Standard Oil Co. v. Brodie

• Decision Date: 10 April 1922
• Docket Number: (No. 287.)
• Citation: 239 S.W. 753
• Parties: STANDARD OIL CO. v. BRODIE et al.
• Court: Arkansas Supreme Court

Page 753

239 S.W. 753

STANDARD OIL CO. v. BRODIE et al.

(No. 287.)

Supreme Court of Arkansas.

April 10, 1922.

Appeal from Pulaski Chancery Court; Jno. E. Martineau, Chancellor.

Suit by R. B. Brodie and others against Standard Oil Company. From a decree for the plaintiffs, defendant appeals. Affirmed.

Gus Ottenheimer, Reid, Gray, Burrow & McDonnell, Poe, Gannaway & Poe, all of Little Rock, for appellant.

J. S. Utley, Atty. Gen., Elbert Godwin and W. T. Hammock, Asst. Attys. Gen., and Geo. W. Emerson, of Little Rock, for appellees.

McCULLOCH, C. J.

This litigation calls for an interpretation, and involves the validity, of a statute enacted by the general assembly of 1921, providing for the collection of a tax upon the sale of —

"gasoline, kerosene or other products to be used by the purchaser thereof in the propelling of motor vehicles, using combustible type engines over the highways." Acts 1921, p. 685.

The validity of the tax is challenged on numerous grounds, which will be discussed in the order presented in the briefs of counsel. The title of the statute is as follows:

"An act to levy a tax upon gasoline used in the propelling of motor vehicles, and for other purposes."

Section 1 of the statute, which is the one imposing the tax, reads as follows:

"That all persons, firms or corporations who shall sell gasoline, kerosene or other products to be used by the purchaser thereof in the propelling of motor vehicles, using combustible type engines over the highways of this state, shall collect from such purchaser, in addition to the usual charge therefor, the sum of one cent (1c) per gallon for each gallon so sold."

Section 2 requires all dealers in the sale of gasoline, for use in propelling motor vehicles, to register with the county clerk of their respective counties and to file a report on or before the 10th day of each month, showing the sales of gasoline, kerosene, or other products purchased for use in the propelling of motor vehicles.

Section 3 provides that all dealers who shall sell gasoline or other products upon which the tax is imposed and who shall fail to collect the same "shall be personally liable for the amount of such tax so uncollected," and that such dealers shall pay to the treasurer of the county the sum of one cent per gallon for all gasoline sold for the purposes named.

Section 4 requires all wholesale distributors of gasoline and like products, suitable for the use of propelling motor vehicles, to also file with the county clerk of their respective counties a statement showing the amount of gasoline and other such products sold by them to retailers. A penalty of not less than $10 nor more than $1,000 is imposed on dealers who shall fail to account for all moneys due by them under the terms of the statute.

Another section provides that, of the tax so collected, one half shall be credited to the general road fund of the county, and the other half shall be transmitted to the treasurer, to be placed to the credit of the highway improvement fund.

It is first contended, in the attack on the validity of the statute, that it constitutes the imposition of a property tax on gasoline and the other commodities mentioned, and that it is void because in violation of the uniformity clause of the Constitution of this state. It is conceded in all quarters that, if the imposition is, in effect, a property tax, it is void. This calls for an interpretation of the statute for the purpose of determining the character of tax sought to be imposed.

In the outset of the discussion it is well to call attention to certain rules of interpretation for the purpose of determining the constitutionality and validity of a legislative enactment. The Supreme Court of the United States has said that:

"The elementary rule is that every reasonable construction must be resorted to, in order to save the statute from unconstitutionality." Hooper v. California, 155 U. S. 657, 15 Sup. Ct. 211, 39 L. Ed. 297.

In the recent case of Dobbs v. Holland, 140 Ark. 398, 215 S. W. 709, 742, we announced the same rule, and we treated it as so familiar in the rules of interpretation of statutes that it was unnecessary to cite authorities in support. We have also said that, if a statute is susceptible of two constructions, one of which would lead to an absurdity and the other not, the latter would be adopted. State v. Jones, 91 Ark. 5, 120 S. W. 154, 18 Ann. Cas. 293. There are many decisions of this court announcing and adhering to those rules and giving them application under a variety of circumstances. Hartford Fire Ins. Co. v. State, 76 Ark. 303, 89 S. W. 42; Pryor v. Murphy, 80 Ark. 150, 96 S. W. 445; Bowman v. State, 93 Ark. 168, 129 S. W. 80; Garland Power & Dev. Co. v. State Board of R. R. Incorporation, 94 Ark. 422, 127 S. W. 454; Hughes v. Kelley, 95 Ark. 327, 129 S. W. 784; Leonard v. State, 95 Ark. 381, 129 S. W. 1089; State v. Handlin, 100 Ark. 175, 139 S. W. 1112; Snowden v. Thompson, 106 Ark. 517, 153 S. W. 823; State ex rel. v. Trulock, 109 Ark. 556, 160 S. W. 516.

In the case of State ex rel. v. Trulock, supra, we quoted, with approval, the following statement on this subject by Mr. Sutherland:

"The mere literal construction of a section in a statute ought not to prevail if it is opposed to the intention of the Legislature apparent by the statutes; and, if the words are sufficiently flexible to admit of some other construction, it is to be adopted to effectuate that intention. The intent prevails over the letter, and the letter will, if possible, be so read as to conform to the spirit of the act." 2 Lewis' Sutherland, Statutory Construction, § 376.

When the interpretation of this statute is approached in conformity with the rules thus stated, it is easy to discover in the language an intention on the part of the lawmakers to impose a tax, not on property, but on a privilege, so as to bring the enactment within constitutional limits. The tax is not imposed on the sale or purchase of gasoline, nor on the gasoline itself, nor even on the use of the gasoline. On the contrary, the final and essential element in the imposition of the tax is that the gasoline purchased must be used in propelling a certain kind of vehicle over the public highways. In the final analysis of this language it comes down to the point that the thing which is really taxed is the use of the vehicle of the character described upon the public highway, and the extent of the use is measured by the quantity of fuel consumed, and the tax is imposed according to the extent of the use as thus measured.

If it had been intended merely to tax the gasoline or its use, it would have been wholly unnecessary to describe the character of the use or the place where it was to be used, and the fact that the lawmakers incorporated these elements in laying the basis of the taxation shows unmistakably that it was intended to impose a tax upon the use of the public highways by the method described. It is clear that the tax is not imposed on the seller nor upon the gasoline while in his hands, and this of itself makes it manifest that there was no intention to levy a tax upon the sale of gasoline nor upon the gasoline itself.

"In construing a statute," said this court in State v. Embrey, 135 Ark. 262, 204 S. W. 1139, "some meaning should be given to every word contained therein, if possible." It is our duty, therefore, to give some meaning and effect to that part of the statute which prescribes the use of the gasoline in propelling an automobile along the highway as the final test of the basis of the tax, and especially is it our duty to do this when the constitutionality of the statute depends upon giving some effect to that feature of it.

Counsel for appellants insist that, even if this is not a direct tax on the gasoline itself, it is, at least, a tax on the use of the gasoline, and that this constitutes a tax on the property itself for the reason that it is a tax on the only available use to which the article is susceptible. In other words, they invoke the rule that has been announced in some quarters, to the effect that a tax levied upon the only available use to which an article is susceptible, is, in effect, a tax on the article itself. 26 R. C. L. 236.

It may be conceded that a tax on gasoline for its only available use would, in effect, be a tax on the commodity itself, but such might not be the case as to other articles, and we are unwilling to subscribe unqualifiedly to the doctrine that a tax on the only available use of an article is, in every instance, a tax on the article itself. In fact, this court repudiated the doctrine in the case of City of Ft. Smith v. Scruggs, 70 Ark. 549, 69 S. W. 679, 58 L. R. A. 921, 91 Am. St. Rep. 100, where Judge Riddick, speaking for the court, said:

"Counsel say that a tax on the use of an article is a tax on the article itself. While this may be true of a piano, bedstead, or cooking stove, the use of which involves no injury or detriment to the public or its property, as to wheeled vehicles it is different, for they are made to be used upon roads and streets. The streets belong to the public and are under the control of the Legislature, whose province it is to enact laws for their improvement and repair. The chief necessity for keeping improved streets is that they may be used for the passage of wheeled vehicles, and the wear of the streets caused by the passage of such vehicles over them makes necessary constant and expensive repairs. For this reason, no doubt, the Legislature considered it to be equitable and just that owners of such vehicles should, in addition to the general tax upon their property, pay something for the privilege of using the streets as driveways, the amount paid to go towards keeping the streets in good repair. This is what the Legislature attempted to do."

But, as we have already said, this is not a tax on gasoline, but on the use on the public highway of the vehicles mentioned,...