Kentucky Independent Oil Co. v. Coleman

• Decision Date: 16 December 1930
• Citation: 33 S.W.2d 615,236 Ky. 592
• Parties: KENTUCKY INDEPENDENT OIL CO. v. COLEMAN, Auditor of Public Accounts.
• Court: Kentucky Court of Appeals

33 S.W.2d 615

236 Ky. 592

KENTUCKY INDEPENDENT OIL CO. v. COLEMAN, Auditor of Public Accounts.

Court of Appeals of Kentucky

December 16, 1930

Appeal from Circuit Court, Franklin County.

Action by the Kentucky Independent Oil Company against Clell Coleman, Auditor of Public Accounts. Judgment for defendant and plaintiff appeals.

Affirmed.

H. B Mackoy, of Cincinnati, Ohio, R. T. Burke, of Louisville, and W. A. Berry and C. C. Grassham, both of Paducah, for appellant.

J. W Cammack, Atty. Gen., and James M. Gilbert and Clifford E. Smith, Asst. Attys. Gen., for appellee.

CLAY J.

Chapter 120, Acts 1924, imposing a state tax of three cents per gallon on all gasoline sold in this commonwealth "at wholesale," as thereinafter defined, became effective on June 18, 1924. Between that date and January 1, 1925, the Kentucky Independent Oil Company paid to the state gasoline taxes aggregating $36,581.64. This action was brought to require the auditor to issue to the company his warrant for that amount. The ground relied on in the original petition was this: The gasoline tax was a tax on the privilege of doing business in this state, and inasmuch as the company by complying with section 4189a, Kentucky Statutes, had already paid for that privilege, it could not be taxed again for the same thing. The auditor filed an answer in three paragraphs containing certain averments not necessary to be set out. The demurrer interposed to the petition was not passed on, but the demurrer to each paragraph of the answer was sustained, and the auditor having declined to plead further, the court awarded a mandamus directing the auditor to issue his warrant for the sum demanded. On appeal we upheld the validity of the tax on the ground that it was an excise tax and not a tax on the privilege of doing business in this state, and therefore did not amount to double taxation, and remanded the cause with directions to sustain the demurrer to the petition. Shanks v. Kentucky Independent Oil Co., 225 Ky. 303, 8 S.W.2d 383.

On the return of the case the action was revived in the name of Clell Coleman, who had succeeded William H. Shanks as auditor, and the demurrer was sustained to the petition as directed.

Thereafter the company filed an amended petition challenging the validity of the tax not only on other grounds not necessary to be considered, but on the further ground that, as construed by this court, it was a burden on interstate commerce, and therefore violative of the commerce clause of the Federal Constitution. With respect to this phase of the case the allegations of the amended petition are these:

Plaintiff further says that it was and has been at all times mentioned herein and in said original petition, engaged in the business of selling and distributing gasoline at wholesale and that it sold said gasoline for use in both intrastate and interstate commerce; that a very large portion of said gasoline, the amount of which plaintiff is unable to state and has and can have no knowledge of or means of stating, was and is sold and distributed to persons to be used and consumed and was and is used and consumed in interstate commerce; that it was and is not possible for plaintiff to ascertain or determine or report to the state of Kentucky, which of the persons to whom said gasoline was sold or distributed by it were intending or going to or would use or consume said gasoline in interstate commerce or in intrastate commerce, or what portion or portions of the gasoline so sold and distributed by it would be or was or is used or consumed in interstate commerce, or in intrastate commerce.

"Plaintiff says that, by reason of the foregoing facts and premises, the said Act hereinbefore mentioned and referred to, by its terms and as so construed, interpreted and enforced by said Court of Appeals, and by its operation and effect, and the tax imposed and collected thereby and thereunder, were and are invalid, illegal and unconstitutional and in violation of paragraph 3, section 8, article 1, of the Constitution of the United States in that they were and are a burden, restraint upon and regulation of interstate commerce for that said Act and said tax have not been and can not be separated or divided as between interstate and intra-state consumption and use, but have been made and held to apply to interstate as well as intra-state consumption and use of said gasoline, and it was and is not possible or feasible to regulate or control the operation and effect of said Act, as so construed, interpreted and enforced, or the tax imposed and collected thereunder so as to prevent it from being imposed upon gasoline consumed or used in interstate commerce while allowing the State of Kentucky to enforce said Act and said tax with respect to the intrastate consumption or use of gasoline."

Without waiving his demurrer and motion to strike theretofore filed the auditor filed an answer denying the allegations of the amended petition, and pleaded in substance that on each sale the tax was added to the sale price and was paid by the purchaser. After the demurrer to the amended petition was withdrawn, evidence was heard, and the law and facts having been submitted to the court without the intervention of a jury, it was adjudged that the company...