State v. Tuscaloosa Building & Loan Ass'n
Decision Date | 17 January 1935 |
Docket Number | 6 Div. 672 |
Citation | 161 So. 530,230 Ala. 476 |
Parties | STATE et al. v. TUSCALOOSA BUILDING & LOAN ASS'N. |
Court | Alabama Supreme Court |
Rehearing Denied Feb. 21, 1935
Further Rehearing Denied June 6, 1935
Appeal from Circuit Court, Tuscaloosa County; Henry B. Foster Judge.
Action by the State of Alabama, for the use of itself and others against the Tuscaloosa Building & Loan Association. From a judgment for defendant, plaintiffs appeal.
Reversed and rendered.
A.A Carmichael, Atty. Gen., Frontis H. Moore, Asst. Atty. Gen., Matt H. Murphy, Sp. Asst. Atty. Gen., and Edw. de Graffenried and A.A. Van de Graff, both of Tuscaloosa, for appellants.
Harwood & McQueen, of Tuscaloosa, and Bradley, Baldwin, All & White and Borden Burr, all of Birmingham, for appellee.
Stokely, Scrivner, Dominick & Smith, of Birmingham, amici curiae.
The state of Alabama, for the use of itself and of Tuscaloosa county, and of Archie Leland, as license inspector of Tuscaloosa county, brought this suit against the Tuscaloosa Building & Loan Association to collect state and county license taxes, penalties, and fees, for the years 1926, 1927, 1928, 1929, 1930, and 1931. The license tax year began on October 1st, in each of said years, and ended on September 30th of the succeeding year.
No question is presented upon the pleadings, and the cause was tried upon an agreed statement of facts. Included in the agreed statement of facts are the declaration of incorporation of the defendant, and the by-laws and amendments thereto of the association.
The court rendered judgment on the agreed statement of facts in favor of the defendant, and from this judgment the present appeal is prosecuted.
On this appeal but a single question is presented, and that is, Was the defendant, appellee here, during said years engaged in the business of lending money, within the meaning of schedule 122, Revenue Code of Alabama; Gen.Acts 1919, p. 419, § 361, schedule 70?
It appears from the agreed statement of facts that the appellee, during the entire period for which the license or privilege taxes were sought to be recovered, conducted its business "strictly in accordance with the laws of Alabama governing building and loan associations, and in strict accordance with its charter and by-laws."
It appears that appellee made no loans during said period, except to persons "who held, or, at the time of the loan, purchased its stock."
That applications for loans or advances were received from persons not members or stockholders of the association is admitted, but no loans to such persons were made until such applicants subscribed for shares of stock equal in par value to the amount of the loan or advance applied for.
It was further agreed that:
entitled as a matter of right to have advanced to him, out of available funds, ninety per cent of the amount, if any, which he had paid upon the purchase price of his share, or shares, upon the execution and delivery by him to the defendant of his note secured by the hypothecation by him to the defendant of the share or shares of stock which he owned in the association.
It was further agreed:
And it fully appears from the agreed statement of facts that, during each of said years,
From the foregoing, it appears that a major portion of earnings of defendant, excluding proceeds derived from the sale of shares of its stock, not understood to be earnings, but paid-in capital, in each of the years from January 1, 1926, to the present, was derived from the collection of interest on sums of money loaned or advanced by the defendant to its members and secured by mortgages on real estate, and the hypothecation to the defendant of the stock.
Under the head "Loan Fund," sections 3 and 4 of article IX of the defendant's by-laws read:
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