gilliom, Indianapolis, for appellee.

BOBBITT, Judge.

These cases were consolidated for briefing and oral argument and are so treated in this opinion.

Whenever appellee is referred to herein it shall mean the appellee and its predecessors in interest, or whichever of them is appropriate under the circumstances.

The action in No. 28,834 was commenced in 1944 by the filing of a complaint in three paragraphs by appellee's predecessors in interest, under the provisions of Acts of 1933, ch. 50, § 14, p. 388, as amended, being § 64-2614, Burns' 1951 Replacement, to recover the sum of $14,503.79 as gross income tax, and $6,315.57 as interest, which it is alleged was improperly collected for the tax years of 1934 to 1941, inclusive, and to recover interest on the total amount at three per cent per annum from the date of the alleged improper collection.

Paragraph 1 of the complaint presents the question whether the tax collected was a tax on interstate commerce in violation of the commerce clause, par. 3 of § 8 of Art. 1 of the Constitution of the United States.

The action in No. 28,835 was commenced in 1948 by the filing of a complaint in five paragraphs by appellee to recover the sum of $55,380.53 as gross income tax, and $4,030.11 as interest, which it is alleged was improperly collected for the tax years 1942 to 1945, inclusive, and to recover interest at the rate of three per cent per annum on the total amount from the date of the alleged improper collection.

Except for the tax years and amounts involved, paragraph one in this case presents the same question as does paragraph one in the other case.

Among the errors assigned are:

1. The court erred in granting appellee's request for special findings of fact and conclusions of law, which request was untimely filed, to-wit: after submission of the cause.

2. The court erred in overruling appellants' objections and exceptions to the findings of fact, specifically designated in specifications one to sixteen, all inclusive, and conclusions of law, specifically numbered one ot eight, all inclusive.

3. The court erred in overruling the appellants' motion to vacate its special findings of fact and conclusions of law, and to enter special findings of fact and conclusions of law the evidence adduced, produced pliance with the evidence adduced, produced and introduced at the trial of the cause.

6. The court erred in its conclusion of law numbered one.

7. The court erred in its conclusion of law numbered two.

8. The court erred in its conclusion of law numbered three.

10. The court erred in overruling appellants' motion for a new trial * * *. Among the grounds alleged in said motion are (1) the decision of the court is not sustained by sufficient evidence, (2) the decision of the court is contrary to law, and (3) the decision of the court as it relates to the special findings of fact and each specification thereof, is not sustained by sufficient evidence. First: Before considering the main issue involved it is necessary to dispose of the independently assigned errors one, two and three.

1. If appellee's request for special findings of fact and conclusions of law was made after the commencement of the trial, the granting of the request was within the sound discretion of the court. F. W. & H. Ind. Tr. & App. Pract., § 1732(1), p. 351.

An abuse of discretion under the circumstances here would be ground for a new trial and hence assignment numbered one, as an independent assignment of error, presents no question in this court. Noblesville, etc., Ass'n v. Capital Furniture & Mfg. Co., 1914, 57 Ind.App. 368, 370, 107 N.E. 85, and cases there cited.

2. Assignment numbered two is addressed to objections and exceptions to findings of fact. Motions to modify, strike out, or add to special findings of fact are not recognized by our code of procedure. Chicago, etc., R. Co. v. State ex rel. City of Noblesville, 1902, 159 Ind. 237, 241, 64 N.E. 860, and authorities there cited. See also: Beach v. Franklin Township, 1914, 56 Ind.App. 220, 225, 103 N.E. 498; Lowe's Revision, Vol. 3, § 53.31, p. 309; F. W. & H. Ind. Tr. & App. Pract., § 1732(7), p. 354.

Appellants' objections and exceptions fall within the same class of pleadings as motions to modify, strike out, or add to special findings and present no question in this court.

3. The error alleged in specification three must be reached by a motion for a new trial on the ground that the finding is contrary to law. Lowe's Revision, Vol. 3, § 53.30, pp. 307, 308.

Second: Appellee contends that appellants have failed to discuss or adequately state in their brief the basis of the objections to the rulings complained of in assignments numbered ten, eleven and twelve, including the causes relied upon for a new trial. An examination of appellants' brief leads us to the conclusion that it is sufficient to constitute a substantial compliance with Rule 2-17(e), (f) of this court. However, an examination of the recital of the evidence in appellants' brief convinces us that the evidence was sufficient to sustain the special findings of fact in both cases. Hence, it is immaterial whether or not appellants have waived the questions raised by their assignments numbered ten, eleven and twelve.

Third: In view of the conclusion which we have reached we need consider only the question raised by paragraph one of the complaint--assignment of error numbered six.

In considering alleged error in a conclusion of law based upon special findings of fact, we accept such facts as correctly found. Hutchens, Adm'r v. Hutchens, 1950, 120 Ind.App. 192, 198, 91 N.E.2d 182; Kerfoot v. Kessener, 1949, 227 Ind. 58, 73, 84 N.E.2d 190.

A summary of the facts relative to conclusion of law numbered one as specially found by the court discloses the following:

Appellee is a corporation organized and existing under the laws of the State of Ohio with its principal office, place of business, warehouse and manufacturing plant in the city of Toledo, Ohio. Neither appellee nor its predecessors in interest had, at any time mentioned herein, any manufacturing plant or warehouse in the state of Indiana, or any officer, agent or solicitor in this state who was authorized to enter into contracts. All manufacturing and fabricating operations herein mentioned were carried on by appellee and its predecessors in interest in the city of Toledo, Ohio. When appellee ascertained that a potential customer in Indiana was interested in securing one or more furnaces it made a study of the needs of the customer and selected a type of furnace adaptable to those needs. Appellee then prepared and submitted to the customer in Indiana, from its Toledo office, in duplicate, a 'proposal and specifications'. Such proposal and specifications expressly provided that it should become a contract binding upon the company only when approved in writing by an executive officer of the company at its office in Toledo. The proposal when signed by the customer in Indiana was returned to appellee at its Toledo office for acceptance and approval. All invoices were prepared at appellee's Toledo office from which they were transmitted to the customer, and all payments on the purchase price were made to it at its Toledo office.

At the time each of the contracts between the appellee and the customer was entered into, said parties contemplated and intended that the furnace covered thereby should be shipped and transported from appellee's plant at Toledo, Ohio, to the customer's plant in Indiana, and the contracts provided for such shipment by appellee directly to the customer f. o. b. cars at the point of shipment. The customer provided a concrete foundation for the furnaces, conduits through which gas pipes, water pipes and electric wiring were connected to the furnaces, and unloaded and transported the furnace to his plant at his expense. Smaller furnaces were completely assembled at appellee's plant in Toledo and were so transported to the plant of the customer. The larger furnaces, because of their size and weight, could not be shipped completely assembled. These were either 'knocked down' or partially assembled at appellee's factory in Toledo, and reassembled or completely assembled at the customer's plant in Indiana.

The contract further provided for a lump sum price to be paid by the Indiana customer and a schedule for the payment of the purchase price, with the final payment to be made on or after the complete assembly and adjustment of the furnace in the customer's plant. The title to the furnace and equipment remained in appellee until the purchase price was fully paid.

All of the furnaces, including large and small, contained intricate machinery and mechanism which required specially trained factory engineers, supervisors and workmen to assemble, where required, and to install, align and adjust all of them at the customer's plant in order to assure a proper functioning furnace which was necessary to consummate and complete the sale.

Each of the furnaces was designed and adapted for the particular use of the customer at the time of their installation, but were such as were used in the trade generally and could be moved from one location to another by making slight changes and adjustments therein, i. e., by varying the temperature, cycle and other details.

The trial court specially found that all of the furnaces here involved were machines performing a manufacturing function in industry and 'were and at all times remained chattel personal property'; and the performance...