Maloney Davidson Co. v. Martin
| Decision Date | 24 June 1938 |
| Citation | 118 S.W.2d 708,274 Ky. 449 |
| Parties | MALONEY DAVIDSON CO. v. MARTIN et al. |
| Court | Kentucky Court of Appeals |
Appeal from Circuit Court, Franklin County.
Suit for a declaratory judgment by Maloney Davidson Company against James W. Martin, individually and as Commissioner of Revenue, and others. From a judgment dismissing the petition the plaintiff appeals.
Reversed.
William S. Kammerer, of Louisville, for appellant.
Hubert Meredith, Atty. Gen., and A. E. Funk, Asst. Atty. Gen., for appellees.
MORRIS Commissioner.
Suit was instituted by appellant against appellees, Commissioner of Revenue, and other officers of the State, all having to do with the administration and enforcement of the laws relative to the taxing of alcoholic beverages and control of the traffic.
The suit was in the form of a declaratory proceeding, as is authorized by Section 639a--1 et seq. of the Civil Code of Practice.
(1) The court below was asked to declare that:
"Plaintiff is not required to purchase the stamps or pay the tax attempted to be required by the provisions of the Act, upon alcoholic beverages acquired or to be acquired by plaintiff for sale to other Kentucky wholesalers for permanent shipment, sale and consumption without the State."
(2) "That plaintiff is not subject to the penalties which the Act imposes for failure to pay such tax." Obviously a declaration on No. 1 disposes of No. 2.
The petition, as we observe it, complies with Code requirements and applicable rules, as to form and substance, so as to entitle plaintiff to the relief sought, if it is correct in its claimed construction of pertinent statutes.
It is alleged that plaintiff is a corporation, with its chief place of business in Louisville. Generally, it alleges its authorization to engage, and that it is engaged, in the wholesale distribution of alcoholic beverages, holding all necessary licenses and permits required by the United States, State County and City Governments.
More specifically it alleges that it has contracted with manufacturers of alcoholic beverages in and out of the State, to sell and deliver at wholesale to other Kentucky wholesalers, such beverages by wholesale, for shipment permanently out of this State, there to be sold through retail outlets, without the State, and to be used and consumed without the State.
It shows itself to have by contract the exclusive right to sell products of the Frankfort Distilleries, Incorporated, some of such being manufactured in the State, and some without, wholesalers and retailers, but its pleading reiterates, and makes it plain, that it is here dealing solely with wholesale sales made to other wholesalers in the State, where the product is to be by them shipped permanently out of the State, there to be sold at retail, and there consumed, or as it expresses the purpose "for ultimate out of State sale, distribution and consumption."
Plaintiff alleges that the State's officers, particularly those charged with the matter of taxing and controlling the particular business, are contending that the law makes such transactions as are above described, subject to a fixed tax, and requires it to comply with certain provisions requiring the affixing to packages stamps showing payment of the tax, before sale or distribution by it in the manner related, with promises of application of the penalizing provisions of the statute upon noncompliance. Plaintiff contends that such transactions as are described are not subject to the tax sought to be collected, nor to the taxpaid stamp fixing provision.
The relief sought was an order of injunction restraining the defendant from compelling compliance where the transaction is solely as described. The court sustained defendant's demurrer to the petition. Appellant declined to plead further, whereupon the court, without specifically declaring the rights, dismissed the petition.
Decision of the question presented requires the incorporation of certain sections of the Act, or their substance relative to the taxation of alcoholic beverages, and perhaps some reference to portions of what are known as the Control Act.
References, unless otherwise noted, are to various sections of Chapter 1, Acts of the General Assembly, 3rd Special Session of 1936, embraced in Kentucky Statutes, 1936, Sections 4281c-1 to and including 4281c-25.
The title of the Act is:
"An Act relating to revenue and taxation on the sale and distribution of alcoholic beverages, and declaring an emergency."
The following definitions are fixed in the Act, subsection 7 of Section 1, Ky.St. § 4281c-1, subsec. 7:
"'Wholesaler' means any one, whether distributor, jobber, broker, agent, or other person, whether enumerated in this Act or not who distributes alcoholic beverages for the purpose of being sold at retail ***."
It is clear that plaintiff has by its pleading of the manner of conducting its business placed itself clearly within the definition of "wholesaler." There is no contention otherwise.
Subsection 9 defines retail sale to mean "sale by a retail outlet," and subsection 10 provides:
"'Retail container' means and includes any bottle, can, barrel, or other container which without separable intermediate container holds alcoholic beverage and which is suitable and destined for sale to a retail outlet, whether it is suitable for delivery to the consumer or not."
Section 4 of the Act, Ky.St. § 4281c-4, fixes the rate of tax on spirits as follows:
"There is hereby levied upon the sale or distribution by sale or gift a tax of one dollar and four cents ($1.04) on each wine gallon of spirits and a like or proportional rate per gallon on spirits sold or distributed in any other container of more or less than one gallon. ***"
Section 5, Ky.St. § 4281c-5, provides:
"The wholesaler who purchases or otherwise acquires title to any alcoholic beverage made taxable by this Act shall within twenty-four (24) hours from the time possession of said beverage is acquired affix or cause to be affixed the stamps required under the provisions of this act ***."
Section 13, Ky.St. § 4281c-13, provides:
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