National Mortgage Corp. v. Suttles ( 1942 )

Following the ruling in Suttles v. Associated Mortgage Companies, 193 Ga. 78, the credits in question were not taxable in this State; distinguishing the ruling in Suttles v. Northwestern Mutual Life Insurance Co., 193 Ga. 495.

No. 14180. SEPTEMBER 24, 1942. REHEARING DENIED OCTOBER 23, 1942. 1. "(a) According to previous decisions by this court construing Georgia statutes, a promissory note executed by a resident of this State, but owned by a non-resident and held by the latter at his domicile out of this State, is to be taxed here only if it is derived from or is used as an incident of property owned or of a business conducted by the non-resident or his agent in Georgia; and this is true although the note may be secured by a mortgage on land situated in this State. Collins v. Miller, 43 Ga. 336; Carhart v. Paramore, 44 Ga. 262;Cary v. Edmondson, 44 Ga. 651; Armour Packing Co. v.Savannah, 115 Ga. 140 (41 S.E. 237); Armour Packing Co. v.Augusta, 118 Ga. 552 (45 S.E. 424, 98 Am. St. R. 128);Armour Packing Co. v. Clark, 124 Ga. 369 (52 S.E. 145);Columbus Mutual Life Insurance Co. v. Gullatt, 189 Ga. 747 (8 S.E.2d 38). (b) Where notes and mortgages are so owned and held by a non-resident, the maintenance of an office and agency in this State for the purpose merely of protecting the security and ultimate collection or liquidation of the indebtedness, the papers themselves being sent into this State only when needed for cancellation, renewal, or foreclosure, would not be using them in this State, within the rule enunciated.Collins v. Miller, supra; Cary v. Edmondson, supra."Suttles v. Associated Mortgage Cos., 193 Ga. 78 (17 S.E.2d 272).

2. The undisputed facts in the instant case show that the property sought to be taxed was acquired and held by a non-resident under a plan and arrangement similar in principle to that which obtained in the above-cited case. The non-resident owner did not maintain an office or agency in the State, but would return the securities to separate and independent agencies in this State for the purpose merely of protecting the securities and ultimate collection or liquidation or renewal thereof. The method of handling the securities was not such as to become "an integral part of some local business conducted by him or his agent," as was ruled in Suttles v. Northwestern Mutual LifeInsurance Co., 193 Ga. 495 (2, a) (19 S.E.2d 396). In the circumstances a judgment by the court without a jury was demanded for the plaintiff non-resident corporation against whom the tax was sought to be assessed. The court erred in denying a new trial. The controlling question in the case is as to taxability of the property; and under the above ruling it is unnecessary to deal with the special grounds of the motion for a new trial.

Judgment reversed. All the Justices concur.

ON MOTION FOR REHEARING.