Moto-Pep, Inc. v. McGoldrick, MOTO-PE

Decision Date03 May 1957
Docket NumberMOTO-PE,I
Citation6 McCanless 119,303 S.W.2d 326,202 Tenn. 119
Parties, 202 Tenn. 119 nc. v. John W. McGOLDRICK, County Court Clerk of Shelby County, Tennessee, et al.
CourtTennessee Supreme Court

George F. McCanless, Atty. Gen., Allison B. Humphreys, Solicitor Gen., Nashville, Milton P. Rice, Asst. Atty. Gen., for appellants (defendants).

Robert M. McRae, Jr., Memphis, Charles G. Neese, Paris, Apperson, Crump, Duzane & McRae, Memphis, of counsel, for appellee (complainant).

NEIL, Chief Justice.

This case presents the question of whether one operating an 'oil depot' within the meaning of Item 71(a), Section 67-4203, T.C.A. (Section 1248.2 Item 71, 1950 Code Supplement) is liable for the privilege tax levied thereby based upon the total gallonage of petroleum products sold, used or otherwise distributed or stored, including the gallonage delivered directly from the depot's suppliers to its customers without ever coming to rest in or passing through the depot's storage tanks.

The complainant corporation (Moto-Pep, Inc.) paid the privilege tax assessed against it and filed its original bill to recover it as provided by the statute.

The defendants filed an answer to the bill, admitting the truth of certain charges and making denial as to others.

The determinative issue is based upon the following stipulation of facts between the parties. It appears on the State's brief and, since it is admitted to be correct by opposing counsel, it is copied in full, as follows:

'The complainant is a Tennessee corporation (Tr. 16) engaged in the business of selling at wholesale petroleum products in the City of Memphis and surrounding area, (Tr. 17) one of its activities being the sale of gasoline in wholesale quantities to retail dealers and large consumers thereof, and the delivery of same to such customers. (Tr. 17) Defendant McGoldrick was at the time of the institution of this suit the duly elected and qualified County Court Clerk of Shelby County. (Tr. 16) Defendant Atkins was the duly appointed and qualified Commissioner of Finance and Taxation of the State of Tennessee, while defendant Beeler was the duly appointed and qualified Attorney General of the State of Tennessee. (Tr. 16) Defendants McGoldrick and Atkins are charged by law with the collection of the privilege taxes levied by the General Revenue Act of Tennessee, same being Section 67-4201 et seq. T.C.A. (Section 1248.1 et seq. 1950 Code Supplement), which Act includes in Item 71(a) thereof the tax here in question. Defendant McGoldrick's duties include the collection of said tax on behalf of both the State of Tennessee and Shelby County, which is empowered under the said Act to duplicate the said tax, while defendant Atkins has the duty of administering the the tax in question as well as other State taxes on behalf of the State of Tennessee.

'Complainant maintains at 432 North Dunlap Street in the City of Memphis a bulk plant which concededly falls within the definition of an 'oil depot' as set forth in Item 71(a), and has paid a privilege tax for the maintenance of the said oil depot each year since the enactment of the General Revenue Act in 1937. (Tr. 19)

'During the periods July 2, 1946 to July 2, 1947, July 2, 1948 to July 2, 1949, July 2, 1949 to July 2, 1950, and July 2, 1950 to July 2, 1951, certain amounts of complainant's products were delivered to complainant's customers by automotive transports from certain oil depots on or near the Mississippi River in Shelby County to complainant's purchasers without said products ever coming into complainant's oil depot. (Tr. 20) Complainant did not include this gallonage in the amount upon which its own oil depot privilege tax was based, that is complainant did not list this gallonage as sold, used or otherwise distributed or stored by it. (Tr. 20) Complainant included in its tax base only such gallonage as actually passed through its own storage tanks and did not include in its tax base that delivered directly from its suppliers to its customers. (Tr. 20) Such direct deliveries are agreed to be a common and increasing practice in the gasoline industry. (Tr. 21)

'On January 28, 1953 complainant was billed for an additional oil depot privilege tax for the years in question for additional amounts based upon the

It is stipulated that the complainant maintains passing through its storage tanks. (Tr. 19-20) The total amount of the additional tax assessed was $850.00 in State tax, a like amount in county tax and a $4.00 clerk's fee, making a total of $1704.00. (Tr. 20) This amount complainant paid under protest and instituted this suit for the recovery thereof, which suit represents the first and only challenge of the State's position on this question since the enactment of the taxing item in question. (Tr. 22)'

The Chancellor sustained the bill, ordering refunded the tax paid under protest.

The defendants appealed and filed the following assignment of error:

'The learned Chancellor erred in finding and decreeing that complainant is required to pay the oil depot tax provided for in Item 71(a), Section 67-4203 T.C.A., only upon the basis of gallonage of petroleum products actually passing through its storage tanks, and in holding that complainant is entitled to exclude from the measure of the tax petroleum products sold by it and delivered directly from its suppliers to its customers.'

The question of complainant's liability for the tax is largely determined by the proper interpretation of Section 67-4203, Item 71(a), T.C.A., relating to the collection of a privilege tax upon 'Oil depots and wagons'. It reads as follows:

'The term 'oil depot' as used herein shall be understood to mean a place within this state where petroleum products or substitutes therefor come to rest within this state after movement in interstate commerce or where such products are kept for sale after manufacture or processing in this state, in quantities greater than thirty-one (31) gallons liquid measure. The transfer fo such products from a licensed 'oil depot' to another location from which wholesale sales are made shall make such location a separate and distinct oil depot.

'Each person having or maintaining an oil depot as above defined, within this state, shall pay a special privilege tax for such place or depot (and shall keep on display to public view at each such place the original or certified copy of receipt showing payment of said special privilege tax) as follows:'

There immediately follows the foregoing provision a graduated list of amounts for which a person, or 'oil depot' is liable, based upon the gallons of petroleum products received and distributed. The statute then provides:

'All petroleum products shipped into this state by tank cars or trucks to retail gasoline dealers shall be a measure of the tax imposed by this subdivision, which tax shall be paid by the person actually receiving such products.'

It is stipulated tht the complainant maintains at 432 North Dunlap Street in the City of Memphis a bulk plant, and it is an 'oil depot' as defined in Item 71(a), Section 67-4203, T.C.A., and has paid the privilege tax for this place of operation since the enactment of the General Revenue Act in 1937. This tax was paid upon a gallonage basis, that is upon the number of gallons of petroleum products listed by complainant as stored at this place (432 North Dunlap Street) and distributed therefrom.

It appears from the stipulation that certain amounts of oil products during the years, 1946-1947, 1948-1949, 1949-1950, 1950-1951, were delivered to customers by automotive transports from oil depots on or near the Mississippi River in Shelby County, the same not coming into the complainant's depot on Dunlap Street. The gallonage coming through this depot on the river was not included in the amount of gallonage as listed and upon which the tax was paid. In other words it was not listed 'as sold, used or otherwise distributed or stored by it.' (Tr. 20)

The defendants insisted that the complainant was liable for this additional tax and complainant was accordingly billed for it. The amount paid was $1,704.

The complainant, appellee here, contends that the Chancellor was correct in holding that it was not liable for this additional tax on the theory that the oil products sold and distributed to customers from the river depot were 'direct sales.' The complainant's interpretation of Item 71(a) is that products sold and distributed otherwise than from a 'licensed depot' are not taxable as a privilege. Thus it is said on the brief of counsel: '* * * when considered from the four corners of the Item the clear and proper import of the wording suggests that the interpretation should be that the selling, using, distributing or storing should apply only to such activities 'from or on the premises of an oil depot', particularly for those depots who are liable for the tax by virtue of a transfer from another depot in Tennessee.'

The point at issue falls into a very narrow compass. At the expense of repeating we again state the issue. The complainant takes the position that its tax is to be computed only upon such gallonage as actually passes through its storage tanks, while the defendants say that the tax base should include all gallonage of petroleum products sold, used or otherwise distributed, or stored, without regard to whether such products ever came to rest in complainant's storage tanks.

Now the complainant admittedly paid the proper tax upon the gallonage which came to rest and went through its depot on Dunlap Street.

The Chancellor in his memorandum filed with the record resolved the issue in favor of the complainant taxpayer, holding that the tax imposed is upon the privilege of maintaining an 'oil depot' as defined in Item 71(a) and that the gallonage which did not pass through such depot could not be allocated to it for the purpose of determining the amount of the tax chargeable to the...

To continue reading

Request your trial
19 cases
  • Kochins v. Linden-Alimak, Inc.
    • United States
    • U.S. Court of Appeals — Sixth Circuit
    • October 6, 1986
    ...Tidwell, 507 S.W.2d 697, 698 (Tenn.1974); Tennessee Blacktop, Inc. v. Benson, 494 S.W.2d 760, 765 (Tenn.1973); Moto-Pep, Inc. v. McGoldrick, 202 Tenn. 119, 303 S.W.2d 326 (1957); Wingfield v. Crosby, 45 Tenn. 241, 5 Cold. 241 (1867). We do not think that the Tennessee Supreme Court would in......
  • State v. Jackson
    • United States
    • Tennessee Court of Appeals
    • October 5, 1999
    ...the law to the facts is a question of law. Beare Co. v. Tennessee Dep't of Revenue, 858 S.W.2d 906, 907 (1993) (citing Moto-Pep v. McGoldrick, 303 S.W.2d 326, 330 (1957). As such, there is no presumption of correctness attached to the Chancellor's decision. Capps v. Goodlark Medical Center,......
  • State v. Jennings
    • United States
    • Tennessee Supreme Court
    • March 11, 2004
    ...Premium Fin. Corp. of Am. v. Crump Ins. Servs. of Memphis, Inc., 978 S.W.2d 91, 93 (Tenn.1998)); see also Moto-Pep, Inc. v. McGoldrick, 202 Tenn. 119, 303 S.W.2d 326, 330 (1957) ("The authorities are well nigh universal in holding that the words of a statute are to be taken in their natural......
  • Ellenburg v. State
    • United States
    • Tennessee Supreme Court
    • November 12, 1964
    ...Tenn. 132, 217 S.W.2d 1 (1948); State ex rel. Dossett v. Obion County, 188 Tenn. 538, 221 S.W.2d 705 (1949); Moto-Pep, Inc. v. McGoldrick, 202 Tenn. 119, 303 S.W.2d 326 (1956). This statute is a prohibition against obscene materials manifestly tending to corrupt morals. In our examinations ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT