Eddins-Walcher Butane Co. v. Calvert, EDDINS-WALCHER

• Citation: 298 S.W.2d 93,156 Tex. 587
• Decision Date: 23 January 1957
• Docket Number: EDDINS-WALCHER,No. A-6028,A-6028
• Parties: BUTANE COMPANY, Petitioner, v. Robert S. CALVERT et al., Respondent.
• Court: Texas Supreme Court

Page 93

298 S.W.2d 93

156 Tex. 587

EDDINS-WALCHER BUTANE COMPANY, Petitioner, v. Robert S. CALVERT et al., Respondent.

No. A-6028.

Supreme Court of Texas.

Jan. 23, 1957.

Rehearing Denied Feb. 27, 1957.

Weatherred, Geary & Shelton, H. L. Morrison, Jr., W. S. Barron, Jr., Dallas, for petitioner.

John Ben Shepperd, Atty. Gen., of Texas, W. V. Geppert, L. P. Lollar, Asst. Attys. Gen., for respondent.

WALKER, Justice.

Eddins-Walcher Butane Company, petitioner, brought this suit against respondents, the Comptroller of Public Accounts and other State officials named in Art. 7057b, ¹ to recover occupation taxes paid under protest. The Court of Civil Appeals has affirmed the judgment of the trial court, rendered at the conclusion of a nonjury trial, denying petitioner any relief. Tex.Civ.App., 293 S.W.2d 104. It is our opinion that petitioner is not subject to the tax.

Article 7060 ¹ requires the payment of an occupation tax based on gross receipts from the operation of 'any gas, electric light, electric power, or water works, or water and light plant, located within any incorporated town or city in this State, and used for local sale and distribution in said town or city.' Petitioner is a corporation engaged in the business of buying and selling liquefied petroleum gas. The home office of the company is in Midland, but there are a number of branch offices, including one located within the city limits of Rankin, an incorporated town in the 1,000-2,500 population bracket according to the last Federal Census. The tax in question was exacted of petitioner under the provisions of the last mentioned statute and is based upon petitioner's gross receipts from business done in Rankin.

The products which petitioner distributes are originally captured from the earth in the form of a gas. For convenience in handling, however, the gas is liquefied under pressure at the refinery. The facilities maintained by petitioner in Rankin consist of two storage tanks, two tank trucks and an office. Petitioner purchases the gas in a liquid state from several refineries in Texas and New Mexico, and transports the same by truck to and places the same in the storage tanks in Rankin. The liquefied gas is then transferred by truck from petitioner's storage facilities into the tanks of its customers in and around the town. The products are kept under pressure and remain in liquid form from the time they are purchased at the refinery until after delivery to petitioner's customers, and are not processed or changed by petitioner in any way. They are eventually consumed by the ultimate purchaser in the form of a gas.

Petitioner contends that liquefied petroleum gas is not a gas within the meaning of Art. 7060 in so far as petitioner's dealings and contacts with it are concerned. As we view the case it is not necessary for us to decide that question, and we shall assume for the purpose of this opinion that there is no merit in such contention.

The key words of the statute as applied to this case are 'gas works,' which the parties agree are synonymous with 'gas plant.' There is some basis for petitioner's argument that the term connotes an establishment in which gas is manufactured or processed as distinguished from merely being distributed. Webster defines 'gas works' as 'a manufactory of gas, esp. illuminating gas; a gas plant;-usually construed in the singular,' and the term 'gas plant' is defined as 'a plant for manufacturing gas.' And in Village of Walthill v. Iowa Electric Light & Power Co., D.C., 125 F.Supp. 859, reversed on other grounds, 8 Cir., 228 F.2d 5647, it was held that a gas distribution system could not be condemned under a statute authorizing the acquisition of a 'gas plant' by eminent domain.

From a reading of the entire statute, however, we have concluded that the Legislature did not intend that the term should be given the limited meaning for which petitioner contends. It is expressly provided that the tax shall be levied only once on the same commodity, and that where the commodity is produced by one person and distributed by another, the tax shall be paid by the distributor alone. This indicates that facilities for the distribution of gas may constitute a gas works within the meaning of the statute even though the commodity is manufactured or produced by another.

The Attorney General relies upon Utilities Natural Gas Co. v. State, Tex.Civ.App., 118 S.W.2d 927, 929, where an attack was made upon a levy of the tax upon a company delivering gas by pipeline to a single customer within the city. In its opinion upholding the tax, the court expressed the view that 'the term 'gas plant' as used in the statute includes any method or manner whereby the business of selling and distributing gas is carried on within any incorporated city or town,' and cited Dallas Gas Co. v. State, Tex.Civ.App., 261 S.W. 1063 (wr. ref.), as supporting such conclusion. This cannot be regarded as an authoritative construction of the statute for the following reasons: (1) the company was using the customary method of delivering gas by pipeline, and the Court of Civil Appeals was not considering other and different methods of delivery; (2) the decision of the Court of Civil Appeals was reversed and judgment rendered that...