Commonwealth v. Corporation

• Citation: 173 A. 404,316 Pa. 33
• Decision Date: 30 June 1934
• Docket Number: 4
• Parties: Commonwealth v. Wiloil Corporation, Appellant
• Court: United States State Supreme Court of Pennsylvania

173 A. 404

316 Pa. 33

Commonwealth v. Wiloil Corporation, Appellant

No. 4

Supreme Court of Pennsylvania

June 30, 1934

Argued May 21, 1934

Appeal, No. 4, May T., 1934, by defendant, from judgment of C.P. Dauphin Co., Commonwealth Docket 1932, No. 356, in case of Commonwealth v. Wiloil Corporation. Judgment affirmed.

Appeal from assessment of gasoline tanks. Before HARGEST, P.J WICKERSHAM and FOX, JJ., without a jury.

The opinion of the Supreme Court states the facts.

Judgment entered for plaintiff, in opinion by WICKERSHAM, J. Defendant appealed.

Error assigned, inter alia, was final judgment, quoting record.

The judgment is affirmed.

J Smith Christy, of Weil, Christy & Weil, for appellant.

John Y. Scott, Deputy Attorney General, with him Wm. A. Schnader, Attorney General, for appellee.

Before FRAZER, C.J., SIMPSON, KEPHART, SCHAFFER, MAXEY, DREW and LINN, JJ.

OPINION

MR. JUSTICE SCHAFFER:

The inquiry to be pursued in this case is whether the Commonwealth may collect certain gasoline taxes from appellant under the Liquid Fuels Tax Act of May 21, 1931, P.L. 149, 72 P.S., section 2611 (b).

Appellant is a Pennsylvania corporation with its principal office and place of business in this State. It is engaged in selling liquid fuels at wholesale, and is a permit-holder under the provisions of the tax act. The department of revenue discovered that it had failed to report and pay tax upon certain cars of gasoline sold by it to the Ace Oil Corporation and the High Power Gasoline Company, both of Philadelphia. All of the gasoline was sold by appellant's agent in Philadelphia to the two companies named. The sales were subject to and received the approval of appellant at its office in Pittsburgh. At the time the sales were made appellant did not possess the gasoline. To fill the orders taken by its agent appellant obtained the gasoline from the Crane Hook Company in Wilmington, Delaware. Shipments were made direct from Wilmington to the purchasers in Philadelphia or Essington, Pennsylvania. In each instance the car containing the gasoline moved under a bill of lading showing appellant as consignor and either one or the other of the two purchasing concerns as consignee. The place of shipment was indicated as Wilmington, and of destination as Philadelphia, or Essington, consignee's private sidings. Freight was not prepaid and the consignee paid it. The invoices made out by appellant and sent to the consignees state that the shipments were made f.o.b. Wilmington, and they include in the price to be paid the tax on the gasoline.

Appellant contends that the tax was added by it to the invoice in ignorance of a proper understanding of the law. However this may be, it appears that after appellant was advised by counsel that it was not liable to collect and pay over the tax to the Commonwealth, it continued to include the impost in subsequent invoices. Appellant has been unable to collect the tax, as both vendees are insolvent.

The first position assumed by appellant is that the title to the gasoline passed to the purchasers at Wilmington, Delaware, and that they were the importers under the terms of the act and alone liable for the tax. The second position taken is that, if the title did not pass at Wilmington, deliveries were made to the purchasers in Pennsylvania in tank cars, the original packages, that the shipments were at all times in interstate commerce and the charging of the tax to the seller is illegal, as it imposes a burden upon such commerce, and that, if that be the intent of the act, it is unconstitutional.

Taking up the first position, we find that the Sales Act of May 19, 1915, P.L. 543, section 18, 69 P.S., section 142, recognizes that the intention of the buyer and the seller determines the time of the passage of title. For the purpose of ascertaining their intention, the act says regard shall be had to the terms of the contract, the conduct of the parties, usages of trade and the circumstances of the case.

We start with the fact that the sale was actually made in Pennsylvania. The contention of appellant arises out of the circumstance that the price was fixed f.o.b. Wilmington. This, however, does not necessarily mean that title passed there, particularly is this so in view of the intention of the parties evidenced by the provision in their contract that the vendees should pay the tax to the vendors. If the parties contemplated that the title passed at Wilmington, outside Pennsylvania, and the gasoline there belonged to the purchasers, it is difficult to understand how the seller could have regarded itself as in any way liable for a Pennsylvania tax. As we view it, the provision in the contract that the gasoline was to be f.o.b. Wilmington was not intended to designate the place of delivery, but to fix the full price to be paid. This is shown by plaintiff's invoice offered in evidence, which, after setting forth the sale, contains the following: "Price 5 1/2c gal. f.o.b. Wilmington, Del. plus 3c tax." Furthermore, plaintiff's secretary and treasurer testified, in answer to the question whether it was not the practice in their business to sell gasoline f.o.b. certain places in order to fix the price, that it was, and that the purchaser when buying gasoline has to take this into consideration, just as the buyer of an automobile has to take into account, when he is purchasing, the custom in that trade to name a price f.o.b. the place of manufacture. It is also apparent from the testimony of the secretary and treasurer that, although the consignee was to pay the freight from Wilmington, this also was only as a matter of price, not of delivery. That f.o.b. a certain place may be merely price-fixing was recognized in Dannemiller v. Kirkpatrick, 201 Pa. 218. See also Charles E. Hires Co. v. Stromeyer, 65 Pa.Super. 241, 243.

Where there is a sale of unascertained goods, the shipping directions do not determine the place of passage of title and delivery. The authorities holding that delivery to a common carrier is delivery to the vendee have no application here, because the intention of the parties, which is controlling on the question of delivery, shows that the title was not intended to pass until the goods reached their destination: Blakiston v. Davies, Turner & Co., 42 Pa.Super. 390, 394. In Frank Pure Food Co. v. Dodson, 281 Pa. 125, which was a case of an agreement to purchase unascertained and nonexisting goods, we said, page 127: "The contract was executory; in other words, it was not a purchase of existing specific property, but an agreement to purchase unascertained and nonexistent goods, to be thereafter produced; the case, therefore, falls within Rule 4, clause 1, of section 19, of the Sales Act of May 19, 1915, P.L. 543, 545. . . . Thereunder, in the case of future goods, the title does not pass until they are ascertained and set aside by the act or consent of both parties. . . . To pass the title, the seller's appropriation of the goods must be assented to by the buyer."

We now come to appellant's second position, which is that the levying of the tax puts a burden on interstate commerce. In Hump Hairpin Mfg. Co. v. Emmerson, 258 U.S. 290, the Supreme Court of the United States said, page 294 "While a state may not use its taxing power to regulate or burden interstate commerce, . . . a state excise tax which affects such commerce, not directly, but only incidentally and remotely, may be entirely valid where it is clear that it is not imposed with the covert purpose or with the effect of defeating federal constitutional...