Trump, Inc. v. Sapp Bros. Ford Center, Inc.

• Decision Date: 19 March 1982
• Docket Number: No. 43697,43697
• Citation: Trump, Inc. v. Sapp Bros. Ford Center, Inc., 317 N.W.2d 372, 210 Neb. 824 (Neb. 1982)
• Parties: TRUMP, INC., a Nebraska corporation, Appellee, v. SAPP BROS. FORD CENTER, INC., Appellant.
• Court: Nebraska Supreme Court

Page 372

317 N.W.2d 372

210 Neb. 824

TRUMP, INC., a Nebraska corporation, Appellee, v. SAPP BROS. FORD CENTER, INC., Appellant.

No. 43697.

Supreme Court of Nebraska.

March 19, 1982.

Syllabus by the Court

1. Equity: Accounting. Generally, in order to be entitled to the equitable remedy of accounting, it is necessary to show a fiduciary or trust relationship between the parties, or a complicated series of accounts, making the remedy at law inadequate.

2. Equity: Jurisdiction. Where a party, having the right to object, voluntarily submits to the jurisdiction of a court of equity, the cause will be retained for trial on its merits and the proper relief awarded.

3. Equity: Jurisdiction. Where the proof fails to establish a right to equitable relief, the court will retain jurisdiction for the purpose of administering complete relief between the parties with respect to the subject matter.

4. Pleadings: Trial: Appeal and Error. The issues as framed in the trial court and upon which the cause was tried, are binding upon the parties in the case on appeal to this court.

Theodore L. Kessner of Crosby, Guenzel, Davis, Kessner & Kuester, Lincoln, for appellant.

R. David Garber of Garber & Batt, Omaha, for appellee.

Heard before KRIVOSHA, C. J., and BOSLAUGH, McCOWN, CLINTON, WHITE, and HASTINGS, JJ.

HASTINGS, Justice.

The defendant, Sapp Bros. Ford Center, Inc., has appealed from a money judgment rendered by the District Court in an accounting action brought by the plaintiff, Trump, Inc. Sapp's assignments of error are in general terms, but essentially it argues that the equitable remedy of accounting was not proper under the facts of the case and that the evidence failed to support the findings of the trial court of the existence of a binding agreement between the parties.

Trump manufactures an aircraft deicer which is used solely at airports to wash snow and ice off the wings of aircraft before takeoff. The deicer is constructed and mounted upon a Ford C-800 truck chassis which since about 1974 has been purchased from Sapp. The agreement made between the two parties was that Trump would pay Sapp for the trucks on the basis of $400 over factory invoice price. Each truck would be ordered to specifications and Trump would be given an approximate price over the telephone. The federal excise tax was included in the basic invoice price of the truck.

Sometime in 1977 it was learned that effective January 13, 1977, the Internal Revenue Code exempted from the excise tax the sale of vehicles for off-highway uses. In order for the manufacturer, in this case the Ford Motor Company, to obtain a rebate of the tax previously paid, it was necessary for it to prove to the federal government that it had not included the tax in the price charged for the truck, or had repaid the tax to the ultimate consumer or had obtained the written consent of the ultimate consumer to the allowance of the credit or the making of the refund. 26 U.S.C. § 6416(a)(1)(A), (B), (C) (1976). According to Rothman v. District Director of Int. Rev. Serv. of U. S., 483 F.2d 1079, 1080-81 (9th Cir. 1973), "The enactment of § 6416(a) was directed toward the prevention of any unjust enrichment flowing to a taxpayer who has collected excise taxes for the government, but has at the same time passed the economic burden of the taxes on to his customers in the form of higher prices. In order for the taxpayer to qualify for a refund of an illegally collected excise tax, he must provide the government with written authority from the person or consumer who actually paid the tax."

It was discovered that the vehicles purchased by Trump qualified for this rebate. Following an inquiry, Sapp informed Trump that it would get in touch with the Ford division office about applying for refunds on those purchases. This led to the filling out of the applications which included Trump's consent to the granting of the rebate to Ford. After several calls by Trump to Sapp inquiring about the rebates, and a direct inquiry by Trump with the Ford Motor Company, it was learned that Sapp had in fact received a refund from Ford some 6 months earlier. Finally, Trump received a check from Sapp in the amount of $8,176.90 representing rebates of taxes on six trucks.

Linda Wostrel, a vice president of Trump, testified she had analyzed all of the purchase orders and invoices furnished to her by Sapp covering the purchase of trucks upon which excise taxes had been refunded. According to her, the total amount of excise taxes that had been rebated to Sapp equaled $37,649.44. Of this amount, $8,176.90 had been refunded to Trump in cash and $10,258 had been applied as a credit in favor of Trump. This left a total of $19,214.54 in excise taxes which had been rebated to Ford and refunded to Sapp, but which had not been passed on to Trump. Actually, the president of Sapp Bros., H. Dean Sapp, did not quarrel too much with that figure.

Walter Thornton-Trump, the president of Trump, Inc., testified that he based his claim for a refund on the rebated excise taxes on "the agreement that we had that the excise tax refund there was due to us." He stated that this agreement was made in late 1977 when Dean Sapp told him that he would help Trump check with the Ford district office to find out what was needed to be done to apply for refunds for Trump. Sapp also admitted that Trump had in fact been refunded excise taxes in the amount of $8,176.90 and that he, Sapp, had acknowledged in writing the receipt of excise tax rebates from Ford Motor Company in the amount of $16,455.66 covering vehicles sold to Trump. This same writing indicated that those rebates would be applied against purchases pending on behalf of Trump. Apparently, $10,258 of that credit is the amount referred to in Linda Wostrel's testimony.

In order to consider Sapp's claim that Trump was not entitled to the equitable...