State v. State Agricultural Credit Corporation, Inc

• Decision Date: 03 January 1933
• Docket Number: 32038
• Court: Louisiana Supreme Court
• Parties: STATE v. STATE AGRICULTURAL CREDIT CORPORATION, Inc

146 So. 159

176 La. 590

STATE v. STATE AGRICULTURAL CREDIT CORPORATION, Inc

No. 32038

Supreme Court of Louisiana

January 3, 1933

Rehearing Denied January 30, 1933

Appeal from Civil District Court, Parish of Orleans; E. K. Skinner Judge.

Summary proceeding by State against the State Agricultural Credit Corporation, Inc., to recover additional license taxes for years 1929, 1930, and 1931. From judgment for plaintiff defendant appeals.

Judgment annulled, and plaintiff's demandrejected.

Henry & Cooper, of New Orleans, for appellant.

Charles J. Rivet, of New Orleans, for the State.

ROGERS J. ST. PAUL and BRUNOT, JJ., dissent.

OPINION

ROGERS, J.

This is a summary proceeding by the state tax collector for the city of New Orleans against the State Agricultural Credit Corporation, Inc., for additional license taxes for the years 1929, 1930, and 1931, amounting, in the aggregate, to $ 2,800.

Plaintiff alleged that defendant is engaged in the business defined by Act No. 221 of 1926, and is subject to the payment of the license tax provided therein. Defendant denied plaintiff's allegations; averred that its license tax is governed by the provisions of section 25 of Act No. 205 of 1924, and that it had paid the proper license taxes for the years for which it is sought to be held. In the alternative, defendant pleaded the unconstitutionality of Act No. 221 of 1926.

The court below rendered judgment in favor of plaintiff, and defendant appealed.

The purpose of Act No. 221 of 1926, as indicated by its title, is to levy an annual license tax on all persons, firms, corporations, or associations of persons engaged in the business of purchasing, selling, trading in, or lending on notes secured by chattel mortgage, vendor's, contractor's, mechanic's or other statutory liens, commonly known as finance or securities companies.

The primary question to be decided is whether the business in which the defendant is engaged is within the purview of the legislative act. The facts disclosed by the record which are necessary to the decision of the question are as follows, viz.:

The State Agricultural Credit Corporation, Inc., was organized in the year 1926 to utilize the facilities provided by the Federal Farm Loan Act and its amendments (see 12 USCA § 641 et seq.). The act of Congress itself provides that it shall be under the direction and control of the Federal Farm Loan Board therein created. By an amendment to the act (12 USCA § 1021 et seq.), the Federal Farm Loan Board is empowered to charter twelve "Federal Intermediate Credit Banks," to be located in the same cities as the twelve Federal Land Banks. One of these banks is located in the city of New Orleans. The statute authorizes the Federal Intermediate Credit Bank to discount for, or purchase from, any agricultural credit corporation organized under the laws of any state, with its indorsement, any note, draft, or other obligation the proceeds of which have been used in the first instance for agricultural purposes. According to the rules and regulations of the Federal Farm Loan Board, "The term 'advanced in the first instance for any agricultural purpose' shall be held to mean advanced in the first instance to a person engaged in agriculture for the purpose of carrying on agricultural production or defraying any indebtedness arising therefrom." And the term "agricultural credit corporation" is defined to be "a corporation organized under the laws of any State for the purpose of loaning money for agricultural purposes."

The defendant, State Agricultural Credit Corporation, Inc., as shown by its charter, is engaged in the business of extending credit to planters and farmers of the state so that they may secure, maintain, and carry on satisfactorily agricultural production, accepting interest-bearing notes, or other written evidences of debt, in representation of the advances made to the borrowers, "all in accordance with the rules and regulations of or agreements with the Federal FarmLoan Board, created by Act of Congress, and to thereafter have the same re-discounted by the Federal Intermediate Credit Bank, or other banking institutions, as and when occasion may require."

The Federal Intermediate Credit Bank at New Orleans recognizes the State Agricultural Credit Corporation, Inc., as an "agricultural credit corporation" organized for the purpose of lending money for agricultural purposes as embraced within the definition of the term set forth in the rules and regulations of the Federal Farm Loan Board. Under its by-laws, rules, and regulations, the State Agricultural Credit Corporation, Inc., is required, in turn, to adopt and promulgate as occasion demands such by-laws, rules, and regulations as may be necessary to maintain satisfactory relations with the Federal Intermediate Credit Bank at New Orleans and the Federal Farm Loan Board at Washington.

And the Federal Intermediate Credit Bank at New Orleans rediscounts the notes or other written evidences of indebtedness of the planters or farmers who obtain advances from the State Agricultural Credit Corporation, Inc., in the words of the crop lien and chattel mortgage, "to plant, cultivate, grow, harvest and carry on during the current crop year * * * crops of sugar cane, corn, hay and other agricultural products."

After the borrower from the defendant corporation has executed his notes which are secured by a lien on his crop and a mortgage on his chattels, and the notes are accepted for rediscount by the Federal Intermediate Credit Bank at New Orleans "the sum available...