Court Opinion

ID: 9862943
Source: CourtListenerOpinion
Date Created: 2023-09-25 02:33:03.48558+00
Date Added: 2024-06-11T11:45:06.130708
License: Public Domain

Opinion on Petition to Rehear
Me. Justice Humpheeys.
Signal Thread Company has filed a petition to rehear, the purpose of which is to have this Court review its holding that the processed thread in the hands of a proc-esser in North Carolina does not constitute doing business elsewhere than in Tennessee on the part of petitioner.
We have reconsidered this holding in the light of cases cited in the petition, R. J. Reynolds Tobacco Co. v. Carson, 187 Tenn. 157, 213 S.W.2d 45 (1948); People v. Bacon, 243 Ill. 313, 90 N.E. 686, 44 L.R.A., N.S., 586, affirmed 227 U.S. 504, 33 S.Ct. 299, 57 L.Ed. 615 (1913); and Coe v. Town of Errol, 116 U.S. 517, 6 S.Ct. 475, 29 L.Ed. 715 (1886), and find no reason to change our holding.
The Reynolds Tobacco Company case is not in point. There, Reynolds, a foreign corporation, stored large quantities of goods in public warehouses in this state for sale and delivery to its customers in Tennessee. This, of course, was held to be doing business. In the present case, the processed thread is in the hands of the independent contract manufacturers simply as the last step in the manufacturing process. This is the fair inference from the stipulation and from the additional fact that complainant Signal Thread Company indicated that it regarded the property as being in this situation by its failure to list the property for taxation by North Carolina.
*258This distinction makes the Bacon case inapplicable. The question there was whether the grain had a situs in Illinois for taxation, or was in the state in interstate commerce. It was held that since the grain had been withdrawn from the carrier it was not in interstate commerce so as to be exempt from state taxation. The court pointed out that the owner of the property, having withdrawn it from the hands of the carrier, and having it in his possession, had the privilege of doing with it as he might choose, so it could not be regarded as in transit from one state to another.
Coe v. Errol is another interstate commerce case, and has nothing to do with the question of what constitutes doing business.
Petitioner’s criticism of the Court’s citation of City of Clinton, Oklahoma, ex rel. Schuetter v. First National Bank in Clinton, 39 F.Supp. 909, affirmed Hann v. City of Clinton, Oklahoma, ex rel. Schuetter, 131 F.2d 978; Brock & Company v. Board of Sup’rs of Los Angeles County, 8 Cal.2d 286, 65 P.2d 791, 110 A.L.R. 700 (1937); and Guinness v. King County, 32 Wash. 503, 202 P.2d 737, 6 A.L.R.2d 1361 (1949), as not being in point is unwarranted. These cases were not cited a being in point with the present case, but simply as authority for the general proposition that property in a state does not necessarily have a situs there for taxation, where the stay of the property in the state is temporary as where the property continues in the hands of its manufacturer, and has not been warehoused in the name of the one for whom manufactured.
The conclusion of the whole matter is that the processed thread in the hands of the independent con*259tractor manufacturer was there as a part of the process of manufacture, and not as an independent act of business on the Thread Company’s part in the state of North Carolina. This is implicit from the whole record, and from the treatment of the property in reference to the Thread Company’s duty to North Carolina to list the thread for taxation under North Carolina taxing statutes, particularly N.C.Gr.S. sec. 105-280, which provides for the listing of tangible personal property for taxation if it has a taxable situs in the state.
There are some other things said in the petition to rehear but, since they complain of matters that had nothing to do with the conclusions reached in the Court’s opinion, they need not be dealt with here.
The petition to rehear is denied.
Burnett, Chiee Justice, and Dyer, Chattin and Cre-son, Justices, concur.