{ "id": 2866278, "name": "Lucille EALEY, d/b/a T & L Ceramics, Appellant, v. BUREAU OF REVENUE of the State of New Mexico, Appellee", "name_abbreviation": "Ealey v. Bureau of Revenue", "decision_date": "1975-12-09", "docket_number": "No. 2040", "first_page": "174", "last_page": "179", "citations": [ { "type": "official", "cite": "89 N.M. 174" }, { "type": "parallel", "cite": "548 P.2d 454" } ], "court": { "name_abbreviation": "N.M. Ct. App.", "id": 9025, "name": "Court of Appeals of New Mexico" }, "jurisdiction": { "id": 52, "name_long": "New Mexico", "name": "N.M." }, "cites_to": [ { "cite": "82 N.M. 41", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5330925 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/nm/82/0041-01" ] }, { "cite": "64 N.M. 59", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5344921 ], "weight": 2, "year": 1958, "opinion_index": 0, "case_paths": [ "/nm/64/0059-01" ] }, { "cite": "57 N.M. 543", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 8842408 ], "weight": 2, "year": 1953, "opinion_index": 0, "case_paths": [ "/nm/57/0543-01" ] }, { "cite": "84 N.M. 610", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2762648 ], "weight": 2, "opinion_index": 1, "case_paths": [ "/nm/84/0610-01" ] }, { "cite": "86 N.M. 128", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2822394 ], "weight": 2, "opinion_index": 1, "case_paths": [ "/nm/86/0128-01" ] }, { "cite": "84 N.M. 314", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2763891 ], "weight": 2, "opinion_index": 1, "case_paths": [ "/nm/84/0314-01" ] }, { "cite": "87 N.M. 334", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2833762 ], "weight": 2, "opinion_index": 1, "case_paths": [ "/nm/87/0334-01" ] }, { "cite": "94 L.Ed. 616", "category": "reporters:federal", "reporter": "L. Ed.", "year": 1950, "opinion_index": 1 }, { "cite": "339 U.S. 33", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 362241 ], "weight": 4, "year": 1950, "pin_cites": [ { "page": "44" }, { "page": "451" } ], "opinion_index": 1, "case_paths": [ "/us/339/0033-01" ] }, { "cite": "87 N.M. 118", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2830275 ], "weight": 2, "pin_cites": [ { "page": "125" } ], "opinion_index": 1, "case_paths": [ "/nm/87/0118-01" ] }, { "cite": "88 N.M. 176", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2837846 ], "weight": 3, "pin_cites": [ { "page": "1199" } ], "opinion_index": 1, "case_paths": [ "/nm/88/0176-01" ] }, { "cite": "83 N.M. 29", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5338277 ], "weight": 2, "opinion_index": 1, "case_paths": [ "/nm/83/0029-01" ] }, { "cite": "41 N.M. 403", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1571469 ], "weight": 4, "year": 1937, "pin_cites": [ { "page": "406" }, { "page": "938" } ], "opinion_index": 1, "case_paths": [ "/nm/41/0403-01" ] }, { "cite": "78 N.M. 97", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5320801 ], "weight": 2, "year": 1967, "pin_cites": [ { "page": "99" }, { "page": "638" } ], "opinion_index": 1, "case_paths": [ "/nm/78/0097-01" ] }, { "cite": "82 N.M. 41", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5330925 ], "weight": 2, "opinion_index": 1, "case_paths": [ "/nm/82/0041-01" ] }, { "cite": "84 N.M. 428", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2766945 ], "weight": 2, "opinion_index": 2, "case_paths": [ "/nm/84/0428-01" ] }, { "cite": "41 N.M. 403", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1571469 ], "weight": 2, "year": 1937, "opinion_index": 2, "case_paths": [ "/nm/41/0403-01" ] }, { "cite": "82 N.M. 41", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5330925 ], "weight": 2, "opinion_index": 2, "case_paths": [ "/nm/82/0041-01" ] } ], "analysis": { "cardinality": 827, "char_count": 18033, "ocr_confidence": 0.781, "pagerank": { "raw": 1.0890697727951073e-07, "percentile": 0.5651648030445018 }, "sha256": "ff5e9e3b9c1f017459de46a6b15f266f7e82ee2bd862f6f96c69e3c827b65f62", "simhash": "1:614c6c283c1606e6", "word_count": 2869 }, "last_updated": "2023-07-14T20:56:52.908635+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "WOOD, C. J., dissenting.", "SUTIN, J., specially concurring." ], "parties": [ "Lucille EALEY, d/b/a T & L Ceramics, Appellant, v. BUREAU OF REVENUE of the State of New Mexico, Appellee." ], "opinions": [ { "text": "OPINION\nHERNANDEZ, Judge.\nThis case represents an appeal from the order of the Commissioner of the Bureau of Revenue, pursuant to \u00a7 72-13-39, N.M. S.A.1953 (Supp.1973). This appeal followed a formal hearing held on March 14, 1975, at which time appellant-taxpayer challenged the Bureau\u2019s denial of her request for a refund of gross receipts taxes paid to the State of New Mexico.\nThe taxpayer operates a telegraph office in Farmington, New Mexico as agent for Western Union. Her duties under the contract with Western Union include the acceptance and transmission of telegraph messages, the destination of which is outside Farmington, and the receipt and delivery of incoming messages to addresses in Farmington. In the latter case, the taxpayer mails or phones the message. Very few messages are hand-delivered. Approximately eighty-five per cent (85%) of the telegraph messages are transmitted interstate; fifteen per cent (15%) of the business is intrastate. Western Union owns the equipment and pays for the Farmington city license which authorizes the operation of the office in Farmington.\nFor her services, the taxpayer is compensated at the rate of seventy cents (70\u2021) per message, regardless of origin, destination, length of message, or method of delivery. Western Union pays no operating expenses. The taxpayer testified she paid individual income tax on the total amount of commissions paid to her by Western Union for her services throughout the year.\nThe Bureau of Revenue in its Decision and Order found that the taxpayer is obligated to pay New Mexico\u2019s gross receipts tax insofar as she performs services in New Mexico; accordingly, her activities fall within the definition of \u201cgross receipts\u201d in \u00a7 72-16A-3(F), N.M.S.A.1953 (Supp. 1973). The Bureau denied the applicability of \u00a7 72-16A-14.10, N.M.S.A.1953 (Supp. 1973), to taxpayer\u2019s case.\nAppellant-taxpayer claims the refund on the grounds that she is exempt from paying New Mexico\u2019s gross receipts tax under both provisions of \u00a7 72-16A-14.10, supra. This section provides:\n\u201cReceipts from transactions in interstate commerce may be deducted from gross receipts to the extent that the imposition of the gross receipts tax would be unlawful under the United States Constitution.\n\u201cReceipts from transmitting messages or conversations by telegraph, telephone or radio other than from one point in this state to another point in this state may be deducted from gross receipts.\u201d\nIt is my opinion that the deduction provided for in the second part of the statute is dispositive of this appeal on two grounds.\nThe first ground is statutory construction. The rule of statutory construction laid down by the Supreme Court in In re Cox\u2019 Estate, 57 N.M. 543, 260 P,2d 909 (1953) is followed here. The court in that case stated: \u201cWe must assume that the legislature means just what the words it uses mean, and that it chose its words advisedly to express its meaning until the contrary clearly appears.\u201d See also Valley Country Club, Inc. v. Mender, 64 N.M. 59, 323 P.2d 1099 (1958).\nClearly, the second provision of \u00a7 72-16A-14.10, supra, encompasses receipts from the taxpayer\u2019s activities. I assume the legislature said what it meant to say.\nThe second ground centers on the taxpayer\u2019s status as an agent of Western Union. The Commissioner found in his Decision and Order that:\n\u201c1) The taxpayer is a telegraph operator working under contract with Western Union Telegraph Company . . . . The taxpayer is an agent of Western Union.\n\u201c5) As agent for Western Union, the taxpayer initiates the transmittal of messages (including money orders) interstate for customers who wish to utilize Western Union telegraph services.\n\u201c8) All moneys received by the taxpayer from customers are received by taxpayer as agent for Western Union and all such moneys are delivered to Western Union by depositing such money in a Western Union bank account. The taxpayer does not withhold or retain any portion of such moneys.\u201d\nThe telegraph equipment is owned by Western Union. The taxpayer is under contract with Western Union which is clearly designated an \u201cAgency Agreement\u201d for the services she performs for this company. Her business, in this context, is inseparable from that of Western Union\u2019s. The Commissioner agrees that Western Union is entitled to the deduction provided for by \u00a7 72-16A-14.10 supra.\nThe case heavily relied upon by the Bureau to support its position is readily distinguishable from the case at hand. In Spillers v. Commissioner of Revenue, 82 N.M. 41, 475 P.2d 41 (Ct.App.1970), the equivalent of the first section of \u00a7 72-16A-14.10, supra, applying to the unconstitutional taxation of interstate commerce by the states was argued by the appellant-taxpayer. This case involved the transportation of goods in interstate commerce. This court stated:\n\u201c . . . [I]t is our conclusion that the receipts to be deductible must result from an act or acts of transportation as distinguished from receipts derived from the negotiation of an agreement under which transportation may result. This statute is not sufficiently broad in language when considered under the rule of strict construction to authorize a deduction of receipts from the initiation of an agreement for transportation.\u201d\nThis court in that case found a separate, local activity, to-wit: the \u201cbooking\u201d of interstate contracts.\nThe taxpayer in the instant case not only \u201cbooks\u201d interstate- contracts, she executes the contract by pushing the button that results in the transmission of interstate messages. She receives messages from out-of-state which are transmitted to Farmington. The Albuquerque control center is a relay station in the process of the transmission of telegraph messages. Once a telegram is transmitted bound for an interstate destination it becomes part of the national network of telegraph communications. Each separate mode of relay or transmission cannot be isolated and taxed as a local incident. There is no separate, local activity for which the taxpayer is responsible.\nWe reverse.\nIT IS SO ORDERED.\nWOOD, C. J., dissenting.\nSUTIN, J., specially concurring.", "type": "majority", "author": "HERNANDEZ, Judge." }, { "text": "SUTIN, Judge\n(specially concurring).\nI concur in the result only.\nThe Commissioner decided and ordered that:\n4) The taxpayer\u2019s only place of business is in Gallup, New Mexico, and all of her activities take place in Gallup.\nThe Commissioner has no authority to transplant the taxpayer from Farmington to Gallup, New Mexico.\nThe Commissioner decided and ordered that:\n2) The taxpayer is a telegraph operator working under contract with Western Union Telegraph Company, ....\nThe taxpayer is an agent of Western Union.\nA. An agent of Western Union is not taxable.\nThe issue to decide is: Can the Commissioner transform the services of an agent for Western Union, by way of transmogrify, into a 'business engaged in by her, when Western Union transmits and receives interstate messages via an Albuquerque control office? The answer is \u201cNo.\u201d\nAs an agent, the taxpayer agreed: (1) to operate a Western Union teleprinter in her office in Farmington, (2) to accept messages from the public in Farmington for transmission out-of-state through an Albuquerque control office of Western Union, (3) to accept out-of-state messages from the Albuquerque control office and deliver them to the public in Farmington, (4) to provide adequate area and appropriate counter and display space for conduct of Western Union business. For these services, the taxpayer received seventy cents per message sent or received.\nThe teleprinter acts as the transmitter. The electrically controlled typewriters in Farmington and Albuquerque are connected by an electrical circuit. When a key is struck on one of the typewriters, an electrical connection causes the corresponding key to be struck on the distant machine. The message then comes in typewritten form on a printed tape.\nWhen messages are sent to the Albuquerque control office for interstate transmission, the tape is taken off the Farming-ton-Albuquerque typewriter and placed on another teleprinter connected with an out-of-state point. The same procedure occurs for messages transmitted from out-of-state points to Farmington.\nWhat is the legal relationship between a principal and agent in the conduct of business?\n\u201cAgency\u201d is defined in 3 Am.Jur.2d Agency, \u00a7 1, as follows:\nThe term1 \u201cagency,\u201d as it is understood in the law and as used in this article, may be defined as a fiduciary relationship by which a party confides to another the management of some business to be transacted in the former\u2019s name or on his account, and by which such other assumes to do the business and render an account of it. Thus, the term \u201cagency,\u201d in its legal sense, always imports commercial or contractual dealings between two parties by and through the medium of another.\n\u201cUnquestionably, insofar as an agent\u2019s acts are within his authority they are in legal contemplation the acts of the principal.\u201d Ronald A. Coco, Inc. v. St. Paul\u2019s Methodist Church, 78 N.M. 97, 99, 428 P.2d 636, 638 (1967). \u201cHe is the servant or employee of the principal\u201d. Comer v. State Tax Commission of New Mexico, 4 N.M. at 408, 69 P.2d at 939, infra. \u201cFundamentally, and according to both the Restatement and the American courts, there is no distinction to be drawn between the liability of a principal for the tortious act of his agent and the liability of a master for the tortious act of his servant.\u201d 3 Am. Jur.2d Agency, \u00a7 267.\nThe taxpayer owned and operated T & L Ceramics as a ceramics shop which made greenware and sold paints for the ceramics. She was engaged in this business. She operated the Western Union business as the medium between the public and Western Union.\nShe was not engaged in the telegraphic business, nor did she perform such services in New Mexico for the purpose of direct or indirect benefit for herself. She was performing services only for Western Union.\nThe Commissioner relies on \u00a7 72-16A-3 (F). One pertinent paragraph reads:\n\u201cGross receipts\u201d, for the purposes of the business of buying, selling or promoting the purchase, sale ... as agent . . . on a commission or fee basis, of any . . . service, . includes only the total commissions or fees derived from the business; [Emphasis added].\nSimilar language was interpreted in Comer v. State Tax Commission of New Mexico, 41 N.M. 403, 69 P.2d 936 (1937). Comer was a commission agent for Phillips Petroleum Company. He was not the owner or operator of a business. He was merely an employee acting as manager or agent for the principal who was engaged in business. Comer was, therefore, not taxable. The Court said:\nIn every instance the tax is levied against the business of an owner or operator, and not against the employee acting as manager or agent for the principal who is \u201cengaged in business.\u201d [Emphasis by Court], [41 N.M. at 406, 69 P.2d at 938].\nSee, Westland Corporation v. Commissioner of Revenue, 83 N.M. 29, 487 P.2d 1099 (Ct.App.1971) where Comer is distinguished.\nThe taxpayer in the instant case falls within the Comer doctrine.\nThe Commissioner relies on Markham Advertising Co. v. Bureau of Revenue, 88 N.M. 176, 538 P.2d 1198 (Ct.App.1975). The taxpayer posted messages for out-of-state advertisers on billboards located only in New Mexico. This Court held:\nTaxpayer\u2019s service is simply to post messages on billboards located in this state. It is being taxed for displaying, not for advertising. This service is intrastate in character, and thus subject to the gross receipts tax. [538 P.2d at 1199].\nMarkham Advertising Co. was not an agent of the national out-of-state advertiser. It was an independent New Mexico business contractor engaged solely in intrastate services.\nThe Commissioner contends that Spillers v. Commissioner of Revenue, 82 N.M. 41, 475 P.2d 41 (Ct.App.1970), is dispositive of this case.\nSpillers was a common carrier engaged in transporting household goods. Spillers performed pursuant to a certificate of convenience and necessity issued by the State of New Mexico. Intrastate transportation and services was its business. Where such transportation and services involved interstate commerce, Spillers acted as a franchised agent under contract with Bekins Van Lines Co. of Hillsdale, Illinois, which is authorized to transport household goods in interstate commerce. Spillers received twenty percent of the transportation proceeds for having initiated an interstate order and a percentage of proceeds for additional services performed in connection with transportation.\nSpillers was taxable because he was \u201cengaged in the business\u201d of being an agent under \u00a7 72-16A-3(F).\nB. The deductible statute is not applicable.\nSection 72-16A-14.10, N.M.S.A.1953 (Repl.Vol. 10, pt. 2, 1973 Supp.) reads:\nReceipts from transactions in interstate commerce may be deducted from gross receipts to the extent that the imposition of the gross receipts tax would be unlawful under the United States Constitution.\nReceipts from transmitting messages or conversations by telegraph, telephone or radio other than from one point in this state to another point in this state may be deducted from gross receipts.\nThis statute is not applicable in this case. The taxpayer does not transmit messages by telegraph. Western Union does. The Commissioner admits, however, that if the taxpayer were an employee of Western Union, receipts from messages transmitted by her would be deductible under this statute. The taxpayer is an employee. This is another example of where the Commissioner \u201cextorts taxes like a pickpocket.\u201d Co-Con, Inc. v. Bureau of Revenue, 87 N.M. 118, 125, 529 P.2d 1239 (Ct.App.1974) (Sutin, J., dissenting).\nC. A taxpayer is entitled to a fair interpretation of the law and the facts.\nIn Wong Yang Sung v. McGrath, 339 U.S. 33, 70 S.Ct. 445, 94 L.Ed. 616 (1950), Mr. Justice Jackson set the stage for criticism of administrative agencies which conduct hearings not in conformity with the Administrative Procedures Act. He quoted at length from committee reports of administrative management. One of them is requoted.\n\u201cA genuinely impartial hearing, conducted with critical detachment, is psychologically improbable if not impossible, when the presiding officer has at once the responsibility of appraising the strength of the case and of seeking to make it as strong as possible. Nor is complete divorce between investigation and hearing possible so long as the presiding inspector has the duty himself of assembling and presenting the results of the investigation. . . .\u201d [339 U.S. at 44, 70 S.Ct. at 451],\nCriticism of the Commissioner\u2019s performance of duty has been stated many times. Co-Con, Inc., supra (Sutin, J., dissenting) ; Gathings v. Bureau of Revenue, 87 N.M. 334, 533 P.2d 107 (Ct.App.1975) (Sutin, J., dissenting) ; Cardinal Fence Co., Inc. v. Commissioner, Bureau of Revenue, 84 N.M. 314, 502 P.2d 1004 (Ct.App.1972) (Sutin, J., dissenting) ; Title Services, Inc. v. Commissioner of Revenue, 86 N.M. 128, 520 P.2d 284 (Ct.App.1974) (Sutin, J., dissenting) ; Torridge Corporation v. Commissioner of Revenue, 84 N.M. 610, 506 P.2d 354 (Ct.App.1973) (Sutin, J., dissenting)-\nIn such cases, the Commissioner\u2019s decisions are affirmed in this Court because it interprets the statute and the evidence against the taxpayers with antagonistic eyes. The taxpayer is entitled to surcease from taxation, free from a partial hearing before the Commissioner, when his case sits outside the \u201cwarp and woof\u201d of the statute. For almost two hundred years we have shouted that \u201cthe power to tax is the power to destroy.\u201d\nThe decision of the Commissioner should be reversed.", "type": "concurrence", "author": "SUTIN, Judge" }, { "text": "WOOD, Chief Judge\n(dissenting).\nJudge Hernandez correctly points out that the issue is whether the taxpayer is entitled to the deduction stated in \u00a7 72-16A-14.10, supra. No issue is raised as to whether the taxpayer\u2019s commissions are gross receipts under \u00a7 72-16A-3(F), supra. Judge Sutin\u2019s discussion of Comer v. State Tax Commission of New Mexico, 41 N.M. 403, 69 P.2d 936 (1937) is not applicable to the issues raised in this appeal.\nNor is there any issue raised as to the taxpayer\u2019s status. She does not contend that she is an employee of Western Union. Her position throughout has been that she was an agent. She claims she is entitled to the deduction provided by \u00a7 72-16A-14.-10, supra, because the agents of Western Union are inseparable from the company. Whether this is so need not be answered in this case.\nThe gross receipts tax which the taxpayer claims should be refunded is the tax paid on her commissions from Western Union. She claims that a gross receipts tax on her commissions is a tax on the transmission itself; that her activities are integral to the single process of transmitting messages.\nThere is evidence that the messages transmitted by taxpayer from Farmington go no farther than Albuquerque. The message goes on another machine in Albuquerque ; the Albuquerque office relays the message to another station. Admittedly there is conflicting evidence. Where there are conflicting inferences from the evidence, the Commissioner\u2019s ruling is binding. Archuleta v. O\u2019Cheskey, 84 N.M. 428, 504 P.2d 638 (Ct.App.1972). There is evidence to support the Commissioner\u2019s finding that taxpayer initiates the transmission of messages by sending them to Albuquerque where the messages are redirected. This finding supports the ruling that taxpayer is not entitled to a deduction under \u00a7 72-16A-14.10, supra. Why? Because taxpayer is not transmitting messages outside of New Mexico.\nI would affirm on the basis of Spillers v. Commissioner of Revenue, 82 N.M. 41, 475 P.2d 41 (Ct.App.1970). Accordingly, I dissent from the result reached by the majority.", "type": "dissent", "author": "WOOD, Chief Judge" } ], "attorneys": [ "Byron Cat\u00f3n, Cat\u00f3n & Hynes, Farming-ton, for appellant.", "Toney Anaya, Atty. Gen., Vernon O. Henning, Bureau of Revenue, Asst. Atty. Gen., Santa Fe, for appellee." ], "corrections": "", "head_matter": "548 P.2d 454\nLucille EALEY, d/b/a T & L Ceramics, Appellant, v. BUREAU OF REVENUE of the State of New Mexico, Appellee.\nNo. 2040.\nCourt of Appeals of New Mexico.\nDec. 9, 1975.\nCertiorari Granted Jan. 12, 1976.\nByron Cat\u00f3n, Cat\u00f3n & Hynes, Farming-ton, for appellant.\nToney Anaya, Atty. Gen., Vernon O. Henning, Bureau of Revenue, Asst. Atty. Gen., Santa Fe, for appellee." }, "file_name": "0174-01", "first_page_order": 210, "last_page_order": 215 }