Schleman v. Guaranty Title Company , 153 Fla. 379 ( 1943 )

Guaranty Title Company is engaged in the conduct of a general abstract and title insurance business in the City of Tampa, Florida. It is the owner of abstract books and records of such completeness as to enable it to make abstracts of title to any and all tracts of land in Hillsborough County. The full cash value of these books and records is $35,000. Guaranty Title Company has returned this property for taxation purposes, as intangible personal property. The County Assessor of Taxes of Hillsborough County has refused to accept this return, and has assessed the property tangible personal property.

The sole question is whether abstract books and records, kept and used as the basis of a business for profit, are taxable under the tax laws of this State as tangible, or as intangible, personal property.

There are two relevant chapters dealing with the subject of taxation of personal property in this State Chapter 199 and Chapter 200 Florida Statutes, 1941. The first defines and classifies intangible personal property and provides a method for assessment and collection of taxes on such property. The second defines tangibles, and makes provision for assessment and collection of taxes thereon.

By Section 199.01 Florida Statutes, 1941, the Legislature has given a broad general definition of intangible personal property. By Section 199.02, Florida Statutes, 1941, it has particularized the kinds of property to which the definition shall apply.

Intangible personal property is defined as "all personal property which is not in itself intrinsically valuable but which derives its chief value from that which it represents. Sec. 199.01 Florida Statutes, 1941. Such intangible personal property is divided into four classes: A, B, C, and D. Intangible personal properties in classes A, B, and C are defined as moneys, legal tender notes, bank deposits, certificates of deposits, cashier's and certified check, bills of exchange, drafts, money placed with savings or building and loan associations; stocks or shares of incorporated or unincorporated companies, certain public bonds, notes or other obligations secured by mortgages, deeds of trust, or other liens upon real and personal estates situated in Florida; and the beneficial interests in certain trust estates. Class D intangible properties are defined as "all other intangible personal property not embraced in classes A, B, or C." Sec. 199.02 Florida Statutes, 1941.

Section 200.01, Florida Statutes, 1941, defines tangible personal property as "all goods, chattels, boats, vessels, vehicles (except motor vehicles), animals and other articles of value capable of manual possession and whose chief value shall consist of the thing itself and not what it represents."

Chapters 199 and 200 Florida Statutes, 1941, are complementary. They are mutually exclusive. Together, they purport to comprehend all personal property subject to taxation. Presumably, every item of taxable personal property falls within the scope of one, or the other, of the chapters. Neither chapter expressly enumerates "abstract records" as included within its purview.

It is insisted by the Tax Assessor that the question posed by the abstract company has been decided by Brooksville Abstract Company v. Kirk, et al., 101 Fla. 175, 133 So. 629; because there this Court said: "It is a matter of common knowledge that an abstract plant is tangible property possessing the attribute of value." We cannot agree that the cited case has settled the question. The issues involved in the Brooksville case were quite different from the issue we have presented here.

In the Brooksville case the abstract company had filed its bill of complaint against the tax collectors of Hernando County and the City of Brooksville to enjoin the collection of taxes assessed against its abstract plant. It alleged that its abstract plant was without value except in its hands and to the extent that it chose to use same as a basis for producing documents of salable value; therefore the plant was not subject to taxation. The prayer of the bill was that the court decree that the abstract plant was for private purposes only, and not lawfully subject to taxation.

Neither the City of Brooksville nor the County of Hernando had been made a party to the bill. The tax collectors had allowed default judgments to be entered against them. The circuit court had allowed the City of Brooksville to intervene and file demurrer. The plaintiff objected to the procedure and filed a motion to strike the demurrer. The lower court denied the motion, whereupon the plaintiff appealed from the order. The only error asigned was upon the order denying the motion to strike. The sole question brought to the court upon the appeal presented a matter of procedure. Notwithstanding the narrow issue presented, the court, in disposing of the appeal, not only reviewed the order allowing the City to intervene and file demurrer, but also considered the allegations of the bill, finding them to be without equity. The quoted portion of the opinion herein alluded to was not necessary or essential to the decision in the case — a mere obiter dictum without force as precedent. Pell v. State,97 Fla. 650, 122 So. 110; Hart v. Stribling, 25 Fla. 435, 6 So. 455. Therefore, the question raised on this present appeal was not decided in the Brooksville case, but is now here as one of first impression in this Court.

It is our conclusion that abstract books and records are not intangible personal property, within the purview of the legislative definition contained in Sections 199.01, 199.02, Florida Statutes, 1941. Section 199.01 defines the intangible personal property intended to be covered by the act. This general definition is qualified by the classification of such intangibles into four general classes. The Legislature has specifically described and enumerated intangibles falling into classes A, B, and C. It has placed all other intangibles "not embraced in Class A, B, and C" into Class D. In other words, it has enumerated certain intangibles specifically, in the first three classes; in the fourth, it has referred to them generally.

It is a familiar rule of statutory construction that when the context is in doubt, general words or phrases following an enumeration of specific things will usually be construed as having reference to things of the same kind, or specie, as those comprehended by the preceding limited and confined terms. Children's Bootery, et al. v. Sutker, 91 Fla. 60, 107 So. 345, 44 A.L.R. 698. Of course, the rule does not overrule all other rules; for when the particular preceding words or phrases exhaust the genus, general words must of necessity be construed to refer to words outside those particularized. U.S. v. Mescall, 215 U.S. 26, 30 Sup. Ct. 19, 54 L.Ed. 77; National Bank v. Estate of Ripley, 161 Mo. 126, 61 S.W. 587; Gillock v. People, 171 Ill. 307, 49 N.E. 712; Winters v. City of Duluth,82 Minn. 127, 84 N.W. 788. But otherwise, when the meaning is in doubt the rule will generally be applied.

In our view of the thing, property falling in Class D must be of the same quality, kind, character, or specie as that expressly enumerated in Classes A, B, and C. We can see no similarity, theoretically or practically, between abstract books and records and moneys, bonds, notes, beneficial interests in trust estates, and other properties specifically enumerated in Classes A, B, and C. Neither can we see any similarity between such property and debit balances of a non-resident firm maintaining a branch office in Florida as a broker for securities, the debit balances being due from Florida customers; which property was held to be taxable as a Class D intangible, in Smith, et al., v. Lummus Tax Assessor,153 Fla. 415, 14 So.2d 897. We think that the books and records are taxable as tangible property, under Chapter 200, Florida Statutes, 1941.

Counsel for the abstract company contend that the nature of its property is such that it cannot be considered as tangible, but only as intangible, property, for the reason that the chief value of the plant lies not in the property itself but only in that which it represents. Counsel liken the abstract plant to literary property — an intellectual composition — in which the owner has an absolute and exclusive incorporeal right of possession, use, and disposition.

As argued by counsel, the intrinsic value of the plant, for all practical purposes, is nothing; the extrinsic value is everything. That extrinsic value consists of the common-law right of publication given to every author; which is property separate and apart from his property in the paper on which his production is written. This property is protected by the common law. It is derived from the intellectual effort, skill, and genius of the abstractor in compiling the information from the public records. As author of the compilation, the abstractor may make abstracts of title therefrom for a reward; or he may withhold it from publication altogether. If he sees fit to withhold his compilation from publication, no 'other person may use it, without the express consent of the owner. This incorporeal property right is of great value. In fact, it is the chief value of the compilation. Without it, the value of the plant is negligible, consisting only of the worth of the paper upon which the records are kept, when sold as scrap paper. Because of the fact that the chief value of the abstract plant is extrinsic, rather than intrinsic, the plant is subject to taxation as intangible, and not as tangible, property.

It is difficult for us to follow the argument of counsel. There can be no doubt but that an author has a common-law right of property in literary or intellectual productions, which entitles him to the use of the production before publication. This right is exclusive as against the world. It is an intangible incorporeal right that exists separate and apart from the property in the paper on which the production is written, or the physical substance of which it is embodied. 18 C.J.S. 138; 34 Am. Jur. pp. 405-408. Such property right has long been recognized and protected in abstract books and records, so long as the manuscript remains unpublished. But the common law extends its protection no further than the first publication. When the first publication has been made, the common-law right of exclusive publication terminates, and the work falls into the public domain. By publication, it becomes dedicated to the public. Thereafter, the author has no exclusive right to multiply copies of the work or to control the issuance of copies by others. 18 C.J.S. 150; 34 Am. Jur. 407.

The rule of dedication and abandonment has been applied to abstract books and records. When the owner furnishes an abstract of title to the general public, this amounts to a publication as to the particular information contained therein, and deprives him of the exclusive right thereafter to multiply copies thereof, or to prevent others from doing so. Vernon Abstract Co. v. Waggoner Title Co., et al., 49 Tex. Civ. A. 144, 107 S.W. 919.

As stated, the theory of counsel is that the chief value of an abstract plant lies in the common law right of publication. If this theory is tenable, will not the value of the plant decrease from day to day in direct proportion to the number of abstracts released to purchasers, on the several tracts involved in the compilation? When the time comes that all tracts of land have been abstracted for the public, will not the extrinsic value of the plant be nothing; the common-law copyright having been completely extinguished or terminated by first publications? It seems to us that this must be so if we accept the theory of counsel. When the incorporeal common-law property right has become extinguished by user, will not the owner at that time be perfectly justified in demanding that thereafter his abstract plant be placed on the tax books as tangible personal property, and taxed only upon the then worth of the sheets of paper upon which his records are written — which will be their value as scrap paper? This would seem to follow, if the theory of counsel is sound. Yet it is hard to believe that when that time arrived the owner would be willing to sell his plant at such depreciated value, or that a prospective purchaser would expect to be able to buy it at that figure.

In our view, the chief value of books and records of an abstract company, kept and used as the basis of a business for profit is not extrinsic, derived from the common-law right of publication; but is intrinsic and inheres within the books themselves. To us, such property partakes of the nature of tangible, not intangible property. To be sure, abstract books and records are partly the result of intellectual effort, training, and skill on the part of the abstractor in accurately sorting, abridging, compiling, and indexing the information he has gathered from the public records. But what act of producing the finished product from raw materials is not the result of such qualities, in greater or lesser degree; be it manuscript or machine? The information contained in abstract books is not in any sense the independent creation of the mind of the transcribed. It is not the development of new thoughts and new ideas — an intellectual creation. About all that the information contained in an abstract book consists of is that which is to be found upon the public records, abridged, possibly, and arranged geographically as to parcels of land, instead of chronologically as to time of recordation. Such books and records are capable of manual possession. They have a particular location while in the hands of the owner for business. They are transferable from hand to hand. They are capable of seizure and delivery. They are useable by any person of ordinary intelligence and ability. They are valuable for the information contained therein, in the collective form into which it has been cast by the labor of the compiler, when used as the basis of a business for profit. Partial publications of the whole are offered to the general public for a reward.

Counsel concede that the property in question is personal property. They admit that the abstract plant has a full cash value of $35,000. This value undoubtedly arises out of the fact that the information contained therein consists of public facts correctly abridged and arranged in readily accessible form, for the sale of copies of related portions thereof to the public. If the entries have not been accurately taken off the public records, and correctly transcribed, the value of the books and, records is little or nothing. Such books and records, therefore, do not "represent" something, in the sense that the term is used in the statute; they are something in themselves. Their chief value lies not in that which they represent, but in that which they are. Completed and placed before the public for use and profit they are, in a sense, comparable to the work of an author that has been compiled and offered for sale. They are, in effect, the tools of trade with which the abstractor plies his calling.

We are not unaware of the fact that there is a conflict of authority on the subject. The constitution of the State of Michigan requires that all property shall be assessed at its cash value. In the fact of this constitutional provision the courts of Michigan have consistently adhered to the view that an abstract plant is not taxable as property. This conclusion has been reached because of the court's interpretation that the constitutional provision means that only that shall be taxed which not only may be put to valuable uses but that also has a recognizable pecuniary value inherent within itself, not enhanced or diminished according to the person who owns or uses it. According to the Michigan view, an abstract plant has no intrinsic value. Therefore, it may not to be taxed. See Dart v. Woodhouse, 40 Mich. 399, 29 Am. Rep. 544; Perry v. City of Big Rapids, 67 Mich., 146, 34 N.W. 530, 11 Am. St. Rep. 570. Loomis v. City of Jackson, 130 Mich. 594, 90 N.W. 328.

We find ourselves unable to follow this reasoning. In our opinion the abstract plant is "an article of value capable of manual possession . . . whose chief value . . . [consists] of the thing itself and not what it represents." Sec. 200.01 Florida Statutes, 1941. See Leon Loan Abstract Co. v. Equalization Board, 86 Iowa 127, 53 N.W. 94, 41 Am. St. Rep. 486, 17 L.R.A. 199; Booth etc. Abstract Co. v. Phelps, 8 Wn. 549, 36 P. 489, 40 Am. St. Rep. 921, 23 L.R.A. 864; State v. St. Paul Abstract Co., 158 Minn. 95, 196 N.W. 932.

Accordingly, the opinion and judgment of this Court heretofore filed is now adhered to, except as the same is modified herein by our view of the effect of the opinion in Brooksville Abstract Co. v. Kirk, 101 Fla. 175, 133 So. 629.

It is so ordered.

BUFORD, C. J., BROWN, CHAPMAN and THOMAS, JJ., concur.

TERRELL and ADAMS, JJ., dissent.