American Bridge Co. v. Smith, 38677.

• Decision Date: 07 February 1944
• Docket Number: No. 38677.,38677.
• Citation: 179 S.W.2d 12
• Parties: AMERICAN BRIDGE COMPANY, a Corporation, Appellant, v. FORREST SMITH, State Auditor of the State of Missouri.
• Court: Missouri Supreme Court

179 S.W.2d 12

AMERICAN BRIDGE COMPANY, a Corporation, Appellant, v. FORREST SMITH, State Auditor of the State of Missouri.

No. 38677.

Supreme Court of Missouri.

Division One, February 7, 1944.

Rehearing Denied, March 6, 1944.

Motion to Transfer to Banc Overruled, April 3, 1944.

Appeal from Cole Circuit Court. — Hon. Frank Hollingsworth, Special Judge.

REVERSED AND REMANDED (with directions).

W.R. Mayne, N.W. Hartman and Fordyce, White, Mayne, Williams & Hartman for appellant.

(1) The jurisdiction of this appeal in this court is amply supported. Mo. Constitution, Art. VI, Sec. 12; Grant v. Trust Co., 108 S.W. (2d) 347; State ex rel. Martin v. Childress, 345 Mo. 495; Dietrich v. Brickey, 327 Mo. 189; State ex rel. v. Young, 327 Mo. 909; Foster v. Commission for the Blind, 327 Mo. 416. (2) The sale of fabricated structural steel from plants outside the State of Missouri to customers and consumers in the State of Missouri, f.o.b. plant or f.o.b. destination, is a retail sale made in commerce between a citizen of this state and a citizen of another state, and is exempt under the Missouri Sales Tax Act. Sec. 11409, R.S. 1939, as amended by Laws 1941, p. 702; Opinion of Attorney General Honorable Roy McKittrick, dated February 8, 1941; Mississippi River Fuel Corp. v. Smith, State Auditor, 164 S.W. (2d) 370; McGoldrick v. Berwind-White Coal Mining Co., 309 U.S. 33; Santa Cruz Fruit Packing Co. v. Natl. Labor Relations Board, 303 U.S. 453, 82 L. Ed. 954; Pennsylvania R. Co. v. Clark Bros. Coal Mining Co., 238 U.S. 456, 59 L. Ed. 1406; Dozier v. Alabama, 218 U.S. 124, 54 L. Ed. 965; National Labor Relations Board v. Fainblatt, 306 U.S. 601, 83 L. Ed. 1014; California Rice Industry v. Federal Trade Comm., 102 Fed. (2d) 716; Dahnke-Walker Mill Co. v. Bondurant, 257 U.S. 282, 66 L. Ed. 239; Currin v. Wallace, 306 U.S. 1, 83 L. Ed. 441; Carter v. Carter Coal Co., 298 U.S. 238, 80 L. Ed. 1160; McGoldrick v. Felt & Tarrant Mfg. Co., 84 L. Ed. 360; McGoldrick v. Du Grenier, Inc., 84 L. Ed. 360; Jaegels Fuel Corp. v. Taylor, 8 N.Y.S. (2d) 456, 84 L. Ed. 695. (3) Application of the sales tax to transactions as made by appellant is unconstitutional in its application. Simpson v. O'Hara, 276 Mich. 55, 268 N.W. 809; Montgomery Ward & Co. v. Fry, 277 Mich. 260, 269 N.W. 166; Koenig v. Truscott Boat Mfg. Co., 135 S.W. 514; International Text Book Co. v. Gillespie, 229 Mo. 397, 129 S.W. 922; Denison Mfg. Co. v. Wright, 120 S.E. 120; Federal Coal Co. v. United States Fuel Corp., 246 S.W. 528; Commonwealth v. Castner, 121 S.E. 984. (4) Sale of steel in the manner made by appellant is not a retail sale in this State within the meaning of the Missouri Sales Tax Act. The Sales Tax Act in question levies basically sales tax on sales "in this state." R.S. 1939, sec. 11408, as amended by Laws 1941, p. 701; Standard Oil Co. v. Department of Finance, 48 N.E. (2d) 514; Ayrshire Patoka Collieries Corp. v. Nudelman, 383 Ill. 345; Allis-Chalmers Mfg. Co., etc., v. Wright, 383 Ill. 354; Ex-Cell-O Corp. v. McKibbon, 383 Ill. 316. (5) Delivery to carriers of fabricated structural steel f.o.b. plant or f.o.b. destination outside of the State of Missouri constitutes delivery to the consignee and does not take the transaction out of interstate commerce so as to authorize the imposition of the Missouri State Sales Tax on such a transaction and the sale was not completed until the order was accepted and the goods were loaded. McLeod v. J.E. Dilworth Co., 171 S.W. (2d) 62; McLeod v. Reichman-Crosby Co., 171 S.W. (2d) 62. (6) The exemption from the Sales Tax Act specifically accorded to "such retail sales as may be made in commerce between this State and any other State of the Union" expresses a legislative attempt to exempt sales made in interstate commerce, and this whether or not such sales might constitutionally be taxed. Sec. 11409, R.S. 1939, as amended Laws 1941, p. 702; Laws 1937, p. 552, sec. 3; Laws 1935, p. 411, sec. 3; Laws 1933-1934 (Ex. Sess.), p. 155, sec. 3; State ex rel. Kansas City P. & L. Co. v. Smith, 111 S.W. (2d) 513, 342 Mo. 75; Dodd v. Independence Stove & Furnace Co., 51 S.W. (2d) 113. (7) Negotiation of sales of goods which are in another state for the purpose of introducing them to the state in which the negotiation is made, is interstate commerce. 11 Am. Jur., sec. 45, p. 44; Weeks v. United States, 245 U.S. 617, 62 L. Ed. 513; Pennsylvania R.R. Co. v. Sonman S.C. Co., 242 U.S. 120, 61 L. Ed. 188; United States v. Tucker, 188 Fed. 741; Bailey v. Mo. Pac. R. Co., 184 Mo. App. 457; Butler Bros. Shoe Co. v. United States Rubber Co., 156 Fed. 1; People ex rel. Hatch v. Riordan, 185 N.Y. 431, 77 N.E. 970.

William G. Marbury, J.W. Thurman, D.A. Thompson and Tyre Burton, Assistant Attorney General, for respondent.

(1) Every retail sale in this State of tangible personal property is subject to a tax of two per cent of the purchase price. Sec. 11408, R.S. 1939, as amended by Laws 1941, p. 701; Sec. 11407, R.S. 1939, as amended by Laws 1941, p. 699. (2) Section 11409 of the Revised Statutes of Missouri, 1939, is not a general exemption of interstate sales from taxation. Sec. 11409, R.S. 1939, as amended by Laws 1941, p. 702; Mississippi River Fuel Corp. v. Smith, 164 S.W. (2d) 370; City of Cape Girardeau v. Fred A. Groves Motor Co., 142 S.W. (2d) 1040; Hoke v. United States, 57 L. Ed. 523; Union R.T. Co. v. Kentucky, 199 U.S. 194, 50 L. Ed. 150; State Tax on Foreign Held Bonds, 82 U.S. 300, 21 L. Ed. 179; James v. Dravo Contracting Co., 302 U.S. 134, 82 L. Ed. 155; Gwinn v. Henneford, 305 U.S. 434, 83 L. Ed. 272, 281. (3) To construe Section 11409 as a general exemption of interstate sales from taxation would render the section void because it would violate the equal protection clause of the Federal Constitution. Sec. 11409, R.S. 1939, as amended Laws 1941, p. 702; Erie R. Co. v. Thompkins, 304 U.S. 64, 82 L. Ed. 1188; Frost v. Corporation Comm. of Oklahoma, 278 U.S. 515, 73 L. Ed. 483; Southern R. Co. v. Green, 216 U.S. 400, 54 L. Ed. 536; State ex rel. Ford Motor Co. v. Gehner, 27 S.W. (2d) 1; Artophone Corp. v. Coale, 133 S.W. (2d) 343; State ex rel. Mo. Portland Cement Co. v. Smith, 90 S.W. (2d) 405; State ex rel. Globe-Democrat Pub. Co. v. Gehner, 294 S.W. 1017, 216 Mo. 694; Pacific Railroad Co. v. Cass County, 53 Mo. 17; State ex rel. v. Johnston, 214 Mo. 656; Automobile Gasoline Co. v. St. Louis, 32 S.W. (2d) 281. (4) A tax on interstate sales is valid so long as the tax does not constitute a burden upon interstate commerce. McGoldrick v. Berwind-White Coal Mining Co., 309 U.S. 33, 60 S. Ct. 388; McGoldrick v. A.H. DuGrenier, Inc., 309 U.S. 70, 60 S. Ct. 404; Jagels "A Fuel Corporation" v. Taylor, 84 L. Ed. 415, 60 S. Ct. 589; Wiloil Oil Corp. v. Commonwealth of Pennsylvania, 294 U.S. 168, 79 L. Ed. 838; United Autograph Register Co. v. McGoldrick, 21 N.E. (2d) 129. (5) No recovery can be had in appellate court on cause of action not pleaded. McMerty v. Morrison, 62 Mo. 140; Grant City, to use of O'Neil v. Salmon, 221 Mo. App. 853, 288 S.W. 88; Gadberry v. Bolton, 242 S.W. 688; McMurtrey v. Kopke, 250 S.W. 399; Munford v. Sheldon, 9 S.W. (2d) 907; Insurance Agency Co. v. Blossom, 231 S.W. 636; St. Louis v. Buselaki, 336 Mo. 693, 80 S.W. (2d) 853. (6) The parties are bound on appeal by the theory of the case adopted by them in the trial court. White v. Pierce, 213 S.W. 512; Foege v. Woestendiek, 201 Mo. App. 382, 212 S.W. 411; Scanlon v. Kansas City, 325 Mo. 125.

VAN OSDOL, C.

Action for a declaratory judgment to determine the taxability of certain sales under the provisions of the Sales Tax Act of Missouri (Article 24, Chapter 74, Revised Statutes of Missouri 1939, Mo. R.S.A., as amended and reenacted, Laws of Missouri 1941, at page 698).

The petition alleged that plaintiff is a corporation organized and existing under the laws of the State of New Jersey; has its principal place of business at Pittsburgh, Pennsylvania; and is engaged in the business of fabricating structural steel at various places without the State of Missouri, which products the plaintiff sells to customers for use or consumption in this state. The petition further alleged that all of the sales so made are in interstate commerce and so are not taxable under the Sales Tax Act, supra; that the defendant, Forrest Smith, State Auditor of Missouri, has otherwise contended, and is threatening to levy and enforce the payment of the tax. The petition prayed the court to settle, ascertain, determine and declare the rights, duties and obligations of the parties with respect to the matters arising by reason of the controversy. Pending the final termination of the action, taxes sought to be collected by defendant have been deposited in the hands of the Clerk of the Circuit Court of Cole County. The trial court found the issues for defendant, holding the sales to be subject to the Sales Tax Act, supra, and plaintiff has appealed.

As stated in the petition, plaintiff, a foreign corporation, fabricates structural steel products, and sells to customers who purchase its products for use or consumption in Missouri (and elsewhere). Plaintiff is licensed in Missouri to transact business as a foreign corporation, and maintains a sales office at St. Louis. No stock of its products is maintained in this state. Its salesmen solicit proposals for the purchase of its products; the proposals are forwarded to plaintiff at its principal offices in Pittsburgh for acceptance, after which a contract signed by the customer is forwarded to Pittsburgh for the final signature of an official of plaintiff. The products are consigned to the purchasers in some instances f.o.b. cars at plaintiff's plants in other states, and in other instances f.o.b. the point of destination in Missouri. Collections are made by the plaintiff's treasurer at Pittsburgh.

The sales, necessitating transportation of goods from other states to Missouri, are admittedly the transactions of interstate commerce....