Case Name: Stone, Chairman, State Tax Commission v. Taylor Machine Works
Court: Mississippi Supreme Court
Jurisdiction: Mississippi
Decision Date: 1948-12-13
Citations: 204 Miss. 790
Docket Number: 
Parties: Stone, Chairman, State Tax Commission v. Taylor Machine Works.
Judges: Griffith, C. J., joins in this dissent.
Reporter: Mississippi Reports
Volume: 204
Pages: 790–824

Head Matter:
Stone, Chairman, State Tax Commission v. Taylor Machine Works.
On Suggestion of Error
In Banc.
Dec. 13, 1948
(37 So. (2d) 779)

Opinion:
The original and dissenting opinions 36 So. (2d) 137, are as follows:
Roberds, J.
The question for decision in this case is whether the wholesale rate of one-eighth of one percent or whether the retail rate of two percent should have been paid by appellee as sales tax on its sales during the years of 1944, 1945 and 1946 of a machine called "Logger's Dream". It paid on the wholesale rate. The Chairman of the State Tax Commission assessed it with the retail rate, which it paid and brought this suit to recover. The trial judge, sitting by agreement as judge and jury, was of opinion the wholesale rate applied, and entered judgment for the taxpayer, from which the Chairman of the State Tax Commission appeals here.
Appellee is a Mississippi corporation domiciled at Louisville, Mississippi. It manufactures and sells the foregoing designated machine. All sales here involved were made to operators of sawmills. Normally, the tax on such sales would have been the retail rate. Section 10108, Code 1942. But, Section 10111, said Code, contains this provision: Sales of tangible personal property to manufacturers only, of machinery, machine parts, and supplies which are exclusive necessities to processing within this state shall be construed to be wholesale sales when the manufacturer to whom the sales are made is taxable under section 2-b [sec 10107] of this act and the gross proceeds from such sales shall be taxable at the wholesale rate. Provided, however, that such sales may be classed as wholesale sales only if evidenced by proper and adequate invoices and records."
Sawmill manufacturers of timber into lumber are taxable under 2-b and the sales here involved were duly evidenced by invoices and records. The narrow and determining question, therefore, is whether said machine, or appliances, is shown by this record to be an ' ' exclusive necessity" in the processing by sawmills of timber into lumber.
As applicable to that question, the record and the briefs disclose these pertinent facts: "Logger's Dream" is manufactured alone by appellee. Application for patent thereon had been made by appellee at the time of the trial but had not then been issued. The machinery constituting this instrument is mounted upon a truck chassis. Appellee extends the length of the chassis sufficiently to properly assemble, mount and operate the machine thereon. It consists mainly of a power-driven drum, a boom, or lifting apparatus, a number of wire cables of varying length, with levers for manipulation of the device by an operator seated upon the chassis. The cables appear to coil and uncoil about the drum to shorten or lengthen the cable-distance needed to attach the cables to the logs. The logs are either snaked along the ground and deposited where desired or they are raised and placed upon trucks, or other conveyances, to be thereby transported to the sawmill. No logs are placed upon the chassis. It is, therefore, useful in assembling scattered logs into piles or placing them on trucks, tram cars, etc., for transporting to sawmills. It is suitable also for lifting logs from the ground onto the ramp of the mill, from which they may be pushed into position to be sawed into lumber. It is claimed by the manufacturer, and what evidence there is in the record on the subject supports the claim, that this is the most economical and efficient machine yet devised for assembling logs into piles and aiding in their transportation to sawmills.
It is also adapted for nse in lifting other heavy articles, as, for instance, mired down, overturned or ditched automobiles, and is so advertised for that and other purposes.
However, it is disclosed that there are a number of other methods of gathering logs in the woods and transporting them to sawmills, as, for instance, by use of skidders, tram cars, operated on dummy rail lines, caterpillar and other tractors, "snaking" them by horse or motor power, etc.
The price of this machine and chassis is from $2,400 to $2,800. Appellee has sold approximately eight hundred of them, in and out of this State. The number sold in this State is not shown. It is shown that at the time of the trial there were some seven thousand sawmills in Mississippi.
Do these facts show this machine to be an "exclusive necessity" in the process of manufacturing trees into lumber by sawmills in Mississippi within the meaning of Section 10111?
The decided cases are of little help. None of the cited cases deal with the precise situation confronting us. The problem must be solved by reason and logic. One definition of necessary is "Essential to a.desirable or projected end or condition; not to be dispensed with without loss, damage, inefficiency or the like; as a necessary tool." Webster's New International Dictionary, Second Edition. It is difficult to lay down any accurate and precise definition by which to test cases. Law writers have tried to do that through the ages, only to have such definitions, accepted as accurate at the time, later changed and altered by subsequent writers. But, as we view the question, a device, to be an exclusive necessity, must be at least one in general use by those engaged in the businss; must be such as not only is indispensable to an efficient, economical and practical prosecution of the particular work, but for which there is no practical, efficient and satisfactory alternative method, and which is available, in point of original cost and expense of operation, to those engaged in the business. It need not be the only method but one falling within the above definition. Tested by this, we must conclude that Logger's Dream is not an exclusive necessity in the processing of trees by sawmills into lumber. In the first place, it is admitted that a number of other methods are used for assembling logs and transporting them to mills. In fact, until the last three or four years the method under consideration was not known. That method was not used at all. In the second place, it is shown that not one out of seven mills in this State use Logger's Dream. "We, of course, know these mills use other methods to assemble the logs at the mills. The cost of Logger's Dream would appear to be prohibitive to operators of small mills. It may in time prove so efficient and become so universally used, and be deemed by those in the business so essential to processing trees into lumber as to properly be considered an ' ' exclusive necessity" for that purpose, but that day has not arrived.
Normally, these sales, in their nature, take the retail rate; the provision for the wholesale rate is an exception. We think the burden of bringing itself within the exception was upon appellee, and that this was not done.
Beversed and judgment here for appellant.