Mutual Lumber Co. v. Sheppard

• Decision Date: 23 June 1943
• Docket Number: No. 9377.,9377.
• Citation: 173 S.W.2d 494
• Parties: MUTUAL LUMBER CO. v. SHEPPARD et al.
• Court: Texas Court of Appeals

173 S.W.2d 494

MUTUAL LUMBER CO. v. SHEPPARD et al.

No. 9377.

Court of Civil Appeals of Texas. Austin.

June 23, 1943.

Motion for Rehearing Overruled July 21, 1943.

COPYRIGHT MATERIAL OMITTED

Appeal from District Court, Travis County; Roy C. Archer, Judge.

Suit by the Mutual Lumber Company against George H. Sheppard and others, who are the comptroller, treasurer, and attorney general of the state, to recover certain chain store taxes paid under protest. From the judgment, plaintiff and defendants appeal.

Affirmed.

Sleeper, Boynton, Darden & Burleson, of Waco, and Hart & Brown, of Austin, for appellant.

Gerald C. Mann, Atty. Gen., Ocie Speer, Asst. Atty. Gen., Glenn R. Lewis, Asst. Atty. Gen., Harold McCracken, Asst. Atty. Gen., and Fowler Roberts, Asst. Atty. Gen., for appellees.

BLAIR, Justice.

Appellant, Mutual Lumber Company, sued the State's Comptroller, Treasurer and Attorney General to recover certain chain store taxes paid under protest. The facts were stipulated and the sole question for determination is whether appellant is exempt from payment of the taxes under that portion of the Chain Store Tax Law (§ 5, Art. 1111d Vernon's Ann.P.C.), which reads: "Provided that the terms, `store, stores, mercantile establishment or mercantile establishments' wherever used in this Act shall not include: wholesale and/or retail lumber and building material businesses engaged exclusively in the sale of lumber and building material."

Appellant operates twelve stores, and its associate, Calcasieu Lumber Company, operates one store, thus making a chain of thirteen stores operated and controlled under the same majority stock ownership. Each of these stores sells lumber and building materials, and is commonly known as a lumber yard. Appellant admitted that five of its stores and Calcasieu Lumber Company sell certain articles or merchandise which do not come within the meaning of the term "building materials" as used in the statute; and as to the taxes paid on such stores appellant abandoned its claim for refund. The seven stores left sell certain items of merchandise which appellees asserted were not building materials, but which appellant asserted were building materials. Of these items the trial court held that items grouped or listed as hand tools, such as paint brushes, glass cutters, saws, hammers, axes, files, chisels, screw drivers, planes, hatchets, bits, shovels, hoes and rakes are not "building materials" within the meaning of the statute exempting businesses engaged in selling them from payment of the tax; and also held that electric light globes are not building materials. All but one of appellant's stores sell some or all of these hand tools. The store at Fredericksburg sells none of them. One store located at Georgetown sells electric light globes. Appellant was denied a refund of the taxes paid except as to the store at Fredericksburg and for which it was awarded a refund of $143.01. From this judgment holding the hand tools listed not to be building materials, appellant has appealed. It makes no point or contention that electric light globes are "building materials" as that term is used in the statute.

The trial court further held that the following grouped items of merchandise or materials, some or all of which each store of appellant sells, come within the meaning of the term "building materials" as used in the statute:

Group 1. Gears, tails and fans, sucker rods and cylinder barrels for windmills. Only the store of appellant located at Fredericksburg sells such materials or merchandise.

Group 2. Cedar fence posts, barbed wire, red picket fence, staples and hasps, bolts and washers, padlocks, iron and clay sewer pipe, cast and galvanized iron pipe, pipe fittings, bath tubs, commodes, sinks, lavatories, gas water heaters, electric light fixtures, electric switches, electric receptacles, electric receptacle plates, porcelain insulating tubes, porcelain knobs for electric wiring, electric wire, gas burners, metal grills, thermostats, exhaust grills for attic fans, timostat electric switches, and septic tanks.

Appellees have appealed from the portion of the judgment holding these two grouped items of merchandise or materials to be "building materials."

Appellant Lumber Company contends that the items grouped as "hand tools" are "building materials" within the meaning of such words as used in the statute, because it imposes a special tax, applicable only to a particular class of businesses, and must be liberally construed in favor of the taxpayer; and because it deals with a particular trade or business the words "building materials" must be given the meaning or signification attached to them by experts in the trade or business. Appellant further contends that in any event hand tools are within the ordinary meaning of the words "building materials" as used in the statute. As persuasive of its views or contentions appellant introduced in evidence opinions of the Attorney General and letters of the State Comptroller showing that in the enforcement of the statute for several years they construed the words "building materials" to include hand tools, as well as all of the items listed in groups 1 and 2.

We are of the view that the trial court correctly held that the hand tools listed are not "building materials" within the meaning of such words as used in the statute.

The Chain Store Tax Law imposes an occupation tax upon the chain store method of doing business. Hurt v. Cooper, 130 Tex. 433, 110 S.W.2d 896. It applies to all sorts of businesses operated under the chain store method, and was enacted primarily for revenue purposes. It is not a special tax, but applies alike to all sorts of businesses not expressly exempted which operate under chain store methods or systems. It was first passed by the 44th Legislature in 1935. Acts 44th Leg., 1st C.S., p. 1589. It originated in the House as a revenue measure, and as first passed by the House exempted from its operation "wholesale and/or retail lumber and building material businesses." The Senate amended the House bill by adding the words, "engaged exclusively in the sale of lumber and building material", and as finally enacted the statute exempted "wholesale and/or retail lumber and building material businesses engaged exclusively in the sale of lumber and building material" from the payment of the tax imposed. By this language the Legislature clearly limited the exemption to "lumber and building material businesses engaged exclusively in the sale of lumber and building material." Thus it excluded from the exemption businesses which are also engaged in the business of selling other merchandise or material not within the meaning of the words, "lumber and building material," as used in the statute. This was the evident intention of the Legislature. The exemption was also intended no doubt to encourage the construction of buildings of all kinds, thus creating permanent and valuable properties subject to taxation. The business of selling lumber and building materials is not a peculiar one, but is one of the oldest and best known businesses in existence. It is the business to which all persons go when they desire to construct or erect any sort of house, store, fence, barn, storage place, edifice, or structure designed for the habitation of men or animals, or for shelter or protection of property; and the Legislature clearly intended to use the words "building materials" in their broadest but ordinary sense or meaning, and to include anything essential to the completion of a building or structure of any kind for the use intended.

No Texas case directly in point is cited or found. It is generally held, however, that the meaning of the noun "building" depends usually upon the particular facts and circumstances of each case, controlled largely by the intention of the parties, or by the aim or purpose of a particular statute. The noun "building" has been generally held to include any edifice erected by the hand of man of lumber, iron, stone, brick, wood, marble, cement, or any other substance, connected together, and designed for any use in the position fixed; or to include an edifice, an erection, a fabric built or constructed; a structure designed for the habitation of men or animals, or for the shelter and protection of property. Whenever the noun "building" is used in this sense it has been held to include all sorts of structures, fabrics built or constructed, edifices or erections used or useful to man. See 12 C.J.S., Building, pp. 382, 383, for a list of such buildings or structures.

The meaning of the adjective "building", when used to define or describe the noun "material" or "materials" as used in the instant statute, is usually regarded as including all materials essential to the erection or construction of a house or other structure used for the habitation of man or animals, or for the protection and shelter of property.

The words "building materials" as used in the statute were clearly intended to be used in their ordinary acceptation or signification. They are not technical words. The meaning of the words "building materials" as employed in the statute is well known to the businesses which sell them as well as to the purchasers and users of them. This was clearly the sense in which the Legislature intended to use them, and manifestly the Legislature did not intend to require the officials charged with the collection of the tax to ascertain a trade or peculiar meaning of the words "building materials." The aim or purpose of the statute was to exempt the businesses engaged exclusively in the sale of such materials from the payment of the tax imposed upon other businesses engaged in the sale of other merchandise under the chain store method, or engaged in the sale of other merchandise along with the sale of "building materials."

The foregoing represents the interpretation which the great weight of authority places upon the words "building...