Creamery Package Manufacturing Co. v. State Board of Equalization of State, 2327

Decision Date05 March 1946
Docket Number2327
Citation166 P.2d 952,62 Wyo. 265
PartiesCREAMERY PACKAGE MANUFACTURING COMPANY, a Corporation, Plaintiff and Appellant, SHERIDAN CREAMERY COMPANY, a Corporation, and SUNRISE CREAMERY COMPANY, a Corporation, Plaintiffs, v. THE STATE BOARD OF EQUALIZATION OF THE STATE OF WYOMING and M. H. LEITNER and ARCHIE EWOLDSEN, as the present members of the State Board of Equalization of the State of Wyoming, Defendants and Respondents
CourtWyoming Supreme Court

Appeal from District Court, Laramie County; SAM H. THOMPSON, Judge.

Action by Creamery Package Manufacturing Company against the State Board of Equalization of the State of Wyoming and others for a declaratory judgment that plaintiff was not liable for a sales or use tax assessed against plaintiff on account of sales made during the year 1937 and 1941, wherein the Sheridan Creamery Company and the Sunrise Creamery Company were joined as plaintiffs. From an adverse judgment, the plaintiff Creamery Package Manufacturing Company appeals.

Reversed with directions.

Judgment of District Court reversed with directions.

For the Plaintiff and Appellant, the cause was submitted upon the brief of Guy and Edelman, of Cheyenne, Wyoming, and oral argument by Mrs. Ruth N. Edelman.

POINTS OF COUNSEL FOR APPELLANT

Less activity will sustain "doing business" for service of process than to subject a corporation to a regulatory statute. International Text Book Co. v. Tone, 115 N.E. 914.

Neither mere solicitation nor casual or intermittent acts of an agent constitute doing business within a state. Whitaker vs McFadden Publications, 105 F. 2nd 44; Schultz vs Long Island Machinery, 173 So. 569; Colorado Iron Works vs. Sierra Grande, 15 Colo. 499.

The use tax may be collected from the seller provided the seller does business in the State or has an office there. If not, the use tax cannot be collected from the seller; but neither can the sales tax. Berwind-White Coal Co. Case, 309 U.S. 33.

The nature and extent of economic activity which constitute "doing business" is by no means clear. Running through the decisions seems to be the general principle that the business must be of such an extent and character as to warrant the inference that the corporation is present within the state with some measure of continuity and permanence. While there is no precise measure of the amount and kind of business necessary to constitute "doing business" neither occasional isolated transactions nor mere solicitation of orders within the State by an agent will of itself establish corporate presence. Michigan Law Review Vol. 41, Pgs. 533-536.

Where a foreign corporation does no business within the state except that which is of an interstate nature, it cannot be compelled to collect sales or use tax. In all cases where a foreign corporation has been required to collect a sales or use tax, the corporation has been found to be doing a local business or maintaining a place of business within the state. Berwind-White Coal Company, 309 U.S. 33; McGoldrick vs. DuGrenier, 309 U.S. 70.

It is well settled under constitutional provisions that interstate or foreign commerce may not be taxed by a state and that a state may not impose upon a foreign corporation a tax for the privilege of engaging in such commerce. 105 A. L. R. 12.

A corporation, authorized by its charter to engage in lawful commerce among the states may, without obtaining a license for the purposes of its interstate business, and without liability to taxation on account of such business, go into another state for the purposes of carrying on interstate commerce. Western Union Telegraph Co. v. Kansas (1910) 216 U.S. 1, 54 L.Ed. 355, 30 S.Ct. 190.

For the Defendants and Respondents, the cause was submitted upon the brief of Louis J. O'Marr, Attorney General, Hal E. Morris, Deputy Attorney General, and Frank M. Gallivan, Assistant Attorney General, all of Cheyenne, Wyoming, and oral argument by Mr. Morris.

POINTS OF COUNSEL FOR RESPONDENT

The interstate commerce clause of the constitution does not in terms prohibit state taxes. Congress is authorized to regulate the commerce, and the state tax is not invalid unless it so far affects the commerce as to amount to a regulation that impairs the authority of congress. The manufacture, production and sale in one state of a commodity for transportation or use in interstate commerce, and its keeping, use and sale in the state to which it is transported have been treated as local transactions that may be subjects of non-discriminatory taxes. State Board of Equalization v. Blind Bull Coal Company, 55 Wyo. 438.

It is now fully recognized that interstate commerce must pay its way. It is not the purpose of the commerce clause to relieve those engaged in interstate commerce of their just share of state tax burdens merely because of an incidental or consequential effect of the tax as an increase in the cost of doing the business. Morrison-Knudsen, et al. v. State Board of Equalization, 58 Wyo. 500.

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

OPINION

BLUME, Chief Justice.

In this case it appears that about November 28, 1941, the State Board of Equalization assessed against the plaintiff, Creamery Package Manufacturing Company, a sales or use tax in the sum of $ 2,322.31, with penalty and interest thereon, making a total assessment of $ 3,013.90, on account of sales made by the plaintiff in the State of Wyoming during the years 1937 to 1941, both inclusive. This action was brought by the above named plaintiff for a declaratory judgment asking that the Court determine, in substance, that the plaintiff is not liable for any such taxes under the facts which appear herein. Two creamery companies in this State were joined as plaintiffs, setting forth separate causes of action. All the plaintiffs claimed, generally, that the items involved in the case are not taxable under the laws of the State, but exempt under Sec. 4 of the Use Tax Act, for the reason that the goods were not generally stocked or kept for sale in the State of Wyoming. The State Board of Equalization, defendant herein, alleged that the taxes assessed were properly due and asked the Court to so declare. The only cause of action heard and tried by the Court was the cause of action on the part of the Creamery Package Manufacturing Company, plaintiff, hereafter designated as such, or by name.

The facts are substantially as follows: The plaintiff, Creamery Package Manufacturing Company, is an Illinois corporation with headquarters in Chicago, Illinois. It has a branch office and a warehouse in Denver, Colorado, and the office in that state takes care of the sales of the plaintiff in Colorado, Wyoming, Utah, New Mexico, part of Nevada and part of Texas. It has a so-called statutory agent upon whom process may be served in case of a suit against the plaintiff. That appointment was made in connection with the so-called domestication of the plaintiff corporation in this State, and the reason for that appointment is mentioned in the case of Creamery Package Manufacturing Company vs. Cheyenne Ice Cream Company, 55 Wyo. 277, 100 P.2d 116. That agent is not a business agent of the plaintiff and does no business for it, as that term is ordinarily understood. Plaintiff is and has been engaged in the business of manufacturing, distributing and selling creamery and ice cream machinery, equipment and supplies throughout the United States, including milk bottles, caps, cartons and other articles used by creameries. It has not now and never has had an office, sample room, store, warehouse, plant, telephone listing, business agent or business headquarters of any kind in the State of Wyoming. It never has taken out a sales tax license and has never obtained a certificate to collect the use tax in this State. Its method of operation in connection with sales was, during the time involved herein, and is substantially as follows: A salesman of the company travels through the state occasionally to take orders; he lives in Denver, Colorado, and has no headquarters in this State. He has no authority to enter into any agreement with a customer that the merchandise ordered would be supplied by plaintiff, and no express authority to make collections, compromise disputes or bind the company in any manner. The only authority which he has is to take orders, which are subject to approval by the plaintiff at its office in Denver, Colorado, and in some instances at the plaintiff's office in Illinois. All goods except as herein mentioned are shipped F. O. B. railroad cars, Denver, Colorado, and in some instances F. O. B. railroad cars in Illinois. The purchaser pays the freight and assumes the risk of delivery of the goods. At times the purchaser pays for the goods to the salesman at the time he takes an order. Generally the goods are sold on open account and payments are sent by check to the Denver office after the goods have been delivered. Sometimes payments are made to the salesmen on subsequent calls. Orders are not always received at the Denver office through a salesman, for at times purchasers in the state send an order directly to Denver. Again, at other times, customers in this State call at the plaintiff's office in Denver, and make their purchases directly from that office. Occasionally plaintiff sells an entire unit of refrigerating equipment in this State. The usual method in such cases is that the equipment is sent F. O. B. railroad cars at the station of the purchaser in this State. The plaintiff, if requested, sends an engineer to supervise the installation of the equipment, but the actual installation is made by men engaged by the purchaser in this State. To make this point clearer, the testimony of Mr. Ziser, the only witness in the case, shows the...

To continue reading

Request your trial
4 cases
  • Ford Motor Co. v. Arguello
    • United States
    • Wyoming Supreme Court
    • June 19, 1963
    ... ... negligence on the part of Ford, in manufacturing the accident vehicle, and that this negligence ... does not now transact business within this state; and has no agent, officer, or other person here ... 235, 149 P.2d 142, 148; and Creamery Package Manufacturing Co. v. Cheyenne Ice Cream ... v. State Board of Equalization, 62 Wyo. 265, 266 P.2d 952, ... ...
  • Buehner Block v. Wyoming Dept. of Revenue
    • United States
    • Wyoming Supreme Court
    • July 27, 2006
    ...to the consignees immediately upon shipment thereunder. Id., 208 P.2d at 1098-1105. See also Creamery Package Mfg. Co. v. State Bd. of Equalization, 62 Wyo. 265, 166 P.2d 952, 953, 956-57 (1946); and Toms v. Whitmore, 6 Wyo. 220, 44 P. 56, 57 [¶ 24] The principal findings of the State Board......
  • Hercules Powder Co. v. State Board of Equalization of State
    • United States
    • Wyoming Supreme Court
    • August 16, 1949
    ...hauled to Parco and delivered to the railroad company. The delivery at that point was not interstate commerce." It was declared in the Creamery Package case to be the rule that foreign corporation was not rendered subject to a sales tax by merely appointing an agent upon whom process might ......
  • Barcon, Inc. v. Wyoming State Bd. of Equalization
    • United States
    • Wyoming Supreme Court
    • December 31, 1992
    ...of the state to mandate the collection of the use tax dates back to the decision of this court in Creamery Package Mfg. Co. v. State Board of Equalization, 62 Wyo. 265, 166 P.2d 952 (1946). The court held that "some one must have a place of business within the State, in order that a compuls......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT