Boeing Air Transport v. Edelman, 578.

• Decision Date: 04 October 1932
• Docket Number: No. 578.,578.
• Citation: 61 F.2d 319
• Parties: BOEING AIR TRANSPORT, Inc., v. EDELMAN, State Treasurer, et al.
• Court: U.S. Court of Appeals — Tenth Circuit

61 F.2d 319 (1932)

BOEING AIR TRANSPORT, Inc., v.EDELMAN, State Treasurer, et al.^*

No. 578.

Circuit Court of Appeals, Tenth Circuit.

October 4, 1932.

John W. Lacey, of Cheyenne, Wyo. and William M. Allen, of Seattle, Wash. (Lacey & Loomis, of Cheyenne, Wyo., Eugene Luccock, of Seattle, Wash., and Todd, Holman & Sprague, of Seattle, Wash., on the brief), for appellant.

Thomas Seddon Taliaferro, Jr., of Rock Springs, Wyo. (Fred W. Johnson, of Rock Springs, Wyo., on the brief), for appelleeCity of Rock Springs.

James A. Greenwood, Atty. Gen., George W. Ferguson, Asst. Atty. Gen., and Harry B. Henderson, Jr., Atty. for City of Cheyenne, of Cheyenne, Wyo. (Richard J. Jackson, Deputy Atty. Gen., and Philip S. Garbutt, Asst. Atty. Gen., on the brief), for appelleesState Treasurer and City of Cheyenne.

Before LEWIS and McDERMOTT, Circuit Judges, and POLLOCK, District Judge.

LEWIS, Circuit Judge.

Appellant, a corporation under the laws of the State of Washington, brought this suit seeking an injunction against the State Treasurer of Wyoming restraining him from collecting from appellant a license tax imposed by the statutes of Wyoming on gasoline to be used by appellant in its airplanes in the transportation of passengers, express, and United States mail in interstate commerce, and to recover the tax theretofore paid.In appellant's business its planes, carrying both intrastate and interstate commerce, ply between Chicago, Illinois, and Oakland, California, and by written agreements with Cheyenne, Wyoming, and Rock Springs, Wyoming, the planes land on municipal fields, at each of those places and take on gasoline, that being the fuel used to generate the needed power in flights.

The bill charges that the Wyoming statute is an interference with and a burden on that commerce in violation of clause 3, § 8, article 1 of the Constitution of the United States, and is therefore illegal and void, "in that the said statutes purport to impose and levy, and do impose and levy a tax on all gasoline purchased or consumed as fuel in Wyoming to propel airplanes flying between the said State and neighboring States in interstate commerce, thus exacting the said tax as the price of the privilege of using an instrumentality of interstate commerce and thus evading the exclusive power of Congress to regulate commerce between the several States."It is further charged:

"That under the provisions of said statutes the wholesale distributors or consignees of gasoline are made agents of the State of Wyoming for the purpose of collecting said gasoline tax, said agents acting under the direction of the defendant, State Treasurer, and while the said distributors and/or consignees of gasoline actually collect, return and remit said tax to the State of Wyoming and to the defendant, the State Treasurer, said gasoline tax is in law and in practice levied and imposed against the consumer of said gasoline within the State of Wyoming and not against the wholesale distributor or consignee, and such tax is paid by all such consumers, ordinarily direct to the defendant, the Treasurer of the State of Wyoming, which said tax this plaintiff has been forced to pay in order to purchase or consume any gasoline in the State of Wyoming, and will hereafter be forced to pay until defendant, his agents, servants, employees, workmen and other persons acting by and through him are enjoined and restrained from collecting the same by order of this court. * * *

"Plaintiff further avers that * * * the plaintiff in order to continue to operate its said airplanes in the conduct of its said business is compelled to purchase from time to time, and from day to day, large quantities of gasoline in the State of Wyoming, and that no such distributor or any other dealer in said State will sell such gasoline to the plaintiff unless the plaintiff so purchasing the same shall make payment of the said tax levied and assessed thereon at the time of the purchase thereof, and that hence the plaintiff is unable to purchase any gasoline in the State of Wyoming for the operation or propulsion of its said airplanes without at the time paying the said tax thereon, and plaintiff alleges that by the express provisions of said Acts and/or by the practical operation thereof by the defendant and the legal effect thereof the said tax is absorbed in the price paid for all gasoline purchased in Wyoming for use or consumption in said State by the purchaser, including this plaintiff, and that under the provisions of said Acts the said tax, although required to be collected and returned to the State by the distributor of or dealer therein as the agent of the State, is both in practice and in legal effect a tax on the consumer of such gasoline. * * *"

It is further alleged in the bill:

"That a part of such gasoline used by the plaintiff is purchased by and delivered to the plaintiff in the State of Wyoming; that a part thereof is purchased outside of said State, and that such gasoline purchased and delivered to the plaintiff either in or outside of said State of Wyoming is used and consumed by it as fuel for the propulsion of its said airplanes in its interstate commerce and business as aforesaid, and is an instrumentality of interstate commerce."

That there has been exacted of it, and it has paid said tax amounting to several thousand dollars on gasoline so used by appellant in interstate commerce, whether purchased or delivered to it in the State of Wyoming or elsewhere, under protest, because of threatened criminal and civil penalties authorized by the statute for non-payment.

The statute was first passed in 1923.It levied a tax of one cent on each gallon of gasoline sold or used within the state.It has been amended at every subsequent session.We think it plain that the original act and as amended imposes the tax only against wholesalers as that term is defined in the original act.Section 1 of the original act (Session Laws, Wyoming, 1923, chapter 73) defined wholesalers thus:

"`Wholesaler' is hereby defined as any person, firm or corporation who imports or causes to be imported gasoline, as herein defined, for sale in the State of Wyoming to the jobber or consumer, or to the persons, firms, corporations or associations of persons, who, in turn, sell to the jobber or consumer.The term `wholesaler' is further defined to mean any person, firm or corporation who produces, refines, manufactures, blends or compounds gasoline in the State of Wyoming for use, sale or distribution in this State."

Section 3 required that every wholesaler, as defined in the act, who was then engaged or should engage in the sale or use of gasoline, should not later than the fifteenth of each month render a statement to the State Treasurer showing the amount of gasoline sold or used in the state during the preceding calendar month, and to pay to the State Treasurer at the same time the license tax of one cent per gallon on all such gasoline.That act also required that every wholesaler should keep a record of all purchases, receipts, sales, and distribution of gasoline, and that the funds received from the license tax by the State Treasurer should be used for the maintenance of highways.Section 6 of the original act made it unlawful for any wholesaler to sell or offer gasoline for sale while delinquent in the payment of the tax or any part thereof.It imposed penalties, civil and criminal, for violations of that provision.The amount of the tax was thereafter raised at subsequent sessions until it was four cents per gallon prior to and at the time this suit was brought.

Section 3 of the original act was amended at the session of 1927(chapter 70, § 2).It did not change the requirement of the original act that the wholesaler should pay the tax, but that amendment further provided:

"Every person who shall use any gasoline in this State upon which the said tax has not been paid by any wholesaler in this State, shall, on or before the 25th day of each calendar month * * * render a true statement to the State Treasurer, duly signed and sworn to, and accompany such statement with the payment of a tax of three cents per gallon on all gasoline as shown by such statement to have been used by him."

Section 4 of the amendatory act of 1927 required that every person or corporation who should have in his possession for the purpose of sale, or should sell or offer for sale, gasoline for motor vehicles, should display in a conspicuous place a sign showing the price at which said gasoline would be sold and the amount of tax thereon, and that neglect in that respect would constitute a misdemeanor subjecting the offender to fine or imprisonment.

At the general session of 1929the legislature(Laws 1929, c. 89, § 1) provided that reports to the State Treasurer of all gasoline sold or used during the preceding month should be made by wholesalers, and that the wholesaler should at the same time pay to the State Treasurer a license tax of four cents per gallon on all such gasoline.Thereafter at a special session in 1929(chapter 14)the legislature again amended section 3 of the original act so that it read thus:

"On and after April 1, 1929, each and every wholesaler as defined in this Act, who is now engaged or who may hereafter engage in his own name, or in the name of others, or in the name of his representatives or agents in this State, in the sale or use of gasoline as herein defined shall not later than the fifteenth of each month, render to the State Treasurer a statement of all gasoline sold or used by them in the ...