*1 testimony the lack remarking upon it. What reason for appellant, and the a retort nothing more
followed the state. attorney for reap the benefits may defendant
“A escape testify, failure to cross-examination, claim and then affords, plays if he
protection the statute brings he very failure. When the want of jury of the the attention and the reason
testimony by him chose, a rebuttal he he
course invites cannot com- adversary, that he and of
plain.” State, holdings see v.
For like Slater Mont
166 Tex.Cr.R. 317 S.W.2d Ky., S.W.2d
gomery Commonwealth, Patterson, D.C., Edwards v.
F.Supp. 311. prosecutor
Here the remarks of invited, provoked and
reply argument were argu-
occasioned defendant’s counsel grounds
ment and are not for reversal.
Affirmed.
All concur. Justices M FORT
S & FINANCE COMPANY DODGE, Iowa, Appellee, COMMISSION, A. E. TAX IOWA STATE
Burrows, Lynn Jr., X. T. Pren Potter and tis, Thereof, Appellants. Members
No. 52975.
Supreme of Iowa. Court
Nov. 13, 1969.
Rehearing Jan. Denied *2 Turner, Atty. Gen.,
Richard George C. Sp. Murray, Atty. Gen., W. Asst. Harry M. Griger, Atty. Gen., Asst. appellants.
Mitchell, Murray, Mitchell & Fort Dodge, appellee.
LeGRAND, Justice. This is a appeal de novo challenging a decree holding personal certain sales of property exempt imposition from the chapter 422, tax under Code Iowa. Plaintiff, corporation, an Iowa has for many years engaged in the business of making personal loans secured liens on property. Defendants are the Iowa State 5Q7 422.43, mem- under section Code Iowa. users” and its individual Tax Commission ultimate Plaintiff admits that opinion we refer sales to In this bers. were included in the assessment. commission. consumers as the jointly defendants appealed Plaintiff to the district court of substantially dis- The facts County, which reversed the com- Webster controversy around centers pute. The grounds: (1) That the sales mission on two *3 security its loan by plaintiff of sale —which 422.42 were not retail sales under section upon every was a motor vehicle— Iowa; (3), That the (2) Code of sales When payment the borrower. default exempt casual sales and from sales tax occurred, possession plaintiff took default 422.45(6), under section Code Iowa. of security the terms of under (cid:127)of the appeals this From decree the commission this was in agreement. Sometimes loan plaintiff us. reverse to We and hold contract, sales the nature a conditional liable the tax for the commis- assessed mortgage. If neces- a chattel sometimes sion. re- sary, property was reconditioned or sale, for paired. It was then advertised I. disagree with the trial pro- ultimately a sale made. court’s conclusion the sales were not sales at first, applied, ceeds were off question depends upon retail. This sale. If and the costs of loan balance placed 422.42, construction surplus, paid any there remained defines various terms used with reference the borrower. In no case did over to is, liability. course, sales axio sale; nor, un- a profit tiff make matic that these legislative definitions are contract, could it do so. der its loan binding us. Sandberg on W. Co. v. Iowa J. Review, State Board of Assessment and plaintiff a retail sales Prior had 103, 107, 643, 645, 278 N.W. returns, as permit quarterly and made N.W. Iowa State Commerce Commis 422.52, required by of Iowa. Code sion v. Northern Company, National Gas surrendered Sometime Iowa, September 5, 161 N.W.2d filed did not permit sales tax and thereafter 1968. make sales tax returns. This method of operation from 1943 until 1965 continued Section 422.42 contains these definitions: At objection from the commission. “ * * * representative time a field of the com- any transfer, ‘Sales’means mission, auditing plaintiff’s while records exchange, barter, or conditional other- or purposes, the data for other came across wise, any by any manner what- or means sales. concerning these motor vehicle soever, for a consideration. furnish Thereafter was asked to “3. ‘Retail sale’ or ‘sale at retail’ means regarding information motor all any person sale to a consumer toor March July through vehicles from any purpose, other for processing or 31, 1965. tangible personal for resale property.” upon Based information furnished
plaintiff, the commission assessed a tax or
In section 422.43 as of the dates
$2264.48,plus penalty
$245.66,
unpaid
appeal
this,
material
this
we find
“There
delinquent
during
sales tax accrued
hereby imposed,
beginning the first day of
period
investigation.
Not all sales April,
percent
tax of two
by plaintiff during
that time were gross receipts
tangible
from all sales of
included in the
The commis- personal
assessment.
property, consisting
goods,
all
and wares,
sion excluded
sales wholesalers
merchandise,
except
or
as otherwise
certain
provided
other transactions and included
division,
in this
sold at retail in
”
*
**
buyers
qualified,
those made to
who
in the state
consumers
users.
opinion,
the commission’s
as “consumers or We hold the
question
transactions
fall
directly
provisions
these stat-
decided in
we held
within
Certainly
attempting
were transfers
ex-
utes.
these
rule of the commission
personal property
empt
a considera-
casual sales from the tax was invalid.
tangible
decision,
tion;
certainly they
just
Subsequent
perhaps
were not
it,
processing
legislature
for resale.
amended the
made for
Under
because of
exempt
the sales were re-
casual sales
tax.
factual situation
act to
Sandberg
v. Iowa
tail sales. W.
Co.
J.
best, then, plaintiff’s argument that
At
Review,
Board of Assessment
State
question
the sales in
were casual would
supra;
Moines
Rail-
Des
and Central Iowa
apply
May
It would
only after
way Company v. Iowa State Tax Commis-
any
not relieve the
tax based
sion,
253 Iowa
prior
on sales
that time.
Schemmer v. Iowa State
Com-
mission,
315,319,
254 Iowa
117N.W.2d
*4
unimportant
This becomes
in view
422.
casual
of
conclusion the sales were not
our
statutory
the
The evi
definition.
argues we should look to
Plaintiff
approximately 50
dence
sold
shows
provisions in the Uniform Commercial
year.
figure
cars each
This
varied from
Code,
prior
and the law as it existed
to
year,
year
depending upon the number
code,
adoption
chapters
of
and to
loans,
testimony
of
but
fixed the
defaulted
322, Code,
certain
for
definitions which
per year.
figure
average
at an
Plain
of
question
exclude the sales here in
from the
tiff
the sales were casual because
contends
provisions
chapter
taxable
422.
of
Without
selling
it
was not
the business of
auto
passing upon
any statutory
whether there is
profit;
for
mobiles
is a finance com
inconsistency, we hold our
here
answer
pany
prevent
and sells automobiles
provisions
must be found within the
of
loss on bad loans.
chapter
specifically
which
defines what
statutory
The
definition of casual sales
taxable, imposes
tax,
provides
for
requires that
conditions be met.
two
We
its collection.
assume,
hold,
although
plain-
we
do not
We hold these
were
transfers
sales at
engaged
goods
tiff is not
selling tangible
422.42(3),
retail under section
Code of
profit
part
business. Never-
Iowa.
theless we hold these transfers were not
casual sales because
cannot satis-
II.
agree
Neither can we
these transac-
fy
requirement
the second
definition
ex-
tions were
sales and
casual'
therefore
—that
nonrecurring.
the sales be
Web-
empt
422.45(6),
under section
which ex-
Dictionary,
ster’s .New International
Sec-
provisions
cludes
from
of the sales
Ed.,
“occur,
ond
defines recur
take
receipts
gross
casual sales.
Sec-
place,
appear again.” Synonyms
listed
tion 422.42(13)
casual sales as fol-
defines
return, repeat,
are
reappear.
reoccur and
lows:
“
tangible
‘Casual sales’ means sales of
In construing section 422.42(13)
personal
property
the owner
a non-
give
we
the words used
usual
their
and or
nature,
seller, at
time
recurring
if the
dinary meaning.
adhere
also
sale,
in the
engaged
profit
plain,
rule that
meaning
is al
obvious
selling tangible goods
business
ser-
ways preferred over one which is strained
vices taxed under section 422.43.” Both and artificial.
Freight,
Bruce Motor
Inc.
422.42(13)
422.45(6)
and section
Lauterbach,
247 Iowa
77 N.W.
May
became effective
amendment
2d
621.
that time there
Prior to
ex-
no
emption
In Des
exemption
for casual sales.
Moines
An
strictly
statute is
con
Railway Company
and Central
taxpayer,
strued
has
who
Commission,
Iowa State Tax
253 Iowa
proving
burden of
clearly that he comes
setup
today and,
explaining
fice
after
Artificial
Fischer
provisions.
within its
him,
Tax
we
cancelled out our Sales
Commis-
Iowa State
Company v.
Ice
reports
quarterly
Permit.
made
We have
sion, 248 Iowa
tax,
subject
had
since
Plaintiff has failed
no sales
citations.
for the col-
changed providing
the law was
here.
burden
meet that
of regis-
lection
time
of the
Tax at
Use
art-
a “strained and
take
indeed
It would
tration.”
say
the statute
interpretation of
ificial”
they
nonrecurring sales when
these were
following day.
replied the
aon
period of time
long
occurred over
Here, except
parts,
is the
formal
average.
once-each-week
commission’s letter:
question
the sales
We conclude
Dodge
“Dear Sir: Re:
Conv. Sed.
1936—
provisions within the
not casual
94-S-9036
therefore
422.42(13)
receipt
acknowledge
“This letter will
422.45(6).
exempt under section
yours
regard
of the 23” instant
urged by
ground
third
III.
use tax on the
car.
above
estoppel and
relates
allegedly
representation's
“We understand that this is a
based
certain
field
of its
car,
and one
by the commission
later was
to an
sold
your
representatives
company
for his own use.
June
*5
your
enclosing
“For
are
information we
probably
first
mention
respect
a book of
Regulations
Rules and
plead
and could
estoppel is not
that
by county
to the
collection of Use
upon
ordinarily be relied
therefore
treasurers.
six we
pages
On
five and
page
Estoppel
plaintiff.
153(1),
31
§
C.J.S.
apply
marked the
which
to finance
rules
336,
322,
Bunger, 255 Iowa
Reed v.
companies
cars,
selling repossessed
which
Randall, 257
Alexander v.
122 N.W.2d
ques-
clearly explain
we believe
the case
However,
422, 427,
ground the facts which said kindly call and sire on us we will do our estoppel. In a commis- clarify best to the matter. representative advised sion field repossessed due sales no tax was on sales “We are forwarding copy this letter thereupon sur- Plaintiff vehicles. motor your county treasurer.” permit to sales tax the commis- rendered its heavily Plaintiff exchange relies this sion. letters, nothing to sup- we see there but 23, 1943, plaintiff day, The same June port the estoppel. say- claim Far from with reference to the commission wrote ing anything from which could in- particular of a vehi- motor sale fer it liability, specifi- had letter no tax employees. cle that letter to one of In cally found to exist as to the paragraph: was transaction concerning inquiry “Incidentally, Eaton, H. made. The Mr. Chas. Inves- fact that it was a use tax rath- tigator your Department, unimportant. our of- er tax is sales Other 51Ú simply general referred for a treat-
than that
letter
authorities.
problem
Estoppel
rules
to use tax ment
see 31
C.J.S.
147,
page
regulations.
was said about
48 Harvard Law Review
Nothing
§
1281, 1299, 1308;
Fidelity
liability.
United States
Guaranty
Company v. State Board of
estoppel, must be found
If there is
384,
Equalization,
1034,
47 Cal.2d
303 P.2d
and not
what Mr. Eaton told
cited
1038 and cases
therein.
plaintiff and
correspondence
in the
between
the commission.
There
various definitions of
equitable estoppel,
all
the ele-
involve
Equitable
is based
party’s right
rely
ment
of a
repre
idea
one
has
certain
who
representation
made.
permit
thereafter
sentations should
page
Am.Jur.2d, Estoppel
§
position
prejudice
ted
change
Waiver,
27, page
section
Sanborn
thereon.
one who has relied
resort
Maryland
Casualty Company, 255 Iowa
injustice
ed to when
manifest
otherwise
1319, 1327,
758, 762,
N.W.2d
Maryland Casualty
would result.
Sanborn
rule
Am.Jur.2d,
is stated in
page
Co.,
“ *
**
as follows:
principle by
citations;
Am.Jur.2d, Estoppel
party
which a
who knows or should know
Waiver,
page
section
section
absolutely precluded,
truth is
both at
28, page
generally
It is not
invoked
equity,
law and in
from denying, or assert-
state, particularly
when the col
ing
contrary of, any
which,
material fact
lection of revenue
is involved.
Am.Jur.
conduct,
his words or
affirmative
Waiver,
2d, Estoppel
negative,
intentionally
culpable
or through
Estop-
page
31 C.J.S.
negligence, he
another,
has induced
who
pel
page
page 690,
§
§
was excusably ignorant of the true facts
730; Annotations,
page
511
perhaps neglect
Iowa State Tax
and
Railway Company v.
Iowa
There
999,
lack of
Commission,
diligence
part
Iowa
and this
plain
in turn
has no doubt caused
and citations.
tiff
have
could otherwise
plaintiff’s
Furthermore,
bearing on
as
passed
chapter
on to
others under
made, we
rely on the statements
right
tax,
But laches
failure to
no
collect
Mr.
au-
Eaton’s
that nowhere
mention
continued,
matter
such
long
how
conduct is
neither
thority shown. The record
shows
estop
does not
requiring
state from
extent of
nature of his
nor the
work
payment
unpaid.
a tax
which
due and
authority.
showing
Without
Am.Jur.2d, Estoppel
Waiver,
and
section
estoppel.
an
completely
fails to establish
Estoppel
page
§
C.J.S.
Estoppel
pages 730, 731.
Waiver,
Am.Jur.2d, Estoppel and
Gustafson,
page
People
stated,
For
the reasons heretofore
we
Cal.App.2d
find
holding
127 P.2d
Annota-
the trial
wrong
court
tions,
improperly
estoppel. party Such must He must ignorant” true facts. SNELL, (dissenting). Justice diligence safeguarding show his own Waiver, Am.Jur.2d, rights. I agree dissent I cannot Banks, page Anfenson v. conclusion reached Division III of N.W. majority opinion. L.R.A.1918D, A of what was told discussion plaintiff’s my reliance is in thereon nothing found opinion completely irrelevant and permit equitable estoppel us would hold issue frank- before us. commendable With may taxing power be exercised brief, says reply ness the of a state based more an oral on no (I quote): representation (the content of which *7 appellee “The fact is that was advised in shown) by a not tax commission by personnel tax commission it that authority (whose defined) is not when did not to collect tax on sales sales representation directly contrary is both and, a con- merchandise imposing to statute the tax and tax com sequence, appellee retail surrendered its rules implementing mission the statute. permit.” sales tax Heyward v. South Tax Carolina Commis sion, 347, 15, 240 S.C. 126 S.E.2d fully That the commission advised was Wasem’s, Washington, Inc. v. State of appears question. 67, 68, 530, 63 Wash.2d P.2d is It thus admitted that there advice was Assessor, A. H. Benoit Co. State and reliance thereon. That there was 201, 5; 1, 160 Me. A.2d Henderson damage appears from the fact that Gill, 313, 754, N.C. 49 S.E.2d plaintiff required $2,264.48 pay is now to Comptroller Weaver Stone Co. v. plus penalty. $245.66 Treasury, 53, 235 Md. 200 A.2d Equipment State v. Maddox Tractor & a where the We thus have situation Co., 260 Ala. representative So.2d advised it need not collect tax. This part when added such tax shall constitute a not was a casual It conversation. was price of such charge, or be debt shall admittedly advice, distinguished from from until paid, consumer or user retailer to conversation, given by mere commission shall be recoverable at same law ” * * * personnel plaintiff place plaintiff’s of manner as other debts. The business. commission admits that as provides: Section 422.49 a consequence plaintiff of this advice sur- rendered permit. its sales tax The com- “Absorbing prohibited. tax It shall be mission was plaintiff’s advised action any unlawful retailer advertise or nearly years acquiesced or more public any hold out or or state to by silence and lapse inaction. After that directly consumer, indirectly, that or the tax of time the goes now back any by part imposed or thereof this div- years S (1960 1965) plaintiff and asks ision will be assumed or absorbed penalty what was it retailer or that will considered as not be told it need collect. consumer, price in the element added, any or if that it thereof part or will Every element estoppel present. is be refunded.” There advice, thereon, was reliance ac- quiescence and now determination of loss. is the commission before us In the case pay, not plaintiff to absorb asking There neither is claim nor evidence of prohibited tax but a own tax any fraud, misrepresentation, concealment absorb, and saying would law from part nondisclosure on the plaintifff. argument This told it need collect. is, course, It true and need not be dis- should theory is based on cussed here that a taxpayer may not take laws about the tax more have known advantage an error or omission to es- imposi- agent. own the commission’s cape charges against taxes or prop- his own manifestly unfair. is tion of such erty. If a tax assessor fails assess resorted Equitable is a doctrine county auditor fails property to list injustice would manifest when otherwise county taxation or the treasurer fails Am.Jur.2d, Estoppel, section result. collect, liability remains. is not page 629. page Such is not the case before us. state, par- generally invoked revenue ticularly the collection of when nature, our Am.Jur.2d, Estoppel, section involved. kept in mind. It is an excise tax as dis- page page tinguished from a property or income tax. page § § The State makes a of a holder sales tax Annotations, 1 A.L.R. page permit a tax collector. The 2d 341. goods sale payable pur- chaser. concern over growing there is are sometimes results which unconscionable 422.43, Iowa, Section Code of so far as per- never doctrine is if this inevitable applicable here, imposes upon, a tax *8 state or one against the a defense mitted as gross receipts tangible from per- sales of A courts agencies. number of of property sonal sold at retail to consumers policy public of questioned soundness the or users. urging prevents taxpayer that from es- a provides: Section 422.48 toppel injustice. prevent manifest “Adding shall, tax. Retailers the tax- as far This more true where is even practicable, as imposed .add the a here, tax for tax payer, and remits as collects division, this average equivalent or the pass required to permitted which he is thereof, price charge to the sales later deter- In such a on to another. cases
513 compels by Supreme the tax- An liability tax extensive the discussion mination tax he appears funds a Court payer pay from own of California United except Fidelity Guaranty Company States & others v. could have collected from Equalization, State Board 47 Cal.2d representation. the erroneous 303 the P.2d 1034. That case involved Estoppel In 31 casualty companies premium rule, ap- this discussing general the after fees agents’ taxes on their commissions pears : the state arranging bonds. circumstances, exceptional how- “Under rejected plaintiffs claimed and but the ever, estoppel of may there be an Plaintiffs collecting agents. were not mere government with tax mat- the in connection by ruling had relied on an erroneous ters, the in- the must be clear and case official but their claim of was that loss a tax justice great. proper In a case of- they their would have otherwise raised reference to may estopped ficial be with premium rates. arising as him tax matters between quote excerpts opinion: from- the government.” many “There are instances in which an following In support this statement equitable estoppel against in fact will run by authorities are cited C.J.S.: the government right re- justice where Mississippi U.S.-City v. of St. Louis * * * quire it. [Citations] D.C.Mo., F.Supp. Corp., Fuel River 57 government may estopped in tax “The be Fidelity Guaranty & Co. Cal.-U.S. * * * matters. [Citations] Equalization, P.2d State Bd. of 303 v. it is the unusual case in which will Pipe 47 2d Ohio-Crown C[al.] cases; applied be in tax must be case Foundry, & Inc. v. Com.Pl. Davis [Ohio] injustice great (see clear and the author 167 N.E.2d Pa.-In re Heberton’s cited). by ities last is indicated This Estate, 285, affirmed 51 Pa.Dist. & Co. general power rules in field. ‘The 564; Tenn.-City of 41 Pa. A.2d never be or sus taxation shall surrendered Co., 326 Memphis v. M. S. S.W.2d W. pended by to which any grant or contract Tenn.App. v. Wash.-Seward * ** party.’ a State shall be Ob Fisken, 122 Wash. P. viously, a not be tax administrator Libby & Wis.-Libby, McNeill A.L.R. permitted exempt ruling to an erroneous Taxation, 51 Dept. of N.W. v. Wisconsin taxes. taxpayer obligation from 2d Wis. goes. But that far the rule collecting taxpayer a mere Where pointed rule proper limitations on that impose may estopped to agency the state out in La Francaise court Societe Ry. Market employees. act of its St. Emp. Comm., Cal.App.2d California Equaliza- Co. Board v. California State * * 534, 133P.2d *.” tion, 2d A[pp.] P.2d C[al.] plaintiff rely- La In the Societe heavily cites and relies The commission later reversed did ing ruling on Commission, City of v. State Ames unemployment insurance deduct the wherein wages. The held the employee’s court from power rule-making held that the collecting the estopped state was with may inconsistent not be employee’s representing con- .amount of tax Pipe statute, Michigan-Wisconsin tribution, estopped to collect but was not Company Johnson, 247 Iowa Line imposed employer. contributions changes .ad- involving I quarrel general Both cases involved have no rule ministrative rules. estoppel may taxpayer for use tax. invoked liability of the not be *9 matters. agent government in tax or revenue collecting presents I case present think have here was not involved. jus- manifest unusual situation where requires exception. tice The result
sought approved by the commission majority my opinion is unconscion-
able. money get laws enacted to
rarely give peace to the tax- and comfort
payer they should administered not be so penalize
as to entrap and innocent. taxing
If the authorities made mistake applied prospec- correct rule should be
tively retrospectively expense at but not
of one reliance whose mistake was agent. advice particular
Because facts
I think estopped collecting the tax.
I would affirm.
GARFIELD, J.,C. and STUART and
BECKER, join JJ., in this dissent.
Dewey Wymer, WYMER and Darline Appellants, Dagnillo,
Lee DAGNILLO and Maxine Appellees.
No. 53184.
Supreme Court of Iowa.
Nov.