Opinion
December 11, 1951.
E. Snow Martin, Lakeland, for petitioners.
Summerlin Summerlin, Winter Haven, for respondent.
The principal issue here is whether certain promissory notes held by respondent are taxable under the provisions of Chapter 199, Florida Statutes, F.S.A., which levies and assesses a tax on intangible personal property.
The notes in question, three in number, are in the amount of $30,000 each, payable to respondent corporation five years after date, with interest at 4 percent per annum, and were executed by three separate makers. Each note provides that "This note is given for the purchase price of 300 shares of the capital stock of no par value of Gapway Grove Corporation and the Certificate for said 300 shares of stock is hereto attached as sole security for the payment of this note, and it is designated, understood and agreed that there is no personal liability on the part of the maker for the payment of this note, and the payee of said note promises and agrees to not sell, endorse, transfer or deliver said note to any person." The makers of the notes, simultaneously with the execution thereof, also delivered to the respondent corporation statements in writing by which they agreed not to make voluntary payments of the notes unless and until requested to do so, in writing, by the president of the corporation.
The respondent here contends that the notes have no value for the purpose of the intangible personal property tax, in that they may not be sold, assigned, transferred or delivered, there is no personal obligation to pay the amount stated therein, the payment thereof may be enforced solely by resorting to the shares of no par value stock pledged as security therefor, and payment cannot be made without being first requested to do so, in writing, by the respondent corporation.
Section 199.01, Florida Statutes, F.S.A., defines intangible personal property as "all personal property which is not in itself intrinsically valuable but which derives its chief value from that which it represents." Each of these so-called promissory notes represents, at least, a mortgage on the 300 shares of stock pledged as security for its payment, so that each must be held to have some value to the respondent corporation, even though such value may not be equal to the face amount of the note. See Nelson v. Watson, 114 Fla. 806, 155 So. 101.
The fact that the shares of stock were issued without par value, as authorized by Section 612.10, Florida Statutes, F.S.A., is not conclusive. The corporation may, as a matter of fact, never comply with the statute and fix a value therefor; yet, it may make money and acquire property so that each share of stock would be worth a substantial amount. If a mere failure of the corporation to follow the statute in fixing a value to no par value stock would make the stock non-taxable, then the corporation may escape entirely the intangible taxes or the owners of stock may escape such intangible taxes even though the actual value of such may run into thousands or hundreds-of-thousands of dollars.
We hold, then, that the "promissory notes" are intangible personal property within the meaning of Chapter 199, Florida Statutes, and are taxable thereunder.
No question is here presented as to the true valuation of the notes for the purpose of the intangible personal property tax. The primary responsibility for such valuation is lodged with the tax assessor. Section 199.04, Florida Statutes F.S.A. And Section 199.12, ibid., provides for an appeal to the board of county commissioners, sitting as a board of equalization, by any person who is aggrieved by the amount of the intangible tax assessed against him by the tax assessor.
The writ is granted and the order quashed.
SEBRING, C.J., and CHAPMAN, THOMAS, HOBSON and MATHEWS, JJ., concur.
TERRELL, J., dissents.