State ex rel. Great Northern Ry. Co. v. State Bd. of Equalization

• Decision Date: 14 June 1948
• Docket Number: 8766.
• Citation: 194 P.2d 627,121 Mont. 583
• Parties: STATE ex rel. GREAT NORTHERN RY. CO. v. STATE BOARD OF EQUALIZATION et al.
• Court: Montana Supreme Court

194 P.2d 627

121 Mont. 583

STATE ex rel. GREAT NORTHERN RY. CO. v. STATE BOARD OF EQUALIZATION et al.

No. 8766.

Supreme Court of Montana

June 14, 1948

Appeal from District Court, First District, Lewis and Clark County George W. Padbury, Jr., Judge.

Mandamus proceeding by the State of Montana, on the relation of Great Northern Railway Company, against the State Board of Equalization of the State of Montana and members thereof to compel approval of claim for refund of gasoline license tax. From a judgment for relator, defendants appeal.

Remanded with directions.

H. O. Vralsted, Counsel for State Board of Equalization, of Helena, R. V. Bottomly, Atty. Gen. and Clarence Hanley, Asst. Atty. Gen., for appellants.

T. B Weir, Newell Gough, Jr., and E. K. Matson, all of Helena, for respondent.

ANGSTMAN Justice.

This is an appeal from a judgment in mandamus proceedings, directing the defendant board to approve a claim of $639.50 with interest for refund of gasoline license tax paid on gasoline lost in transit. The gasoline was purchased by the California Company, a gasoline dealer in Montana, from the Texas Company, a corporation engaged in the business of refining gasoline at Sunburst and placed in two tank cars for shipment by relator. One car was consigned to Great Falls Line, Great Falls, and the other to the California Company at Butte; both cars were derailed in transit and the entire contents of more than 13,000 gallons was spilled and entirely lost.

The California Company had paid the sum of $639.50 as taxes to the Texas Company, being 5 cents per gallon, less 2% deduction for evaporation. The California Company on September 14, 1946, filed a claim with defendant board for refund of the tax which was disallowed in October. Relator having reimbursed the California Company for the loss of the gasoline and for the tax, took an assignment of the claim after it had been rejected.

This application was thereafter instituted resulting in the judgment appealed from.

The principal question involved is whether a purchaser of gasoline who has paid the gasoline license tax of 5 cents per gallon is entitled to a refund of the tax when the gasoline is destroyed in transit.

The refund statute was first enacted as Chapter 17, Laws of 1927. As amended it is now section 2396.4, Revised Codes of Montana 1935. Section 2396.4 allows the refund to any person who has purchased and used gasoline on which the license tax has been paid 'for the purpose of operating or propelling stationary gas engines, tractors used for agricultural purposes other than on the public highways or streets of this state, motor boats, aeroplanes or aircraft, or for cleaning or dyeing, or for any commercial use other than propelling vehicles upon any of the public highways or streets of this state.'

The refund is obtained by filing a sworn statement with the board of equalization setting forth among other things that the gasoline 'has been used by such consumer other than for propelling vehicles operated upon any of the public highways or streets of this state.'

These provisions as now appearing in section 2396.4 are exactly the same as when originally enacted by Chapter 17, Laws 1927. On the same day that Chapter 17 was approved, Chapter 19 of the same legislative assembly was also approved wherein we think that assembly placed its own interpretation upon the meaning of the refund statute. In section 13 of Chapter 19, Laws of 1927, the legislature provided for the disposition of the funds produced by the gasoline license tax. In general it provided for their expenditure in the construction, reconstruction, betterment and maintenance of highways and 'for the purpose of payment of refunds and drawbacks authorized by law to be made to purchasers of gasoline used in this state for other purposes than the propulsion of motor vehicles over the public highways and streets of this state.'

It seems to us that the legislature simply intended to impose the tax on all gasoline used in propelling vehicles on the highways of the state and that the legislative assembly that passed the refund statute so understood it. This is shown not only by Chapter 19, Laws 1927, but also by section 2396.4 authorizing a refund upon a sworn statement that it was used for other purposes than propelling vehicles operated on any of the public highways or streets of the state. If the statute is susceptible to the above interpretation, then it would follow that the purchaser of gasoline wasted and spilled in transit would be entitled to a refund. Guardia v. Johnson, 134 Cal.App. 574, 25 P.2d 856.

On the proper construction of our statute, the case of Mason-Walsh-Atkinson-Kier Co. v. Case, 2 Wash.2d 33, 97 P.2d 165, 167, is helpful. The statute there considered was nearly the same as ours. In reviewing the history of the gasoline tax law in the state of Washington the court in part said:

'In 1923, the legislature, by chapter 81, p. 242, amended the 1921 act, and added several new sections thereto, which contain the rudiments of our present gasoline tax system. It was provided, in the new and additional sections, that every person, firm, or corporation who should use liquid fuel for the purpose of operating motor vehicles upon the public highways should pay 'an excise tax of two cents per gallon upon all such liquid fuel so used.' It specifically provided, however, that, if the liquid fuel was used for the purpose of propelling stationary gas engines, farm tractors, or motor boats, or other commercial use, 'except in motor vehicles operated or intended to be operated upon any of the public highways of the state,' reimbursement should be made by the state treasurer upon claims prepared and filed within the time and in the manner therein set out.'

The court held that the 1921 Act was an excise tax on the sale of liquid fuel.

It then said: 'The new sections added by the 1923 act clearly impose a tax on the use of liquid fuel in operating motor vehicles on the roads. The connection of this tax with the state highway program is further emphasized by the fact that the next legislation on the subject is found in an act relating to the public highways (Chapter 88, page 159, Laws of 1929), the short title of which is 'Highways.' An additional tax of one cent per gallon is imposed in this highway act, and it is provided: 'Sec. 4. Every person, firm, or corporation, including distributors, who shall use liquid fuel for the purpose of operating motor vehicles, including motor trucks, upon the public highways of the state, or the political subdivisions thereof, * * * shall pay a tax of one cent per gallon in addition to the tax imposed by section 2 of Chapter 81 of the Laws of 1923, * * * upon all such liquid fuel so used, * * *.'

'It is further provided in this chapter that the revenue produced by the additional cent so provided should be placed in a fund which is known as the 'lateral highway fund,' to be divided among the counties of the state to be used in the construction and improvement of lateral highways.'

Continuing in reviewing subsequent legislation, the court said: 'The next act relating to the subject is chapter 140, page 430, Laws of 1931. This raised the tax to four cents per gallon 'upon all such liquid fuel so used,' that is, used in operating motor vehicles upon the public highways of the state. This act was followed by chapter 58, page 298, Laws of 1933, which, as amended in 1935, 1937, and 1939, Laws 1935, 1937, 1939, pp. 269, 1086, 538, is the existing law. The short title of this act is 'Petroleum Products: Tax and Regulation.' This act provided that distributors of motor vehicle fuels and other petroleum products should be licensed and bonded; and, 'Sec. 5. Every distributor shall pay, in addition to any other taxes provided by law, an excise tax to the treasurer of this state of five (5) cents for each gallon of motor vehicle fuel sold, distributed or used by it in the State of Washington. * * *'

'But, of the sums so paid, it was the legislative intention that the state should retain as taxes only that portion paid with reference to fuel used to propel motor vehicles on the highways. This is conclusively shown by section 18(a), which reads, in part, as follows: ' Any person who shall use any motor vehicle fuel as herein defined for the purpose of operating or propelling stationary gas engines, farm tractors, aircraft, or boats or who shall purchase and use any such fuel for cleaning or dyeing or other use of the same, except in motor vehicles operated or intended to be operated upon the public highways of the state, or export the same for use outside of this state, and who shall have paid any license tax for such motor vehicle fuel hereby required to be paid, either directly to the vendor from whom it was purchased or indirectly by adding the amount of such license tax to the price of such fuel, shall be reimbursed * * *'

'When one reads the italicized portions of the above quoted section consecutively, 'Any person * * * who shall purchase and use any such fuel * * *, except in motor vehicles operated or intended to be operated upon the public highways, of the state, * * * shall be reimbursed,' it becomes manifest that the legislature of 1933 continued to adhere to the just and reasonable policy which governed its predecessors, to-wit: That the burden of special taxes created and imposed to raise funds for the construction and upkeep of the costly and highly specialized highways suitable for motor vehicle traffic ought to be borne by those who use the highways for that traffic.'

The slight difference between the Washington statute and our own does not compel a different result. The Supreme Court of Idaho has also reached the same result as to its 1945...