Kearns Coal Co. v. City of Knoxville
| Decision Date | 01 December 1945 |
| Citation | 191 S.W.2d 183,183 Tenn. 148 |
| Parties | KEARNS COAL CO. v. CITY OF KNOXVILLE. SAME v. DANCE, County Court Clerk, et al. |
| Court | Tennessee Supreme Court |
Error to Chancery Court, Knox County; A. E. Mitchell, Chancellor.
Consolidated suits by the Kearns Coal Company against City of Knoxville and by same complainant against J. W. Dance, County Court Clerk, and others, to recover privilege taxes paid under protest by complainant under Williams' Code, § 1248.36 for the year 1944. To review decree dismissing the bills of complaint, the complainant appeals in error.
Affirmed. William F. Barry, Sol. Gen., of Nashville, and Allison B. Humphreys Jr., Asst. Atty. Gen., for State of Tennessee.
James G. Johnson, of Knoxville, for J. W. Dance, Clerk.
Companion bills were filed by complainant Kearns Coal Company, in the Chancery Court of Knox County, against the City of Knoxville and J. W. Dance as County Court Clerk of Knox County and ex officio collector of privilege taxes for the state and county. The purpose of the bills was to recover certain privilege taxes paid by complainant under section 1248.36 of Williams Code, for the year 1944. Said taxes had been paid under protest by the complainant, who sets out the reasons for the protest and alleged illegality of the collection, in identical terms in both bills, as follows: 'Complainant would show that none of its business in Tennessee is in intrastate commerce, but that all orders taken by its solicitors must be sent to its main office in Cincinnati Ohio for approval or disapproval, and that it has no stock in trade in the State of Tennessee, and that its entire business, insofar as the State of Tennessee or City of Knoxville is concerned, is in interstate commerce and the levy and collecting of a privilege license by the defendant is unconstitutional in that it is a burden on interstate commerce and, therefore, the said privilege license, paid under protest, was illegally collected by the defendant, City of Knoxville.'
Complainant was later allowed to amend by adding to its original bill:
'Complainant avers that it, at no time during the year for which the tax was collected, did or since said time, has been doing business in the City of Knoxville and in Knox County, Tennessee so as to make it liable for privilege license as a 'coal dealer."
Respondents met these bills with demurrers, and when the demurrers were overruled, filed answers. Thereafter depositions were taken, and on the hearing the chancellor, in a well considered opinion, found the operations of complainant on which the taxes had been collected were not in interstate commerce. He further found that the complainant was taxable under section 1248.36 of the Code, and dismissed the bills.
From this action of the chancellor the complainant has perfected appeals, and it is agreed that the law and facts being substantially identical, the cases for all purposes are consolidated, and appealed in a single transcript.
The pertinent facts disclosed by the evidence and found by the chancellor are that complainant is a foreign corporation with its principal office and place of business in Cincinnati, Ohio; that it has a resident representative described as a 'solicitor' in the original bills, in Knoxville, Tennessee, where, in the Park National Bank Building, it maintains a permanently equipped office, with telephone listed in the name of the corporation, and the name of the corporation on the office door. It is fair to describe complainant as a coal broker, taking orders from wholesale dealers in that commodity, and having shipments of coal made to the dealer direct from the mine. The details of the operation before us are that the Knoxville representative of complainant solicits and secures orders from the Knoxville wholesale dealers and transmits these orders to Cincinnati, where the orders, if accepted, are transmitted to the mine for shipment by railroad to the Knoxville dealer, who is notified by the Knoxville representative of the shipment and the arrival of the coal.
It is agreed that during 1944, the year for which the tax was levied, all shipments were made from coal mines in Roane, Andersoi and Campbell counties, Tennessee, so that none of the coal sold in Knox County by the complainant crossed the state line before delivery to the dealer.
Stress is laid by complainant on the fact that the Knoxville representative has no authority to make final acceptance of an order and on the fact that sales are made f. o. b. at the mine. Complainant has no bank account and keeps no financial records in Knoxville.
It appears that the mine operator who loads the coal in Tennessee, sends the bills of lading to Cincinnati, where the home office notifies the representative in Knoxville of the shipment, and the representative in turn notifies the dealer. The dealer is billed directly from Cincinnati, and makes payment direct to that office. We do not find in the record an estimate of the total amount of coal sold by complainant in the Knoxville territory during the year for which the tax was collected, but judging by the fact that one dealer testified...
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