Morris v. Riley

Anderson, J., delivered the opinion of the court. The state auditor, appellee, denied appellant, J. H. Morris, the exemption from taxes claimed by him for his ice factory under chapter 138, Laws of 1922, being chapter 146, Laws of 1910, chapter 100, Laws of 1916, chapter 183, Laws of 1918, amended (sections 6878 and 6879, Hemingway’s Code, and section 6878, Hemingway’s Supplement 1921). The circuit court of Hinds county rendered a judgment in favor of appellee denying said exemption, from which appellee prosecutes this appeal. The case was tried on agreed facts, which are as follows : “It is agreed further: That Joe Henry Morris is a resident and citizen of the state of Mississippi, living in the city of Jackson, where he was born. That he is now thirty-one years of age, and has been engaged in the ice business at Jackson for fourteen years, working heretofore for the Morris Ice Company, a Mississippi corporation, and thereafter for the Morris Ice Company, a Delaware corporation. That initially he had no other position than as an employee, but gradually got to the place at which he became and was general manager of the Morris Ice Company of Delaware, and was receiving a [11] salary at the rate of five thousand dollars a year when the plant was destroyed by fire. ‘ ‘ That the entire plant of the Morris lee Company was destroyed by fire November 1, 1923, and the destruction was complete. At the date of such destruction by fire, said Joe Henry Morris owned fifty-one per cent, of the stock of said Morris Ice Company, there being one hundred forty-four shares of such stock issued and outstanding, of which he owned seventy-three shares. This property belonged to him absolutely. That there were other stockholders in said corporation. Without fault on the part of any one, the Enochs Lumber & Manufacturing Company and adjoining property caught fire and the fire spread to the Morris Ice Company, where its complete plant was destroyed. “That said Morris Ice Company had been in business in Jackson for a long period of years, having been incorporated in 1882, and that it had built up a large retail ice business in the city of Jackson and some carload lot business to surrounding towns. That in the ice business in Jackson and in the surrounding towns there has been and still is sharp competition in manufacture and sale. That at the present time the cost of material for rebuilding and of labor in rebuilding is abnormally high. That said Joe Henry Morris intends to erect an ice factory in the city of Jackson, not upon the lot heretofore occupied, and to operate said plant electrically, when the former plant was operated by steam. That said factory will be a new factory from the ground up, and that there will not be in the new plant a single bolt taken from the old property of the Morris Ice Company, and the said corporation has sold and is selling as much as possible of the said junk resulting from the fire. “That said Joe Henry Morris owns no other business than the ice business, and rents his home in the city of Jackson, where he has resided since he was born. “It is agreed that at the time of destruction by fire of the plant in the city of Jackson the Morris Ice Company [12] supplied approximately seventy-five per cent, of the ice sold by retail in the city of Jackson; that when the fire occurred it destroyed all of the instrumentalities, all of the wagons and trucks except two wagons. It did not destroy any of the mules. Immediately upon destuction the Morris Ice Company proceeded to buy ice from other dealers both in Jackson and elsewhere to continue to supply the business it had built up in Jackson. This was possible due to the season of the year, but in the summer season this method of continuation would be impossible due to the fact of the impossibility of purchasing adequate ice to supply the trade in Jackson. “It is the purpose of the Morris Ice Company to continue this operation until the business is begun by petitioner, upon which all responsibility ceases, when such adjustment as may be agreed upon will take place between petitioner and the Morris Ice Company, whereunder he will acquire therefrom the intangible value of its good will and the two wagons and the mules, or such of them as may be left. There were twenty-two mules owned at the time of the fire, and six have been subsequently sold. The name ‘Morris Ice Company’ is of value and represents a course of dealing of many years’ standing, satisfactorily serving the public. “The evidence shall be treated as a part of and controlling in the petition and the questions raised on demurrer. ’ ’ The first paragraph of section 1 of chapter 138, Laws of 1922, is in the following language: “That new factories and new enterprises of public utility hereafter established are granted exemption from ad valorem taxation on tangible property used in, or necessary to, the operation of the service or industry hereinafter named, but not upon the products thereof, for a period of five years, the time of such exemption to commence from the date of charter of a corporation, and, if an individual enterprise, then from the commencement of work; the [13] new manufactures and new enterprises of public utility to be exempted are enumerated as and limited to.” In the following paragraph ice factories are enumerated as one of the new enterprises of public utility entitled to exemption from taxes. Statutes exempting property from taxation are to be strictly construed against the “would-be” exemptionist. He must bring himself clearly within the statute under which the exemption is claimed. All reasonable doubts are resolved against him. New Standard Club v. McGowen, 111 Miss. 92, 71 So. 289, Ann. Cas. 1918E, 274. Both sides rely to some extent on Robertson, State Revenue Agent, v. Mississippi Packing Co. (Miss.), 98 So. 539. The court said in that case (addressing itself to the particular facts in hand) that the question whether under the statute there is a new enterprise being established is not determinative in case of a corporation by the personnel of the stockholders, the ownership of the stock, the ownership of the property, nor whether the business of the concern has ceased and begun again; that the time when the plant, the buildings and property, that which is subject to taxation, is located, is the controlling factor; that the purpose of the statute was to induce the establishment in this state of new enterprises of the character therein enumerated; that the exemption was granted as an inducement to the establishment of such enterprises ; that the public benefit to flow therefrom was the consideration for the’ exemption. The court did not intend to convey the idea that in determining whether or not a new enterprise is being established neither the personnel of the stockholders nor the ownership of the stock nor the ownership of the property nor whether the business had ceased and begun again should have any weight in any case, for in a proper case such considerations should weigh largely in determining whether an establishment is a new or an old enterprise. Bankruptcy, suspension of business, and a complete change in own [14] ership were the principal facts relied on in that case as giving the right to the exemption. It is true in the present case that appellant is rebuilding the plant on a different lot from where the old plant was situated. Nevertheless appellant, through his ownership of a majority of the stock in Morris Ice Company, owns a majority of the property and assets of that company which were not destroyed by the fire, including all of its personal property, choses in action, good will, etc. The business has gone right along with appellant in charge since the fire. When the new plant is rebuilt it is true it will be owned by appellant, and not by the Morris Ice Company; still it will simply be a continuation of the old business under the old name and a new ownership. It will be the old establishment repaired and added to. We hold that this is not the establishment of a new enterprise in the meaning of the statute. It is simply the old enterprise of the Morris Ice Company in a new form under new ownership. There has been no cessation in the business. The establishment has never ceased to be an establishment as shown by the agreed facts. If the exemption claimed here were allowed the state would be giving a consideration for the establishment of an enterprise already located and established, and which has been in existence for many years. Affirmed