Case Name: Department of Taxation, Respondent, vs. Miller, Appellant
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1942-02-10
Citations: 239 Wis. 507
Docket Number: 
Parties: Department of Taxation, Respondent, vs. Miller, Appellant.
Judges: 
Reporter: Wisconsin Reports
Volume: 239
Pages: 507–514

Head Matter:
Department of Taxation, Respondent, vs. Miller, Appellant.
November 4, 1941
February 10, 1942.
For the appellant there were briefs by Wood, Warner & Tyrrell, attorneys, and John K. Wood and Kenneth F. Webster of counsel, all of Milwaukee, and oral argument by Mr. Wood and Mr. Webster.
For the respondent there were briefs by the Attorney General and Harold H. Persons, assistant attorney general, and oral argument by Mr. Persons.

Opinion:
The following opinion was filed December 2. 1941:
Fowler, J.
The assessor of incomes of Milwaukee county imposed in 1932 an emergency relief surtax against Clara A. Miller on her 1931 income. She paid this tax. Thereafter in proceedings duly had an additional tax of $1,763.09 was imposed by the assessor. This tax was also paid. The taxpayer filed with the assessor a petition for a refund of'these payments. The assessor denied the refund. The taxpayer appealed to the Wisconsin board of tax appeals. The board reversed the order of the assessor and ordered a refund. The Wisconsin Department of Taxation brought .action under sec. 73.015 (2), Stats., in the circuit court for Milwaukee county to review the order of the board. The circuit court reversed the order of the board and sustained both taxes imposed by the assessor of incomes. The case is an appeal from the circuit court order.
The facts are stipulated. They are in part summarized as follows : During the year 1931 the taxpayer owned securities worth somewhere between one and three million dollars. During that year she made many changes in her invested securities, selling some and purchasing others. The total volume of such manipulations involved purchases and sales aggregating, respectively, $765,306.89 and $340,536.55. Her purpose in so manipulating her securities was to better her holdings and thus to increase her income. In this sense it was, as she claims, to make money. On the basis of differences between purchase and sales prices of securities sold during the year, her losses exceeded her gains in the aggregate of $81,141.87. She claims she is entitled to deduct this sum from the tax base upon which her emergency relief surtax was computed. She was allowed such deduction from her regular income tax base. Whether she is entitled to such deduction in computing the tax involved, depends on the meaning of the statute imposing that tax.
The validity of the statute imposing the tax involved is not in question. The only question involved is whether under par. (b) of sec. 4 (2) of ch. 29, Laws of Sp. Sess. 1931-32, the provisions of the general income tax law relating to "gains or losses on the sale or disposition of stocks, bonds and other securities" is applicable. Par. (b) declares that the provision relating to* such "gains and losses" shall not be applicable "unless the property is held by the taxpayer in the course of his regular trade or business."
It seems to us that whether the judgment of the circuit court should be'affirmed may be based on an item of the stipulated facts. Attached to and made a part of the stipulation is a final summary in two columns, headed and concluded as follows :
"A Corrected Assessment if Mrs. Miller is held to have been a dealer in securities — Refund 01 QÍ » due $3,916.85/
"B Corrected Assessment if Mrs. Miller is held not to have been a dealer in securities — Additional tax due $1,763.09.'
This item shows that it was stipulated that the case hinged on whether Mrs. Miller was a dealer in securities. The stipulation is to the effect that the clause in the statute involved: ."or unless the property is held by the taxpayer in the course of his regular trade or business," means unless the taxpayer holds tire securities as a dealer in securities. Holding securities in course of the taxpayer's regular course of trade or business in fact does make and was in effect stipulated to make the holder a dealer in securities. Being a dealer implies buying to hold for sale. It means selling to customers who apply to purchase and whom the dealer solicits to buy. A dealer in securities holds securities for sale, and one who applies may purchase whatever the dealer holds. Mrs. Miller did not buy securities for the purpose of holding them for sale. She had no' customers. No> one applied to her to sell. She solicited no one to buy. She had no dealing with customers at all, or with anyone to whom her securities were sold. She only directed a broker to buy on the stock exchange what specified securities she wanted to buy and to sell what she wanted to sell. This did not constitute her any more a dealer in securities than one is a dealer who buys or sells a single security. The only difference between one who- sells a single security that he holds and buys another and one who sells many that he holds and buys many others, is only in the number of his transactions, not in the nature of his transactions or their effect toward making him a dealer in securities. As the item of the stipulation tells the whole story we see no need to consider makeweights or counterweights. Neither affects the result. Taking definitions of "regular trade or business" or "dealer," whether law definitions or ordinary dictionary definitions, does not help, as one may pick and choose as he will to support whatever view he takes. There is nothing ambiguous in the statute. Every word in it has a universally understood meaning, and giving to every word such meaning we are unable to perceive that the securities of the defendant were held by Mrs. Miller "in the course of his [her] regular trade or business." The simple fact is Mrs. Miller did not follow or conduct "a trade or business." To say she did would be to quibble.
Several federal cases are cited by appellant as taking a contrary view. The last United States supreme court income tax case that construes the phrase "trade or business" is Higgins v. Commissioner of Internal Revenue, 312 U. S. 212, 61 Sup. Ct. 475, 85 L. Ed. 783, which sustains the view here adopted. It construes the statutory phrase, "carrying on a trade or business."
The appellant urges that it was recognized in Appeal of Van Dyke, 217 Wis. 528, 259 N. W. 700, that the taxpayer "was allowed his deductions because he was within the class of persons covered by the language 'unless the property is held by the taxpayer in the course of his regular trade or business.' " Language so indicating was not discovered in a cursory examination of the opinion. We do not say that it is not there, but we do' say that if counsel refer in their brief to language hidden somewhere in the body of a twenty-two-page opinion they should indicate the page where the statement referred to may be found. At any rate, the point that the losses the taxpayer was seeking to deduct were sustained "in the course of his regular trade or business" was not contested or litigated in the Van Dyke Case,
Counsel contend that the statute has been generally construed by the taxing authorities of the state to mean that a taxpayer sustaining losses in the course of buying and selling securities' as did the plaintiff is entitled to deduct losses from the tax base of the emergency surtax involved. Six decisions of the tax commission and two of the board of tax appeals (its successor) are cited as> holding the taxpayer engaged in a trade or business and four of the tax commission are cited as holding that he was not. The facts are not stated. In this situation we can give these decisions no consideration, without devoting more time to research than we have to give. At any rate, unless long continued, substantially uniform, and without challenge by the government authorities and the courts, an administrative practice should not be assumed as settling the interpretation of a statute. ' Higgins Case, supra.
By the Court. — The order of the circuit court is affirmed.
The following opinion was filed February 10, 1942 :