Queen City Brewing Co. v. District of Columbia

• Decision Date: 08 February 1943
• Docket Number: No. 8303.,8303.
• Citation: 134 F.2d 44
• Parties: QUEEN CITY BREWING CO. v. DISTRICT OF COLUMBIA.
• Court: U.S. Court of Appeals — District of Columbia Circuit

134 F.2d 44 (1943)

QUEEN CITY BREWING CO. v. DISTRICT OF COLUMBIA.

No. 8303.

United States Court of Appeals for the District of Columbia.

Argued January 13, 1943.

Decided February 8, 1943.

Writ of Certiorari Denied June 7, 1943.

Mr. E. Barrett Prettyman, of Washington, with whom Messrs. F. G. Awalt and Raymond Sparks, both of Washington, D. C., were on the brief, for petitioner.

Mr. Glenn Simmon, Assistant Corporation Counsel, D. C., of Washington, D. C., with whom Messrs. Richmond B. Keech, Corporation Counsel, D. C., and Vernon E. West, Principal Assistant Corporation Counsel, D. C., both of Washington, D. C., were on the brief, for respondent.

Before GRONER, Chief Justice, and MILLER and VINSON, Associate Justices.

Writ of Certiorari Denied June 7, 1943. See ___ U.S. ___, 63 S.Ct. 1330, 87 L.Ed. ___.

GRONER, C. J.

This case involves the right of the District of Columbia to assess and collect a municipal tax on certain personal property of petitioner found in the District on the statutory tax assessment day. Petitioner, a Maryland corporation, is engaged in the manufacture and sale of beer in Cumberland, Maryland. An independent distributor located in the District of Columbia bought and sold petitioner's beer. The method of business was this: The distributor would send his private trucks to Cumberland, purchase and pay for the beer, transport it to Washington and sell it to retailers. Petitioner had no office, plant, warehouse or other place of business in the District and no interest in the property or business of the distributor. No officers, directors or employees of petitioner lived in the District, nor does petitioner pay any person in the District a salary or commission. The District Board of Tax Appeals found that petitioner was not in any of the years in question engaged in business in the District. When petitioner sold its beer in Cumberland it was delivered there to the purchasers in half-barrel and quarter-barrel metal containers and in wooden cases, each containing 24 bottles. The purchaser was required to deposit with petitioner $6 for each half-barrel, $4 for each quarter-barrel and 75 cents for each wooden case, which deposit was refunded when the barrels and cases were returned. It was on these valuations that the tax was assessed. The containers remained in the District only until they were empty. During the years in question petitioner reported and paid taxes to the State of Maryland on all of its containers. The tax years in question in this case are 1938, 1939, 1940 and 1941, and the assessed taxes amounted to $974.90. Petitioner paid under protest and appealed to the District of Columbia Board of Tax Appeals. The Board held the assessments valid and a petition to review was brought to this court.

The Board's decision is founded on the Act of June 29, 1922, which is Section 47 — 501 of the Code of Laws of the District of Columbia, the Board's view being that under this local tax act the rule in Johnson Oil Refining Co. v. State of Oklahoma, 290 U.S. 158, 54 S.Ct. 152, 78 L.Ed. 238, justified the imposition of the tax. Admittedly, there is no specific provision in the tax laws of the District of Columbia placing an ad valorem assessment on what is generally called migratory personal property belonging to a non-resident of the District, — such, for instance, as a statute found in most of the States imposing a tax on rolling stock of railroads, tank or refrigerator car companies employed in interstate commerce.

We are met, therefore, at the outset with the question whether there is any District law which may be said to apply to the property in question. The basic tax statute provides that all personal property in the District subject to taxation shall be listed and assessed at its full and true value.¹ It requires the assessor annually to cause to be prepared a printed blank schedule, with the rate of tax prescribed. The assessor is required to deliver a copy "to any citizen applying therefor." The Act then requires every person, association, corporation, firm or company "in said District" liable to taxation to fill out the blank within thirty days, showing thereon his "address in the District of Columbia," and pay the tax on or before the first day of June. By an act of June 29, 1922, making appropriations for the government of the District of Columbia, the provisions of the 1902 Act were enlarged by providing for "a tax at such rate on the real and personal property subject to taxation in the District as will, when added to the other taxes and revenues of the District, produce money enough to enable the District to pay promptly and in full all sums directed by Congress to be paid by the District, * * *." This is now Sec. 47 — 501 of the Code of the District. By Act of February 18, 1929, D.C.Code 1940, § 47 — 1206, the returns of personal property were thereafter required to be filed annually in the month of July. (Italics supplied.)

Except the above no taxing statutes of the District are relied upon to validate the assessment and tax on the property we are concerned with. The Board's view was that the last-mentioned provisions authorizing taxation by the District "of all tangible personal property * * * subject to taxation", embraced and included all personal property which constitutionally could be made the subject of taxation. This conclusion, we think, is too far reaching to be sustained. Instead, we are of opinion the vital question is whether tangible personal property temporarily in the District, belonging to a non-resident not engaged in business in the District, is intended to be and is taxed under the quoted language of the statute. On reason and authority we think it is not.

The statute, which requires the filing of a return as a basis for the assessment, applies by its language only to persons, associations, corporations, firms or companies "in said District." True enough, a person or a corporation may for some purposes be in the District constructively rather than actually. But this is not true of petitioner. It did no business in the District. It maintained no agency here. Its plant is in Maryland. Its sales of beer were made there. There is no language in the statute applicable to this state of facts and none specifically requiring petitioner to file a return. Hence it is not required to pay a tax, since the filing of the return, or an assessment for refusal to file one, when required, is the sole basis for the tax.

No rule is better established than that personal property, in the absence of a law to the contrary, follows the person of the owner and has its situs at his domicile. Undoubtedly, the rule has a number of exceptions, one of which is that for purposes of taxation personal property may be taxed at the place where it is actually located. Tappan v. Merchants' Nat. Bk., 19 Wallace 490, 22 L.Ed. 189. But in such a case the assessment on which the tax is based must, in addition to other safeguards to insure fairness, be required by a statute definitely identifying the kind and character of the property subject to the tax. This, we think, clearly appears from Marye v. Baltimore & O. R. Co. 127 U.S. 117, 8 S.Ct. 1037, 1038, 82 L.Ed. 94. That case involved the right of Virginia to tax certain engines and cars belonging to the Railroad Company, a corporation of Maryland, used in the operation of leased roads extending through parts of Virginia. The State act under which the assessment was made required that "Every railroad and canal company not exempted from taxation by virtue of its charter shall report annually, on the first day of June, to the auditor of public accounts, all of its real and personal property of every description as of the first day of February of each year, showing particularly in what county or corporation such property is located," including "rolling stock, including passenger, freight, cattle, or stock, baggage, mail, express, sleeping, palace, and all other cars owned by or belonging to the company," and pay the tax thereon. Rejecting the claim of Virginia, the Supreme Court said: "It is not denied, as it cannot be, that the state of Virginia has rightful power to levy and collect a tax upon such property used and found within its territorial limits, as this property was used and found, if and whenever it may choose, by apt legislation, to exert its authority over the subject. * * * But, looking at the statute under which the proceeding in question has been taken for the taxation of this property, we think it quite clear that it has no application to the rolling stock owned by the Baltimore & Ohio Railroad Company employed by it, in the manner described * * *." (Italics supplied.)

The court's conclusion was definitely based on the fact that the language of the act did not evince a purpose to include foreign property temporarily found in the taxing State. This holding was in deference to the rule that such property ordinarily has its situs and is taxable at the domicile of its owner. See, also, Buck v. Beach, 206 U.S. 392, 27 S.Ct. 712, 51 L.Ed. 1106, 11 Ann.Cas. 732. These principles are applicable to an even greater degree where, as here, the removed property has not become incorporated in, or commingled with, the property of the taxing authority, nor attained a new taxing situs by reason of having acquired a permanent location in a new jurisdiction. City of St. Louis v. Wiggins Ferry Co., 11 Wall. 423, 20 L.Ed. 192; Ayer & Lord Tie Co. v. Commonwealth of Ky., 202 U.S. 409, 26 S.Ct. 679, 50 L.Ed. 1082. Here the tax is imposed on certain metal beer barrels and wooden cases which were found in...