Binkley Coal Co. v. Smith

• Decision Date: 07 February 1944
• Docket Number: 38678,38679
• Parties: Binkley Coal Company; Bell & Zollier Coal Company; Chicago, Wilmington & Franklin Coal Company; Franklin County Coal Corporation; Moffat Coal Company; Old Ben Coal Corporation; Peabody Coal Company; Pyramid Coal Corporation; Sahara Coal Company; Truax-Traer Coal Company and the United Electric Coal Companies, Plaintiffs-Appellants, v. Forrest Smith, State Auditor of the State of Missouri, Defendant-Respondent. the Consolidated Coal Company; the St. Louis & O'Fallon Coal Company; Forsythe-Carterville Coal Company, and Walter Bledsoe & Company, Plaintiffs-Appellants, v. Forrest Smith, State Auditor of the State of Missouri, Defendant-Respondent
• Court: Missouri Supreme Court

179 S.W.2d 17

352 Mo. 627

Binkley Coal Company; Bell & Zollier Coal Company; Chicago, Wilmington & Franklin Coal Company; Franklin County Coal Corporation; Moffat Coal Company; Old Ben Coal Corporation; Peabody Coal Company; Pyramid Coal Corporation; Sahara Coal Company; Truax-Traer Coal Company and the United Electric Coal Companies, Plaintiffs-Appellants, v. Forrest Smith, State Auditor of the State of Missouri, Defendant-Respondent. the Consolidated Coal Company; the St. Louis & O'Fallon Coal Company; Forsythe-Carterville Coal Company, and Walter Bledsoe & Company, Plaintiffs-Appellants, v. Forrest Smith, State Auditor of the State of Missouri, Defendant-Respondent

Nos. 38678, 38679

Supreme Court of Missouri

February 7, 1944

Rehearing Denied March 6, 1944. Motion to Transfer to Banc Overruled April 3, 1944.

Appeal from Cole Circuit Court; Hon. Sam C. Blair, Judge.

Reversed and remanded (with directions).

Hamilton K. Beebe, Herman L. Taylor, Walter R. Mayne and N W. Hartman for appellants; Essington, Beebe & Pratt and Fordyce, White, Mayne, Williams & Hartman of counsel. (Same points and authorities as in American Bridge Company v. Smith, ante.)

William G. Marbury, J. W. Thurman, D. A. Thompson and Tyre Burton, Assistant Attorney General, for respondent. (Same points and authorities as in American Bridge Company v Smith, ante.)

Maurice H. Winger and George J. Winger amici curiae.

(1) The legislative intention as shown by Missouri sales tax and use tax legislation from 1939 to 1943. Laws 1939, p. 885; Secs. 11408, 11409, 11411, 11412, 11449, R.S. 1939; School Dist. v. Smith, 342 Mo. 21, 11 S.W.2d 167; Laws 1941, p. 698. (2) The State Auditor has attempted by regulation to override the will of the Legislature and to make of the Sales Tax Act a use tax law. (3) In the cases at bar there are no retail sales in this State, hence the Missouri Sales Tax Act cannot apply. Secs. 11407 (g), 11408, R.S. 1939; 46 Am. Jur., pp. 605-607, 608; 24 R.C.L., pp. 40, 45; State v. Rosenberger, 212 Mo. 648, 111 S.W. 509; Sharff v. Meyer, 133 Mo. 428, 34 S.W. 858; Brandon v. K.C. Stock Yards Co., 224 Mo.App. 858, 27 S.W.2d 65; T.J. Moss Tie Co. v. Stamp, 7 S.W.2d 407; Tuttle & Pike v. Construction Co., 136 Mo.App. 309, 117 S.W. 86; Levine v. Hochman, 217 Mo.App. 76, 273 S.W. 204; Martz v. Bighorn Glass Co., 269 S.W. 697. (4) By Section 11409 all sales involved in these cases are exempt from sales tax. Sec. 11409, R.S. 1939; Federal Trade Comm. v. Pacific States Paper Assn., 273 U.S. 52, 47 S.Ct. 255; Sonneborn Bros. v. Cureton, 262 U.S. 506, 43 S.Ct. 643; Jewel Tea Co. v. Williams, 118 F.2d 202; Collier v. Wabash R. Co., 109 S.W. 969; State ex rel. K. C. Power & Light Co. v. Smith, 342 Mo. 75, 111 S.W.2d 519; St. Louis Amusement Co. v. St. Louis County, 347 Mo. 456, 147 S.W.2d 667; State v. Phillips Petroleum Co., 349 Mo. 360, 160 S.W.2d 764; Mississippi River Fuel Corp. v. Smith, 350 Mo. 1, 164 S.W.2d 370. (5) If the Missouri Sales Tax Act is construed to apply to sales made f.o.b. mines outside the State of Missouri it becomes unconstitutional for the reasons stated in plaintiffs-appellants' principal brief and because it violates the due process clause of the Fourteenth Amendment to the Constitution of the United States. McGoldrick v. Berwind-White Coal Co., 309 U.S. 33, 60 S.Ct. 388; State Tax on Foreignheld Bonds, 15 Wall. 319; Burnet v. Brooks, 288 U.S. 378, 53 S.Ct. 457; Union Refrigerating Transit Co. v. Kentucky, 199 U.S. 144, 26 S.Ct. 36; J.D. Adams Mfg. Co. v. Storen, 304 U.S. 307, 58 S.Ct. 913.

Van Osdol, C. Bradley and Dalton, CC., concur.

OPINION

VAN OSDOL

Actions by plaintiffs, sellers, for declaratory judgments to determine the taxability of certain sales under the Sales Tax Act of Missouri (Article 24, Chapter 74, Revised Statutes of Missouri 1939, Mo. R.S.A., as amended, Laws of Missouri 1941, at page 698). The trial court declared the sales to be taxable and rendered judgment for the defendant, State Auditor of Missouri. Plaintiffs have appealed.

The petitions in both cases alleged that the plaintiffs are foreign corporations engaged in the business of selling coal from mines located without the territorial limits of Missouri to customers for use or consumption within this state; that these sales are in interstate commerce and are not taxable under the Sales Tax Act of Missouri; and that the defendant has contended otherwise, threatening to levy and enforce payment of the tax. The petitions prayed the court to declare the rights, duties and obligations of the parties with respect to the matters arising by reason of the controversies. Pending the termination of the actions, the monthly taxes which may be due unto defendant have been deposited in the hands of the Clerk of the Circuit Court of Cole County.

As stated in the petitions, all of the parties plaintiff in both actions are foreign corporations, and (except as herein stated, infra) have their home offices and principal places of business outside this state. Plaintiff, Binkley Coal Company, mines coal in Missouri and in Illinois; in the instant actions we are not concerned with the taxability of the sales of the coal mined by this plaintiff in Missouri. No other of the plaintiffs mines any coal in this state, nor does any plaintiff maintain any stockpile of coal in Missouri from which deliveries are made to purchasers in this state. Plaintiffs, other than plaintiff Pyramid Coal Corporation, maintain sales offices or sales representatives in Missouri. No spot order (delivery within not more than thirty days) nor contract order (delivery in more than thirty days) is accepted or approved by plaintiffs in Missouri, with the exception of those of certain plaintiffs in the case, The Consolidated Coal Company et al. v. Forrest Smith, State Auditor of the State of Missouri, Case No. 38679.

In Case No. 38679, the parties plaintiff are foreign corporations, but two of the plaintiffs, The Consolidated Coal Company and The St. Louis & O'Fallon Coal Company, have their principal places of business in St. Louis, Missouri. These two plaintiffs accept orders and approve contracts at their offices within this state. Some of the orders of plaintiff, Forsythe-Carterville Coal Company, are accepted in Missouri by its president.

All coal to customers in Missouri is delivered f.o.b. the mines in Illinois (or Indiana).

The sales, necessitating transportation of goods from other states to Missouri, are admittedly transactions of interstate commerce. The principal issue raised by the pleadings involves the intention of the legislature in the enactment of Section 11409, R.S. 1939, Mo. R.S.A., Sec. 11409, as amended, Laws of Missouri 1941, at page 702. See now, Laws of Missouri 1943, page 1017. A part of Section 11409, supra, as amended, is as follows:

"There is hereby specifically exempted from the provisions of this article and from the computation of the tax levied, assessed or payable under this article such retail sales as may be made in commerce between this state and any other state of the United States, . . . and any retail sale which the State of Missouri is prohibited from taxing under the Constitution or laws of the United States of America, . . ."

It is the contention of plaintiffs (appellants) that the exempted "such...