Kistner v. Iowa State Bd. of Assessment and Review

• Decision Date: 21 June 1938
• Docket Number: 44369.
• Citation: 280 N.W. 587,225 Iowa 404
• Parties: KISTNER v. IOWA STATE BOARD OF ASSESSMENT AND REVIEW.
• Court: Iowa Supreme Court

280 N.W. 587

225 Iowa 404

KISTNER v. IOWA STATE BOARD OF ASSESSMENT AND REVIEW.

No. 44369.

Supreme Court of Iowa.

June 21, 1938

Appeal from District Court, Black Hawk County; R. W. Hasner, Judge.

This is an appeal from the assessment of a retail sales tax by the Iowa State Board of Assessment and Review against E. F Kistner, doing business as the Kistner Funeral Home in Waterloo, Iowa. It was the claim of the Board that he was a retailer, within the provisions of the act, and subject to the tax. The lower court so held and found Kistner liable for tax in the amount of $49.24, together with penalties thereon. Kistner has appealed. Opinion states the facts.

Affirmed.

Swisher, Swisher & Cohrt, of Waterloo, for appellant.

Clair E. Hamilton, of Winterset, for appellee.

MITCHELL, Justice.

This is an appeal from the assessment of a retail sales tax by the State Board of Assessment and Review against E. F. Kistner doing business as the Kistner Funeral Home, in Waterloo, Iowa. It was the contention of the State Board that he was a retailer under the provisions of the act and subject to the tax.

After a hearing, at which evidence was offered, the lower court found Kistner was a retailer and was liable for tax in the amount of $49.24, together with penalties. He was dissatisfied with this finding and has appealed.

E. F. Kistner is the owner and operator of a business known as the Kistner Funeral Home, and has been so engaged since February 23, 1902. He did not take out a retail sales tax permit, and on February 26, 1935, was notified by the Iowa State Board of Assessment and Review to file a retail sales tax return for certain periods, which were specified. He made no returns, and on the 29th of March, 1935, the Board, by action taken, charged him with an assessment for retail sales tax, together with penalties. Notice of such assessment was given to him by the Board, and he appealed to the District Court of Black Hawk County, Iowa.

The record shows that when the relative or person desiring burial for the deceased comes to appellant he finds out that party's wishes for the disposal of the body, the character of the service to be held, whether public or private, whether for burial or cremation, whether he must look after fraternal associations, the kind and formation of cortege, the standing of the deceased in the community, the financial worth and ability to pay and the kind of protective casket desired. After determining this, he takes the parties into the casket room for the selection and approval of the casket, and makes a price upon his services with the use of a particular casket, and other personal property that he is to furnish. After the casket to be used is selected he enters into a written contract with the party or parties. A copy of that contract is set out in the record. This contract is very carefully worded and provides that Kistner is selling service only and not personal property. No reference is made to the price of the casket or vault. The amount stated is for the service to be rendered, which includes the casket and the vault that have been chosen. Appellant claims he has not sold or offered for sale any casket or other items of personal property entering into his service and apart from the service, and would not make any such sale if anyone undertook to buy or wanted to buy the items separately. The contract enumerates the items included in the service, such as benefit of time, skill, counsel and advice in making and completing arrangements, care, preparation of body, use of equipment, hearse, sedan, supervision and direction of funeral rites, use of funeral home, use of approved protective wood burial casket and protective burial box, dressing body, grave marker, slippers, acknowledgment cards and envelopes. The services vary in the various contracts, depending upon the desires and wishes of the parties.

It is appellant's contention that he is not a retailer of the caskets, burial vaults, shipping cases and other tangible personal property, but that he is the user or consumer of said articles; that he is not required to take out a permit as a retailer and is not required to collect tax on the retail sales of said caskets, burial vaults, etc.; that the tax, if any, should be collected from him by the person who sells said tangible personal property to him, whereas it is the contention of the State Board of Assessment and Review that the said tangible personal property, when sold to appellant, is not sold to a consumer or user; that the appellant is engaged in business as a retailer; that he does not use or consume the said articles but sells them at retail and he is therefore required under the provisions of Chapter 82 of the Acts of the 45th General Assembly, Extra Session, to collect a 2% tax upon such sales and that he is also required to obtain a permit to engage in or transact business as a retailer within the State of Iowa.

I.

The first contention of appellant is that he is not selling tangible personal property but is using the caskets, vaults and other tangible personal property and converting the same from personal property to real property.

Section 9930 (1) (2) of the Sales Act defines " sale" as:

" A sale of goods is an agreement whereby the seller transfers the property and goods to the buyer for a consideration called the price."

Section 6943-f38(b), Code of 1935, a part of the Sales Tax Law, provides:

" ‘ Sale’ means any transfer, exchange, or barter, conditional or otherwise, in any manner or by any means whatsoever, for a consideration."

Appellant contends that in order to have a transfer of property there must be a transferee, and that under the contract he enters into with the parties purchasing the service from him there is no transferee. He says it cannot be the deceased as no contract or transaction can be made or had with one deceased; that the furnishing of a funeral service and the use therein of tangible personal property, insofar as the deceased or his legal representatives are concerned, is not the creation of a debt against the deceased or his estate; that under the contract he has agreed to furnish a complete service and his services are not completed until the body is returned to the earth, when he relinquishes possession and his rights and interests in and to the personal property used; when the corpse, together with the burial equipment such as the casket, vault, slippers or other personal property, is placed in the ground, it attaches to and becomes a part thereof; that he thus converts such property which he uses in the service from personalty to realty; that no one acquires any personal property from him; the contracting parties do not acquire any property rights in and to the burial equipment used. Appellant cites certain cases to support this contention. The first is that of Foley v. Brocksmit, 119 Iowa 457, 93 N.W. 344, 60 L.R.A. 571, 97 Am.St.Rep. 324. In that case there was no signed contract, nor did the heirs order the goods. The funeral director was called by an outsider. The deceased in that case was a man eighty years of age. He had no relatives in the vicinity. He had been a janitor in the general offices of a railroad company for years. His associates were generally laboring men, and his most intimate friend was a street sweeper. He left an estate of approximately $5,000. The sole question involved in that case was whether or not the undertaker could enforce a claim against the estate for more than a reasonable amount for the burial of a person in that particular station. It seems that the undertaker in that case, at his own instance, furnished silks and satins for the inside of the casket and gold trimmings for the outside. The bill that he rendered amounted to $526. The court, speaking through the late Justice Deemer, at page 458, 93 N.W. at page 345, said: " Such charges are not, strictly speaking, debts due from the deceased, but charges which the law out of decency imposes upon his estate. And, so far as these are reasonable in amount, they take legal priority of all such debts; as, likewise, do the administration charges. A decent burial should comport with the social condition of the deceased and the amount of his fortune." And at page 461, 93 N.W. at page 346, we read: " The idea that a man dying leaving an estate of less than $5,000 should have a casket costing $425, and that his estate should be burdened with funeral expenses amounting to $526, is little short of ridiculous. Courts will not permit such an injustice to be tolerated, no matter what the finding of the jury."

Appellant also cites the case of Anderson v. Acheson, 132 Iowa 744, 110 N.W. 335, 9 L.R.A.,N.S., 217, but that is a case in which the casket and corpse are buried. A different situation prevails when the contract is signed and the goods furnished. Appellant does not still own the casket, shroud or vault; when he enters into the contract with the relatives of the deceased, they agree to pay him a certain amount of money, and he agrees to conduct the funeral and furnish certain articles of personal property. There is a transfer of title to the person who orders the goods, and it makes no difference how the goods are furnished; the person who signs the contract acquires title to the personal property and until it is buried in the ground he has a right to do whatever he wants to with it.

II.

It is next contended by the appellant that he does not come within the provisions of the Act because he is not engaged in selling at retail in the State to consumers or users, but is engaged in rendering professional service, under the terms of the contract into which he enters.

Section 6943-f38 of the 1935 Code is as follows:

" * * *

c. ‘ Retail sale’ or ‘ sale at retail’...