Automatic Canteen Company of America v. Johnson

Tapley, J.

Dissenting Opinion

I do not concur with the reasoning or the result in the majority opinion. I do agree, however, that the principles of law applicable to the instant case are set forth in Trimount Coin Machine Co. v. Johnson, 152 Me. 109 and South Shoe Machine Co., Inc. v. Johnson, 158 Me. 74, 188 A (2nd) 353.

The majority opinion correctly presents the issue:

“The main issue is whether the appellant has exercised within the State any right or power over its vending machines incident to its ownership.”

The majority of the court finds:

“The employees of the appellant Automatic Canteen Company of America coming into Maine were interested in and had duties in connection *198with the canteens as well as the merchandise sold therein. The appellant has a vital interest in the efficient operation of the silent salesmen. The acts of its employees in Maine bore upon whether the lessee or distributor was carrying out the terms of the lease.”

Thus the majority conclude:

“----that the appellant has exercised such right and power over its vending machines incident to its ownership that it is subject to the use tax.”
“The use and possession of the property in Maine in its entirety is, and at all times has been, in the lessee or customer by virtue of the lease.----There is, of course, no use tax arising under any theory of the Act from the purchase of the machine outside of Maine or from the lease ivritten in Massachusetts. Until the machine reached the State of Maine there was no action whatsoever within the State with respect to the property owned by the petitioner.” (Emphasis supplied.) Trimount Coin Machine Co. v. Johnson, supra.

According to the terms of the lease in the case at bar, the distributor is required to install, inspect, repair, operate and maintain the vending machines. He has control over the machines until he breaches his contractual responsibility and the lessor seeks to enforce its rights under the lease.

“The mere existence of certain rights or powers in the owner-lessor reserved by the lease would not suffice to subject him to taxation if he failed to or refrained from exercising any such right or power in Maine.” South Shoe Machine Co., Inc. v. Johnson, supra.

The representatives of the company, according to the undisputed evidence, were present in Maine for the prime purpose of reviewing and reporting the overall canteen business of the distributor in the sale of the products. *199While here they observed the condition of the machines because sloppy maintenance could affect the sale of merchandise.

In my opinion, when representatives of the company came to Maine to review the merchandising business conducted by the distributor in the sale of its products and, while present in Maine, they, incidental to the main purpose of their visit, made visual observation of the vending machines, they did not by so doing exercise any right or power over them.

According to my view of the facts, in light of the applicable statutory language, I am led to the conclusion the Legislature never intended that a mere visual observation of the machines, unaccompanied by some affirmative act taken in accordance with the terms of the lease, would be an exercise of right or power incident to their ownership.

I would sustain the appeal.

Webber, J., joins in this opinion.