Northcutt v. Clayton, 529
| Decision Date | 03 February 1967 |
| Docket Number | No. 529,529 |
| Citation | 269 N.C. 428,152 S.E.2d 471 |
| Court | North Carolina Supreme Court |
| Parties | R. H. NORTHCUTT, Trading as Premium Credit Company v. I. L. CLAYTON, Commissioner of Revenue for the State of North Carolina. |
Taylor, McLendon & Jones, Wadesboro, for plaintiff.
Thomas Wade Bruton, Atty. Gen., and Peyton B. Abbott, Deputy Atty. Gen., for defendant.
This appeal presents one question: Must the operator of an insurance premium financing business pay to the Commissioner of Revenue a privilege license tax under G.S. § 105--88 in addition to the license fee which G.S. § 58--56 requires him to pay to the Commissioner of Insurance? In pertinent part, G.S. § 105--88 provides:
'Loan agencies or brokers.--(a) Every person, firm, or corporation engaged in the regular business of making loans or lending money, accepting liens on, or contracts of assignments of, salaries or wages, or any part thereof, or other security or evidence of debt for repayment of such loans in installment payment or otherwise, and maintaining in connection with same any office or other located or established place for the conduct, negotiation, or transaction of such business and/or advertising or soliciting such business in any manner whatsoever, shall be deemed a loan agency, and shall apply for and procure from the Commissioner of Revenue a State license for the privilege of transacting or negotiating such business at each office or place so maintained, and shall pay for such license a tax of seven hundred fifty dollars ($750.00).
Plaintiff, although conceding in his brief that he is engaged in 'a type of financing which indirectly amounts to lending money,' contends that he is not engaged in the Regular business of making loans and that his business is not one of those 'commonly known as loan companies or finance companies.' This contention, however, will not stand scrutiny. Plaintiff is no less a finance company because he lends money for one purpose only, I.e., financing insurance premiums; and certainly he takes security for the repayment of his loan when he accepts a power of attorney authorizing him to cancel his debtor's insurance and to collect the unearned premium on the policy upon the debtor's default. G.S. § 58--60. Plaintiff's insurance premium finance agreement, prepared pursuant to G.S. § 58--58.1, provides, Inter alia, that the borrower's failure to pay any installment within five days from the due date empowers plaintiff to 'begin proper action as set forth in G.S. § 58--60.' As a consequence of these agreements, the purposes of the State's motor vehicle financial responsibility acts are sometimes thwarted. See Daniels v. Nationwide Mutual Insurance Co., 258 N.C. 660, 129 S.E.2d 314, and Griffin v. Hartford Accident & Indemnity Co., 265 N.C. 443, 144 S.E.2d 201; Griffin v. Hartford Accident & Indemnity Co., 264 N.C. 212, 141 S.E.2d 300.
In practical effect, plaintiff's security is as much a purchase-money mortgage on the commodity which his debtor has bought as any chattel mortgage or conditional sales agreement could be. He is, therefore, a person described in section (a) of G.S. § 105--88, and insurance premium finance companies are not specifically exempted by section (b). Notwithstanding, plaintiff contends that when the Consumers Finance Act (G.S. § 53--164 to 53--191), the Article, and G.S. § 105--88 are considered together, they disclose the legislative intent not to require the $750.00 license tax of insurance premium financiers.
The Consumer Finance Act requires all persons--a generic term embodying any business entity--who engage in the business of lending money in amounts of $600.00 or less and who receive in connection with such loans interest and other compensation or expenses aggregating more than six per cent per annum to secure a license from the Commissioner of Banks. He supervises the activities of these small loan companies in a manner similar to that in which the Commissioner of Insurance supervises the activities of premium insurance financing companies. To cover the expenses of the Commissioner of Banks and to defray the costs of his investigations, each licensee is required by G.S. § 53--167 to pay fees as specified in G.S. § 53--122. These fees are similar in purpose to those required of insurance premium financiers by G.S. § 58--56. In addition to the fee, each licensee under the Consumer Finance Act also pays the $750.00 privilege tax exacted by G.S. § 105--88. Chapter 1053 of the Public Laws of 1961 rewrote the North Carolina Small Loan Act and specifically provided in section 3: 'All laws and clauses of laws in conflict with this Act are hereby repealed; provided, however, G.S. 105--88 is not hereby repealed * * *.' As an administrative practice, the Commissioner of Banks and the Commissioner of Revenue exchange lists to ensure that all loan agencies pay the privilege tax and to ensure that the Commissioner of Banks is cognizant of all agencies subject to his regulation.
The convolution of plaintiff's theory of nonliability for...
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