American-La France Fire Engine Co., Inc. v. Riordan
| Decision Date | 07 November 1923 |
| Docket Number | 1995. |
| Citation | 294 F. 567 |
| Parties | AMERICAN-LA FRANCE FIRE ENGINE CO., Inc., v. RIORDAN, Collector of Internal Revenue. |
| Court | U.S. District Court — Western District of New York |
Sackett Chapman, Brown & Cross, of New York City (William P. Chapman Jr., of New York City, of counsel), for plaintiff.
William J. Donovan, U.S. Atty., of Buffalo, N.Y. (Harold V. Cook Asst. U.S. atty., of Buffalo, N.Y., Carl A. Mapes, Solicitor of Internal Revenue, and Charles T. Hendler, Sp. Atty. of Internal Revenue, both of Washington, D.C., of counsel), for defendant.
In this action the plaintiff, American-La France Fire Engine Company Inc., asks to have refunded to it by the defendant, Collector of Internal Revenue Vincent H. Riordan, an excise tax of $30,578.17 (less tax of $222.49 on two sales), paid at different times in the years 1918 and 1919 under compulsion and protest. Section 3220, R.S. (Comp. St. Sec. 5944). The taxes were assessed as manufacturers' sales taxes on automobile trucks to which fire-extinguishing appliances were for the most part permanently attached by plaintiff. The claim for refund was rejected by the Commissioner of Internal Revenue on the ground that the motor fire-fighting vehicles were taxable under the revenue acts as automobile trucks and automobile wagons. Plaintiff alleges in the complaint that the assessments were wrongfully, unjustly, and illegally made, in that its manufactured motor-driven apparatus were not included in the statute, and are therefore not subject to taxation. The evidence largely relates to structure and function of plaintiff's apparatus, and various facts have been stipulated by the parties. It is stated that this is a test case, and that a much larger amount is involved than the recovery sought herein.
The first question is whether certain specified fire-fighting apparatus is included in the statute and classification; and, second, whether the products of plaintiff, sold to municipalities, were exempt from taxation. Section 600 (Comp. St. 1918, Sec. 6309 3/4a) reads as follows:
'That there shall be levied, assessed, collected, and paid-- (a) Upon all automobiles, automobile trucks, automobile wagons, and motorcycles, sold by the manufacturer, producer, or importer, a tax equivalent to three per centum of the price for which so sold.'
Subsequently the Revenue Act of 1918, in effect February 24, 1919 (Comp. St. Ann. Supp. 1919, Sec. 6309 4/5a), was passed by Congress. It reads as follows:
In these provisions Congress classified and referred to various kinds of motor vehicles which were subject to the tax. The apparatuses in question are embodiments of self-propelled vehicles designed to traverse roads and streets at different speeds. It is necessary to determine on the issues, first, whether plaintiff's vehicles were taxable as automobile trucks and automobile wagons. The proofs are that some of the chassis used to carry the fire machinery were manufactured by plaintiff, others (Ford motor trucks) were purchased in the open market, and chassis of another manufacturer (Brockway Auto Trucks) were also utilized for attaching thereto fire-extinguishing appliances, pumps, chemical engines, ladders, etc. Hose and tools are carried to fires, together with eight to ten firemen, who stand on running boards of some of the motor vehicles.
The terms 'automobile, automobile truck,' were concededly interpreted by the Commissioner of Internal Revenue on January 12, 1918, to include any self-propelled vehicle, irrespective of the nature of its use, and that to fall within those terms it was essential that the vehicle or conveyance be used primarily for the transportation of persons or property other than the machine itself. By this interpretation motor fire engines and fire-fighting machines, if constructed to carry only such persons as were required to drive them, were excluded from the scope of the tax. Regulation No. 47 as amended (articles 11, 12, and 13), stating that the tax applied to automobile trucks, even though 'persons may incidentally be transported at the same time,' modified the previous rulings. Hook and ladder trucks, hose wagons, and squad cars were held taxable and taxes were paid thereon by plaintiff under protest, even though the sales were made to municipalities. It was afterwards ruled (regulation 44) that sales of motor fire engines and motor-transporting apparatus to states and political subdivisions were not taxable as automobiles, or as automobile trucks, and the taxes paid were refunded.
Fire engines designed to carry only such persons as are necessary to drive them were ruled not taxable, but those designed to carry firemen not particularly employed in driving the machine were taxable as automobiles. On October 7, 1919, article 11 was amended to hold fire engines nontaxable, if designed to carry only persons necessary to drive them and to operate the pumps; but if they were manufactured to carry firemen beyond the required number to operate the machine they were separately taxable as passenger-carrying automobiles. Automobile trucks, equipped as hook and ladder trucks and hose carts, were also held taxable. The uncertainty and indefiniteness of some, if not all, the various rulings by the Commissioner was finally laid at rest on July 22, 1919, by the promulgation of a revised regulation that motor fire engines and motor fire-fighting apparatus, hose carts, hook and ladder trucks, water tower trucks, etc., were subject to taxation as automobile trucks and automobile wagons, regardless of sales to municipalities.
It is strongly urged by plaintiff on the first point that this was an erroneous ruling, since the fire engines and fire apparatuses were not primarily designed to carry either persons or property; their construction plainly showing that their sole object and purpose was to function as machines in extinguishing fire. It is argued that, if Congress had intended to include self-propelling fire engines and other motor-driven fire machines, it would, in view of the history of such machines and apparatuses, have embodied a particular description of the objects to be taxed, or used a term or phrase of wider scope than is to be imputed to any generic designation, and, having failed to do so, the inference is justifiable that fire-fighting engines and apparatus were not intended to be taxable. The argument, however, disregards, as it seems to me, the similitude that modern fire engines and self-propelled apparatus for conveying hose, hook and ladders, firemen, etc., to a fire bears to the general terms selected by Congress for the imposition of the tax upon all vehicles of that particular class.
It is a familiar rule of statutory construction that the words phrases, and terms used by the legislative body must always be given effect by the court in its endeavor to ascertain and determine the intention of Congress in passing a statute. Its enactments are never to be defeated by adhering too strictly to the letter thereof. Oates v. Nat. Bank, 100 U.S. 244, 25 L.Ed. 580; 2 Lewis' Sutherland on Statutory Construction (2d Ed.) Sec. 363. And when the revenue act of 1917 was passed Congress saw fit to use the words 'all automobiles, automobile trucks,' fixing a tax of 3 per cent.; but in 1918 it specifically included automobile trucks and automobile wagons in fixing the tax at 3 per cent., tending to show that automobile wagons not previously included were then being sold. The...
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