Spencer v. Consumers' Oil Co., Inc.

• Decision Date: 16 August 1932
• Parties: SPENCER, State Treasurer, v. CONSUMERS' OIL CO., Inc.
• Court: Connecticut Supreme Court

162 A. 23

115 Conn. 554

SPENCER, State Treasurer, v. CONSUMERS' OIL CO., Inc.

Supreme Court of Errors of Connecticut.

August 16, 1932

Appeal from Superior Court, New Haven County; Ernest A. Inglis Judge.

Action by Samuel R. Spencer, State Treasurer, against the Consumers' Oil Company, Incorporated, to collect a tax alleged to have accrued to the State of Connecticut under the provisions of chapter 62 of the Public Acts of 1927 upon gasoline sold by the defendant as a distributor of fuels brought to the superior court, in New Haven County, where the defendant's motion to erase the cause from the docket was denied, the plaintiff's demurrer to paragraphs 9 and 10 of the defendant's set-off was sustained, the plaintiff's motion to strike out the second defense of the defendant's answer was granted, the plaintiff's demurrer to the defendant's third defense was sustained (Inglis, J.), and the issues tried to the court (McEvoy, J.). Judgment for the plaintiff, and defendant appeals.

No error.

Argued before MALTBIE, C.J., and HAINES, BANKS, AVERY, and ELLS, JJ.

Taxes paid held not recoverable where there was no mutual mistake payment under protest, or duress.

John M. Chapnick, of New Haven, for appellant.

Ernest L. Averill, Deputy Atty. Gen., Bernard A. Kosicki, Asst Atty. Gen., and Warren B. Burrows, Atty. Gen., for appellee.

ELLS J.

The defendant, a licensed distributor of gasoline and kindred fuels under the laws of this state, sold large quantities of gasoline during the months of June, July, August, September, October, and November, 1929, and made a monthly report to the commissioner of motor vehicles containing a statement of the number of gallons sold by it during each month and declaring that the defendant had collected a tax of two cents a gallon. This tax was collected and held by the defendant for the state of Connecticut. The state treasurer made demand upon the defendant for $9,725.30, the amount shown by these reports to be due, and upon the refusal of the defendant to pay, brought this action.

The complaint alleges that the plaintiff as state treasurer is authorized and empowered to enforce the payment by civil action of any tax accruing to the State of Connecticut under the provisions of Chapter 62 of the Public Acts of 1927, and demands payment of $9,725.30 alleged to have accrued to the state as a tax upon gasoline sold by the defendant during the specified months. The defendant moved to erase the cause from the docket upon the grounds that no gasoline tax is levied by this act, and that the state treasurer is not a proper party plaintiff and is not authorized to enforce payment of this alleged tax. The court denied the motion, whereupon the defendant set up the same two claims in the second defense of its answer and upon motion the court struck out this entire defense. The third defense raised similar questions, and the plaintiff's demurrer thereto was sustained. The defendant also pleaded by way of set-off that between July 31, 1925, and July 22, 1929, it had paid the treasurer of the state of Connecticut $66,961.81 in payment of gasoline taxes by virtue of unconstitutional and void statutes. The plaintiff demurred to this set-off, and the demurrer was sustained. Upon the trial the defendant admitted it had made the sales and collected the sums alleged in the complaint, and that these sums represent taxes collected by it at the time of the sales of gasoline to the purchasers, but by claims of law, endeavored to contend that the public acts creating this tax are unconstitutional and that if this tax is a valid one the treasurer of the state of Connecticut has no authority to maintain an action to collect it from the defendant, and that it is entitled to a set-off. These are the questions raised by the defendant's appeal.

It will thus be seen that this corporation invoked certain of our state laws to establish itself as a licensed distributor of gasoline, conducted a large business under that franchise, collected its own price in full and in addition a tax for the State of Connecticut of two cents on every gallon sold, as provided by this law, and now refuses to pay over to the state the tax so collected on the ground that the laws which licensed it to sell gasoline, and in addition to the regular sale price retained by it to collect for the state of Connecticut a tax of two cents a gallon, were invalid and void and that therefore it can keep for its own use large sums of tax money which admittedly do not belong to it. The mere statement of such a claim constitutes a fair answer and should suffice to defeat it. We have, however, carefully examined into the intricate subtleties of the defendant's argument and will briefly state our conclusions.

A license to sell gasoline was first required by a statute enacted in 1919 (Pub. Acts 1919, c. 166). A state tax of one cent a gallon was first imposed in 1921 by chapter 300, § 4. Various regulations were made to provide for the keeping of a record of sale by all distributors and for the rendering of monthly reports of the number of gallons sold to be made to the motor vehicle commissioner and for the payment " to the treasurer of the State a tax of one cent per gallon upon each gallon so reported." Section 7 provides that: " Whenever any distributor *** fail to pay any tax due under the provisions of this act within the time limited herein, the attorney general shall enforce payment of such tax by civil action against such distributor or purchaser for the amount of such tax, in a court of appropriate jurisdiction."

In 1923 by chapter 203 a slight change was made in the section concerning definitions, and a section was added providing that the funds raised by this tax shall be expended for highways by the highway commissioner.

In 1925 an entirely new act was passed (Pub. Acts 1925, c. 145), which expressly repealed the 1921 [115 Conn. 558] and 1923 Acts. The act is in seven sections. In section 4, which has to do with the creation of the tax, two important changes occur. The tax is raised to two cents a gallon, and fuel for motorboats is exempted from the tax. In section 7 " the commissioner" (presumably the motor vehicle commissioner) is named as the person authorized to enforce payment of the tax.

It is stipulated in the record that this act was not signed or approved by the Governor until more than three days subsequent to the final adjournment of the Legislature. The defendant claims that this act was therefore unconstitutional.

In 1927 by chapter 62 the first section of the 1925 act was " amended to read as follows." There ensued a complete re-enactment of the section concerning definition. Section 2 " is amended to read as follows." There ensues a complete and independent enactment providing that a distributor must be licensed. Section 3 of the new act amends section 4 of the 1925 act by tightening the phraseology as to the payment of the tax. This section is a complete re-enactment, amounting to an independent enactment of a law providing for a tax of two cents per gallon and provides complete machinery for the checking up of sales made by the distributor and provides that the tax so collected shall be paid each month " to the treasurer of the State." In section 4 the new act provides, for the first time, for a bond of $10,000 to be filed with the commissioner of motor vehicles conditioned for the payment of the tax. Four other sections are added, two concerning a revocation of license, one concerning interest, and one providing for an appeal. This is the act upon which the complaint is founded.

The defendant contends that the act of 1927, being an amendment of the act of 1925 which is unconstitutional, must also be ineffective. We have no occasion to consider the conflicting decisions of other jurisdictions as to the effect upon an amending act of the invalidity of the act which it purports to amend. The defendant accepted a license to do business as a distributor under the act in question (in each year during which the money which the state is claiming was collected by it); it acted in collecting that money from consumers under the terms of the act; and made monthly reports of such collections to the commissioner as required by the act. It cannot, having acted under the statute to the detriment of others, now claim that the statute was...