Gully v. C.I.T. Corporation

150 So. 367, 168 Miss. 268, 1933 Miss. LEXIS 171
CourtMississippi Supreme Court
DecidedOctober 23, 1933
DocketNo. 30644.
StatusPublished
Cited by5 cases

This text of 150 So. 367 (Gully v. C.I.T. Corporation) is published on Counsel Stack Legal Research, covering Mississippi Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gully v. C.I.T. Corporation, 150 So. 367, 168 Miss. 268, 1933 Miss. LEXIS 171 (Mich. 1933).

Opinion

Cook, J.,

delivered the opinion of the court.

This is an appeal by J. B. Gully, state tax collector, from adverse judgments of the circuit court of Harrison *273 county in three cases which involved essentially the same facts, and were consolidated by agreement of the parties. One of the cases was an appeal by the appellee, O. I. T. Corporation, from a back tax assessment by the municipal authorities of the city of Gulfport, Mississippi, of solvent 'credits of said corporation, evidencing money loaned at a greater rate of interest than six per cent, per annum for the years 1929, 1930, and 1931. Another of the cases was an appeal from a like assessment of the same solvent credits made by the board of supervisors of Harrison county, while by the third suit it was sought to collect from the said C. I. T. Corporation privilege taxes and damages for the period from June 1, 19301, to June 1, 1932, amounting to one thousand two hundred dollars.

The facts necessary to be stated are substantially as follows: The C. I. T. Corporation is a foreign corporation, with offices in New York, Chicago, and various other cities throughout the business world, which was qualified and admitted to do business in the state of Mississippi. It is engaged in two classes of business which are separate and distinct in the plan used; one called the direct plan, and the other the indirect plan. Under what is denominated the direct plan, they are engaged in the purchase of notes and conditional sale contracts securing the purchase price of automobiles. In the transaction of this class of business the said corporation purchases outright notes and contracts evidencing and securing the purchase price of automobiles, and collects the same directly from the purchaser; and for this purpose only it maintains an office in Jackson, Mississippi, and pays a privilege tax for so doing business in said city and the county of Hinds. Under the indirect plan, this corporation was engaged in lending money secured by assigned conditional sale contracts of personal property, principally furniture; the borrower being at all times required to place and keep with the lending corporation collateral amounting to at least one and one-half times the amount of the outstanding loan.

*274 Iii February, 1928*, the Gulfport Furniture Company, of Gulfport, Mississippi, received a circular letter, sent from the New York office of tlie appellee corporation, outlining its plan of lending money on furniture contracts, and, after tbe exchange of correspondence, and the furnishing of a financial statement by the Gulfport Furniture Company, the appellee, at the request of the furniture company, sent a traveling auditor to Gulfport to examine into the financial condition of the Gulfport Furniture Company, and the class of paper acquired by it in selling its furniture to installment buyers. Upon the report and approval of its auditor, a loan of forty-three thousand five hundred dollars was consummated upon approval by the appellee’s New York office, and a check for the proceeds of the loan was drawn by the appellee corporation on a New York bank and forwarded to the Gulfport Furniture Company. The note which was executed for this loan was payable at the office of appellee in New York, and was kept there, together with attached sheets listing and describing tlie collateral securing the note, and the collateral itself, consisting of conditional sales contracts executed by purchasers} of furniture from the Gulfport Furniture Company. From time to time payments were made on the original loans, and other similar loans were made; and some of the notes evidencing these loans contained the following provision: “So long as the holder permits, we will as agents for the holder collect the sums due on said collateral in trust for the holder and agree not to mingle the same with our funds and to remit to the holder on the installment dates set out in the note the portion thereof equal to the respective installments or such further portion as the holder may demand plus all anticipated collections on collateral, and such remittances shall be credited toward the payment of the respective installments. Repossessed merchandise shall be set aside in trust for the holder. ’ ’

Until about January, 1932, the Gulfport Furniture *275 Company acted as collecting agent for tlie appellee, and collected the assigned collateral, and made monthly remittances of its collections for credits on its loans from appellee. But the testimony is undisputed that the above-quoted provision of the notes, that these collections should be made in trust for the holder and should not be mingled with tlie funds of the Gulfport Furniture Company, was not enforced, but was wholly disregarded. From time to time the appellee sent its auditors to Gulfport to check the collections and remittances, which were made monthly-

About January, 1932, the Gulfport Furniture Company became financially embarrassed, and was adjudicated a bankrupt. Thereupon, tlie appellee opened an office in Gulfport in charge of a representative, for the sole purpose of collecting the outstanding furniture installment contracts held by it, for application upon and discharge of the balance due on loans previously made by it to the bankrupt furniture company. Included in the solvent credits attempted to be assessed was also a small loan made to the Norwood Furniture Company, of Biloxi, Mississippi, which was handled in substantially the same manner as the Gulfport transaction. The testimony is to the effect that all collections made on collateral securing these loans were promptly remitted to the New York or Chicago offices of appellee, and were not reinvested in this state.

The first question presented is whether or not the loans made to the Gulfport Furniture Company and the notes evidencing the same had such a business situs in Harrison county, Mississippi, as to subject them to taxatioiL. In opening their discussion of this question, counsel for appellant state that the court below based its decision on the case of City of Vicksburg v. Armour Packing Company (Miss.), 24 So. 224 ; and they frankly conceded that if that case has not been overruled, and is to be followed, the case at bar should be affirmed. This statement, that *276 the judgment of the court below must be affirmed if the case of City of Vicksburg v. Armour Packing Company, supra, is followed, is undoubtedly correct so far as the attempted assessment of solvent credits is concerned. We do not understand counsel to contend that the case of City of Vicksburg v. Armour Packing Company has been expressly overruled, but their contention seems to be that changes in the statute giving the state the right to assess solvent credits for taxes, together with the trend of later decisions construing and applying the statute, have rendered that decision inapplicable.

Section 3757, Code 1892, was the statute providing for the taxation of solvent credits at the time the case of City of Vicksburg v. Armour Packing Company, supra, was decided, while sections 3137 and 3108(v), Code 1930, are the present statutes providing for the assessment of such credits, including money loaned at' a greater rate of interest than six per cent, per annum.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Mississippi St Tax v. Lambert
179 F.3d 280 (Fifth Circuit, 1999)
Lambert v. Mississippi State Tax Commission
179 F.3d 281 (Fifth Circuit, 1999)
Brady v. John Hancock Mut. Life Ins. Co.
342 So. 2d 295 (Mississippi Supreme Court, 1977)
Kopp v. Baird
313 P.2d 319 (Idaho Supreme Court, 1957)

Cite This Page — Counsel Stack

Bluebook (online)
150 So. 367, 168 Miss. 268, 1933 Miss. LEXIS 171, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gully-v-cit-corporation-miss-1933.