Fed. Land Bank of St. Paul v. De Rochford, 6550.

• Decision Date: 11 August 1939
• Docket Number: No. 6550.,6550.
• Parties: FEDERAL LAND BANK OF ST. PAUL v. DE ROCHFORD et al.
• Court: North Dakota Supreme Court

69 N.D. 382

287 N.W. 522

FEDERAL LAND BANK OF ST. PAUL

v.DE ROCHFORD et al.

No. 6550.

Supreme Court of North Dakota.

July 15, 1939.

Rehearing Denied Aug. 11, 1939.

Syllabus by the Court.

1. The imposition by a state of a license tax for the privilege of engaging in business as a dealer in motor vehicle fuel, measured by the quantity of motor vehicle fuel sold, including gasoline sold to a Federal Land Bank for the operation of its automobiles, does not operate as an unconstitutional interference with, or burden upon, the Federal Government or its instrumentalities.

2. In computing the amount of license tax of a dealer in motor vehicle fuel in North Dakota, all motor vehicle fuel used or sold by him must be considered, including motor vehicle fuel which he has sold to a Federal Land Bank.

Appeal from District Court, Burleigh County; Jansonius, Judge.

Action by the Federal Land Bank of St. Paul against Leo De Rochford, doing business under the name and style of Molly's Service Station, and Berta E. Baker, as State Auditor of the State of North Dakota, for a declaratory judgment adjudicating and determining whether, in computing the amount of tax against a dealer in motor vehicle fuel, the fuel sold to the plaintiff should be included or excluded. From an adverse judgment of the district court, the plaintiff appeals.

Judgment affirmed.

Geo. F. Shafer, of Bismarck, John Thorpe, of St. Paul, Minn. (Peyton R. Evans and Gerald E. Lyons, of Washington, D. C., and Robert J. Barry, of St. Paul, Minn., of counsel), for appellant.

Alvin C. Strutz, Atty. Gen., and T. A. Thompson and B. F. Tillotson, Asst. Attys. Gen., for respondents.

CHRISTIANSON, Judge.

The laws of North Dakota require each dealer “in motor vehicle fuel” to file with the State Auditor a certificate showing that he is engaged in such business. Initiated Measure, Laws 1927, p. 549, § 4. They make it unlawful to engage in business in North Dakota “as a dealer, unless such dealer is the holder of an unrevoked license issued by the State Auditor to engage in such business.” Laws 1935, c. 172, § 1.

They require “each and every dealer in motor vehicle fuel” to render to the State Auditor, not later than the 15th day of each calendar month, “a sworn statement of the number of gallons of motor vehicle fuel sold or used by him or them during the preceding calendar month”. Laws 1929, c. 166, § 2. They provide that:

“Said dealer shall pay a license tax of three cents per gallon on all motor vehicle fuel used and sold by him, other than such fuel sold by him or them, in the original packages as above specified, and shall have the option of paying said tax of three cents per gallon on all motor vehicle fuel sold by him or them, in the state, in the original packages in which the same was imported as above specified.

Whenever any sale is made by a dealer of motor vehicle fuel in the original packages in which the same was imported as above specified, such dealer shall deliver to the purchaser thereof an invoice of such motor vehicle fuel, stating the name and address of the purchaser, the quantity and kind of fuel sold, and whether or not said dealer assumes and agrees to pay the license tax on said fuel above specified, and such dealer shall transmit to the state auditor at the same time he shall render the statement above specified, duplicate copies of all such invoices issued and delivered by him during the period covered by such statement.” Laws 1929, c. 166, § 2.

“Any person, firm or corporation who shall purchase or receive any motor vehicle fuel from any dealer in this state in the original package in which the same shall have been imported, and upon which fuel the said dealer shall not have assumed to pay the tax as provided in this act, shall, on the 15th day of each month render to the State Auditor the same statement required of the dealer by Section 2 hereof, and at the same time shall remit and pay to said State Auditor a license tax of two cents per gallon on such motor vehicle fuel, upon which the dealer has not assumed the tax.” Initiated Measure, Laws 1927, pp. 547, 550, § 8.

“Every dealer paying such license tax or being liable for the payment thereof, shall be entitled to charge and collect the sum of three cents per gallon, on such motor fuel sold by him, as a part of the selling price thereof.” Laws 1929, c. 166, § 3.

“That any person or persons, firm or corporation who shall buy or use any motor vehicle fuel as defined in this Act, for the purpose of operating and propelling stationary gas engines, tractors used for agricultural purposes, motor boats, airplanes or aircrafts, or who shall purchase or use any of such fuel for lighting, heating, cleaning or dyeing or other commercial use of the same, except motor vehicles operated upon any of the public highways or streets in this State, on which motor fuel tax imposed by this Act has been paid, shall be reimbursed and repaid the amount of such tax paid by him on presentation to the State Tax Commissioner, on a form prescribed by the State Tax Commissioner, of a sworn statement setting forth * * *. Application for refunds or re-payments shall not be made oftener than at the beginning of the quarter of each calendar year. * * * The State Auditor shall furnish the Tax Commissioner with the information relating to the collection of the motor vehicle fuel tax and the Tax Commissioner shall withhold approval of any refund or re-payment until the State Auditor shall certify to the Tax Commissioner that the tax upon such motor fuel, on which refund or re-payment is claimed, shall have been paid.” Laws 1929, c. 166, § 6, as amended by chapter 248, Laws 1937.

The defendant, Leo DeRochford, is a duly licensed dealer in motor vehicle fuel under the laws of North Dakota relating to the sale of such fuel, being engaged in such business at Bismarck, North Dakota. During August, September, and October, 1937, the Federal Land Bank of St. Paul purchased from said DeRochford 150 gallons of gasoline for use in carrying on its activities within the State of North Dakota. A controversy arose as to whether the motor vehicle fuel sold by DeRochford to the defendant, Federal Land Bank, must be included in computing the amount of the tax to be paid by DeRochford to the State. The Bank contended that the tax could not be constitutionally imposed upon the dealer for any motor vehicle fuel which it purchased from him for the purpose of carrying on its authorized activities within the State, and that consequently the dealer might not charge the amount of such tax as a part of the price. The defendants, DeRochford and the State Auditor, on the other hand, contended that the motor vehicle fuel sold by DeRochford to the Federal Land Bank must be included in computing the tax and that consequently DeRochford might include the amount of such tax in the price. Action was brought for a determination of the controversy that had arisen and for a declaratory judgment adjudicating and determining the rights, liabilities, status and legal relations of the parties, and for a determination whether, in computing the amount of the tax against a dealer, motor vehicle fuel sold by him to a Federal Land Bank should be included or excluded. The trial court held that sales of motor vehicle fuel made to the Federal Land Bank should be included; that the dealer was required to pay a tax to the State, based upon such sales, and that accordingly he might fix the price of gasoline sold to the Federal Land Bank on that basis. Judgment was entered accordingly, and the Federal Land Bank of St. Paul has appealed.

The sole question presented for determination on this appeal is whether the State of North Dakota has the right to impose upon a licensed dealer in motor vehicle fuel a license tax of three cents per gallon upon motor vehicle fuel sold by such dealer to a Federal Land Bank for use in automobiles owned by said Bank and operated by it incidental to its activities in the State.

The appellant, the Federal Land Bank of St. Paul, contends:

1. That the imposition of such tax is forbidden by Section 26 of the Federal Farm Loan Act, 12 U.S.C.A. § 931.

2. That it is forbidden by implication by the Constitution and laws of the United States because the Federal Land Bank of Saint Paul is an instrumentality of the United States, and the tax in question here can in no event be imposed without the express consent of Congress and Congress has given no consent.

3. That if Chapter 166, Laws of North Dakota for 1929, as amended, requires that in measuring the amount of the license tax of the defendant, DeRochford, as a licensed dealer in Motor Vehicle Fuel in this State, there must be included motor vehicle fuel sold by him to the plaintiff, the Federal Land Bank of Saint Paul, then said Chapter 166, Laws 1929, as amended, violates Clause 2 of Article VI of the Constitution of the United States, U.S.C.A., which provides: “This Constitution, and the Laws of the United States which shall be made in Pursuance thereof * * * shall be the supreme Law of the Land; * * * any Thing in the Constitution or Laws of any State to the Contrary notwithstanding”; and, also, violates that part of Section 8, cl. 18, of Article I of the Constitution of the United States, U.S.C.A., which provides: “The Congress shall have Power * * * To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.”

The laws of North Dakota contain no language from which it may be implied that there was any intention to except motor vehicle fuel sold to a Federal Land Bank, in computing the license tax of a dealer. In fact the statute providing for such tax does not exempt any motor vehicle fuel that is used or sold by a dealer, although it makes provision for a refund of the tax that has been paid upon motor vehicle...