Great Northern Ry. Co. v. State

• Decision Date: 01 September 1939
• Docket Number: 27519.
• Citation: 93 P.2d 694,200 Wash. 392
• Parties: GREAT NORTHERN RY. CO. v. STATE.
• Court: Washington Supreme Court

93 P.2d 694

200 Wash. 392

GREAT NORTHERN RY. CO. v. STATE.

No. 27519.

Supreme Court of Washington

September 1, 1939

Department 2.

Action by the Great Northern Railway Company against the State of Washington for the amount of state fuel oil taxes paid by plaintiff, in which defendant filed a cross-complaint to recover taxes alleged to be due. From a judgment awarding recovery to plaintiff and dismissing the cross-complaint defendant appeals.

Affirmed.

BLAKE C.J., dissenting.

Appeal from Superior Court, Thurston County; D. F. Wright, judge.

G. W Hamilton, Atty. Gen., and John E. Belcher, Asst. Atty. Gen., for the State.

Thomas Balmer, Edwin C. Matthias, and Anthony Kane, all of Seattle, for respondent.

MILLARD Justice.

Section 78, Chapter 180, page 749, Laws 1935, imposes a tax on each distributor of one-fourth of one cent for each gallon of fuel oil 'sold, distributed, withdrawn or used by him.' Section 1 (amendatory of § 78, Chapter 180, Laws 1935), Chapter 116, page 459, Laws 1937, imposes a tax on each distributor of one-fourth of one cent for each gallon of fuel oil 'sold, distributed, or withdrawn by him.' The only change in the 1935 statute by the 1937 enactment was to discontinue the tax on use. Subdivision (c), § 79, Chapter 180, page 750, Laws 1935, defines the term 'distributor' and divides distributors into three classes, for purpose of taxation under the act, as follows: 'The word 'distributor' shall mean and include every person who refines, manufactures, produces or compounds fuel oil and/or diesel oil and sells, distributes, or in any manner uses the same in this state; also any person who imports any fuel oil and/or diesel oil into this state and stores, withdraws, sells, distributes, or in any manner uses the same in this state whether in the original package or container in which it is imported or otherwise; also any person who having acquired in this state in the original package or container fuel oil and/or diesel oil, shall distribute or sell the same, whether in such original package or container in which the same was imported or otherwise, or in any manner uses the same. * * *'

Subdivision (c), § 79, Chapter 180, Laws 1935, was amended by subdivision (b), § 2, Chapter 116, page 460, Laws 1937. It added the word 'withdraws' after the word 'sells' in the first class of distributors named in the definition and omits the phrase 'or in any manner uses.' No change was made in the second and third classes of distributors named in the definition.

Section 1, Chapter 186, page 581, Laws 1939, imposes a tax on each distributor of one-fourth of one cent for each gallon of fuel oil 'withdrawn, sold, distributed or in any manner used by such distributor.' This amendment restores the tax on use discontinued by § 1, Chapter 116, Laws 1937, which amended § 78, Chapter 180, Laws 1935.

Subdivision (a), § 2, Chapter 186, page 581, Laws 1939, amendatory of subdivision (b) § 2, Chapter 116, Laws 1937, and subdivision (c), § 79, Chapter 180, Laws 1935, defines the term 'distributor' and divides distributors into three classes, for purpose of taxation under the act, as follows: "Distribtor' shall mean and include every person, firm, association or corporation who refines, manufactures or compounds liquid or liquefiable petroleum products, and withdraws, sells, distributes, or in any manner uses the same in this state; also any person, firm, association or corporation who acquires the same within the state from any person refining it within or importing it into the stat on which the tax of one-quarter (1/4) cent per gallon has not been paid; or [3] any person, firm, association or corporation who imports the same into this state and withdraws, sells, distributes or in any manner uses the same in this state.'

The 1939 enactment restores the phrase 'or in any manner uses' to the first class of distributors named in the definition in the 1935 act and omitted from the 1937 amendatory statute. The second class of distributors named in the definition in the 1935 and 1937 statutes is made the third class in the 1939 enactment which omits the word 'stores' and the clause 'whether in the original package or container in which it is imported or otherwise.' By the 1939 statutory definition of the second class of distributors, a third classification (not so restricted as the third class of distributors named in the definition in the 1935 and 1937 statutes) is made. This group of distributors comprises those who acquire fuel oil within this State from any person refining fuel oil within or importing it into the state if the tax on such fuel oil has not prior thereto been paid.

The penalty provisions of Chapter 58, page 298, Laws 1933, were adopted (doubtless to compel those engaged in selling, withdrawing, distributing and usling fuel oil to take out a distributor's license and pay the tax imposed by Title XI, Chapter 180, Laws 1935 and Chapter 116, Laws 1937) as a part (§ 81, Chapter 180, page 751, Laws 1935; § 4, Chapter 116, page 461, Laws 1937) of the 1935 and 1937 statutes.

Section 8, Chapter 58, page 306, Laws 1933, provides that a fuel oil tax shall be paid monthly; that if a person acts as a distributor 'without first securing the license required by section 3', he shall pay a penalty amounting to one hundred per cent of the tax. If the sworn monthly statement required by § 7, of the act, page 306, is not filed by the distributor, a penalty amounting to ten per cent is added to the tax due. If the tax is not paid by the distributor by five p. m. on the fifteenth day of the next month after the tax becomes due, the distributor is subject to another penalty of ten per cent. All of the penalties are cumulative and 'no action taken pursuant to this section shall relieve in any wise any person from the penal provisions of this act.'

Section 9 of Chapter 58, page 307, Laws 1933, provides that, if any distributor is delinquent in the payment of his excise tax under the act, notice of the amount of such delinquency shall be given by the director of licenses 'to all persons having in their possession or under their control any credits or other personal property belonging to such distributor' and such persons so notified shall withhold the payment of such credits, etc., to the taxpayer to protect the state in the collection of the tax. Such taxes, penalties and interest constitute a lien in favor of the state upon all franchises, property and rights to property, whether real or personal (whether such property is employed by such person in the prosecution of his business, or otherwise) from the date the taxes are due and payable until paid. If the distributor is in default for more than ten days, the director is authorized to issue a warrant to the sheriff of any county of the state commanding the sheriff to levy upon and sell the goods and chattels of such distributor, without exemption, found within his jurisdiction, for the payment of the amount of the delinquency, with the added penalties, etc., and to proceed with the sale 'with like effect and in the same manner as prescribed by law in respect to executions issued against doods and chattels upon judgment by a court of record.' In addition to the foregoing self-executing provisions undoubtedly designed to compel obedience without resort to the courts, §§ 19 and 22 of Chapter 58, pages 323, 326, Laws 1933, provide that any person, firm, association or corporation 'or any officer or agent thereof failing to pay the tax as herein provided, or violating any of the other provisions of this act,' shall be punishable by a fine of from five hundred to five thousand dollars, or by imprisonment for a term not exceeding one year, or by both such fine and imprisonment. The state highway partolmen are authorized to arrest 'on view, without writ, rule, order or process, any person known to have violated any of the provisions of this act.'

Prior to the enactment of the fuel oil tax statute plaintiff used fuel oil for the generation of steam in its locomotives in the operation of its railroad as a common carrier of commerce in the state of Washington and adjacent states. On December 20, 1929, plaintiff entered into the first contract pertinent to the case at bar for the purchase of California fuel oil from the Associated Oil Company. The contract recites the purpose was to obtain a dependable supply of fuel oil for the operation of plaintiff's trains west of Whitefish, Montana.

The contract of December 20, 1929, was for '* * * the period beginning on January 1, 1931, and ending on December 31, 1933, deliveries to be made in fairly equal monthly installments, all the fuel oil up to and not exceeding a total during each year of $2,300,000 bulk barrels of 42 U.S. gallons each, required by Buyer during said period for current fuel oil purposes in the operation of its lines of railway west of Whitefish, Montana; provided that Buyer shall purchase hereunder not less than 1,800,000 bulk barrels of fuel oil during each year of said period.'

A similar provision is in he contract executed August 16, 1935. By supplemental agreement of September 14, 1931, the term of the contract of December 20, 1929, was extended to December 31, 1935. The fuel oil involved in the case at bar, between May 1, 1935, to December 31, 1935, was sold and delivered under the terms and conditions of the contract of December 20, 1929. A new contract, in all particulars important to this case the same as the preceding contract, was exectuted August 16, 1935, for the period January 1 to December 31 1936. That contract was continued in force for the period ending December 31, 1938, by letter contract of June 10, 1936. The fuel oil involved in this case from and after January 1, 1936, was sold and delivered...