Mississippi Supreme Court, 1947

Richards Lightman Theatres Corp. v. Stone

Mississippi Supreme Court · Decided February 24, 1947 · McGehee

29 So. 2d 265; 201 Miss. 460; 1947 Miss. LEXIS 406 (Southern Reporter, Second Series)

Counsel

W.E. Gore, of Jackson, and William W. Goodman, C. Rudolph Johnson and Morris L. Strauch, all of Memphis, Tenn., for appellant. The gum counters are not taxable under the act, because the maintenance, operation and sale of merchandise therein do not constitute the principal business in which the appellant is engaged. Texas Co. v. Wheeless, 185 Miss. 799 , 187 So. 880 ; State ex rel. Collins v. Grenada Cotton Compress Co., 123 Miss. 191 , 85 So. 137; Ex parte Taylor, 58 Miss. 478 , 482, 38 Am. Rep. 336; Bluff City R. Co. v. Clarke, 95 Miss. 689 , 49 So. 177; Stone v. Rogers, 186 Miss. 53 , 189 So. 810 ; Penny Stores v. Mitchell, 59 F.2d 789 , appeal dismissed 287 U.S. 672 , 53 S.Ct. 122, 77 L.Ed. 580; Code of 1942, Secs. 9300-9311; Laws of 1930, Ch. 90, Art. 1, Sec. 2(c); Laws of 1932, Ch. 90, Sec. 22; Laws of 1934, Ch. 119; Laws of 1936, Ch. 157; Laws of 1938, Ch. 55; Laws of 1940, Ch. 121; Funk Wagnall's New Standard Dictionary of the English Language, 1927, word "principal." No penalty should have been collected. Craig v. Stone, 194 Miss. 767 , 11 So.2d 433 ; Craig v. Southern Natural Gas Co., 193 Miss. 76 , 8 So.2d 230 ; State ex rel. Greaves v. Henry, 87 Miss. 125 , 40 So. 152, 5 L.R.A. (N.S.) 340; Code of 1942, Secs. 9305, 9306. Collection without an assessment deprived the corporation of its property without due process of law. Smith v. Board of Sup'rs of Tallahatchie County, 124 Miss. 36 , 86 So. 707; Bridges v. Board of Sup'rs of Clay County, 58 Miss. 817 ; McPherson v. Richards, 134 Miss. 282 , 98 So. 685; Mullins v. Shaw, 77 Miss. 900 , 27 So. 602, 28 So. 958; Gilchrist-Fordney Co. v. Keyes, 113 Miss. 742 , 74 So. 619; Robertson v. First National Bank, 115 Miss. 840 , 76 So. 689; Bolivar County v. Coleman, 71 Miss. 832 , 15 So. 107; Garner v. Webster County, 79 Miss. 565 , 31 So. 210; Henderson Molpus Co. v. Gammill, 149 Miss. 576 , 115 So. 716 ; Gordan v. Smith, 154 Miss. 787 , 122 So. 762 ; Sharp v. Smith, 180 Miss. 887 , 178 So. 595 ; Pettibone v. Wells, 181 Miss. 425 , 179 So. 336 ; Federal Land Bank of New Orleans v. Cox, 183 Miss. 250 , 183 So. 482 ; McDevitt v. Walls (Miss.), 122 So. 766 ; Gulf S.I.R. Co. v. Adams and Yazoo M.V.R. Co. v. Adams, 85 Miss. 772 , 38 So. 348; Simpson v. Ricketts, 185 Miss. 280 , 186 So. 318 ; Craig v. Columbus G.R. Co., 192 Miss. 461 , 5 So.2d 681 ; Craig v. Southern Natural Gas Co., supra; Craig v. Stone, supra; Craig v. Gulf, M. O.R. Co., 196 Miss. 172 , 16 So.2d 760 ; Enochs v. State, 128 Miss. 361 , 91 So. 20; Code of 1930, Sec. 211; Code of 1942, Secs. 2886, 9216, 9303, 9304; Laws of 1934, Ch. 158, Sec. 1; Laws of 1935, Ex. Sess., Ch. 20, Secs. 180, 182, Ch. 120, as amended by Laws of 1936, Ch. 154; Constitution of 1890, Sec. 14; United States Constitution, 14th Amendment. J.H. Sumrall, of Jackson, for appellee. The so-called "gum counters" were "stores" engaged "principally," and in fact exclusively, in selling merchandise at retail. Said stores admittedly were owned, controlled and operated by "one management or association of ultimate management," and therefore constituted such stores as contemplated by the law under consideration. The nature of the tax is such that nothing is required of the collector of such tax but to issue the license on the basis of tax tendered, as reflected by the applicant for the license. Any demand for the tax in the first instance, or for additional tax where the proper amount is not paid, being necessary only when it is discovered that no tax has been paid, or misrepresentation in the application made. And certainly no duty is imposed on the collector to make a formal order or finding of facts. When the taxes are not paid when due, then the mandatory duty rests upon the collector to collect the penalty which is positively imposed by the provisions of the law under which the penalty was collected. All of these three questions were decided by the lower court affirmatively, and I therefore respectfully submit that the judgment of the lower court was correct, and should be affirmed. Craig v. Gulf, M. O.R. Co., 196 Miss. 172 , 16 So.2d 760 ; Laws of 1936, Ch. 157; Laws of 1938, Ex. Sess., Ch. 55; Laws of 1940, Ch. 121. Green Green, of Jackson, and Rosen, Kammer, Wolff, Hopkins Burke, of New Orleans, La., amici curiae. If a "gum counter" be a chain store within Chapter 121, Laws of 1940, then thereby the 14th Amendment is violated and said statute void. Mississippi State Tax Commission v. Brown, 188 Miss. 483 , 193 So. 794 , 195 So. 465, 127 A.L.R. 919; Prudential Ins. Co. v. Barnett, 200 Miss. 233 , 27 So.2d 60 ; Johnston v. Jackson Oil Refining Co., 108 Miss. 416 , 66 So. 777, 778; Kennington v. Hemingway, 101 Miss. 259 , 267, 57 So. 809; Zeigler v. Zeigler, 174 Miss. 302 , 164 So. 768 , 770; Huckabee v. Nash, 182 Miss. 754 , 183 So. 500 , 502; Reeves v. Adam Hat Stores, Inc., 15 L.W. 2343; Great A. P. Tea Co. v. Kentucky Tax Commission, 278 Ky. 367 , 6 L.W. 1099; Penny Stores v. Mitchell, 59 F.2d 789 , 85 A.L.R. 737, 284 U.S. 576 , 76 L.Ed. 500, 287 U.S. 67 , 77 L.Ed. 580; State Board of Tax Commissioners v. Jackson, 283 U.S. 527 , 75 L.Ed. 1248, 73 A.L.R. 1464; Great A. P. Tea Co. v. Maxwell, 284 U.S. 576 , 76 L.Ed. 500; Liggett Co. v. Lee, 288 U.S. 517 , 77 L.Ed. 929, 83 A.L.R. 699; Great A. P. Tea Co. v. Grosjean, 301 U.S. 412 , 81 L.Ed. 1193; Laws of 1930, Ch. 90; 52 C.J. 1149; Broom's Legal Maxims, p. 159. A privilege tax imposed solely in virtue of ownership contravenes Section 112 of the Constitution of 1890. Thompson v. Kreutzer, 112 Miss. 165 , 72 So. 891; Chicago R.I. P.R. Co. v. Robertson, 122 Miss. 417 , 84 So. 449; Cudahy Packing Co. v. Stovall, 112 Miss. 106 , 72 So. 870; Thompson v. McLeod, 112 Miss. 383 , 73 So. 193; Hancock County v. Imperial Naval Stores Co., 93 Miss. 822 , 47 So. 177; Jones v. Adams, 104 Miss. 397 , 61 So. 420; Barnes v. Jones, 139 Miss. 675 , 103 So. 773 ; Locke v. L.N. Dantzler Lumber Co., 119 Miss. 783 , 81 So. 175; Hattiesburg Grocery Co. v. Robertson, 126 Miss. 34 , 88 So. 4; State ex rel. Knox v. Gulf, M. N.R. Co., 138 Miss. 70 , 104 So. 689; City of Jackson v. Deposit Guaranty Bank Trust Co., 160 Miss. 752 , 133 So. 195 ; Southern Package Corporation v. State Tax Commission, 174 Miss. 212 , 164 So. 45 ; Stone v. General Contract Purchase Corporation, 193 Miss. 301 , 7 So.2d 806 ; Gulf Refining Co. v. Stone, 197 Miss. 713 , 21 So.2d 19 . A "gum counter" is not a chain store within the purview of Chapter 121, Laws of 1940. Mississippi State Tax Commission v. Brown, supra; Lewis v. Simpson, 176 Miss. 123 , 167 So. 780 ; Gully v. Jackson International Co., 165 Miss. 103 , 145 So. 905 ; Mathison v. Brister, 166 Miss. 67 , 145 So. 358 ; Orrell v. Bay Mfg. Co., 83 Miss. 800 , 36 So. 561; Folkes v. State, 63 Miss. 81 ; State ex rel. Knox v. Union Tank Car Co., 151 Miss. 797 , 119 So. 310 ; Pan-American Petroleum Corporation v. Miller, 154 Miss. 565 , 122 So. 393 , 395; Thompson v. Craig, 196 Miss. 465 , 17 So.2d 439 , 441; Kennington v. Hemingway, 101 Miss. 259 , 268, 57 So. 809; State Teachers' College v. Morris, 165 Miss. 758 , 144 So. 374 , 377; Gandy v. Public Service Corporation of Mississippi, 163 Miss. 187 , 140 So. 687 ; Hanna v. Ford, 189 Miss. 464 , 198 So. 37 ; Mississippi Cottonseed Products v. Stone,, 52 L.Ed. 714; 37 A.L.R. 942-978; 2 L.R.A. 609; 59 C.J. 1036, Sec. 1613; 84 L.Ed. 21-51, Annotation. This statute can impose a liability only when and after that specifically rendered essential by the statute has been done. Herein, in order to impose a tax, it is essential that there precedently should have been an assessment thereof. Otherwise, no right to collect exists. Yazoo M.V.R. Co. v. Adams, 83 Miss. 306 , 36 So. 144; Stone v. Yazoo M.V.R. Co., 62 Miss. 607 , 116 U.S. 347 , 29 L.Ed. 650; Mississippi Railroad Commission v. Gulf S.I.R. Co., 78 Miss. 750 , 29 So. 789; Briscoe v. Buzbee, 163 Miss. 574 , 143 So. 887; Gulf S.I.R. Co. v. Adams, 85 Miss. 772 -779, 38 So. 348. Argued orally by W.E. Gore and Garner Green, for appellant, and by J.H. Sumrall, for appellee.

Opinion of the Court

McGehee, J.,

delivered the opinion of the court.

There was levied and collected a chain-store tax of approximately $2,000.00, including penalties, under the provisions of Chapter 121, Laws of 1940, Sections 9300 *466 to 9311, inclusive, Code 1942, upon the theory that the taxpayer, Richards Lightman Theatres Corporation, was engaged in operating chain stores in connection with three or more theatres owned and conducted by the said ■corporation in this State. This suit is brought for the recovery of the said tax and penalties which were not required to have been paid under protest as a condition precedent to the recovery thereof, and a judgment was rendered by the trial court, whereby the relief prayed for was denied.

The proof discloses that the "stores” operated by the theatre corporation were maintained within the lobby of each theatre, where they were accessible only to those who had first purchased tickets, and that chewing gum, candy bars, popcorn, etc., were there sold to its patrons; that this merchandise is purchased from local wholesale stores, not owned by this taxpayer, instead of being distributed from a central warehouse; and that, therefore, there is not present in the operation of these "gum counters” the advantages of mass buying and the other factors and advantages availed of by the ordinary chain stores.

The title of Chapter 121, Laws of 1940, recites that the Act is one to levy and impose a tax upon the privilege of operating three or more stores or mercantile establishments, one or more of which is located in this State, and to classify such stores for the purpose of taxation, and "to declare the public policy on which this act is founded; . . .”

Section 1 of the Act clearly discloses that the foundation of the tax is the fact that ‘ ‘ due to the greater specialization in management and methods, the advantages of mass buying,” etc., stores operated in multiple units enjoy an advantage over individually owned and operated single stores to such an extent as to justify their separate classification for the purpose of privilege taxation.

In the case of Kennington v. Hemingway, 101 Miss. 259, 267, 57 So. 809, 811, 39 L. R. A. (N. S.) 541, Ann. Cas. *467 1914B, 392, the Court said: “ . . . One of the maxims of the common law, therefore, is ‘verba intentioni debent inservire.’ (Words are to be governed by the intention.) As was said by this court in Board of Education v. [Mobile & O.] Railroad Co., supra [72 Miss. 236, 16 So. 489]: ‘It is familiar learning that, in the construction of statutes, courts chiefly desire to reach and know the real intention of the framers of the law, and, reaching and knowing it, then to adopt that interpretation which will meet the real meaning of the Legislature, though such interpretation may he beyond or within, wider or narrower than, the mere letter of the enactment. ’ ’ ’

We are of the opinion that the tax levied and collected in the instant case is not within the intent and meaning of the Act in question, and that, therefore, the appellant was entitled to recover the amount of the taxes and penalties paid by it to the appellee as a chain-store tax, together with interest thereon as provided for by the Act in question, and that the judgment of the trial court denying the said relief should he reversed.

In view of the above stated conclusion, we pretermit any expression of opinion on the additional grounds upon which the appellant relies for a reversal.

Reversed and judgment here for appellant.

Case-law data current through December 31, 2025. Source: CourtListener bulk data.