United States v. Cordy

• Decision Date: 12 May 1932
• Docket Number: No. 1834.,1834.
• Citation: 58 F.2d 1013
• Parties: UNITED STATES v. CORDY, Comptroller of Treasury of Maryland.
• Court: U.S. District Court — District of Maryland

58 F.2d 1013 (1932)

UNITED STATES v. CORDY, Comptroller of Treasury of Maryland.

No. 1834.

District Court, D. Maryland.

May 12, 1932.

Simon E. Sobeloff, U. S. Atty., and Cornelius Mundy, Asst. U. S. Atty., both of Baltimore, Md.

William Preston Lane, Jr., Atty. Gen. of Maryland, G. C. A. Anderson, Asst. Atty. Gen. of Maryland, for respondent.

WILLIAM C. COLEMAN, District Judge.

The question here involved is whether the state of Maryland may validly assess a gasoline tax (article 56, §§ 211-223, inclusive, Bagby's Annotated Code of Maryland) upon gasoline sold to the Post Exchange at Ft. George G. Meade, Md., a military reservation of the United States government.

The Maryland act imposes upon every dealer in the sale or use of motor vehicle fuel, as defined in the act, a so-called license tax of 4 cents per gallon. There are numerous administrative provisions of the act with which we need not be concerned. Suffice it to say that a dealer is defined by the act (section 211 (c) as "any person, firm or corporation who imports or causes to be imported gasoline and such other volatile and inflammable liquids produced or compounded for operating or propelling motor vehicles, as herein defined, for use, distribution or sale and delivery in, and after the same reaches, the State of Maryland. * * *" The same definition is made applicable also to any person, firm, or corporation producing, refining, manufacturing, or compounding such fuel in the state for use, distribution, or sale and delivery therein. The act further expressly provides, section 218, that it "shall not be imposed on motor vehicle fuel when exported or sold for exportation from the State of Maryland to any other State or nation, (whether in the form of a compound, or otherwise)," and in section 219A (Code Pub. Gen. Laws Supp. 1929) that "the Federal Government shall be entitled to the refund of the tax upon all motor vehicle fuel purchased by it with respect to which the tax has been paid, upon compliance with the provisions of Section 219 of this Article" (which relates to the method of applying for refunds).

It appears that the Post Exchange has paid the tax under protest on some of the sales, and, as to others, an amount equal to the tax alleged to be due is being withheld pending the determination in this suit as to whether or not any such tax may be legally exacted.

The grounds upon which the government bases its claim for exemption are, first, that the Post Exchange is a government instrumentality; and, second, that, since the gasoline in question sold to the Post Exchange was delivered by dealers to the Post Exchange located on the government reservation at Ft. George G. Meade, such amounted to interstate commerce, and that, therefore, gasoline so delivered is impliedly, if not expressly, exempt from taxation under the Maryland act.

The state of Maryland denies the soundness of these contentions. The suit, being one at law, is the proper form of action. Stratton v. St. Louis Southwestern Rwy. Co., 284 U. S. 530, 52 S. Ct. 222, 76 L. Ed. ___; Matthews et al. v. Rodgers et al., 284 U. S. 521, 52 S. Ct. 217, 76 L. Ed. ___; Miller v. Standard Nut Margarine Co. of Florida, 284 U. S. 478, 52 S. Ct. 260, 76 L. Ed. ___, and this court otherwise has jurisdiction. It is well settled that, where a suit is based upon unauthorized administration of a state law by a state official, such is not to be construed as a suit against the state itself. Reagan v. Farmers' Loan & Trust Co., 154 U. S. 362, 14 S. Ct. 1047, 38 L. Ed. 1014; Louisiana v. Texas, 176 U. S. 1, 20 S. Ct. 251, 44 L. Ed. 347. There is no allegation in the present pleadings, and, in fact, there is no contention on the part of the government, that the Maryland Gasoline Tax Act is itself unconstitutional, but merely that, in attempting to tax gasoline sold to the Post Exchange, the Comptroller of the Treasury of the State of Maryland is attempting to do something that is not authorized by the statute itself.

Army Post Exchanges are mediums established and maintained by army regulations, pursuant to statutory authority, for the convenience of both officers and enlisted men whereby, at reasonable cost to them, certain creature comforts in the way of clothing, food, etc., as well as recreation and amusement, not otherwise provided by regulations, may be secured. They were originally organized under General Orders No. 10, Adjutant General's Office, February...