Louisiana Iron & Supply Co. v. Jolly
| Decision Date | 22 October 1935 |
| Docket Number | 26183. |
| Citation | 51 P.2d 280,174 Okla. 579,1935 OK 1017 |
| Parties | LOUISIANA IRON & SUPPLY CO. v. JOLLY, County Tax Assessor, et al. |
| Court | Oklahoma Supreme Court |
Rehearing Denied Nov. 19, 1935.
Syllabus by the Court.
1. Where personal property in the course of its journey in interstate commerce is collected at a given point by any means of transportation, and is merely awaiting the necessary facilities for further transportation on its journey, it will be deemed to be in transitu while so detained, and not subject to local taxation there; but where it is waiting indefinitely the owner's pleasure, or the rise of markets, or is waiting or undergoing a further process of manufacturing, it may acquire an actual situs at such a point, rendering it there subject to taxation.
2. After the interstate movement has begun, it may be regarded as continuing so as to maintain the immunity of the property from state taxation, despite temporary interruptions due to the necessities of the journey or for the purpose of safety and convenience in the course of the movement. Formalities such as the forms of billing and mere changes in the method of transportation, do not necessarily affect the continuity of the transit. The question is always one of substance, and in each case it is necessary to consider the particular occasion or purpose of the interruption during which the tax is sought to be levied.
Appeal from District Court, Carter County; John B. Ogden, Judge.
Suit by the Louisiana Iron & Supply Company against W. A. Jolly, as Tax Assessor of Carter County, and others, to enjoin taxing officials from assessing personal property for purposes of ad valorem taxation, and collecting taxes thereon. From a judgment for defendants, plaintiff appeals.
Reversed and remanded, with directions.
Stephen A. George, of Ardmore, for plaintiff in error.
W. W Potter, Co. Atty., of Ardmore, for defendants in error.
In this appeal the plaintiff in error was the plaintiff in the trial court and the defendants in error were the defendants in the trial court, and, in this opinion, they will be referred to as plaintiff and defendants, respectively.
It appears from the statement of the case by the attorney for the plaintiff and the attorney for the defendants, and from the findings of fact of the court below, that in the latter part of 1934, the plaintiff was a Louisiana corporation having its office and place of business in Shreveport, in that state, and that the plaintiff purchased, at that time, from the Sinclair-Prairie Pipe Line Company certain pipe lines, and it caused said pipe lines to be removed from the ground and the pipe to be disjointed for the purpose of shipping it to East Texas. During the latter part of December, 1934, the plaintiff caused the pipe to be transported by trucks from the oil fields to the town of Healdton, Okl., and unloaded on the freight yards of the Atchison, Topeka & Santa Fé Railway Company for immediate shipment to the East Texas oil fields. The plaintiff had crews of workmen employed day and night straightening said pipe preparatory to loading the same on freight cars. A large part of the pipe, which constituted the pipe line purchased in the ground, had actually been shipped out of Healdton before the 1st day of January, 1935. The pipe was being loaded and shipped as fast as time and facilities for loading would permit. Approximately half of the entire pipe line had been loaded and shipped before January 1, 1935, but it was impossible to load and ship the rest before that time because the facilities were inadequate.
The tax assessor of Carter county, Okl., learned that this pipe was being shipped under these circumstances, and at about 9 o'clock on the morning of January 1, 1935, the defendant W. A. Jolly, as tax assessor of Carter county, Okl., appeared at the railway station at Healdton and demanded the payment of an ad valorem tax on all pipe that had not been shipped up to that date. The tax assessor returned to his office at Ardmore, Okl., made an assessment against said pipe, and delivered the same to the county treasurer of Carter county, who issued his tax warrant and placed same in the hands of the sheriff of said county, who caused said warrant to be levied upon the unshipped pipe on the morning of January 2, 1935.
Thereafter, the plaintiff filed a suit in the district court of Carter county, Okl., against the defendants to restrain and enjoin them from interfering with the transportation and shipment of said pipe to East Texas, and to restrain and enjoin the defendants from advertising and selling said pipe for the satisfaction of the taxes.
A temporary injunction was granted, but on final trial the temporary injunction was dissolved and a judgment and decree rendered for the defendants, and this is an appeal from said judgment and decree.
The plaintiff sets out eleven assignments of error, but in its argument in this case groups them all in the following three general propositions:
(1) The property involved in this action was not subject to local taxation in Carter county, Okl., for the year 1935, for the reason that same was in transit in interstate commerce; and the attempted imposition of the tax in question is an undue burden upon interstate commerce, in violation of the commerce clause of the Federal Constitution.
(2) The property involved in this action was only temporarily located in the town of Healdton, Okl., and until such time as it could be loaded on cars for further shipment in interstate commerce to East Texas; and said property did not acquire and did not have a taxable situs in the town of Healdton or in Carter county, Okl., at the time of the attempted levy and assessment of said tax.
(3) The enforced payment of the tax claimed in this action would deprive this plaintiff of the equal protection of the law, and would deprive plaintiff of its property without due process of law.
Under the first head, plaintiff contends that the pipe on January 1, 1935, was in transit in interstate commerce and, therefore, could not be subjected to taxation by the officials of Carter county for the year 1935.
It is a well-established doctrine that a tax on property in transit from one state to another is invalid because an illegal burden on interstate commerce, and one of the principal questions involved in this case is whether the transit had begun at the time of the acts complained of, or whether the pipe had been delivered to the carrier for transportation.
We think the rule is well stated by the Supreme Court of Indiana in Board of Commissioners of Brown County v. Standard Oil Co., 103 Ind. 302, 2 N.E. 758, 759, as follows: "Where personal property is collected at any point, by any means of transportation, and is merely awaiting the necessary facilities for further transportation, it will be deemed to be in transitu while so detained; but where it is awaiting indefinitely the owner's pleasure, or the rise of markets, or is awaiting or undergoing a further process of manufacturing, it will acquire an actual situs at such point, rendering it there subject to taxation."
On this point we call attention to Ogilvie v. Crawford County (C C.) 7 F. 745 and Blount v. Munroe, 60 Ga. 61. In the case at bar, the trial court held that the pipe involved in this suit had not been entered in interstate commerce when the assessment was made, and that the pipe was therefore subject to local taxation for the year 1935. The trial court found that said pipe had not been delivered to the railway company, but was in possession of the plaintiff at the time of the assessment, and that the railway company had not issued a bill of lading covering the particular pipe assessed. It seems...
To continue reading
Request your trial