Monamotor Oil Co. v. Johnson

• Decision Date: 29 March 1933
• Docket Number: No. 4197.,4197.
• Citation: 3 F. Supp. 189
• Parties: MONAMOTOR OIL CO. v. JOHNSON, State Treasurer, et al.
• Court: U.S. District Court — Southern District of Iowa

3 F. Supp. 189

MONAMOTOR OIL CO. v. JOHNSON, State Treasurer, et al.

No. 4197.

District Court, S. D. Iowa, W. D.

March 29, 1933.

COPYRIGHT MATERIAL OMITTED

George S. Wright, Addison Kistle, and Paul E. Roadifer, all of Council Bluffs, Iowa, for plaintiff.

John Fletcher, former Atty. Gen., Earl Wisdom and J. J. Hess, former Assts. to Atty. Gen., Edward L. O'Connor, Atty. Gen., and C. E. Hamilton and L. W. Powers, Assts. to Atty. Gen., for defendants.

Before KENYON, Circuit Judge, and SCOTT and DEWEY, District Judges.

DEWEY, District Judge.

Complainant's bill attacks the validity and method of enforcement of the motor vehicle fuel tax statutes of the state of Iowa.

Jurisdiction is invoked on diversity of citizenship of the parties and on account of a controversy arising under the Constitution and laws of the United States, the amount in controversy exceeding the limitation.

The complainant insisting upon interlocutory orders, a three-judge court was instituted and convened and the cause came on for hearing before such court on the demand for a temporary injunction. When the court was assembled and the cause called, by agreement of the parties, the trial was made a final hearing on the merits.

In 1925 the 41st General Assembly of the state of Iowa (chapter 6), in keeping with the demand for better roads all over the United States, passed an act having to do with the improvement of the highways of the state imposing a license fee or tax on gasoline or motor vehicle fuel used or otherwise disposed of in the state of Iowa, and providing for a levy, collection, payment, refund, and distribution. This act has been amended and now appears in the Code of Iowa 1931, as chapter 251-A1, the entire chapter being set out.

That chapter, which may be referred to herein as the 2-cent statute and, in so far as the same is material here, provides as follows:

"5093-a1. Amount of Fee. A license fee of two cents per gallon or fraction of a gallon is hereby imposed on all motor vehicle fuel used or otherwise disposed of in this state for any purpose whatsoever. Any person using motor vehicle fuel within the state shall be liable for the fee herein provided for unless the same shall have been previously paid. License fees shall be collected and disposed of in the manner hereinafter provided.

"5093-a2. * * * The term `distributor' as used in this chapter shall mean any person who brings into the state or who produces, refines, manufactures or compounds within the state any motor vehicle fuel to be used within the state or sold or otherwise disposed of by him within the state for use in the state. * * *

"5093-a3. * * * Any person who sells or offers for sale at retail motor vehicle fuel in this state, shall keep posted in a conspicuous place, * * * a placard showing the total sale price per gallon including license fee, of all grades of motor vehicle fuel sold, said placard to have printed thereon the words `state license fee included'.

"When quantity discounts or rebates are allowed, such facts shall be shown on the placard. * * *

"5093-a4. * * * Each distributor * * * shall * * * procure a license from the treasurer of state permitting said distributor to transact said business within the state of Iowa. * * *

"5093-c2. * * * He distributor shall first file with the treasurer of state a statement showing financial responsibility satisfactory to said department, or a corporate surety bond payable to the state of Iowa in the penal sum of one thousand dollars, conditioned that said distributor will pay to the state of Iowa any and all fees required by the law. * * *

"5093-a5. * * * On or before the twentieth day of each calendar month each distributor * * * shall file in the office of the treasurer of state, at Des Moines, Iowa, a * * * report * * * prescribed and furnished by said treasurer, showing the total number of gallons of motor vehicle fuel * * * imported by him during the preceding calendar month, the date of receipt, unloading point, tank car identification and invoiced gallonage of each and every tank car or other receptacle in which motor vehicle fuel is imported * * *. At the same time he shall remit to the treasurer the amount of the license fee for such preceding month * * * a deduction of three per cent of the invoiced gallonage imported may be made for evaporation and loss.

"If, after the prescribed license fees are so remitted and paid, any motor vehicle fuel in the possession of a licensed distributor is destroyed * * * before being sold or used by him * * * the said treasurer is authorized to certify to the amount of the license fees so paid thereon to the auditor of state as a refund. * * *

"If any distributor * * * shall fail to remit on or before the twentieth of each month to the treasurer of state to cover the license fees due on that date, a penalty of ten per cent of the amount thereof shall immediately accrue. * * * If any such distributor shall fail to pay such license fees and penalties within ten days after the date due, the attorney general shall bring appropriate action for the recovery of such license fees and penalty; and in addition whenever any licensed distributor fails to render the prescribed reports, * * * or fails to pay the license fee due within the prescribed time, the treasurer of state may revoke the license of such distributor. * * * Neither this act nor any of its provisions shall apply to foreign or interstate commerce. * * *

"5093-a6. * * * The books, records, papers * * * and equipment of any distributor which pertain to the sale of motor vehicle fuel shall be subject to inspection. * * *

"5093-a7. * * * Any distributor * * * who shall fail to make * * * the reports * * * or shall refuse to permit the treasurer to examine the books, * * * of such distributor pertaining to the sale of motor vehicle fuel, * * * shall be deemed guilty of a misdemeanor. * * *

"5093-a8. * * * Any person who shall buy or use any motor vehicle fuel * * * for any other commercial use except for propelling motor vehicles operated in whole or in part upon the public highways of the state or upon the streets of any city or town in the state, shall be reimbursed and repaid the amount of such license fee paid by him. * * *

"5093-a9. Distribution of Proceeds. License fees collected under the provisions of this chapter shall be distributed and disbursed follows: One-third to the primary road fund. Two-thirds to the secondary road construction fund of the several counties of the state. The treasurer shall apportion said two-thirds portion among the counties of the state in the ratio that the area of each county bears to the total area of the state, and shall, on the first day of each month, remit to the treasurer of each county the amount apportioned to the secondary road construction fund of the county. * * *"

Two years later the 42d General Assembly, by chapter 101, revised and codified the statutes of the state with reference to the primary road system and the primary road fund of the state, and at the same session by chapter 103 amended the law as it appeared in chapter 101. These statutes covered a different subject-matter than the 2-¢ statute.

The second paragraph of the first section of this amendment provides for a 1-cent tax on gasoline, and as it now appears in the Code of Iowa 1931 reads as follows: "4755-b38. Motor Vehicle Fuel — Additional Tax. There is hereby levied on all motor vehicle fuel imported and used within this state a license fee of one cent per gallon, which shall be in addition to the license fee levied by chapter 251-A1. All of the provisions and conditions of said chapter 251-A1 relating to the levy, collection or payment of the license fee on motor vehicle fuel shall apply with equal force to the license fee levied herein. Out of the proceeds of said additional license fee the state highway commission shall, each year, set aside a sufficient amount to pay the portion of the bridge, culvert, and right of way refund becoming due and payable on January first of the succeeding year. The remainder of the proceeds of said additional license fee shall be credited to the primary road fund."

Facts.

The claim of the plaintiff that the officers of the state are enforcing the motor vehicle fuel tax statutes in an unconstitutional manner and the affirmative defenses of the defendants require consideration of some of the facts introduced at the trial. Most of the salient facts are stipulated by the parties and are adopted as fact findings by this court.

The MonaMotor Oil Company is a foreign corporation, incorporated in Arizona and doing business in Iowa. The defendants are officers of the state of Iowa as designated. The oil company's business is quite extensive as it operates 30 service stations in the state of Iowa and leases 29 other service stations; it maintains bulk stations for the storing of gasoline at Council Bluffs, Iowa, and both imports and exports motor vehicle fuel and kindred products; it imports motor vehicle fuel into Iowa in tank cars and trucks for sale through its stations and also to other distributors and dealers in the state and supplies distributors and dealers outside of the state in wholesale quantities and this business has been carried on by the oil company for many years. Up to April 1, 1932, it refined gasoline at Carter Lake, Iowa, and since that time has been blending and compounding gasoline at that place.

Carter Lake, Iowa, is in Pottawattamie county, Iowa, and is on the west side of the main channel of the Missouri river and in moving gasoline from Carter Lake, Iowa, to other points in Iowa, it is necessary that such gasoline pass through the state of Nebraska. At Carter Lake it maintained bulk and storage tanks for the storage of gasoline, refined, blended, compounded, and also purchased by said company. Sales of gasoline are made from the bulk stations at Council Bluffs, Iowa, to many dealers in Nebraska, Minnesota, South Dakota,...