Court Opinion

ID: 9532960
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:26:38.632912+00
Date Added: 2024-06-11T13:28:52.815698
License: Public Domain

On Rehearing

PER curiam:.
In application and brief on rehearing the appellee asks that the court review the matter of whether the appellee, as the contractor, was the agent of the Federal Government (NASA) in purchasing the materials, equipment and supplies from the suppliers under Contracts 5608 and 5606F. Such materials, etc., were all found by this court in its opinion to have been used by the contractor, at least for a time, in performing the research and development work called for under the Contract 5608. In this respect the court feels that it has in its 24-page opinion on appeal fully considered and answered the alleged question of agency, to the effect that the purchases of the materials, etc., by the appellee from the suppliers, whether made under Contract 5608 or Contract 5606F, were made by the appellee as an independent contractor and not as an agent of the Federal Government. The application of the appellee and brief in support thereof bring nothing new into the picture, and we do not deem it necessary to give the alleged agency question any further consideration, other than to reaffirm what we have already concluded on the subject.
The appellee next asserts that we have not in the opinion answered or written to the question, or holding ox the trial court, concerning the sales to the appellee, as the contractor, being allegedly sales for resale to the government, or in effect wholesale sales on the contractor level, and as such not subject to the sales tax, regardless of the question of agency. While we did not go into this proposition in as much detail as we did the other, it was considered by us along with the question of agency. The holding of the trial court on the question of sales for resale was in the opinion on appeal’not only referred to by us, but also quoted in its entirety. It was also pointed out in the opinion that the State was attempting to tax in these cases only the procurement of items which were used by the appellee, however briefly, in performance of its research and development work under Contract 5608. The purchase of such items by the appellee for the purpose of its using them, even in some instances for only a brief period of *320time, in performing the research and development work under said contract, tends to establish that such purchases by the appellee were not for resale, but were incidental to such research and development work done by the appellee. Moreover, the entire decree of the trial court as quoted in the opinion was reversed by us.
The record in these cases leads us to further conclude that the appellee, as the independent contractor, purchased the materials, etc., from the suppliers for the purpose of using the materials in performing Contract No. 5608, and in doing what appears to have been exclusively research and development work thereunder, insofar as such contract was performed in Alabama. The record also shows that the materials, etc., were so used by the appellee. Under the circumstances the sales to the appellee could hardly be considered to be sales for resale, or wholesale sales.
In the case of United Aircraft Corp. v. O’Connor, 141 Conn. 530, 107 A.2d 398, 402, the contractor was engaged under a government contract in research engineering and experimental work for the United States Navy and Air Force, in an attempt to develop more efficient aircraft motors. The Connecticut Supreme Court held that the purchases of materials by the contractor, to be used by it in performing such work, were not for resale, even though some of the experimental aircraft motors involved were actually delivered to the government by the contractor. Such deliveries were said not to be sales by the contractor to the government, but were held to be merely incidental to the special or professional services rendered by the contractor. See also Snite v. Department of Revenue, 398 Ill. 41, 45, 74 N.E.2d 877; note 139 A.L.R. 372, 381; and Haden v. McCarty, 275 Ala. 76, 152 So.2d 141.
The case of United Aircraft Corporation v. Connelly, 145 Conn. 176, 140 A.2d 486, cited by the appellee, is distinguishable from these cases and also the cases above cited, including the O’Connor case. In the Connelly case the contractor was found to be actually engaged in manufacturing and selling certain personal property as such to the government, rather than performing exclusively professional services or research and development.
There being no further proceedings necessary, the decree of the trial court is hereby reversed and a decree rendered in accordance with the opinion.
Opinion modified and extended and application overruled.
LIVINGSTON, C. J., and SIMPSON, COLEMAN and KOHN, JJ., concur.