Continental Supply Company v. People

Decision Date21 March 1939
Docket Number2100
PartiesCONTINENTAL SUPPLY COMPANY v. PEOPLE
CourtWyoming Supreme Court

ERROR to the District Court, Laramie County; SAM M. THOMPSON Judge.

Action by the People of the State of Wyoming against the Continental Supply Company, to recover use taxes allegedly due the State. To review an adverse judgment, the defendant brings error.

Affirmed.

For the plaintiff in error, there was a brief by Hagens & Wehrli of Casper, and oral argument by Mr. W. J. Wehrli.

The burden was on plaintiff to prove that the materials were promptly purchasable in Wyoming. Subsection K, Sec. 4, Ch 118, Laws of 1937. Certain commodities are exempt under the law. Sec. 6, Ch. 118, Laws of 1937. Plaintiff did not negative the exception in its petition, but it was a material allegation, 49 C. J. 153. Chicago Ry. Co. v. Hamilton (Ind.) 85 N.E. 1044. United States v. Cook, 84 U.S. 168. Fed. Chem Co. v. Paddock (Ky.) 94 S.W.2d 645. Garvey v. Wesson (Mass.) 154 N.E. 516. Plaintiff was required to plead and prove that the merchandise was not exempt under the act. Rice Oil Co. v Toole County (Mont.) 284 P. 145. United States v. Ry. Co., 234 U.S. 669. The act provides that certain commodities are exempt, if not stocked for sale, or promptly purchasable in Wyoming. Many authorities involve a definition of the word "purchase." Hamilton v. Gray (Vt.) 31 A. 315. Bank v. United States, 38 F.2d 923. Hunt v. Bassett (Mass.) 783. People v. Caskrill (Calif.) 216 P. 78. Griffith v. Trenton (N. J.) 69 A. 29. 51 C. J. 95. Hessell v. Johnson (Wisc.) 36 N.W. 417. City of Denver v. Moewes (Colo.) 60 P. 986. Authorities on this point may be multiplied but the foregoing represents the decided weight of authority. Imposition of the tax under Sec. 6 of the act is an unconstitutional burden upon interstate commerce. Henneford v. Co., 300 U.S. 77. Weeks v. United States, 245 U.S. 618, 62 L.Ed. 513. Sonneborn Bros. v. Koeling, 262 U.S. 506. 67 L.Ed. 1095. Dahl Implement Co. v. Campbell (N. D.) 178 N.W. 197. Purchase v. State (Nebr.) 191 N.W. 677. Abner Mfg. Co. v. McLaughlin (N. M.) 64 P.2d 387. City of Rushville v. Heyeman (Ind.) 114 N.E. 691. Krueger v. Acme Fruit Co. (C. C. A., 5th Cir.) 75 F.2d 67. Dahnke-Walker Milling Co. v. Bondurant, 257 U.S. 282, 66 L.Ed. 239. Federal Trade Commission v. Pacific States Paper Trade Association, 273 U.S. 52, 71 L.Ed. 534. Cooney v. Mountain States Telephone and Telegraph Company, 294 U.S. 384, 79 L.Ed. 934. Baldwin v. Seelig, 294 U.S. 511, 79 L.Ed. 1032. J. B. Simpson, Inc. v. O'Hara (Mich.) 268 N.W. 809. Montgomery Ward & Co. v. Fry (Mich.) 269 N.W. 166. Property in interstate commerce can be taxed only after it comes to rest in the state where the tax is imposed. 12 C. J. 104. Henneford v. County, supra. Minnesota v. Blasius, 290 U.S. 1. Blexom v. Henneford (Wash.) 76 P.2d 586. Gredd Dyeing Co. v. Query, 286 U.S. 472. Clements v. Town of Casper, 4 Wyo. 494. State v. Willingham, 9 Wyo. 290. State v. Byles, 22 Wyo. 136. The rule in Felt and Tarrant Mfg. Co. v. Corbitt, 23 Fed. Sup. 186, sustaining the use tax law of California, conforms to the general rule above stated. Sec. 6 of the Use Tax law violates Article 1, Sec. 28 of the Wyoming constitution requiring all taxation to be equal and uniform. 61 C. J. 39. The act violates Article 3, Section 24 of the Wyoming constitution requiring the subject of a bill to be expressed in its title. The defect may be raised for the first time on appeal. Grover Irrigation Co. v. Ditch Co., 21 Wyo. 204. Delfelder v. Bank, 38 Wyo. 481. A tax cannot lawfully be collected from one person when it is legally due from another. National Ice Co. v. Express Co. (Calif.) 79 P.2d 380.

For the defendant in error there was a brief by Ray E. Lee, Attorney General; Thomas F. Shea, Deputy Attorney General; and Wm. C. Snow, Assistant Attorney General, all of Cheyenne, and an oral argument by Mr. Lee.

Appellant's contention that the burden was on plaintiff to plead and prove that the materials were promptly purchasable in Wyoming, is not a fair statement under any question involved in the case, when Sec. 4-K, Ch. 118, Laws 1937 is considered. Findings of the trial court will not be disturbed where supported by substantial evidence. Peterson v. Johnson, 46 Wyo. 475. Willis v. Willis, 48 Wyo. 403. Kaleb v. Woodman of America, 51 Wyo. 116. It is also contended that the imposition of the tax at the time of sale is a burden upon interstate commerce. It is made clear by Sec. 6 of the act that the tax is imposed on the storage, use, or other consumption of tangible personal property within the state of Wyoming. Sec. 3, Ch. 118, Laws 1937. Sec. 6 of the act simply provides the method of collecting the tax. The case of Monamotor Oil Co. v. Johnson, 292 U.S. 86 disposes of this question. We call attention to the following cases, which also support the imposition of the tax. Felt & Tarrant Mfg. Co. v. Corbett et al., 23 Fed. Sup. 186; Southern Pac. Co. v. Corbett et al., 23 Fed. Sup. 193; and Pacific Tel. & Tel. Co. v. Corbett et al., 23 Fed. Sup. 197. (All of these cases appear in the advance opinions, 23 Federal Supplement, No. 3, June 20th, 1938.) Henneford et al. v. Silas Mason Co., 300 U.S. 577, 57 S.Ct. 524, 526, 81 L.Ed. 814; James v. Dravo Contracting Co., 302 U.S. 134. Silas Mason Co. et al. v. Tax Commission of Washington et al., 302 U.S. 186, and Western Livestock v. Bureau of Revenue, 82 U.S. L.Ed. advance opinions No. 11, page 548. This is an excise tax. It is applied uniformly to all coming within the scope of its provisions. State v. Willingham, 9 Wyo. 290. Henneford v. Co., supra. The position taken by plaintiff that the property is not taxable because the statute is invalid, is inconsistent with its claim that the property is exempt. This is an excise tax and the constitutional rule requiring uniformity has no application to excise taxes. Matter of Kessler, 146 P. 113. Ann. Cas. 1917 A. 228. State of Maryland v. Shapiro, 101 A. 703. State v. Wilson, 168 P. 679. State Bd. of Tax Commissioners v. Jackson, 75 Law Ed. 1248. State ex rel. Porterie v. Hunt, 162 So. 777. State ex rel. Griffin v. Greene, 67 P.2d 995. Frazier v. State Tax Commission, 175 So. 402. The fourth point raised by Counsel attacks the sufficiency of the title of the act without citing authority. The tax is not upon the sale, but rather upon the storage, use or other consumption of tangible personal property and the tax is upon the purchaser and not upon the seller, although the seller under certain conditions is made responsible for its collection. We think the point is fully answered by the case of Monamotor Oil Co. v. Johnson, supra. The final point urged by appellant is that a tax cannot lawfully be collected from one person when it is legally due from another. Appellant here attempts to force a strained and unreasonable construction upon the statute which we believe is wholly without merit. Monamotor Oil Co. v. Johnson, supra. We desire to offer the following additional cases in support of our contention that the tax is not a burden upon interstate commerce. Edleman v. Transport Co., 289 U.S. 249. American Airways v. Wallace, 57 F.2d 877. Great A. Tea Co. v. Grosgean, 301 U.S. 412. We also desire to call attention to the case of Investment Co. v. People (Colo.) 81 P.2d 764. The point there involved was whether the use tax should be applied to an elevator sold by the Otis Elevator Co. of St. Louis to the Investment Company and installed in the City of Denver. The Colorado Court held that the transaction was subject to the use tax law of Colorado.

BLUME, Justice. RINER, Ch. J., and KIMBALL, J., concur.

OPINION

BLUME, Justice.

This is an action to recover certain taxes alleged to be due the State of Wyoming under the provisions of the Use Tax Act of 1937, Chapter 118, Session Laws of Wyoming 1937.

The Continental Supply Company, defendant in the case below and plaintiff in error here, is a Delaware corporation engaged in the business of selling supplies to oil producers and operators and to persons engaged in drilling wells for the production of oil and gas. Its home office is in Dallas, Texas; it is authorized to transact business in Wyoming, and it maintains as its principal office or place in Wyoming a store at Casper. It has three different places of business in the State. On or about June 9, 1937, the Corporation made application to the State Board of Equalization of Wyoming for a Certificate of Registration pursuant to Section 5, Ch. 118, Session Laws of Wyoming 1937. On September 3, 1937, a "Certificate of Registration and Authority to Collect Use Tax" was issued, addressed to the corporation's Casper Office.

During the months of June, July and August, 1937, the Corporation made various sales of merchandise to purchasers in Wyoming. Some of this merchandise was, doubtless, supplied from stock in the corporation's hands in its Wyoming stores. Other items, apparently not carried in local stocks, were ordered by the Corporation from its home office in Dallas, and by that office from dealers or manufacturers in other states. In most instances, apparently, shipment was made directly from the foreign dealer or manufacturer to the Wyoming purchasers, and in such cases the merchandise was at no time, at least directly, in the actual possession of the Corporation's Wyoming retailers. The merchandise involved in this action reached the purchaser in this state in all cases. The time taken up in filling the various orders does not appear, but judging from the testimony of the witness Gross, they were all filled in the regular, ordinary course of trade.

The appellant, from its office at Dallas, made a report on July 20, 1937, of the merchandise sold for storage, use or other consumption during June. Similar returns...

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