127 Va. 688 | Va. | 1920
delivered the opinion of the court.
The Interstate Railroad Company presented to the clerk of the Circuit Court of Wise county for recordation two papers under one cover, each dated February 20, 1920, to-wit:
(1) The first paper appeared upon its face to be a lease from the Fidelity Trust Company, trustee, to the railroad company of 500 coal cars at a total price of $1,100,000, of which $200,000 was payable in cash and the residue was to be paid in ten subsequent annual installments of $90,-000 each, with interest. All of these payments were termed rentals, but the lease provided for a formal transfer of the title as soon as all of the payments had been made.
This paper, containing also numerous other provisions common to instruments of that character but not material here, was duly signed, sealed and acknowledged by both parties.
(2) The second paper, attached to the former and expressly referring to it as a contemporaneous instrument, was an agreement between the same parties which recited that Brown Brothers and Company, Philadelphia bankers, had
The two papers in question are rather prolix in their provisions and recitals. The foregoing is a sufficient statement of their substantial purport. Reading the two papers together, it is perfectly apparent that the railroad company desired to purchase 500 coal cars and was willing to pay therefor the price of $1,100,000; that the cars were procured from a manufacturing company through the financial agency and assistance of the trust company and Brown Brothers and Company; that the railroad company paid $200,000 in cash, and agreed to pay the additional sum of $900,000; that the two papers in question were in furtherance of one and the same transaction, and were essentially inter-dependent; that while the first paper might have appeared on its face to be complete in itself, the second showed that it was not; that both were essential to effectuate the transaction, and that neither party would have executed and delivered either paper without the execution and delivery of the other. Exactly the same purpose could have been more simply accomplished if the terms of the agreement had all been embodied in one paper, but the substance and effect
The clerk of the Circuit Court of Wise county, construing the two papers as essentially one contract, was of opinion that the recordation tax was only the sum of $1,100, computed upon the total consideration of $1,100,000, and that no separate tax should be collected upon the agreement relating to the car trust certificates. He accordingly admitted the paper to record and accepted the sum of $1,100 as the proper amount of the tax. When the matter came to the attention of the Auditor of Public Accounts, however, he was of opinion that an additional tax of $900 ought to have been collected, and notified the clerk that he would be held liable accordingly in the settlement of his accounts. The clerk then brought this suit against the railroad company to recover the last named sum: A jury was waived and the court awarded the plaintiff a judgment for $900, to which this writ of error was allowed.
The position taken by the Commonwealth appears to be that the first paper being a contract relating to rolling stock is clearly subject as such under the provisions of section 13 of the tax bill, Code 1919, page 3087, to a tax on the total consideration amounting to $1,100, and that therefore “the only question for consideration is whether the second instrument referred to is subject to the usual tax upon being admitted to record.”
This latter contention proceeds upon the assumption that the two papers are independent of each other in essential particulars, and the right to collect the tax on the second is sought to be sustained, not on the ground that the paper is one relating to rolling stock, but on the ground, first, that it is signed, sealed and delivered, and hence taxable as a deed under the above.cited section of the tax bill;- and, second, that it is a deed of trust or mortgage and taxable as such under that section.
The case of Saville v. Virginia Railway & Power Co., 114
The judgment complained of will be reversed, and a final order entered here in favor of the defendant company.
Reversed.