Court Opinion

ID: 9848021
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:11:25.672039+00
Date Added: 2024-06-11T09:17:55.041446
License: Public Domain

Bussey, Justice
(dissenting) :
Pertinent to the proper disposition of this appeal is the following language from Fuller v. Tax Commission, 128 S. C. 14, 121 S. E. 478:
“(W)here the language relied upon to bring the particular person or subject within the law is ambiguous or is reasonably susceptible of an interpretation that would exclude the person or subject sought to be taxed, the well-established general rule requires that any substantial doubt should be resolved against the government and in favor of the taxpayer (United States v. Merriam [263 U. S. 179], 44 S. Ct. 69, 68 L. Ed. 240). In the application of that general rule there are other recognized principles of construction which are pertinent and may lend controlling weight. Double or multiple taxation upon succession to the *22same property is not favored in the law, and a construction of a tax statute that imposes such double taxation will be avoided if not clearly required.” (Emphasis added.)
Numerous cases collected in West’s South Carolina Digest, under Statutes, Key No. 245, are in accord with the general proposition that any substantial doubt as to legislative intent of a taxing statute has to be resolved against the government and in favor of the taxpayer.
It is also quite well settled that there is always a presumption against a legislative intent to impose a double tax and that the courts will not construe a statute as imposing a double tax unless such intention is clear from its terms or by necessary implication. Wingfield v. S. C. Tax Commission, 147 S. C. 116, 144 S. E. 846, 854. The opinion in this case cites and discusses numerous authorities in accord with this proposition.
To say the least, there is, to my mind, a most substantial doubt that the legislature ever intended that the document here involved should be taxed both as a promissory note and as a power of attorney. Therefore, I feel conscientiously impelled to dissent. The majority opinion quite correctly states that the service agreement, here involved, is essentially a promissory note and that being the essential nature of the document, it is, of course, taxable as a promissory note. Other provisions of the instrument are merely aids to the enforcement of the payment of the promissory note. Inter alia, the note assigns to the holder as security any and all unearned premiums and dividends which might become payable under the insurance policy or policies financed. To this extent the service agreement partakes of the nature of a chattel mortgage. Upon breach or default by the promissor or maker, under settled principles of law as to chattel mortgages, title to any unearned premiums or dividends would automatically vest in the holder of the instrument. See cases collected in West’s South Carolina Digest, Chattel Mortgages, Key No. 162. The power of attorney, one of the *23numerous clauses in the service agreement, is put there obviously for the sole and incidental purpose of enabling the holder of the instrument, upon default by the maker, to cancel the insurance and collect from the insurer that to which the holder by then has the lawful title. Thus, while nominally acting as attorney in fact for the maker, in reality it is acting for itself to obtain possession of that to which it is lawfully entitled.
As suggested in respondent’s brief, if this type of incidental power contained in a document, which is essentially other than a power of attorney, subjects the document to double taxation, it would follow logically that many other security instruments commonly used in commercial and financial transactions, containing incidental powers, would likewise be subject to double taxation. Could such possibly have been the intent of the General Assembly? I most seriously doubt it.
No case directly in point has been cited by either appellants or respondent. A case more nearly in point than any other disclosed by research is that of Personal Finance Co. of New York v. Lyons et al., 128 Conn. 254, 21 A. (2d) 652. This case was decided under the law of New York where the particular transaction involved originated. A New York statute forbade a finance company to take from a borrower “any confession of judgment or any power of attorney”, and further provided that a violation by the finance company would render the transaction void and the loan uncollectible. The borrowers executed a promissory note and chattel mortgage, which latter contained a lengthy provision authorizing the mortgagee, upon default, to seize and sell the mortgaged personal property. The mortgagors contended that such provision was a power of attorney, in violation of the New York statute, thus rendering the transaction void, and the trial court so held.
Upon appeal, the Supreme Court reversed and held that such power of sale was not in the nature of a power of *24attorney and not in violation of the New York statute. The Court pointed out that under New York law after default of the mortgagor the mortgagee became the absolute owner of the property, subject only to a right of redemption remaining in the mortgagor, and that under the power of sale the mortgagee was selling the property as its own and not as the agent of the mortgagors.
I regard this decision as logical and persuasive that the purely incidental, nominal power of attorney contained in the service agreement here is not, in fact, a power of attorney within the purview and intent of the taxing statute. I would affirm the judgment of the lower court.