Gillis v. State of California 8212 1934
| Decision Date | 05 November 1934 |
| Docket Number | No. 28,28 |
| Citation | 55 S.Ct. 4,293 U.S. 62,79 L.Ed. 199 |
| Parties | GILLIS v. STATE OF CALIFORNIA. Argued Oct. 8—9, 1934 |
| Court | U.S. Supreme Court |
Mr. Ernest C. Carman, of Los Angeles, Cal., for petitioner.
Messrs. H. H. Linney and U.S. Webb, both of San Francisco, Cal., for the State of California.
California laws make it unlawful for any person to act as a distributor of motor vehicle fuel without first obtaining a license from the board of equalization and executing bond conditioned to pay taxes and observe other requirements. St. 1923, p. 571 Id. 1931, c. 85, p. 105, c. 86, p. 119, c. 793, p. 1652, c. 997, p. 2001, c. 1082, 2288.
'Distributor' includes persons, firms, and corporations refining, manufacturing, or producing motor oil and distributing it within the state.
Section 65, Jud. Code, title 28 USCA § 124 (Act of March 3, 1887, c. 373, § 2, 24 Stat. 554; Aug. 13, 1888, c. 866, § 3, 25 Stat. 436; Mar. 3, 1911, c. 231, § 65, 36 Stat. 1104):
The District Court, Southern District of California, in a cause instituted there for the purpose of conserving the assets of Western Oil & Refining Company and giving opportunity for reorganization, appointed petitioner, Gillis, receiver, April 4, 1931. Immediately after assuming the duties of the office, as required by the local statutes, he procured license and executed bond with the Fidelity & Deposit Company of Maryland as surety. Thereafter he carried on the business of the company manufacturing, refining, producing, and distributing gasoline—and co-operated with creditors and stockholders concerning reorganization plans.
In 1933 the Fidelity & Deposit Company refused to continue upon the bond after a specified day. Petitioner endeavored to find another acceptable surety. Failing in this, he reported the circumstances to the court; pointed out his inability to comply with the local statutes; and stated that, unless the business could continue substantially as theretofore, the purpose of the receivership would be frustrated. He asked authority to proceed without bond or license; otherwise, he affirmed, final liquidation at material loss to all concerned would be necessary. The Attorney General, speaking for the state, objected. The court ordered and directed petitioner 'to continue his operations as such Receiver (including the production, distribution and sale of gasoline or motor vehicle fuel in the State of California) after termination of the hereinbefore mentioned bond, or withdrawal therefrom of the surety thereon, for the payment of gasoline taxes * * * without any such bond or the giving of security in any other manner for the payment of such gasoline taxes and without any license. * * *' The Circuit Court of Appeals held section 65 of Judicial Code (28 USCA § 124) applicable and controlling, and reversed the challenged order. The result we think is correct; the judgment must be affirmed.
While the precise point now presented does not seem to have been definitely decided, the power of Congress to prescribe duties and obligations of receivers has been often recognized. United States v. Harris, 177 U.S. 305, 308, 20 S.Ct. 609, 44 L.Ed. 780; Erb v. Morasch, 177 U.S. 584, 585, 20 S.Ct. 819, 44 L.Ed. 897; Central Trust Co. of New York v. St. Louis, A. & T.R. Co. (C.C.) 40 F. 426, 427; Hornsby v. Eddy (C.C.A.) 56 F. 461, 462; Felton v. Ackerman (C.C.A.) 61 F. 225, 227; Peirce v. Van Dusen (C.C.A.) 78 F. 693, 701, 69 L.R.A. 705; Fidelity Title & Trust Co. v. Kansas Natural Gas Co. (D.C.) 219 F. 614, 616; Westinghouse, etc., Mfg. Co. v. Binghamton R. Co. (D.C.) 255 F. 378, 382; Mercantile Trust Co. v. Tennessee Cent. R. Co. (D.C.) 286 F. 425, 428; Crawford v. Duluth St. R. Co. (C.C.A.) 60 F.(2d) 212, 214.
There is no suggestion of repugnance between the state Constitution and the motor vehicle fuel statute. And the latter must be accepted as valid law of the state within the ambit of section 65, Judicial Code (28 USCA § 124), unless its provisions...
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