Carroll v. Socony-vacuum Oil Co. Inc.

• Decision Date: 23 August 1949
• Parties: CARROLL v. SOCONY-VACUUM OIL CO., Inc.
• Court: Connecticut Supreme Court

136 Conn. 49

68 A.2d 299

CARROLL

v.SOCONY-VACUUM OIL CO., Inc.

Supreme Court of Errors of Connecticut.

Aug. 23, 1949.

COPYRIGHT MATERIAL OMITTED.

William T. Carroll, State Treasurer, sued the Socony-Vacuum Oil Company, Inc., to recover an amount retained by the defendant from the tax on gasoline sold by it under the terms of a repealed statute.

The case was reserved by the Superior Court in Hartford County, Murphy, J., for the advice of the Supreme Court of Errors.

The Supreme Court of Errors, Maltbie, C. J., advised that the demurrer to defendant's answer should be overruled on the ground that the statute compensating the distributors retrospectively for services they rendered to the state in collecting the gasoline tax was not unconstitutional.

Frank W. Flood, Assistant Attorney General, with whom, on the brief, was William L. Hadden, Attorney General, for plaintiff.

Thomas J. Spellacy and Samuel H. Aron, Hartford, with whom, on the brief, was John J. Kenny, Hartford, for defendant.

Maxwell M. Merritt, Hartford, and J. Kenneth Bradley, Bridgeport, argued the case as amici curiae.

The following attorneys appeared on briefs as amici curiae: W. Arthur Countryman, Jr., Joesph F. Berry, Hartford, William L. Beers, New Haven, Frederick L. Comley, Bridgeport.

Before MALTBIE, C. J., and BROWN, JENNINGS, ELLS and INGLIS, JJ. (Judge ERNEST A. INGLIS of the Superior Court sat for Judge DICKENSON).

MALTBIE, Chief Justice.

The issue presented by this reservation concerns the constitutionality of an act of the General Assembly authorizing gasoline distributors in the state to retain certain moneys withheld by them under the terms of a statute which had in fact been repealed. The case is the outgrowth of our decision in Anastasio v. Gulf Oil Corporation, 131 Conn. 708, 42 A.2d 149.

Before undertaking a discussion of the issues argued before us, we must point out the scope of the decision which we may render. The action was brought by the state to recover the moneys withheld. The writ was dated March 14, 1946. On November 27, 1946, the defendant answered denying liability. The General Assembly at its 1947 session passed the act upon which the defendant relies and which it claims released it from liability. General Statutes, Sup. 1947, § 400i. Thereafter it amended its answer to include a special defense setting up that claim. The plaintiff demurred to it on the ground that the act was unconstitutional because it gave money belonging to the state to the distributors who by its terms were permitted to retain the sums withheld and granted to them exclusive public emoluments or privileges, and because it was unlawfully discriminatory. With the pleadings in this situation the case was reserved to us. The basis of the reservation was not that the advice we might give would settle the issues in the case, but that it was reasonably certain to enter into the final decision. Under our present rules of practice this is a proper basis for a reservation. Practice Book 1934, p. 121, § 421. New Haven Metal & Heating Supply Co. v. Danaher, 128 Conn. 213, 218, 21 A.2d 383. The statute authorizing such a proceeding provides: ‘The court or judge making such reservation shall, in the judgment, decree or decision made or rendered in such cases, conform to the advice of the supreme court of errors.’ General Statutes § 7967. That provision necessarily implies a limitation upon the extent to which we may go in giving advice; it must be such that the court or judge from whom the reservation comes can properly apply it in deciding the issues before it when the reservation was made.

As this case was pending on demurrer when it was reserved, the ultimate issue before us is: Should the demurrer be sustained or overruled? State ex rel. Morris v. Bulkeley, 61 Conn. 287, 376, 23 A. 186, 14 L.R.A. 657; Benham v. Potter, 77 Conn. 186, 200, 58 A. 735. Ordinarily we should not consider any issues beyond those which the court could decide in ruling upon that demurrer and that would mean issues presented by the allegations of the pleading demurred to. Santoro v. Kleinberger, 115 Conn. 631, 633, 163 A. 107. To that principle an exception may be made as regards facts not alleged if they are clearly undisputed, and our advice may be given contingent upon an amendment to the pleadings which will properly allege them. Camp v. Scott, 47 Conn. 366, 379; Schlesinger v. Chapman, 52 Conn. 271, 274. We understand that the parties are in no dispute as to the general background of facts stated in our decision in Anastasio v. Gulf Oil Corporation, supra; in fact, the case has been presented to us upon that basis; and those facts we will consider, leaving it to the trial court to require any amendment necessary to present them before it decides the demurrer. Certain other facts material to one aspect of the issues before us we cannot regard as undisputed; and, as we shall point out later, we cannot for that reason decide fully the issues argued before us.

Under statutes cited in our opinion in the Anastasio case, a tax was required to be paid by distributors of gasoline which was sold or used for propelling automobiles over the highways; while the tax was to be paid by them, it was in fact one imposed upon those who used the gasoline for that purpose; and the distributors were in effect agents of the state in collecting it. In 1933 two acts were passed with reference to the tax; one amended the previous statute which imposed the tax; Public Acts, 1933, c. 303, § 5; and the other provided: ‘Each distributor may retain one per cent of the tax on gasoline * * * to cover the expense of collection of said tax and loss by reason of shrinkage.’ Public Acts, 1933, c. 267. The statute revision commissioner, in preparing the Supplement to the General Statutes for 1933, combined the two acts into a single section. General Statutes, Sup. 1933, § 466b. In 1935, that section was amended and the provision allowing distributors to retain the 1 per cent was omitted. Public Acts, 1935, c. 228, § 15. Nevertheless, the omitted provision was printed in the 1935 Cumulative Supplement to the General Statutes as a separate section. General Statutes, Cum.Sup.1935, § 655c.

The distributors were required to report each month to the state treasurer upon forms prepared by the motor vehicle commissioner. The first part of each report consisted of a statement of all gasoline sold, used or transferred by the distributors. The second part stated the amount of gasoline on hand at the beginning of the month, the amount received during the month, and the amount on hand at its end; in this way the amount to be accounted for was determined; the number of gallons which had been covered by the first part of the report was then deducted; and this left a balance, which was entered merely as ‘Difference.’ The third part of the report was a summary of items taken from the first part as the basis upon which the tax was to be computed, with a deduction of 1 per cent as ‘distributors allowance.’ Each month the commissioner of motor vehicles certified to the state treasurer the amount of tax due from the distributors in accordance with the summary in the third part of the reports, and the distributors, upon demand of the treasurer, paid the amount so certified. In determining the amount of taxes certified to be due, no account was taken of the gasoline appearing in the report under the item ‘Difference.’ The Anastasio case was brought to recover an additional amount of taxes claimed to be due the state on account of this item. The action was one of a large number of similar suits brought against different distributors. It had been assumed by all parties that § 655c was in effect as a valid statute of the state, and in the trial of the Anastasio action, and in its presentation to us, much of the argument was based on the proper construction to be given to that section. When we discovered that the statutory provision embodied in that section had been repealed in 1935, we found it impossible to decide the case as presented and remanded it for further proceedings according to law. Our decision was rendered on April 3, 1945.

The present action was brought upon a different basis. The plaintiff is now seeking to recover the 1 per cent which was deducted in determining the amount of taxes due as stated in the third part of the report. It is stipulated that this action is one of a number of similar actions brought by the plaintiff, that the plaintiff claims that there is due from the defendant the sum of $186,152.71, and, from the 153 distributors from whom he is claiming a recovery, an aggregate principal sum of almost $900,000, with interest amounting to more than $450,000, and that after our decision in the Anastasio case thirty-one distributors paid the state on like claims made by the plaintiff an aggregate principal sum of $7408.86, with interest amounting to $2647.93.

The 1947 act provides as follows: ‘Section 1. Distributors, as defined in chapter 84 of the general statutes, who have, by virtue of the sentence printed as section 655c of the 1935 supplement to the general statutes, retained one per cent of the tax on gasoline are hereby authorized to retain said one per cent of the tax on all gasoline sold on or before April 3, 1945. Sec. 2. The sentence printed as $655c is expunged from said supplement. Sec. 3. This act shall take effect from its passage.’ Public Acts, 1947, No. 499, General Statutes, Sup.1947, § 400i, Rev.1949, § 2558. It became effective by the signature of the governor on July 8, 1947.

In the first place, it is necessary to determine the scope of the 1947 act. Section 655c of the 1935 Cumulative Supplement stated that the deduction was ‘to cover the expense of collection * * * and loss by reason of shrinkage.’ In Anastasio v. Gulf Oil Corporation, 131 Conn. 708, 718, 42 A.2d 149, we pointed out that, as the tax was one imposed upon gasoline sold or used, an allowance for...