Stone v. Rogers

• Decision Date: 12 June 1939
• Docket Number: 33749
• Court: Mississippi Supreme Court
• Parties: STONE v. ROGERS

189 So. 810

186 Miss. 53

STONE v. ROGERS

No. 33749

Supreme Court of Mississippi, Division A

June 12, 1939

Suggestion Of Error Overruled July 8, 1939.

APPEAL from the circuit court of Union county HON. T. H. MCELROY Judge.

Suit by Lee Rogers, doing business as the Lee Rogers Gin Company against A. H. Stone, chairman of the State Tax commission to recover back taxes paid by the plaintiff. Judgment for plaintiff, and the defendant appeals. Reversed and rendered.

Reversed and judgment here for appellant.

J. A. Lauderdale, Assistant Attorney-General, for appellant.

My contention is that under the definition of the term "sale" or "sales" as given by section 1 of chapter 119, Laws of 1934, and the provisions of section 2-c of said chapter, that the tax levied by said statute is levied upon a person who sells, barters or exchanges property. In other words, the tax applies to a person who is bartering or exchanging property for other property the same as if he were making a sale of the property exchanged.

Webster's International Dictionary, Second Edition, defines the word "barter" as follows: "To traffic or trade by exchanging one commodity for another as distinguished from selling one commodity and purchasing another through the use of money or some other medium of exchange."

In Coker v. State, 8 So. 874, the Supreme Court of Alabama held that a barter is an exchange of goods of one character for goods of another; any sale of one character of merchandise where any transfer of merchandise is taken in exchange instead of money.

In Meyer v. Rosseau, 2 S.W. 112, 47 Ark. 460, the Supreme Court of Arkansas held that "barter" and "exchange" are of about the same meaning. "Barter, " the exchange of one commodity or article of property for another; exchange of goods, a commutation, transmutation or transfer of goods for other goods as distinguished from "sale, " which is a transfer of goods for money.

The record in this case shows that when a farmer delivered seed to the appellee and desired cotton seed meal in exchange therefor that the appellee treated such seed as his own, put them in his own seed house and commingled them with other seed that he had purchased, shipped and sold them for cash, and when he had sufficient orders for cotton seed meal he ordered a car of meal in his own name and received same in his own name. Under this statement of fact, I do not see how it could be contended otherwise than that the appellee swapped, bartered or exchanged cotton seed meal for cotton seed.

Under the provisions of said act a barter or exchange is taxed the same as a sale, and the ginner was liable in this case for the tax the same as if he had sold the cotton seed for a cash consideration.

It is contended that the appellee makes no profit on said exchange but that he makes the exchange because other ginners in the county do the same thing. It is clear that even though this exchange is made without profit, it is made in order to meet competition. However, the tax levied by said chapter 119 does not depend upon profit. The tax is levied upon gross income or gross proceeds of sale regardless of whether or not a profit is made.

Hugh N. Clayton, of New Albany, for appellee.

Privilege tax laws are liberally construed in favor of the citizen sought to be taxed.

Wilby v. State, 93 Miss. 767, 47 So. 465, 23 L.R.A. (N.S.) 677; Bd. of Levee Comrs., Yazoo Miss. Delta v. Howze Mercantile Co., 149 Miss. 843, 116 So. 92; Gully v. Jackson International Co., 165 Miss. 103, 145 So. 905; State ex rel. Rice v. Louisiana Oil Corp., 174 Miss. 585, 165 So. 423.

The liberal construction of tax laws even protects an unlawful business from doubtful assessments.

Scott v. Hossley, 142 Miss. 611, 107 So. 760.

Laws imposing taxes are not to be construed beyond natural import of the language and to impose burdens upon doubtful interpretations.

State v. Grenada Cotton Compress Co., 123 Miss. 191, 85 So. 137; Sperry & Hutchinson Co. v. Harbison, 123 Miss. 674, 86 So. 455.

In construing statutes, the court should ascertain and enforce the intent of the Legislature.

Sartin v. Prentiss County, 156 Miss. 46, 125 So. 563.

In construing a statute the consequences of a particular construction should be considered, whether they be good or bad.

Robertson v. Texas Oil Co., 141 Miss. 356, 106 So. 449; Ziegler v. Ziegler, 174 Miss. 302, 164 So. 768.

In construing a statute, the court will assume the Legislature employed the words of the statute in their usual and most common sense.

State v. J. J. Newman Lbr. Co., 103 Miss. 263, 60 So. 215.

Unless letter and context of law otherwise require, statutes must be so construed that their operation will be consistent and practical.

Miers v. Miers, 160 Miss. 746, 133 So. 133.

In construing a statute, not only the language but the purpose and policy the Legislature had in view must be considered.

Smith v. Chickasaw County, 156 Miss. 171, 125 So. 96.

The definition of the word "sale" is found in section 1 of chapter 119 in these words "the term 'sale' or 'sales' includes the barter or exchange of properties as well as the sale thereof for money, every closed transaction constituting a sale."

It is my position that the appellee is not engaged in "barter" or "exchange" within the meaning of the above definition and that he acts as a medium of exchange and agent for the particular farmer whose cotton seed he receives and to whom he delivers subsequently cotton seed meal. There is no question but that he does not make a profit out of the transaction or that the custom of taking cotton seed by ginners and subsequently delivering cotton seed meal is universal in Union County.

The custom or system does not work to the advantage of any particular ginner in the county since every ginner follows the custom or system. Since they do not make any profit in these transactions, the farmers and the cotton oil mills are the only two groups of individuals who profit by the transaction. I realize that a just claim for the payment of sales tax cannot be defeated solely on the ground that the person against whom the claim is propounded has made no profit but I mention the lack of profit in the appellee to show that he is acting for and on behalf of the farmers who have previously deposited cotton seed with him.

It is alleged and it is the position of the appellee that he was merely a medium of exchange between the farmer and the cotton oil mills and that he acted as agent for the farmers in making the exchange of seed for meal. The fact that he might have owned certain cotton seed in a particular box car load wherein were cotton seed of the farmers, does not alter the situation in any particular. He only ordered, and this is not denied, such cotton seed meal from the mill as was necessary to deliver to farmers for cotton seed previously deposited for meal. Since this fact is true I cannot see that the situation is changed in any particular because he happened to buy some cotton seed for cash which he sold for cash. Those transactions are not connected with the transactions where he receives seed for meal.

It is the position of the appellee that this is a system devised and originated by the county agent for the sole use and benefit of the farmers of Union County; that, applying all the rules of statutory construction listed in this brief, no taxes should be required of him and he should recover the amount paid the appellant; that the Legislature did not intend to tax him for his actions in this particular and that it is against the public policy of the Legislature that such actions as he has done should be penalized and taxed; that he has made no profit from the transactions and that his services to the farmers have not increased the patronage of his gin because every other ginner in the county follows the same system; that the collection of tax was not proper and that the judgment of the lower court should be affirmed with interest thereon from the date of said payment to the appellant to the present time.

Argued orally by J. A. Lauderdale, for appellant, and by Hugh N. Clayton, for appellee.

OPINION

McGowen, J.

Under the provisions of chapter 119, Laws of 1934, and acts amendatory, the appellant demanded certain taxes from the appellee. Rogers paid said taxes under protest, and filed his suit at law to recover said taxes.

The cause was tried on the declaration, plea and agreed statement of facts by the Circuit Judge, who found that Rogers was not liable for the taxes assessed and collected, and entered judgment for the amount thereof in favor of appellee against the appellant, from which judgment this appeal is taken.

"It is further agreed that the facts are as follows:

"That the facts alleged in the declaration are true and correct as stated therein except in so far as they may be in conflict with facts hereinafter stated.

"That when a farmer had his cotton ginned by the plaintiff and wished to exchange the cottonseed for cottonseed meal, the plaintiff would have this farmer's cottonseed blown into a same seed house owned by plaintiff and he would give the farmer a ticket on which was indicated the amount of seed so received and its value; that the farmer to whom said ticket was issued then had the right to receive cash to the amount stated therein, or subsequent thereto, had the right to receive therefor cottonseed meal of the same value as the value of the cottonseed stated therein, or cottonseed to the amount stated therein, if there was no cottonseed meal available at that time; that the plaintiff also bought cottonseed from farmers and that he had the cottonseed which he bought outright blown into the same common seed house that, when he had received a sufficient amount of...