Dixie Oil Co. v. United States

• Decision Date: 12 March 1928
• Docket Number: No. 5237.,5237.
• Citation: 24 F.2d 804
• Parties: DIXIE OIL CO. v. UNITED STATES.
• Court: U.S. Court of Appeals — Fifth Circuit

24 F.2d 804 (1928)

DIXIE OIL CO. v. UNITED STATES.

No. 5237.

Circuit Court of Appeals, Fifth Circuit.

March 12, 1928.

Robert A. Hunter, of Shreveport, La. (Robert A. Hunter, Cecil Morgan, and Robert P. Hunter, all of Shreveport, La., on the brief), for plaintiff in error.

Philip H. Mecom, U. S. Atty., of Shreveport, La., and Chas. T. Hendler, Sp. Atty. Bureau of Internal Revenue, of Washington, D. C. (Philip H. Mecom, U. S. Atty., and J. Fair Hardin, Asst. U. S. Atty., both of Shreveport, La., and C. M. Charest, Gen. Counsel Bureau of Internal Revenue, and Charles T. Hendler, Sp. Atty. Internal Revenue, both of Washington, D. C., on the brief), for defendant in error.

Before WALKER, BRYAN, and FOSTER, Circuit Judges.

WALKER, Circuit Judge.

This was an action by plaintiff in error (herein called plaintiff) to recover an amount of taxes paid by it under protest, which amount was claimed by the taxing officials to be due under the provisions of Revenue Act 1918, §§ 500(e) and 501(d) 40 Stat. 1102, 1103 (Comp. St. §§ 6309 1/3a, 6309 1/3b), imposing a tax on "all transportation of oil by pipe line."

The case was tried by the court without a jury on a stipulation of facts made by the parties. The following was shown by that stipulation:

Plaintiff owned and operated a gas and oil lease covering approximately 700 acres, on which there were a number of producing oil and gas wells; the eastern boundary of the lease being about 8,000 feet from the nearest railroad, the Texas & Pacific Railroad. Plaintiff owned a pipe connecting the wells on its lease with a loading rack on the Texas & Pacific Railroad; the loading rack also being owned by plaintiff. The oil produced was pumped from the wells into a battery of settling tanks located in the western part of the lease and another battery of such tanks located near the eastern side of the lease. From those settling tanks the oil was pumped to the loading rack, and there loaded into tank cars, if such tank cars were available. If no tank cars were available, the oil was stored in the storage tank located near the eastern boundary of the lease, and when tank cars were available the oil was pumped from the storage tank to the loading rack. When the oil was loaded in tank cars it was shipped to Whiting, Ind., to the Standard Oil Company of Indiana, for refining by that company. The control of the oil remained exclusively in plaintiff until delivery was made to the railroad by its being loaded in tank cars. Said pipe was never used as a common carrier pipe line. No charge has been made for the use thereof, and it has not been used, except by plaintiff, for the purpose of carrying its own oil produced on said lease to the loading rack, where its transportation by rail began.

The stipulation contained an admission that evidence could be produced showing practices of common carrier pipe lines as to charges for transportation of oil by pipe line. That admission was made subject to plaintiff's objection that the evidence referred to was irrelevant, incompetent, and immaterial.

In behalf of plaintiff it was contended that its carriage of its own oil in its own pipe, extending from its lease to its loading rack, was not "transportation of oil by pipe line," within the meaning of the statute.

In addition to other taxes imposed by section 500 of that act from and after April 1, 1919, that section imposed "(e) a tax equivalent to 8 per centum of the amount paid for the transportation on or after such date of oil by pipe line." Immediately succeeding provisions of section 501 of that act, in reference to taxes on transportation by carriers other than pipe line,...