author: STEPHENSON, Justice.

text:
    COMMONWEALTH of Kentucky, Appellant, v. Jane DOE, aka "Bear", Appellee.
    Court of Appeals of Kentucky.
    June 6, 1975.
    Ed W. Hancock, Atty. Gen., Patrick B. Kimberlin, III, Asst. Atty. Gen., Frankfort, for appellant.
    Andrew B. Dennison, Cincinnati, Ohio, Richard R. Slukich, Covington, for appellee.
   STEPHENSON, Justice.

A Kenton County grand jury returned an indictment against Douglas Sweeney and Jane Doe, also known as “Bear.” The indictment charged the defendants with the offense of trafficking in controlled substances, KRS 218A.140(1).

The appellee, Betty Jo Stewart, subsequently appeared before the trial court and moved to dismiss the indictment upon the ground that the caption of the indictment “Jane Doe, aka ‘Bear,’ ” was legally insufficient to identify appellee as the person charged. The Commonwealth moved to amend the indictment pursuant to RCr 6.16 to substitute the name Betty Jo Stewart for that of Jane Doe, aka “Bear.”

The trial court overruled the motion to amend and sustained appellee’s motion to dismiss the indictment. The Commonwealth appeals; we reverse.

We are of the opinion that Jane Doe, aka “Bear,” is legally sufficient to identify a person charged in an indictment. The indictment charges the person with the offense; the name identifies the person. “. . . [I]t is well established in the law that a person may be indicted by other than his true name, so long as he is commonly known by the name used in the charge preferred against him.” Dunn v. Commonwealth Ky., 350 S.W.2d 709, 711 (1961).

We do not agree with appellee’s contention that Jane Doe, aka “Bear,” is completely anonymous. Use of Jane Doe alone would be, however, we are not persuaded that “Bear” is not a name that sufficiently describes a person. We do not know of any reason why the Commonwealth could not proceed to trial against “Bear.” It has only to show that “Bear” is the person charged in the indictment. The purpose of requiring the name of the defendant is for identification. It is significant that during the trial of a criminal case, a witness will point out the defendant as a person in making an identification and not just state the name of the defendant.

RCr 6.16 provides that “[t]he court may permit an indictment or information to be amended any time before verdict or finding if no additional or different offense was charged and if substantial rights of the defendant are not prejudiced.”

The provisions of the Criminal Code, § 125, which provided for amendment of indictment if error is discovered as to the true name of the defendant, cited in Dunn, supra, are certainly incorporated by inference in RCr 6.16. We hold that the amendment of an indictment to correct error in the name of the person charged is a matter of form and not of substance.

If the appellee is commonly known as “Bear,” we cannot see how her substantial rights would be prejudiced by amendment to show her true name. The appellee challenges the indictment solely on the ground that her substantial rights were violated by insufficient specificity in the name on the indictment. She did not state to the trial court that she had never been known by the name under which she was indicted. From this we infer an admission of being commonly known by the name “Bear.” Dunn, supra.

The trial court is directed to set aside the order dismissing the indictment, to permit the Commonwealth to amend, and to dispose of the case by trial.

All concur.

      . Although it is not shown in the record, we assume from argument that this appearance resulted from the service of a bench warrant.


source: Caselaw Access Project

author: CULLEN, Commissioner.

license: Public Domain

text:
    SISTERS OF DIVINE PROVIDENCE OF KENTUCKY, INC., et al., Appellants, v. Susanna B. WHALEN, Executrix Under Will of Mary George Peters, Appellee.
    Court of Appeals of Kentucky.
    Oct. 11, 1974.
    As Modified Nov. 14, 1974.

      Benton, Benton, Luedeke & Rhoads, Newport, for appellant, Sisters of Divine Providence of Kentucky, Inc.
    Hays & Hays, Winchester, Robert H. Hays, Lexington, for appellants, James K. Brown, Patricia W. Brown and Sue A. Brown.
    White, McCann & Stewart, Winchester, for appellee.
   CULLEN, Commissioner.

We have an appeal by Sisters of Divine Providence of Kentucky, Inc. (owner and operator of St. Agatha Academy of Winchester, Kentucky), and another appeal by James K. Brown (and his wife) and Sue A. Brown, from a judgment holding that neither of the appealing units was entitled to take any interest under the will of C. B. George, deceased.

The pertinent part of the will is Item 6, which reads as follows :

“Item 6. I also will and devise to my said daughter all of the real estate of which I die the owner, to her, to have and use for and during her natural life, and at her death, to go absolutely and forever to any child, children or descendants she may leave surviving her; but if she should die without leaving any child, children or descendants surviving her, then it is my will that all of my real estate shall go to and vest, share and share alike, in my nieces and nephews. I will after the death of my daughter, that any part or share of my estate going to my niece, Maggie George, shall be held in trust for her support and the support of her two children, until they are twenty-one years of age or until her death, at such time anything of value of this estate belonging to Maggie George, shall be turned into the St. Agatha Academy, Winchester, Kentucky. Should any of my nieces or nephews die before the death of my daughter leaving descendants, then such descendants shall take the share their parents would have taken if living.”

The controversy is as to the devise of the share to Maggie George, for her support for life and the support of her two children to age 21, with remainder to the Academy, which devise was to take effect if the testator’s daughter died without surviving descendants. She did die without surviving decendants, and the problem arises from the fact that Maggie had died, and her children (James and Sue Brown) had reached the age of 21, before the death of the testator’s daughter.

The circuit judge held that the Academy could not take because:

“1) The decedent intended to establish a contingent consuming trust for the primary benefit of Maggie George and her two children, with the residual beneficiary being the Sisters of Divine Providence of Kentucky, Inc. However, the contingencies upon which the trust was to be established did not occur, and therefore the trust never came into existence. Since the trust did not come into existence, no portion of the estate could vest in the residual beneficiary.”

He further held that the Browns could not take because, under the last sentence of Item 6 of the will, which provided that if a niece or nephew died leaving descendants such descendants should take the share their parent would have taken if living, the Browns as Maggie’s descendants could take only the share Maggie would have taken if living, and since that share was only an estate for Maggie’s life, and Maggie was dead, there was nothing for the Browns to take. The judgment awarded the share in question to the other nieces and nephews of the testator (and the descendants of those who had died before the testator’s daughter).

We do not accept the premise upon which the circuit court held that the Academy was not entitled to take. The premise was that if a remainder is provided for, to follow a consuming trust for a life beneficiary, and the trust does not come into existence because of the death of the life beneficiary before the time specified for the trust to commence, the remainder fails. None of the parties on this appeal has undertaken to supply authority for that proposition.

This court has held, with respect to a consuming life estate with a remainder devise, that if the life estate fails by reason of the death of the life tenant before the testator’s death, the remainder does not lapse but is accelerated. Timmons v. Graham, Ky., 312 S.W.2d 357; Settle v. Vercamp, Ky., 485 S.W.2d 251. The mere fact that in the instant case the direction was that the consuming life interest be “held in trust” is not a reason, so far as we are able to determine, why the remainder should not accelerate, rather than lapse, here also. The fact that the trust for life did not come into existence is no reason for lapsing the remainder in fee that was to follow the life trust. We see no reason why the testator would have intended the ultimate devise to the Academy not to take effect unless Maggie and her children first got to enjoy the benefits provided in the will for them.

We hold that the Academy is entitled to take under the remainder devise to it. This holding disposes of the claim of the Browns that they are entitled to take. Their claim had no validity in any event, because it rested on the proposition that the last sentence of Item 6 of the will applied to Maggie’s share. As pointed out by the circuit judge, that sentence could not as a practical matter apply to Maggie’s share because that share was only a beneficial estate for her life. Furthermore, it is plain that the testator did not intend Maggie’s children to take anything under the sentence in question, because in the preceding provisions of the will he made clear his intent that those children were to receive only support to age 21.

To the extent that the judgment denies recovery to the appellants Brown it is affirmed; in all other respects it is reversed with directions to enter judgment in conformity with this opinion.

All concur.


text:
    The COURIER JOURNAL and Louisville Times Company et al., Petitioners, v. Honorable Michael D. McDONALD, Judge, Jefferson Circuit Court, Respondent.
    Court of Appeals of Kentucky.
    Nov. 22, 1974.

      Edgar A. Zingman, Robert C. Ewald, Jon L. Fleischaker, Wyatt, Grafton & Sloss, Louisville, for petitioners.
    Frank E. Haddad, Jr., Louisville, for respondent.
   CULLEN, Commissioner.

We have before us an original proceeding in this court in the form of a petition by The Courier Journal and Louisville Times Company, newspaper publishers, and Frank W. Clifford, one of the company’s reporters who alleges himself to be a citizen and taxpayer of the City of Louisville, against Judge Michael O. McDonald of the Jefferson Circuit Court, seeking an order of mandamus directing the respondent to vacate an order he entered in a wrongful-death suit that had been pending before him. The wrongful-death suit had been brought by the administrator of the estate of a deceased resident of Louisville against two city policemen and the city itself, seeking damages on a claim that the death was caused by negligence or wilful misconduct of the policemen and negligence of the city. The suit was settled out of court, but upon the fact of settlement being brought to the attention of the respondent judge, he entered the following order in the suit:

“IT IS ORDERED that all parties concerned, including the plaintiff and those who will take from the plaintiff, the defendants, Michael F. Duffy, Sr., and Paul W. Nethery, Jr., the defendant, City of Louisville and all agencies thereof and all counsel of record in this case are directed not to discuss the monetary terms of any settlement arrived at in this action with any person unless authorized to do so by the Court.”

The foregoing order is the one that the petitioners herein seek to have vacated.

The petition alleges that the terms of the settlement are a matter of public interest; that the city records concerning the payment of public money in the settlement are public records; that the petitioners have such special interest as entitles them to examine the public records; that the city officials are ready and willing, absent the order here in question, to disclose the facts of the settlement; and that the order denies to the petitioners their constitutional rights in the areas of freedom of the press and freedom of speech.

The response pleads that the order in question was justified to protect the right of privacy of the individual litigants in the wrongful-death suit, and that the petitioners have not shown such a special interest as would entitle them to inspect the city records concerning the settlement.

As will be developed at a later point in this opinion, we think that the order in question has no validity, but for the reasons directly hereinafter stated we are denying the petition for mandamus.

The relief sought is that the Order in the wrongful-death suit be vacated, as void. The petitioners herein were not parties to that suit, so they could not have moved directly in the circuit court to have the order vacated. See CR 60.02; City of Manchester v. Keith, Ky., 396 S.W.2d 44; Mulligan v. First National Bank & Trust Co. of Lexington, Ky., 351 S.W.2d 59; City of St. Matthews v. Roberts, Ky., 490 S.W.2d 750; 46 Am.Jur.2nd, Judgments, sec. 694, p. 845; 49 C.J.S. Judgments § 293b, p. 540. Since they could not have had the order vacated by proceeding directly in the circuit court, obviously they have no standing to ask this court to direct that the order be vacated. The general rule is stated to be that mandamus will not lie to courts or judges at the instance of strangers to the proceedings. See 55 C.J. S. Mandamus, § 49, p. 84.

The petitioners are not precluded from seeking to attack the validity of the order in question collaterally by an appropriate civil action in which the question of whether the order is a valid basis for denial of an inspection of the city records can be placed in issue.

Although, for the reasons stated, we are denying mandamus, it will be expeditious that we state our view that the order in question will not withstand a test of validity. The theory that the order was authorized by way of protection of the litigants’ right of privacy, which is the only theory offered in support of the order, is not well-grounded. The very authorities relied upon by the respondent recognize that the right of privacy does not extend to affairs with which the public has a legitimate concern. See 62 Am.Jur., 2nd, Privacy, sec. 1, p. 683. Certainly the payment of city funds in settlement of a suit against the city and some of its officers, based on negligence or misconduct in the performance of duty, is a matter with which the public has a substantial concern, against which little weight can be accorded to any desire of the plaintiff in that suit to keep secret the amount of money he received.

Actually, there is no assertion that any of the litigants asked that his privacy be protected by such an order as the one in question. The order appears to have been purely gratuitous on the part of the court. The order partakes of the nature of a prior restraint of expression, which “bears heavy presumption against its constitutional validity.” New York Times Co. v. United States, 403 U.S. 713, 91 S.Ct. 2140, 29 L.Ed.2d 822.

We do not reach the question of whether the petitioners herein have such an interest as would entitle them to inspect the city records pertaining to the settlement over objections by the custodians of those records. Cf. City of St. Matthews v. Voice of St. Matthews, Inc., Ky., 519 S.W.2d 811 (this day decided). They allege that the custodians have no objection, aside from the court order.

The petition is denied.

All concur.


author: HARBISON, Justice. HARBISON, Justice.

text:
    PULASKI HIGHWAY EXPRESS, INC., et al., Appellees, v. Winfield DUNN et al., Appellants.
    Supreme Court of Tennessee.
    May 19, 1975.
    Rehearing Denied June 30, 1975.
    Everett H. Falk, Asst. Atty. Gen., Eugene W. Ward, T. E. Midyett, Jr., Nashville, for appellants.
    Richard H. King, Nashville, for appellees.
   OPINION

HARBISON, Justice.

In this case the issue is presented as to whether the Public Service Commission may properly include the value of leased vehicles in making the annual ad valorem tax assessment of motor carriers operating in the state. Only the assessment for the tax year 1972 is involved, because the pertinent statutes were revised in 1973, so as to provide in unmistakable terms that leased vehicles should be considered utility property and should be taxed ad valorem to the lessee of the equipment. T.C.A. §§ 67— 601(7), 67-602(5), 67-901 (1974 Supp.).

Prior to the 1973 legislation, the taxation of motor carriers, particularly that of nonresident irregular route carriers, had had a varied history, involving several amendments to the taxing statutes, and considerable litigation. It is necessary for a decision of the issues presented here to discuss some of this history and some of the cases on the subject.

This case reached the courts by petition for certiorari from the State Board of Equalization. Pursuant to the provisions of T.C.A. § 67 — 901 et seq., the Tennessee Public Service Commission made the ad valo-rem assessment of the distributable properties of the motor carriers involved, for the year 1972. Included in these assessments was the value of equipment which was being leased by the carriers and used as a part of their operations, under certificates of convenience and necessity issued by the Tennessee Public Service Commission or the Interstate Commerce Commission. The State Board of Equalization reviewed the assessments, and made some modifications therein which are not pertinent to the issues involved, and from the revised assessments the motor carriers filed a petition for certiorari to the Chancery Court of Davidson County. The assessments were challenged insofar as they included the value of leased equipment. The chancellor held the assessments illegal and void, concluding that under the pertinent statutes the Public Service Commission did not have authority to include leased vehicles in the ad valorem assessment of the carriers. The Public Service Commission and the Board of Equalization have appealed that decision to this Court.

The record in this case does not contain any depositions or other testimony. The taxpayers relied upon written exceptions which they filed to their assessments before the Public Service Commission, and upon statement of counsel before the Board of Equalization. The Public Service Commission also relied upon unsworn statements of its staff members or statements of counsel, together with written exhibits. No samples of any vehicle leases were filed in evidence, nor is there any testimony supporting many of the factual statements made in the briefs as to the method or manner of leasing involved. At one point in the briefs of the taxpayers, it is stated that all of the leases involved were at arm’s length and for full value. Before the Board of Equalization, however, counsel for the taxpayers stated that many of the carriers had formed their own leasing companies as subsidiaries or affiliated corporations, and that in the case of some of the carriers, all of their operating equipment was leased from such affiliates.

On the part of the Public Service Commission, there are statements in the briefs and statements made before the administrative agencies below concerning past practices of the Commission, and concerning their method of assessing leased equipment so as to insure that double taxation did not occur. Again, however, there is no testimony of any witness supporting any of these allegations or statements, and this Court finds itself unable to review any of the factual assertions made by either side because of the absence of a record supporting the allegations. There are no stipulations of fact contained in the record, and in the absence of either evidence or stipulations, this Court can only review the legal issues presented, together with the few facts which are admitted in the pleadings. Ample opportunity was afforded all parties concerned to offer testimony both before the Public Service Commission and the Board of Equalization, and neither side availed itself of that opportunity.

Under some circumstances the Court might consider statements of counsel, if uncontradicted. In this case, however, even the statements of counsel are conflicting. For example, it is asserted by counsel for the Public Service Commission that at all times prior to 1968 the Commission did include leased properties in its annual assessments. Counsel for the carriers, however, states that at no time prior to 1969 was any such leased property ever so assessed. There is language in at least one reported opinion, to which reference will hereinafter be made, which lends some support to the statement of counsel for the Commission. This Court, of course, has no way of knowing what the practice of the Commission was without testimony being offered, except such as it has been able to glean through independent research in the reported decisions.

For many years prior to the tax year in question, the state statutes had provided that the Public Service Commission (formerly designated as the Railroad and Public Utilities Commission) should assess for taxation for state, county and municipal purposes “all of the properties of every description, tangible and intangible, within the state, belonging to the following named persons, hereinafter referred to as companies . . .” Williams Tenn.Code Ann. § 1508; T.C.A. § 67 — 901 (prior to the 1973 revision).

Much emphasis is placed in the present case upon the phrase “belonging to” which was found in the previous statutes. In the 1973 revision, this phrase was deleted, and the section now refers to all of such properties “owned by and all personal property used and/or leased by” the various companies listed therein.

It is insisted on behalf of appellees that the phrase “belonging to” meant only property owned outright by the utility companies referred to in the previous statutes. Certainly the phrase “belonging to” may mean absolute ownership, but it also may mean a property right or interest less than absolute title. For example, it certainly would include properties held by the vendee under a conditional sales contract, or property possessed by a mortgagor on which there was an outstanding chattel mortgage. In the opinion of this Court, it could also include leased property as well as owned property. The phrase has been construed in other states in a number of contexts, and in many cases it has been held that property may “belong to” an entity which has less than full title.

For example in the case of Baltimore Dry Docks & Ship Bldg. Company v. N. Y. & P. R. S. S. Co., 262 F. 485 (4th Cir. 1919), a ship was held to “belong to” the United States Government, even though the government simply held the ship under a charter arrangement and was not the owner thereof. Likewise, in the case of Board of Supervisors of Wythe County v. Medical Group Foundation, Inc., 204 Va. 807, 134 S.E.2d 258 (1964), property was held to “belong to” a charitable corporation for purposes of a tax exemption, even though the corporation only leased the land and buildings involved.

We do not, therefore, consider that the phrase “belonging to” in the previous versions of the statutes to be conclusive or dispositive of the issue presented here.

The statutes above referred to listed various kinds of utility companies which were subject to assessment by the Commission, and prior to 1957, subsection 12 simply described motor carriers subject to such assessments as:

“motor bus and/or truck”.

The Commission asserts that prior to 1957, it had always included leased equipment in the assessment of truck and bus lines, but, as previously pointed out, there is no evidence of this, and the assertion seems to be disputed by counsel for the motor carriers presently involved.

In all events, in 1957 subsection 12 of the assessment statute was rewritten, and by Chapter 191 of the Public Acts of 1957 the subsection was amended to read as follows:

“Motor bus and/or truck companies, which shall be deemed to include every motor carrier operating within, into and/or through the State of Tennessee, under and by virtue of any certificate of convenience and necessity, permit or other operating authority, granted by the Tennessee Public Service Commission under provisions of Title 65, Chapter 15, Tennessee Code Annotated . . . ”

Several suits were instituted challenging the constitutionality of this amendment by irregular route, nonresident motor carriers operating in the state, whose property had not theretofore been subjected to ad valo-rem taxation. The constitutionality of the 1957 amendment was upheld in the following cases: Howard Sober, Inc. v. Clement, 52 Tenn.App. 115, 372 S.W.2d 202 (1960); Jack Cole Company v. Ellington, 52 Tenn. App. 120, 372 S.W.2d 204 (1961), and E & L Transportation Company v. Ellington, 212 Tenn. 671, 371 S.W.2d 456 (1963).

In the case last cited, this Court discussed the contention of the motor carriers before it. The Court said:

“They say they are foreign corporations engaged in business as irregular route motor carriers having no tangible property at any fixed location or locations within Tennessee. The only properties which they have in this State at any time are owned or leased trucks operating into and through Tennessee in interstate commerce over irregular routes on a nonsche-dule basis to the extent that demands for their services require and they are, therefore, exempt from the taxes assessed.” 212 Tenn. at 673, 371 S.W.2d at 457. (Emphasis added.)

An examination of the complaint and of the briefs filed in that case reveals that leased equipment was included in the assessments then under consideration. The authority of the Commission to assess it was expressly challenged. Although the point was not separately discussed by the Court, the entire assessments were sustained. The Court held, as the Court of Appeals had held in the two cases cited above, that the provisions of the 1957 statute were constitutional, and that they did authorize the taxation ad valorem in Tennessee of properties of such nonresident motor carriers, even though the particular units or properties involved might be in the state only at irregular intervals.

In the case before the Supreme Court, in addition to reiterating their contentions which had been made in the Court of Appeals, the carriers also insisted that the imposition of the tax upon property of irregular route carriers amounted to double taxation. Since this contention is vigorously made in the case presently before us, it should be noted that in the E & L Transportation Company case, supra, the Tennessee Supreme Court rejected the contention. The Court pointed out that double taxation itself is not proscribed by the Tennessee Constitution in the first place, but the Court found that in fact there was no double taxation on the properties in question under the procedures used by the Public Service Commission at the time of the 1963 decision. 212 Tenn. at 675-678, 371 S.W.2d 456.

There has been offered no evidence whatever in the record before us that the 1972 assessment has resulted in double taxation of any properties. While we do not think that the legislature intended that double taxation should occur, nevertheless this Court cannot presume that such has occurred in the absence of some testimony or other evidence to that effect.

Following the 1957 amendment to the statutes, which amendment was upheld by the courts as pointed out above, the Public Service Commission apparently continued to tax ad valorem the distributable properties of irregular route carriers until 1968. By Chapter 459 of the Public Acts of 1968, subsection 12 was again rewritten, the previous language being deleted and the following substituted therefor:

“Motor bus and/or truck companies, domiciled in this State and/or owning real or personal property located in this State.”

Litigation was instituted to determine the meaning and effect of this amendment in the Chancery Court at Nashville, and this litigation reached the Court of Appeals, Middle Section, which rendered an unreported decision in the case of Atkins, et al. v. Alterman Transport Lines, Inc., et ah, on August 29, 1969. This suit had originated as a declaratory judgment action, and the chancellor had held that the 1968 amendment to the taxing statutes was constitutional, and that it governed the assessment of motor carriers for the taxable year 1968. The chancellor further held that “There is no provision under Chapter 459 for the assessment of ad valorem taxes by the Tennessee Public Service Commission to the lessee of property leased to and operated by motor carriers.”

The Court of Appeals affirmed the decision of the chancellor as to the constitutionality of the statute, and as to its governing the assessment for the tax year 1968. The court held that under the amended statute, nonresident irregular motor route carriers were no longer subject to ad valorem taxation in Tennessee unless they owned property in the state.

In its opinion, the Court of Appeals stated that pursuant to T.C.A. §§ 65-1519 and 59-436, the Commissioner of Revenue of Tennessee had entered into certain reciprocal agreements with other states with regard to the inspection and supervision of interstate vehicles. The court stated that Tennessee “was the only one of these States that required payment of ad valorem taxes, and the payment of such taxes was required under the provisions of Chapter 191, of the Public Acts of 1957.” Because of the Tennessee ad valorem taxation, the State of Florida, in 1967, had notified all Tennessee registered carriers that they would be liable for certain Florida taxes. It was against this background, according to the opinion of the Court of Appeals, that Chapter 459 of the Public Acts of 1968 was adopted, so as to repeal the 1957 statute authorizing the imposition of ad valorem taxes upon these irregular route carriers.

There was no assignment of error to the Court of Appeals with respect to the portion of the chancellor’s opinion dealing with leased equipment, and, therefore, the Court of Appeals did not discuss that issue.

In its opinion the Court of Appeals said:

“The situation which was created when the Governor signed Chapter 459 into law simply changed the status of the property of nonresident carriers, situated outside of the State from property subject to ad valorem tax back to exactly what it was before 1957, namely, property without a fixed situs in Tennessee that would make it subject to ad valorem tax in this state.”

The court stated that only by virtue of the 1957 act was the situs of the property of these nonresident carriers fixed in Tennessee. Such situs was established by reason of the fact that these carriers operated under certificates of convenience and necessity issued by the Public Service Commission. The court said:

“Without such legislation, the fixed si-tus of such carriers’ property would not ordinarily be in Tennessee and therefore, in the absence of such enabling legislation, such property not so situated in Tennessee is not considered as taxable property for the purpose of ad valorem taxation.”

On behalf of certain local taxing officials who were parties to the litigation, it- was urged that the 1968 statute in effect created an “unconstitutional exemption” to certain classes of persons. Because a similar insistence is made in the present ease, we quote the following portion of the opinion of the Court of Appeals:

“Our answer to this question is that Chapter 459 does not give a tax exemption to a certain class of persons. As the Supreme Court said in Southern Express Co. v. Patterson (122 Tenn. 279, 123 S.W. 353 (1909)) Article 2, Section 28, of the State Constitution is not a self-executing provision and before any property can be valued and assessed for taxation, a proper method and machinery for such valuation and assessment must be provided.
“No tax exemption is involved here, the simple fact is that in 1957, by Chapter 191 of the Public Acts, the General Assembly provided the necessary implementing legislation, establishing a method and machinery for valuation and assessment of property of certain non-resident, irregular route carriers, which property was not theretofore subject to valuation and assessment for ad valorem taxation.”

The court held that since the 1957 act had been repealed, the property of these carriers could no longer be reached for taxation.

It was with this background that Chapter 327 of the Public Acts of 1969 was enacted, once again amending subsection 12 of T.C.A. 67-901. It is the construction and effect of this statute which are in issue in the present litigation.

The caption to Chapter 327 of the Public Acts of 1969 is as follows:

“AN ACT to amend Section 67-901, Tennessee Code Annotated, relating to assessment by Public Service Commission, companies included.”

In Section 1 of the chapter, subsection 12 was amended by adding the words “or leasing” immediately after the words “or owning”, so as to make the subsection read as follows:

“Motor bus and/or truck companies domiciled in this state and/or owning or leasing real or personal property located in this state . . .”

It is conceded by all parties that one of the purposes of this act was to make the property of nonresident irregular route carriers subject to ad valorem taxation in Tennessee, whether the carriers owned property in the state or not. That is, such carriers which operated in this state were subject to ad valorem taxation, even though they only operated leased equipment or otherwise operated in the state without actually owning property or being domiciled therein.

No issue is taken by the appellees that this was one of the purposes of the 1969 legislation, and it is conceded that the language used by the General Assembly was sufficient to accomplish that purpose.

It is insisted by the Public Service Commission, however, that the statute had a further purpose, and that was to authorize the Commission to assess leased properties ad valorem to motor carriers, as well as owned properties. The carriers took exception to this construction by the Commission, and litigation again resulted. An annual assessment made pursuant to the 1969 statute was taken to the Chancery Court of Davidson County for review by petition for certiorari, and on February 16, 1971 Chancellor Frank F. Drowota III held that the 1969 legislation did authorize the Commission to tax leased equipment to the lessee. His memorandum opinion has been filed in the record in this case. In the opinion the chancellor reviewed the legislative history which has been recited above, and concluded that one of the very purposes for the 1969 legislation was to permit such taxation. A petition for rehearing was filed in which it was argued that the Commission could only tax the separate leasehold value of rented equipment, rather than the investment value, and that the interpretation rendered by the court would result in double taxation or in the creation of a new class of exempt persons, in violation of the Tennessee Constitution. The chancellor overruled this petition. An appeal was taken to this Court, but the appeal was dismissed before the case was heard in December 1971.

As previously stated, the present litigation concerns the 1972 assessment of the carriers, the last one prior to the effective date of the comprehensive statutory revisions of 1973.

In the present case, the Chancellor of Part I of the Chancery Court at Nashville, Hon. Ben H. Cantrell, held that the 1971 proceedings were not res adjudicata for the 1972 tax year and further held that under T.C.A. § 67 — 901, the Public Service Commission could only tax property actually owned outright by the motor carriers. In other words he held that the 1969 amendment was descriptive of the types of companies which could be taxed, but that it did not contain authority to tax leased equipment to the lessee. He relied upon the phrase “belonging to” contained in the preamble to the statute, and also pointed out that there was no attempt to assess the value of the leasehold separately from the value of the equipment itself. He cited and relied upon Memphis Peabody Corp. v. MacFarland, 211 Tenn. 384, 365 S.W.2d 40 (1963), in which this Court, in a privilege tax case, held that a leasehold in real property should be separately valued from the fee.

Although a privilege tax case, the holding in that case was consistent with general assessment statutes then in force, governing local tax assessors, and directing that separate interests in real property be assessed separately. T.C.A. § 67-606(5). It should be noted that this statute has no application to personal property, and the reliance of the carriers on valuations of real estate leaseholds in the present litigation is misplaced.

The chancellor below concluded that the single purpose of the 1969 legislation was to bring within the taxing power of the State nonresident irregular route carriers who merely leased property, but that it did not make the leased property itself subject to ad valorem taxation to the carrier.

Because of the sharply differing interpretations given the statute by the parties, and their differing conclusions as to what the intentions of the legislature may have been, this Court has sought such extrinsic aids to the legislative intent as were available. In the debates on final passage of the bill in the House of Representatives on May 7, 1969, the sponsor of the legislation made the following statement:

“This is a bill that has been requested by the Railroad & Public Service Commission dealing with the assessment of leased property. There has been such a tremendous change in the procedures of the industry with respect to the leasing of property rather than the owning of the property that literally the companies expect to be treated in leasehold property just exactly like they do in ownership, because they have gone to leaseholds more than they have to ownership. So this bill has the effect of permitting the assessment for tax purposes of leasehold property as though it were owned property by the respective companies.”

It is well known that as a result of the holding of the Tennessee courts in the case of Southern Railway Company v. Clement, 57 Tenn.App. 54, 415 S.W.2d 146 (1966) and related federal decisions, the Tennessee assessment statutes were sweepingly revised in 1967. In order to equalize the assessment ratios being fixed by local tax assessors and those being fixed by the Public Service Commission on utility properties, Chapter 325 of the Public Acts of 1967 and other legislation were adopted. These statutes sought to equalize the lower local assessments with those being made by the Public Service Commission over a period of years, beginning in 1968 and continuing through 1973. See T.C.A. 67-605 (prior to the 1973 amendment).

In the debates in the House of Representatives on the 1969 legislation, this situation was pointed out, and the sponsor of the 1969 statute now in question pointed out that a number of carriers were leasing equipment, so that the owner could be assessed by local assessors, rather than owning the property, and having it assessed as utility property by the Commission.

There is, therefore, no question from the legislative history but that it was the intention of the legislature to make leased equipment assessable to the utilities or carriers using it, instead of leaving it to local assessment. The remaining question is whether the language used was sufficient to carry out that purpose or not.

It is the opinion of this Court that the language was sufficient, particularly when taken with other portions of the assessment statutes.

As stated, because of the lack of an evi-dentiary record, we are deprived of knowledge as to what the past practices of the Public Service Commission had been. For many years, however, the next section of the Code, following the one which is the subject of this opinion, had required the owners of the various utility properties mentioned in the Code section now under consideration “to file with the commission on or before the first day of April, biennially . . under oath, schedules and statements giving the following information concerning all properties owned or leased by such owners . . . ” See Williams Tennessee Code Annotated, § 1509; T.C.A. § 67 — 902 (prior to the 1973 amendment). It thus appears that, at a minimum, the various utility companies had been required for a very long period of time to report their leased properties. As far as this Court can determine, only the 1968 legislation, as construed in the litigation above referred to, purported to prohibit the taxation of leased equipment to a utility as though it were owned by that utility.

We know of no authority, and none has been cited, to the effect that the General Assembly may not for tax purposes require the assessment and taxation of property to the owner of any limited interest in personal property. How that owner will share the tax burden with other owners of interests in the property is a matter of contract between them. This was pointed out in the record before the Board of Equalization in the present case, and the members of the Board stated that they felt that if leased equipment were taxed at its full value to the lessee, then the matter of the bearing of the tax burden would be worked out between the lessor and the lessee by appropriate rental rates.

This Court is reluctant to hold that the taxing power of the State does not encompass the assessment to a utility of leased equipment operated by it in the exercise of its franchises in the state and, in this instance, upon the highways of the state.

We are unable to follow the argument made by appellees that such a method of assessment in any way involves the creation of an unconstitutional exemption. At issue here is only a mechanism or machinery for the assessment and taxation of property, the location and identification of which would otherwise be difficult to determine. The property is taxed ad valorem, and the respective owners of interests therein may by contract distribute the burden thereof among themselves as they see fit.

As previously stated, we do not believe that the legislature intended double taxation to result from this system, and the statements of the Public Service Commission in the record are to the effect that the Commission itself does not intend such a result and will take appropriate measures to prevent this from occurring. In the 1971 opinion of the chancery court, the chancellor stated that the record in that case revealed effective procedures and steps taken by the Commission to prevent double taxation.

The carriers concede that under the 1973 legislation, there is no question but that leased property is assessable to them. Other than by the 1968 legislation as construed, we find no prohibition to its being assessed to them in the years prior to 1973. The 1969 legislation, in our opinion, removed any prohibition found to have been created by the 1968 act.

The judgment of the chancellor is reversed and the suit is dismissed at the cost of appellees.

FONES, C. J., and COOPER, BROCK and HENRY, JJ., concur.

OPINION ON PETITION TO REHEAR

HARBISON, Justice.

A courteous and thoughtful petition to rehear has been filed on behalf of appellees. After careful consideration of the same, the Court is of the opinion that the issues presented therein were dealt with in the original opinion. Accordingly the petition to rehear is denied at the cost of appellees.

FONES, C. J., and COOPER, BROCK and HENRY, JJ., concur.

      . Despite these provisions, however, the assessed taxes were then and still are a lien on the fee “and not merely upon the interest of the person to whom said property is or ought to be assessed, but to any and all other interests in said property, whether in reversion or remainder, or lienors, or of any nature whatever.” T.C.A. § 67-1803.

      . This is borne out by statement of counsel for the carriers before the State Board in the present case, that both real and personal property were being taken out of the names of carriers and then leased back “to get the benefit of the lower tax rates.”

      . The Commission states that it only proposes to assess equipment held under a “long-term” lease as distinguished from a trip lease or other short-term arrangement. As previously pointed out, in this opinion we have undertaken to deal only with general principles of assessment rather than specific factual situations because of the lack of an evidentiary record or of issues dealing with anything other than the general powers of the Commission.


author: COOPER, Justice.

text:
    Frank J. CASH, Appellant, v. IDEAL CEMENT COMPANY, Appellee.
    Supreme Court of Tennessee.
    June 16, 1975.

      H. Calvin Walter, Walter, Gilbertson & Claiborne, Knoxville, for appellant.
    Norman H. Williams, Fowler, Rowntree, Fowler & Robertson, Knoxville, for appel-lee.
   OPINION

COOPER, Justice.

Frank J. Cash filed an action in the Chancery Court of Knox County on May 1, 1974, seeking to recover workmen’s compensation benefits for disability resulting from silicosis. The employer, Ideal Cement Company, denied that Mr. Cash sustained any work-connected disability, and also plead lack of notice and the one year statute of limitations placed on workmen’s compensation actions. On trial, the chancellor concluded that the employer “had made out its defense that the one year statute of limitations bars the case because the suit was not brought within one year of the disability, March 28, 1973.” The chancellor then expressly pretermitted making “any specific findings with regard to notice or degree of disability.” The employee appealed, insisting that the chancellor erred:

“(1) in holding that the statute of limitations barred plaintiff’s cause of action because there was no material evidence to support a conclusion that the plaintiff had actual knowledge of, or should be charged with constructive notice of, the fact that he had an occupational disease prior to his diagnosis by Dr. Swann,
(2) in holding that the statute of limitations began to run from the date of disability or date that the employee had reason to know that there was a reasonable possibility that his breathing problems were work connected, instead of the date of diagnosis of occupational disease, . . ”

Just prior to argument of this case on appeal, the death of appellant was suggested and the cause was revived with the names of Uneeda G. Cash, widow of appellant, and Jackie F. Cash, administrator of the estate of appellant, being substituted for that of appellant.

The record shows that appellant, who could neither read nor write, worked twenty-seven plus years as a jackhammer helper, and/or driller, and/or truck driver, in a rock quarry operated by appellee. The nature and place of the employment necessarily caused appellant to be exposed to large amounts of rock dust from the quarrying operations. During his employment, and especially the last two years, appellant suffered from various physical ailments for which he sought medical treatment, such as a back injury, arthritis, hypertension and difficulty in breathing. Appellant’s difficulty in breathing was apparent to his fellow workers to an extent that one advised appellant to see a specialist. This advice was given “approximately two years or maybe a little longer than that before [appellant] took off sick the last time.” Appellant did not see a specialist but was treated by Dr. P. H. Cardwell on at least two occasions, the last being in May, 1972, for “acute bronchitis.”

In February, 1973, appellant applied for and was granted disability retirement by appellee, effective March 28, 1973, on the basis of hypertension and arthritis. Appellant admitted “that his breath was gone in March, 1973,” and that it affected his ability to do the lifting and walking required in the performance of his job with appellee.

On June 4, 1973, appellant was admitted to the hospital for diagnostic studies by a thoracic surgeon, who found that appellant was suffering from silicosis. The thoracic surgeon testified the silicosis was compatible with appellant’s history of working in the dusty atmosphere of a rock quarry and that, in his opinion, the silicosis was present and disabling at the time of retirement of appellant on March 28, 1973.

In Murray Ohio Manufacturing Company v. Vines, 498 S.W.2d 897 (Tenn. 1973), it is pointed out that “the controlling language in our statute of limitations applicable to workmen’s compensation cases has been held to be ‘. . . one (1) year after the occurrence of the injury.’ (Section 50-1017). We are aligned with those states that are said to have the ‘injury type’ statute as distinguished from the ‘accident type’ statute. Admittedly, the injury type statute provides a less definite date of accrual of employee’s cause of action. The running of the statute is said to be suspended ‘. . . until by reasonable care and diligence it is discoverable and apparent that a compensable injury has been sustained.’ ”

And, in Tennessee Products & Chemical Corp. v. Reeves, 220 Tenn. 148, 415 S.W.2d 118 (1967), this court held that “before the statute of limitations in occupational disease cases begins to run there must be: First, an incapacity for work; Second, either actual or constructive knowledge an occupational disease is the cause of the incapacity for work. In relating the incapacity for work to the disease an employee is required to exercise reasonable care and diligence; and if he does not he could be charged with constructive notice.”

There is no question under the evidence in this case that the appellant had an incapacity to work at the time he retired on March 28, 1973. Neither is there any question but that appellant knew of his incapacity and knew that it was due to a large extent to his difficulty in breathing. However, we find no material evidence in the record to support a finding that appellant had either actual or constructive knowledge that his breathing difficulty, with resulting incapacity to work, was due to an occupational disease until the diagnosis of silicosis in June, 1973. It is true that plaintiff was advised by a fellow employee to see a specialist for treatment but there was no suggestion that plaintiff was suffering from an occupational disease. And while appellant did not take his friend’s advice to see a specialist, he did thereafter see his physician, Dr. P. H. Cardwell, in May, 1972, and was treated for “acute bronchitis,” which is not a listed disease. Under these circumstances, to impute to appellant constructive knowledge that his disability was due to a listed occupational disease would be to attribute to him greater knowledge of his physical condition, its cause and needed medical treatment, than that possessed by appellant’s treating physician. This we can not do. We hold, contra to the conclusion of the chancellor, that under the undisputed evidence in this case, the statute of limitations on appellant’s workmen’s compensation claim began to run on June 7, 1973, when it was first determined that appellant was disabled from a listed occupational disease, and that this action, being brought on May 1, 1974, is not barred by the statute of limitations. Imperial Shirt Corp. v. Jenkins, 217 Tenn. 602, 399 S.W.2d 757 (1966); Murray Ohio Mfg. Co. v. Vines, supra.

The decree of the chancellor dismissing this action is reversed. The chancellor having pretermitted the issues of notice and extent of disability, the cause is remanded for a determination of those issues. Costs of this appeal are adjudged against the appellee, Ideal Cement Company.

FONES, C. J., and HENRY, BROCK and HARBISON, JJ., concur.


author: HARBISON, Justice.

text:
    The NAVARRE CORPORATION, Appellant-Plaintiff, v. George M. TIDWELL, Commissioner of Revenue, State of Tennessee, Appellee-Defendant.
    Supreme Court of Tennessee.
    June 16, 1975.
    Witt, Gaither, Richardson, Henniss & Whitaker, Chattanooga, for appellant-plaintiff.
    Everett H. Falk, Asst. Atty. Gen., Nashville, for appellee-defendant; R. A. Ashley, Jr., Atty. Gen., of counsel.
   OPINION

HARBISON, Justice.

This action was filed by appellant, The Navarre Corporation, seeking to recover franchise and excise taxes, together with interest and penalty thereon, which had been paid under protest. The issue presented is whether or not appellant was doing business during the tax years in question “in Tennessee and elsewhere” so as to entitle it to use the apportionment formula for excise and franchise taxes contained in T.C.A. §§ 67-2710 and 67-2916. Since appellant is neither a common carrier nor a manufacturer, apportionment is claimed on the basis of the proportion of gross receipts in Tennessee to total gross receipts for the years in question.

The facts of the case are substantially undisputed. Appellant is a Tennessee corporation, having its principal office and place of business in Chattanooga. There are no corporate offices regularly maintained at any other place than the home office in Chattanooga, and all of the employees of the company except two are residents of Chattanooga. Appellant has not domesticated its charter or otherwise formally qualified to do business in any other state of the United States or abroad. During the tax years in question it has paid no excise or franchise taxes to any other state of the United States. It has paid some national taxes to the State of Israel, the nature of which is not clear in the record, although in one exhibit these taxes are referred to as income taxes.

In response to an inquiry from the Tennessee Department of Revenue, concerning the operations of appellant during the tax years in question, an accountant for appellant wrote, “No taxes, based upon or measured by net earnings, are paid to any state other than Tennessee. The Corporation has no offices located outside Tennessee.”

The business of appellant is related to the soft drink industry, and, according to the record, falls into two major categories or divisions. One of these is a sales operation, in which various kinds of supplies are sold to soft drink bottling companies. Appellant used its own force of salesmen during the first portion of the tax period involved (the total period being 1967 through 1971), but during 1968 or 1969 the company changed its method of operation in this field and retained only two full-time employees in the sales division. Thereafter it used a system of independent brokers situated at various points in the United States “to augment sales where we did not have direct coverage”, according to the testimony of Mr. Navarre.

These brokers were not full-time employees of The Navarre Corporation. They lived in the territories where they served, and they had other clients or customers by whom their services were employed, in addition to appellant. When these brokers or commission salesmen made sales, the products involved were manufactured by independent companies and shipped from the manufacturer to the customer. Some of the billing for these sales was done by appellant, which received payments in Chattanooga and deducted its commission, remitting the balance to the manufacturer. In other instances the manufacturer did the billing and remitted to appellant at Chattanooga its commission. A few of the customers were situated in Tennessee, but most of the sales were made to customers situated in other states. One of the salesmen, who lives in South Carolina, received a salary as well as a commission. The president of the company, who is also a non-resident of Tennessee, received a salary. All other salaried personnel of the appellant live in Chattanooga and operate from the Chattanooga offices.

The other division or major segment of the business of appellant is the rendering of personal services in the form of management services to bottling companies located in other states or abroad. Primarily these services were rendered to the Coca-Cola Bottling Company of Miami, Florida and to various plants or bottling companies owned or controlled by the Miami company. The Miami Coca-Cola Bottling Company is a separate corporation, publicly owned, in which appellant has a substantial stock ownership and with which appellant has a management services contract. The president of appellant is also president of this Miami company. He draws no salary from the Miami company, but is paid by appellant, apparently, for all services rendered by him to both companies. The other principal company with which appellant had management services contracts is a Coca-Cola Bottling Company located at Tel Aviv in Israel. Appellant also has a financial interest or ownership in this company. In performing these management services contracts, the president of appellant or other personnel employed by appellant frequently go to the situs of the company being serviced, sometimes remaining there for substantial periods of time. The services involve the giving of advice and making of policy decisions concerning finance, distribution, production and other aspects of the soft drink business. Personnel of appellant have the use of office facilities at the various bottling plants being serviced, but, as previously stated, there is no serious contention that the appellant actually maintained regular business offices outside of the State of Tennessee during the tax years involved here.

Appellant owns very little property situated outside of the State of Tennessee. It has a wholly owned subsidiary corporation in Florida which owns an apartment house. Appellant also owns a small tract of land in Florida on which is situated a cabin or camp, occasionally used by personnel of the company. It also owns a boat which was situated in Florida during at least part of the tax years in question, and on which business conferences and meetings were held. When the boat was not being used by company personnel, it was available for lease to third parties.

For performing its management services contracts, appellant received a fixed commission on each case of soft drinks sold by the company being serviced. In connection with the Tel Aviv operation, appellant paid taxes to the government of Israel. The president of appellant testified, “I don’t know what form this tax takes, but it’s about 25 percent that they put on it. I think we receive only 75 percent of the total that is due us.”

At another point Mr. Navarre testified, “. . .1 don’t really know what tax it is from them. It may be an income tax. It may be an excise tax. It’s a tax on funds going out of Israel.”

An accountant for the firm testified:

“Q Exactly what is the Israeli tax that you mention? What type of a tax is it?
“A It is an income tax, but it is on gross income before any deductions.”

The accountant testified that he was not sure whether the tax was on the right to do business in the State of Israel or whether it was a tax on money withdrawn from that nation. As previously pointed out, remittance advices exhibited in the record refer to the tax as an income tax. Its nature, purpose and incidence are not otherwise defined in the record before us.

It is conceded by all parties that the Tennessee Franchise and Excise Taxes are taxes on the privilege of doing business in Tennessee in corporate form. Nashville & Decatur R. Co. v. Atkins, 489 S.W.2d 837, 842 (Tenn.1973); Texas Gas Transmission Corp. v. Atkins, 197 Tenn. 123, 270 S.W.2d 384 (1954), cert. den., 348 U.S. 883, 75 S.Ct. 125, 99 L.Ed. 694 (1954).

Appellant also concedes that for a domestic corporation of this state to be entitled to apportionment, the taxpayer must show that it is actually engaged in business in corporate form in jurisdictions other than Tennessee, and that the burden of establishing this entitlement rests upon the taxpayer. John Ownbey Co. v. Butler, 211 Tenn. 366, 365 S.W.2d 33 (1963); Signal Thread Company v. King, 222 Tenn. 241, 435 S.W.2d 468 (1968).

As stated by this Court in Roane Hosiery, Inc. v. King, 214 Tenn. 441, 381 S.W.2d 265 (1964), the purpose of the apportionment formula is to prevent duplicate taxation on corporations doing business in Tennessee and elsewhere. The Court said in that case:

“When we thus look at this tax, which is imposed here, and the apportionment formula which is a part of this act, it is plain to see that the Legislature had in mind that they didn’t want to impose double taxation or duplicate taxation on any corporation, but so long as the corporation is a Tennessee domestic corporation doing business here, it should pay taxes as the statute provided on its total net earnings. But if the corporation could, and did, show that it was doing business and paying a tax on the business done in another state, then this apportionment formula would apply. The only common sense and logical conclusion to reach from the enactment of this statute is that the burden is on the corporation to show the Commissioner this, and then the Commissioner applies the formula.” 214 Tenn. at 447, 381 S.W.2d at 268.

It was pointed out in the Ownbey case, supra, that the test of “doing business” as used in the excise and franchise taxing statutes, is not the same as the test used in determining whether a corporation is amenable to service of process in a particular jurisdiction; other and different considerations are involved when considering the subject for purposes of construing tax laws.

Generally, where a Tennessee corporation seeks to claim the benefit of the apportionment formula, it has been required to show a substantial number of contacts with another jurisdiction in order to bring itself within the concept of “doing business” in that jurisdiction. Actual domestication or qualification to do business in another jurisdiction is one of the criteria which has been emphasized; the payment of franchise or excise taxes, or taxes substantially equivalent in nature, to another jurisdiction has also been a major consideration. Both of these are admittedly lacking in the present case, insofar as appellant is concerned. These are not necessarily the sole criteria for permitting apportionment, but certainly, under the Tennessee eases, a very strong showing would have to be made by a taxpayer which had neither qualified to do business in another jurisdiction nor paid privilege taxes there on the privilege of doing business.

The right of Tennessee corporations to use the apportionment formula for excise taxes was considered in detail by the Court in the case of John Ownbey Co., Inc. v. Butler, 211 Tenn. 366, 365 S.W.2d 33 (1963). There four different domestic corporations claimed benefit of the apportionment formula provided for manufacturing corporations, T.C.A. § 67-2707. None of them was held entitled to the benefit thereof. The Court said:

“It seems to us that clearly the undisputed facts in these cases show that these are Tennessee corporations with Tennessee operations done wholly in Tennessee controlled by Tennessee home offices; that the orders and contracts are subject to acceptance in the home office; that the shipments are made from Tennessee headquarters; and that no place of business is maintained elsewhere; therefore the only conclusion to reach is that all the corporate earnings are inevitably realized at the respective Tennessee offices.” 211 Tenn. at 381, 365 S.W.2d at 39.

In the case of Roane Hosiery, Inc. v. King, 214 Tenn. 441, 381 S.W.2d 265 (1964), a Tennessee corporation had acquired all of the stock of a selling corporation chartered in Delaware. The Tennessee corporation made practically all of its sales through the Delaware corporation, paying that corporation a commission. It sought the benefit of the apportionment formula of the excise tax statutes, but was held not entitled thereto. The Court said:

“We might add that it was the purpose of the Legislature in enacting this excise tax statute to place a tax on all business done within this State unless it was taxed by a foreign state, and if this were done, that is taxed by a foreign state, a showing to this effect could be made under the apportionment formulae statutes above cited and the apportionment formula would then be followed by the Commissioner. We think that this is the meaning of sec. 67-2707, T.C.A.
“This tax is imposed upon the privilege of doing business in corporate form in this State. Texas Gas Transmission Corp. v. Atkins, supra. The tax is not laid upon the corporate earnings directly in the sense that an income tax is so laid, but it is measured entirely by the net income of the corporation.” 214 Tenn. at 446, 381 S.W.2d at 267.

In that case, it was argued by the taxpayer that its activities were such as to make it subject to certain New York state taxes. The record did not show, however, that there had been any attempt by the New York taxing authorities to levy any such taxes, and the Court emphasized that the taxpayer was not qualified to do business in corporate form in the State of New York.

In the present case it is contended that appellant was subject to certain taxes by the State of Florida because of its activities there. It does appear that in years subsequent to the tax period in question, the taxpayer paid certain taxes to the State of Florida. One of the Florida taxing statutes involved, however, did not become effective until 1972, which was after the tax years involved in the present litigation. Although another Florida corporate tax, the franchise tax, was shown to have been in existence during the tax years in question, appellant did not pay it, nor was it apparently required or advised to do so.

In the case of Signal Thread Co. v. King, 222 Tenn. 241, 435 S.W.2d 468 (1968), even the voluntary payment of taxes to another jurisdiction was held not to entitle the taxpayer to the apportionment formula, where the Court found insufficient permanent contacts or nexus with the other jurisdiction to bring it within the concept of “doing business” there. In that case the taxpayer, a Tennessee corporation, processed and finished certain raw materials into finished thread in Chattanooga, Tennessee. Most of the thread sold by the taxpayer, however, was processed and finished at plants located in North Carolina, which plants were owned by other corporations. The taxpayer had one full-time resident employee in the State of North Carolina, who solicited orders which were submitted to the home office in Chattanooga. Personnel of the taxpayer from time to time went to the North Carolina mills in order to check on the machinery being used and on product quality. The taxpayer at all times owned a certain stock of finished goods or work in process situated in North Carolina, which it insured but on which it did not pay North Carolina ad valorem taxes. After the taxpayer became involved in a controversy with the Tennessee Department of Revenue as to its right to use the apportionment formula, the taxpayer voluntarily paid franchise and income taxes to the State of North Carolina covering most of the tax years in dispute.

This Court affirming the chancellor and holding that the taxpayer was not entitled to apportionment, said:

“As we view it, the assertion that appellant was doing business in North Carolina during the tax years involved is based upon the following: (1) The maintenance in Charlotte of one full-time employee, engaged in selling thread, who uses his home as an office. (2) The engagement by appellant of corporations in North Carolina to do manufacturing work for it upon a contract basis; during which manufacturing work one or more of appellant’s employees is required to go from Tennessee to North Carolina for quality inspection checks of machines and product to see that the special quality of the thread is maintained. (3) The presence in North Carolina of inventory in the course of processing or awaiting shipment. (4) The voluntary payment by complainant to North Carolina, immediately prior to the commencement of this suit, of corporate income and franchise taxes for the tax periods covered by this suit.
“Neither the individual nor the collective effect of these factors amounts to doing business elsewhere, so as to entitle appellant to apportion as it insists. John Ownbey Co. v. Butler, 211 Tenn. 366, 365 S.W.2d 33.” 222 Tenn. at 253, 435 S.W.2d at 473.

In the present case appellant insists that since it is not engaged in manufacturing products in Tennessee or selling products from its Tennessee headquarters, and since it renders personal services rather than making sales of products, insofar as its management services contracts are concerned, the principles announced in the foregoing authorities should not be applicable to it. It insists that, particularly insofar as the management services contracts are concerned, its personnel are required to go into other jurisdictions and that the commissions and profits earned by appellant are earned by reason of services rendered in those jurisdictions.

While it is conceded by the State that the appellant does have “contacts” with other jurisdictions, it is insisted by the Commissioner that these contacts are insufficient to entitle appellant to apportion its excise and franchise taxes to those jurisdictions, especially in view of the absence of qualification and payment of taxes there.

After careful consideration of the record, this Court is of the opinion that the position of the Commissioner is correct and that the taxpayer has made an insufficient showing to entitle it to use the apportionment formula. It is basically a Tennessee corporation, operating out of Tennessee headquarters, and deriving its privileges to do business in corporate form from the State of Tennessee. Although it might be deemed to be “doing business” in other jurisdictions for purposes of service of process under various types of “long arm” statutes or other extraterritorial statutes, we do not believe that it has sufficiently shown that it is “doing business” in any other jurisdiction, during the tax years in question, to entitle it to apportion its gross receipts for purposes of Tennessee franchise and excise taxes.

No question is made as to the validity of the contractual arrangements between appellant and its affiliated corporations regarding the personal service contracts, nor is anything said here intended to reflect upon these in any way. It is obvious, however, that these contracts afford a medium or channel through with the Miami and the Israeli companies may compensate their own officers or stockholders for services rendered, in view of the interlocking stock ownership and dual official relationships shown in the record. We do not attach as great significance to these contracts as might be done in the case of a completely independent and unrelated consulting or counseling firm. The contracts undoubtedly are deemed expedient and useful for corporate purposes and accounting. However, insofar as services rendered under them are relied upon to constitute “doing business” in other jurisdictions for purposes of the present case, we cannot attach the controlling weight to them which is contended for by appellant.

The judgment of the chancellor is affirmed at the cost of appellant.

FONES, C. J., COOPER and HENRY, JJ., and GODDARD, Special Justice, concur.

BROCK, J., not participating.


text:
    Edward H. SAPP, County Judge of Bledsoe County, Tennessee, et al., Appellants-Respondents, v. STATE of Tennessee ex rel. Carlton NIPPER, Sheriff of Bledsoe County, Tennessee, Appellee-Petitioner. Albert SLUSHER, Administrator of Anderson County, Tennessee, Appellant-Defendant, v. H. H. HILL, Sheriff of Anderson County, Tennessee, Appellee-Plaintiff.
    Supreme Court of Tennessee.
    June 9, 1975.

      William G. McPheeters, Dayton, James Nelson Ramsey, Oak Ridge, for appellants.
    David R. Swafford, Pikeville, J. Carson Ridenour, Clinton, for appellees.
   OPINION

HARBISON, Justice.

The sole determinative question presented in each of these cases is the constitutionality of T.C.A. § 8-2001 et seq., insofar as these sections pertain to the employment of deputies sheriff and assistants to the county sheriff.

Insofar as they pertain to the county sheriff, the statutes provide that the sheriff shall make application to the circuit or criminal judge of his county for the employment of deputies and assistants, showing the necessity therefor, the number required and the salary that should be paid to each, when the sheriff cannot alone properly and efficiently conduct the affairs and transact the business of his office by devoting his entire working time thereto. The statutes provide for the county judge to be made a party defendant to such a petition, authorizing him to make such answer as he deems advisable under the circumstances. Thereupon the appropriate circuit or criminal court is authorized to hold a hearing and to allow or disallow the application, either in whole or in part. T.C.A. § 8-2004 provides that the order of the court shall be spread upon the minutes of the court as in the case of other judgments, and that the order or decree fixing the number of deputies and salaries may be changed or modified from time to time upon application made to the court.

In T.C.A. § 8 — 2006 either party dissatisfied with the order of the court in the proceedings is given the right of appeal.

In each of the present cases, the respective sheriffs filed petitions seeking approval of the employment of deputies, assistants, and other expenses of their offices, with the appropriate state court sitting in their counties. The petitions in each case were allowed by the respective trial judges. In the Bledsoe County case the respondent county officials prayed an appeal from the order of the circuit judge, but did not perfect their appeal. Thereafter, apparently they failed to comply with the court order, and the present proceedings in the Bledsoe County case arise from a petition by the Sheriff for a writ of mandamus against the County Judge and the Quarterly County Court for failure to comply with the order of the Circuit Judge with respect to the payment of salaries and expenses of the office of the Sheriff. A peremptory writ of mandamus was issued by the Circuit Judge, from which the county officials have appealed. There is no transcript of evidence in that case, and the case is before us solely on the technical record, showing the original petition by the Sheriff, response thereto, and orders of the court, together with the pleadings and orders in the mandamus proceeding.

The Anderson County case is here on direct appeal from the order of the Circuit Judge, sustaining the petition of the Sheriff.

As stated, in each of the two cases, the only issue presented is whether or not the procedure authorized in T.C.A. § 8 — 2001 et seq. is constitutional. It is insisted on behalf of the county governments in each case that the procedure authorizing a state circuit or criminal judge to approve the number of deputies and assistants to be employed by a county sheriff violates the principles of separation of powers, and imposes legislative functions and duties upon the judicial department of the state, in violation of Article 2, Section 1 and Article 6, Section 1 of the Tennessee Constitution. The first of these constitutional provisions provides for the division of the state government into three distinct departments, Legislative, Executive and Judicial, and the second of the provisions defines the judicial power of the state.

In addition to involving the foregoing constitutional provisions, these cases also involve the following portion of Article 11, Section 9 of the state constitution:

“The Legislature shall have the right to vest such powers in the Courts of Justice, with regard to private and local affairs, as may be expedient.”

The code sections in question, T.C.A. § 8— 2001 et seq., were derived from Chapter 101 of the Public Acts of 1921, as subsequently amended. The history of these statutory provisions is discussed in the case of Hunter v. Conner, 152 Tenn. 258, 277 S.W. 71 (1925). As pointed out in the opinion in that case, there had been a series of “anti-fee” statutes enacted by the General Assembly prior to 1921, all of which had been held unconstitutional for various reasons. In the Hunter case, supra, the present statutes were expressly held constitutional, with the exception of one portion which was elided, and which will be mentioned subsequently. There has been no retreat from or modification of the Hunter decision in the years subsequent to its rendition, insofar as our research discloses, and we are of the opinion that it is controlling here.

In the earlier case of Hickman v. Wright, 141 Tenn. 412, 210 S.W. 447 (1918), an earlier “anti-fee” statute, Chapter 47 of the Public Acts of 1917, was held unconstitutional for various reasons. With respect to the specific provisions here under consideration, however, the Court in that case quoted Article 11, Section 9, of the Tennessee Constitution and said:

“As to the policy of delegating to the courts the authority to determine the number of deputies and the salaries they are to receive this court has nothing to do; but if the legislature sees proper to confer this power on the courts, then under the foregoing provision of the Constitution we think it has a right to do so and that it would not be a wrongful delegation of power and would not be imposing nonjudicial duties on the courts.” 141 Tenn. at 423, 210 S.W. at 450.

It is true, as pointed out on behalf of the appellant in the Anderson County case, that in the subsequent case of Henderson County v. Wallace, 173 Tenn. 184, 116 S.W.2d 1003 (1938), this Court used language in construing Article 11, Section 9, of the constitution which is somewhat difficult to reconcile with that used in the Hickman case, supra.

In that case, the Court was not considering the constitutionality of the present statutes, but was construing Chapter 63 of the Public Acts of 1937. The latter statute purported to amend what is now T.C.A. § 8-2405 (then Williams Tennessee Code Annotated, § 10743) so as to authorize the legislature to supplement the salary of individual county officers when it deemed the salary or compensation provided by the general salary law to be inadequate. A further provision of the statute authorized particular county officials, when their fees did not amount to as much as the maximum salary provided for their offices, to apply to the circuit or chancery courts, and these courts were authorized to adjudge a supplement to the fees of these officers.

The provisions of the 1937 Act were held by this Court to be unconstitutional in the Henderson County case. The Court held that these provisions had the same constitutional infirmities as existed with the portion of the 1921 Salary Act, which had been stricken in Hunter v. Conner, supra, and which had been elided therefrom by that decision. The Court did not, however, in the Henderson County case, in any way retreat from or modify the decision in the Hunter case, insofar as that case upheld the constitutionality of the statutes now under consideration.

In the Hunter case, as in the Henderson County case, it was held that the legislature could not delegate the power to fix the salary of a regular county officer or regular clerk of any court, and in our opinion, there is no inconsistency between the two cases.

In the Henderson County case, the Court did use language, in construing Article 11, Section 9, of the Tennessee constitution, to the effect that that provision referred to powers being vested in the governing bodies of counties, that is, the quarterly county court or a board of commissioners. The Court did state that, insofar as fixing the salary of regular county officials themselves:

“But we have been referred to no authority in support of the contention that legislative functions, even with respect to private and local matters, can be vested in the circuit or chancery court, and, in our opinion, the constitution prohibits the delegation of such power.” 173 Tenn. at 189, 116 S.W.2d at 1005.

Again, however, it should be emphasized that in the Henderson County case, the Court was dealing with the fixing of salaries of regular elected or appointed county officials by the courts on the one hand, whereas it was dealing with the authorization for employment of assistants or deputies in Hunter v. Conner.

While it might have been possible for the legislature to have chosen other methods by which county officials might seek approval of the employment of assistants, the method prescribed by T.C.A. § 8-2001 et seq. was approved in Hunter v. Conner, supra, and has now been the practice for more than fifty years. This method has been examined and the statutes mentioned in several subsequent cases, and in none of them has there been any suggestion that the statutory provisions were unconstitutional. See Brewer v. Davidson, 223 Tenn. 399, 445 S.W.2d 908 (1969); White v. Davidson County, 210 Tenn. 456, 360 S.W.2d 15 (1962); Atkinson v. McClanahan, 520 S.W.2d 348 (Tenn.App.1974). Carter v. Jett, 51 Tenn.App. 560, 370 S.W.2d 576 (1963).

It is the opinion of this Court that the statutes in question and the procedures authorized by them do not violate the provisions of the Constitution of the State of Tennessee with respect to the separation of powers, and that they are authorized within the scope and purview of Article 11, Section 9, of the Constitution.

The judgment of the trial court in each of these cases is affirmed at the cost of the appealing parties.