Silver Fleet Motor Exp., Inc. v. Carson

• Decision Date: 11 March 1949
• Citation: 219 S.W.2d 199,188 Tenn. 338
• Parties: SILVER FLEET MOTOR EXPRESS, Inc. v. CARSON et al.
• Court: Tennessee Supreme Court

219 S.W.2d 199

188 Tenn. 338

SILVER FLEET MOTOR EXPRESS, Inc. v. CARSON et al.

Supreme Court of Tennessee.

March 11, 1949

Appeal from Chancery Court, Davidson County; Thos. A. Shriver Chancellor.

Consolidated actions by Silver Fleet Motor Express, Inc., against Sam K Carson, and others, to recover from defendants in their respective capacities of commissioner of finance and taxation and of county court clerk of Davidson County, certain motor vehicle registration fees paid under protest.Decree for defendants and plaintiff appeals.

Affirmed.

John K. Skaggs, Jr. and William Mellor, both of Louisville, Ky., and Walker & Hooker, of Nashville, for appellant.

Roy H Beeler, Atty. Gen., William F. Barry, Sol.Gen., of Nashville, Harry Phillips, Asst. Atty. Gen., and Horace Osmant, County Atty. of Davidson County, of Nashville, for appellees.

GAILOR Justice.

This appeal presents three consolidated causes brought against the Commissioner of Finance and Taxation and the County Court Clerk of Davidson County, to recover certain motor vehicle registration fees, Codesec. 1166.30, paid under protest by the Motor Express Corporation.After proof was taken and a hearing had, the Chancellor upheld the validity of the tax and the Motor Express Corporation has appealed.

For the tax years involved, there was a reciprocal agreement, Codesec. 1152.7a, between the States of Tennessee and Indiana, exempting certain motor vehicles owned by residents and citizens of the two States from paying the aforesaid registration fees.The gist of the present controversy is that the Motor Express Corporation insists that for certain motor vehicles operated by it, it is entitled to exemption under this agreement, and that the Commissioner has refused to allow the exemption.The pertinent clause of the agreement is as follows:

'This agreement shall only apply to persons, firms, and corporations who are now legal residents or who hereafter may become legal residents of the said reciprocating States authorized to engage or engaged in the operation of motor vehicles in interstate commerce only when such vehicles have been duly licensed in the State which is a party to this agreement and of which the owner is a resident.Corporations will be entitled to the benefit of this agreement only when they maintain their principal and general office in one of the reciprocating states.It is further provided that this agreement shall apply only to trucks operating for hire in interstate commerce when such trucks are operated from Indiana into or through Tennessee and from Tennessee into or through Indiana.'

Since this is a suit by a taxpayer claiming an exemption, the taxing statute and subsidiary agreement will be construed strictly against the taxpayer and in favor of the State's power to tax, and on exemption will be granted by implication.Hamilton Natl. Bank v. McCanless,176 Tenn. 570, 144 S.W.2d 768;Sealed Power Corp. v. Stokes,174 Tenn. 493, 127 S.W.2d 114;Railroad Co. v. Harris,99 Tenn. 684, 43 S.W. 115, 53 L.R.A 921.

Findings of fact by the Chancellor are conclusive in this Court if there was material evidence to support them.Smith v. Grizzard,149 Tenn. 207, 259 S.W. 537;Boshears v. Foster,154 Tenn. 494, 290 S.W. 387;Joest v. John A. Denie's Sons Co.,174 Tenn. 410, 126 S.W.2d 312.

As we construe the foregoing paragraph of the reciprocal agreement as it is to be applied to this taxpayer, it is necessary for the taxpayer to show, in order to show that it is entitled to the exemption claimed, the following three things:

(1) That its principal and general office is in the State of Indiana;

(2) That the motor vehicles on which the exemption is claimed were engaged exclusively in interstate commerce;

(3) That the said motor vehicles were operated only from Indiana into or through Tennessee, or only from Tennessee into or through Indiana.

All three of these propositions were found by the Chancellor against the contention of the Motor Express Corporation.

To establish that its 'principal and general office' was in Indiana was the first proof necessary to entitle Complainant to the exemption claimed.The words 'principal and general office' are presumed to be used with their usual ordinary and accepted meaning.Sanford Realty Co. v. Knoxville,172 Tenn. 125, 110 S.W.2d 325;O'Neil v. State,115 Tenn. 427, 90 S.W. 627, 3[188 Tenn. 343] L.R.A., N.S., 762;Cherokee Brick Co. v. Bishop,156 Tenn. 168, 299 S.W. 770, so that the burden was on Complainant to show that the largest volume and percentage of its business, administrative affairs, correspondence and finance was conducted in and from Seymour, Indiana, and not as the State contended, in and from Louisville, Kentucky.

The great weight of the evidence supported the State's contention.Complainant has only two or three employees in Seymour, and 70 or more at its office and terminal in Louisville.The Complainant has a large and busy office and terminal in Louisville.It has no separate office in Seymour, but shares space there in an office rented with other corporations controlled by the same family which owns control of Complainant.All books of account and correspondence are kept in Louisville.Only the stock books and minutes of directors and stockholders are kept in Seymour.The principal bank account is kept and all the principal, active officers live in Louisville.Clearly, there was clear and convincing evidence to support the Chancellor's finding that the 'principal and general office' was in Louisville, Kentucky.On this phase of the casehe said:

'Numerous exhibits in this record show that the company designated Louisville, Kentucky as the place where it maintained its principal and general offices.

'One cannot examine all of this mass of literature published by the complainant, in which it designated Louisville as its general office, without being impressed that the officials of the company regarded such as being true.

'It is conclusively shown that complainant had its principal and general office at 216 East Pearl Street, Louisville, Kentucky, during the years 1941 and 1942, because claims were filed with the State of Tennessee for a refund of motor vehicle registration fees and taxes, signed and sworn to by C.J. Buhner, Secretary of the company, and attached thereto was an affidavit of E. J. Buhner, President, stating that 'Silver Fleet Motor Express, Inc., maintains its principal office at Louisville, Kentucky, and operates its trucks from Louisville through Tennessee to Birmingham, Alabama, and from Louisville to Nashville, Knoxville and Chattanooga, Tennessee.'

'These claims for refund were made upon the ground that Silver Fleet Motor Express, Inc., was entitled to the benefits of a Reciprocal Agreement entered into in October, 1939, between the States of Tennessee and Kentucky.As a part of the affidavit by the Secretary, it was said:

"The taxpayer, therefore, asks refund of said taxes, in that they have been erroneously and illegally collected by the County Court Clerks of the indicated counties, inasmuch as it is entitled to the provisions of the reciprocal agreement, it being a resident, and maintaining its principal and general office at 216 East Pearl Street, Louisville, Kentucky.'

'The proof shows

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