Miami Coal Co. v. Fox

• Decision Date: 29 April 1931
• Docket Number: No. 25537.,25537.
• Citation: 203 Ind. 99,176 N.E. 11
• Parties: MIAMI COAL CO. v. FOX, County Treasurer. et al.
• Court: Indiana Supreme Court

203 Ind. 99

176 N.E. 11

MIAMI COAL CO.

v.FOX, County Treasurer. et al.

No. 25537.

Supreme Court of Indiana.

April 29, 1931.

Appeal from Vermillion Circuit Court; Wm. C. Wait, Judge.

Suit by the Miami Coal Company against Homer B. Fox, as Treasurer of Vermillion County, and another to permanently enjoin defendants from collecting a tax on intangible personal property. Decree for defendants, and plaintiff appeals.

Reversed and remanded, with directions.Hays & Hays, of Sullivan, and Gallagher Kohlsaat, Rinaker & Wilkinson, of Chicago, Ill., for appellant.

Beasley, Aikman, O'Brien & Beasley, of Terre Haute, for appellees.

TRAVIS, J.

This is a suit in equity by Miami Coal Company against the treasurer and auditor of Vermillion county, Ind., to permanently enjoin these officials from collecting or attempting to collect a tax on intangible personal property owned by the company, certified by the state board of tax commissioners of Indiana to the auditor of Vermillion county, Ind., for taxation for the year 1923, to declare the tax void, and to cancel, set aside, and annul the tax assessment.

The issue made by appellees' general denial to appellant's amended complaint was submitted to the court. Its finding was for the appellees, and its decree that plaintiff (appellant) take nothing.

The court overruled appellant's motion for a new trial; the causes presented as errors being that the decision of the court is not sustained by sufficient evidence, is contrary to law, and contravenes the Fourteenth Amendment to the Constitution of the United States, in that it upholds the taking of appellant's property without due process of law, and is a denial to appellant of the equal protection of the laws.

The evidence consists of an agreed stipulation of facts, three exhibits of documentary evidence, the testimony of the vice president of appellant, who was in charge of production of coal, and testimony by an accountant who testified concerning the intangible personal property of appellant upon which the tax assessment was based.

The facts as simplified for the purposes of appeal are that the company is a corporation, organized in Indiana April 26, 1901, from which date it has been such corporation, engaged in the mining, production, and sale of coal, and was such and so engaged on March 1, 1923. May 25, 1901, the company was licensed by the state of Illinois to transact business in that state, pursuant to its laws, as a foreign corporation, and not as a domestic corporation. Appellees, Homer Fox and Mortimer Lewis, were treasurer and auditor, respectively, of Vermillion county, Ind., on December 12, 1925, the date the amended complaint was filed.

Appellant was engaged March 1, 1923, and for at least twenty years prior thereto, and continuously thereafter, in the mining, production, and sale of coal produced from mines located in Indiana. Appellant owned on March 1, 1923, intangible personal property, consisting of bills and accounts receivable, over and above all legal deductions, of the true cash value of $1,060,565; and appellant was assessed with such bills and accounts receivable as personal property in the same amount in Vermillion county, Ind.; and the auditor of Vermillion county entered such assessment for $1,060,565, and has extended the tax thereon, as an assessment due and owing from appellant for 1923. Thereafter the tax duplicate of the record of the tax was delivered to the county treasurer for collection. The tax has not been paid, on which account the treasurer is threatening to and will, unless enjoined by the court, proceed to collect from appellant so assessed. The foregoing are facts agreed to and stipulated by the parties.

Documentary evidence consisted of articles of incorporation of appellant in Indiana April 26, 1901, which showed the object of incorporation, among other things, to be the mining and selling of coal, and that the principal place of business of the corporation shall be located in Vigo county, Ind.; also annual report of appellant filed in the office of secretary of Illinois. This report to the secretary of state of Illinois, states the name of the official of the corporation who made the report, the location of the principal business office of the corporation in Illinois to be in the city of Chicago; the names and residences of the officers and directors of the corporation, all of whom resided in Chicago, Ill., except two directors who resided in Indiana; that the corporation had not acquired title to any real estate in securing any debt or liability due it; that the corporation had not entered into any illegal pool, trust, agreement, combination, confederation, and understanding in restraint of trade in contravention of any act of Illinois concerning such matters; the amount of authorized capital stock of the corporation to be $350,000; that the corporation wished to pay a franchise tax based upon its entire authorized capital stock; and, in the event that the corporation is assessed a franchise tax upon its entire authorized capitalization, it will be paid promptly. No other statements were made or information given by the corporation concerning itself in the last-mentioned and foregoing report to the secretary of state of Illinois. There was documentary evidence of proceedings before the state board of tax commissioners of Indiana in relation to the corporation whereby this board ordered the final assessments for the year 1923 to be as follows: Vermillion county on personal property in Clinton City, $1,275 assessment by county board, and $1,061,840 assessment by the state board; in Vigo county on personal property, for Pierson township, $106,500, and for Fayette township, $505,510. The testimony showed that the sole business of the corporation in Indiana was the production and shipping of coal. Since the beginning of business by the corporation, all sales of coal have been made in its office in Chicago, where all the books of account are kept in which are made the entries for the sale of coal, where all contracts for the sale of coal are made, and where all accounts are due and payable. The corporation has never had an agent or office in Indiana authorized to sell coal or collect accounts. The price of the coal is fixed by the secretary of the corporation in Chicago. No funds of the corporation enter Indiana except money transmitted from the Chicago office for payment of the miner's pay rolls. All “bills” for supplies and materials are paid at the corporation's office in Chicago. The officers' salaries are paid at the Chicago office, as also are the dividends to the owners of the capital stock of the corporation. Shipments of coal are from the mines direct to the purchasers, upon orders issued from the Chicago office, and reports of shipments are made to the Chicago office from the mines. No records of the corporation are kept in Indiana, except duplicates of the pay rolls and copies of shipments. The corporation paid taxes in Indiana for the year 1923, in Vermillion county in the sum of $6,779.30; in Vigo county, $11,058.90; in Knox county, $1,020.33; and in Parke county, $213.62-all as shown by the original vouchers and tax receipts. The only evidence introduced at the trial of this suit was by appellant to sustain its bill of complaint.

The trial was had upon the stipulation that the property sought to be taxed was intangible personal property consisting of bills and accounts receivable over and above all legal deductions, of the true cash value of $1,060,565.

[1] Inasmuch as appellant admits by stipulation that it has not paid the tax cast against the assessed valuation of the property, to prevail in its suit to enjoin the collection of the tax, it must show by allegation and proof that the property upon which the tax is assessed is not subject to taxation. Section 14034, Burns' 1926; McCrory v. O'Keefe (1904) 162 Ind. 534, 536, 70 N. E. 812.

Appellant maintains that the intangible personal property, though owned by it, a domestic corporation, is not subject to taxation because such property, according to the record, has a business situs in Illinois, and therefore does not have a taxable situs in Indiana.

Testimonial proof of ultimate facts, if such may be considered upon appeal, that the bills and accounts receivable which are assessed for taxation are from the sale by appellant of its coal at its legally designated place of business stipulated to be in Illinois, and at which place of business the sole records of such sales and of the bills and accounts receivable are made and kept, and the place where such bills and accounts receivable are due and payable, and are paid, is admitted by appellees in their brief in presentation of their proposition that, “even though intangible personal property owned by a resident of Indiana acquires what is termed a business situs of that character does not deprive the property of its situs for taxation purposes in the state of Indiana,” under which the point is made that “the rules announced as to personal property acquiring a situs outside Indiana, such as will be sufficient to take such property beyond the jurisdiction of Indiana taxing authorities, do not apply to intangible personal property.” The evidence is unchallenged and undisputed.

The question presented is whether the laws of Indiana require the assessment of the bills and accounts receivable owned by appellant, even though they have a business situs in Illinois. This question has not been presented to this court before for decision. The decision of this case requires a construction of so much of the revenue laws of Indiana as pertains to the questions presented.

The sections of the revenue laws which are presented by the briefs and which are considered in the construction of the sections or parts thereof necessary to a decision of the questions presented, are, viz.:

“Section 3. All property within the jurisdiction of this state, not expressly exempted, shall be...