Pan Am. Airways Co. v. Godbold
| Decision Date | 27 June 1942 |
| Docket Number | No. 2481.,2481. |
| Citation | 36 Haw. 170 |
| Parties | PAN AMERICAN AIRWAYS COMPANY v. NORMAN D. GODBOLD, JR., TREASURER TERRITORY OF HAWAII. |
| Court | Hawaii Supreme Court |
OPINION TEXT STARTS HERE
ERROR TO CIRCUIT COURT FIRST CIRCUIT, HON. A. M. CRISTY, JUDGE.
Syllabus by the Court
When words used in an Act are defined in the Act, the express declaration of the meaning of the words must govern unless there is sufficient in the Act elsewhere to show that the words are used in another sense.
Where the Act as a whole evidences a legislative intent to tax every distribution or other disposition or use of liquid fuel imported into the Territory permitted by the Constitution and laws of the United States, the question of whether the levy of the tax in question imposed an unconstitutional burden on interstate commerce was a legitimate subject of inquiry in an effort to arrive at the legislative intent, even though the constitutionality of the Act is not questioned.
When the statute is susceptible of two constructions, one of which supports it and gives it effect and the other renders it unconstitutional and void, the former is to be adopted, even though the latter may be the more natural interpretation of the language used.
Where gasoline is withdrawn from storage by the importer thereof for the purpose of fueling transoceanic airplanes operated by it, said gasoline has been used in the Territory within the meaning of the word “use” as employed in the Hawaiian Fuel Tax Act.
J. G. Anthony (Robertson, Castle & Anthony on the briefs) for plaintiff in error.
R. V. Lewis, Deputy Attorney General (J. V. Hodgson, Attorney General, with her on the brief), for defendant in error.
This is a writ of error to the judgment of the circuit court of the first judicial circuit in favor of Norman D. Godbold, Jr., Treasurer of the Territory of Hawaii (hereinafter called the defendant), in an action by Pan American Airways Company (hereinafter called the plaintiff) to recover moneys paid under protest for taxes claimed to be due from it to the Territory under the Hawaiian Fuel Tax Act. (R. L. H. 1935, c. 64.) The action is authorized by and was brought pursuant to section 571, R. L. H. 1935, to recover taxes admittedly paid by plaintiff under protest.
There are no issues of fact. The sole question is, Do the undisputed facts bring the plaintiff within the taxing provisions of the Hawaiian Fuel Tax Act?
The material facts are that all gasoline upon which the tax was levied and paid was purchased by plaintiff from the Standard Oil Company of California under a contract made by an exchange of letters between the oil company in California and plaintiff's purchasing agent in New York. The contract was entered into January 24, 1935, and by the terms of the contract set forth in the initial correspondence the gasoline required by the plaintiff for its Pacific Ocean air lines was to be delivered to it in 150,000 gallon lots, f.o.b. dock San Pedro or Richmond, California. On April 1, 1936, the contract was renewed, to expire April 1, 1939, and in addition provided that deliveries taken at Honolulu should be two cents per gallon higher than the base price f.o.b. Richmond, California.
On October 1, 1936, the oil company leased to the plaintiff a certain storage tank at Iwilei, Honolulu, for a term to expire March 31, 1939, and modified the existing contract by providing that The oil company further agreed to “handle deliveries of your gasoline purchased from us to said storage from our tank ships and to make delivery by tank truck of said gasoline for you from said storage to your fueling station at Pearl City.” Said amendment further provided that “any tax imposed by any governmental authority upon, or measured by, the production, manufacture, storage, transportation, or sale of the gasoline delivered hereunder, shall, unless included in the price payable by you, be added to such price and shall be paid to us in addition thereto.”
On June 8, 1938, the contract as amended was extended to April 1, 1942, and thereafter until terminated by ninety days' written notice from either of the parties, and certain other amendments with which we are not concerned were made.
On February 10, 1939, plaintiff leased from the oil company an additional storage tank at Iwilei, Honolulu, and provisions with reference to deliveries to the plaintiff from the oil company's tank ships and transportation to plaintiff's Pearl City storage tanks were renewed. This amendment further provided that “any tax imposed by any governmental authority upon or measured by the storage, transportation, withdrawal or sale of the gasoline placed in said storage by us for you shall be paid by you.”
On July 26, 1939, the contract as amended was further amended by providing that “effective at once, your Honolulu requirements of Aviation Gasoline will be sold to you in bulk (not packaged) f.o.b. Richmond, California, delivery to be made into our tankers at our Richmond dock for transportation for your account to storage leased by you in Honolulu,” and provided for a charge of two cents per gallon to compensate the oil company for transporting the gasoline for the plaintiff from Richmond to the storage in Honolulu.
All gasoline purchased by the plaintiff and brought into the Territory pursuant to said contract was first stored in the Iwilei tanks and from time to time thereafter transferred to plaintiff's air base tanks and as needed metered into the fuel tanks on plaintiff's planes from its air base tanks and consumed in its transoceanic flights out of Honolulu. It is the gasoline thus withdrawn from storage and placed in plaintiff's planes that measured the tax demanded of plaintiff and paid by it under protest.
The Hawaiian Fuel Tax Act requires every distributor of “liquid fuel” to pay a license tax to the Treasurer of the Territory at a stated rate per gallon for all such fuel “refined, manufactured, produced or compounded by such distributor and sold or used by him in the Territory, or imported by such distributor, or acquired by him from persons not licensed distributors, and sold or used by him in the Territory.” (§ 2013.)
The term “distributor” is defined as every person who “refines, manufactures, produces or compounds liquid fuel in the Territory, and sells or uses the same therein; also every person who imports or causes to be imported into the Territory any liquid fuel * * * for his own use in the Territory; also every person who acquires liquid fuel from a person not a licensed distributor and sells or uses the same.” (§ 2010.)
The plaintiff argues that the recited facts do not show a “use” of the gasoline “in the Territory,” whereas the defendant argues that the fueling of plaintiff's planes in the Territory in the manner aforesaid constitutes a “use” of the gasoline “in the Territory.”
Before the tax can be applied to the plaintiff, it is necessary to show that the manner in which plaintiff acquired and disposed of the gasoline brought into the Territory for its use brings it within the statutory definition of a distributor. The plaintiff does not refine, manufacture, produce, compound, sell or import for sale any gasoline or other liquid fuel. If plaintiff is to be brought within the definition of a “distributor,” it must be because it imports or causes to be imported into the Territory gasoline for its own use “in the Territory.” That it imports or causes to be imported gasoline into the Territory for its own use cannot be questioned. The sole question then is, Was the “use” for which the gasoline was imported and to which it was put by the plaintiff a “use” thereof “in the Territory”? If it was, then plaintiff's activities brought it within the statutory definition of a distributor who imported gasoline for its own use in the Territory and its action must fail. On the other hand, if the gasoline was not “used in the Territory,” no tax was due and plaintiff should prevail.
The statutory definition of “use” wherever used in the Hawaiian Fuel Tax Act is as follows: “ ‘Use’ either as a noun or verb, and derivative expressions, shall mean and include distribution or other disposition of fuel, or any other use thereof, whether with or without compensation therefor.”
Other provisions of the Hawaiian Fuel Tax Act have been relied upon by counsel in support of their interpretation of the word “use.” We shall briefly outline those provisions.
Section 2015 requires each distributor to keep records showing the total number of gallons of fuel “imported by such distributor * * * and sold or used by him in each county during each month; the total number of gallons of such fuel sold to the United States or any department or agency thereof * * * or used in any manner, in each county during each month, the effect of which sale or use is to exempt the fuel so sold or used from the imposition of the tax * * * .”
Section 2016 requires each distributor to file with the Treasurer monthly statements showing, among other things, “the total number of gallons of fuel imported by him and sold or used within each county by him during such month.” This section also provides that the tax “shall not apply to any fuel exempted and so long as the same is exempted from the imposition of the tax by the Constitution or laws of the United States; and that the tax shall be paid only once upon the same fuel.”
Section 2019 provides as follows: ...
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