State ex rel. Missouri Portland Cement Co. v. Smith

• Citation: 90 S.W.2d 405,338 Mo. 409
• Decision Date: 04 February 1936
• Docket Number: 34718
• Parties: State of Missouri at the relation of Missouri Portland Cement Company, a Corporation, Relator, v. Forrest Smith, State Auditor
• Court: United States State Supreme Court of Missouri

90 S.W.2d 405

338 Mo. 409

State of Missouri at the relation of Missouri Portland Cement Company, a Corporation, Relator, v. Forrest Smith, State Auditor

No. 34718

Supreme Court of Missouri

February 4, 1936

Peremptory writ awarded.

John W. Mather for relator.

(1) It is a fundamental rule in the interpretation of statutes limiting rights and interests not to construe them to embrace the sovereign power of the Government, unless the same be expressly named therein or intended by necessary implication. The State Highway Commission is an agency of the State Government of the State of Missouri and therefore purchases by the State Highway Department of materials and supplies to be used in the construction and maintenance of the State Highway system should not be construed to be impressed with the one per cent sales tax levied by the Emergency Revenue Act of 1935. 1 Kent's Commentaries (13 Ed.), 460; 61 C J. 366; City of Edina v. School District, 305 Mo 452, 267 S.W. 112; State ex rel. Commission v Bates, 317 Mo. 696, 296 S.W. 418; State ex rel. Pub. Co. v. Hackman, 314 Mo. 43, 282 S.W. 1007. (a) The tax imposed by the Emergency Revenue Act of 1935 is a tax on the consumer and therefore constitutes a tax on the State Highway Commission. City of Covington v. State Tax Comm., 77 S.W.2d 386; Standard Oil Co. v. Brodie, 239 S.W. 753; Wiseman v. Phillips, 84 S.W.2d 91; Texas Co. v. Arizona, 254 P. 1060. (b) To construe the Emergency Revenue Act of 1935 to apply to purchases by the State Highway Commission would violate the provisions of Article X, Section 6, of the Constitution of Missouri and Section 9743, Revised Statutes 1929. Art. X, Sec. 6, Mo. Const.; Sec. 9743, R. S. 1929; Clinton v. Henry County, 115 Mo. 557, 22 S.W. 494; Thogmartin v. Nevada School Dist., 189 Mo.App. 10, 176 S.W. 473; Normandy Consol. School Dist. v. Wellston Sewer Dist., 77 S.W.2d 477. (c) If not violative of Article X, Section 6 of the Constitution of Missouri and Section 9743, Revised Statutes 1929, the Emergency Revenue Act of 1935 would certainly contravene long established public policy governing the State and its agencies, if construed to apply to purchases by the State and its agencies, because there is no specific mention made of the State or its agencies nor is there any implication, necessary or otherwise, that it was intended to apply to the State or its agencies. 2 Cooley on Taxation (4 Ed.), p. 1316; 61 C. J. 366; 26 R. C. L., secs. 290, 292; Foster v. Duluth, 140 N.W. 129; Independent School Dist. v. Pfost, 4 P.2d 893; O'Berry v. Mecklenburg Co., 151 S.E. 880. (2) Even though State agencies generally should be held not to be exempt from the operation of the Emergency Revenue Act of 1935 on purchases of materials and supplies by reason of the theories advanced under Point (1) and its subdivisions, yet the State Highway Commission is exempt by virtue of the provisions of Article IV, Section 44a of the Constitution of Missouri, and Article XII, Chapter 42, Revised Statutes 1929, and acts supplemental thereto and amendatory thereof. Art. IV, sec. 44a, Mo. Const.; Art. XII, Chap. 42, R. S. 1929; State ex rel. McDowell v. Smith, 67 S.W.2d 50; State ex rel. Highway Comm. v. Thompson, 19 S.W.2d 642.

Roy McKittrick, Attorney General, John W. Hoffman, Jr., and Olliver W. Nolen, Assistant Attorneys General, and John H. Hendren for respondent.

(1) The tax provided by the Emergency Revenue Act of 1935 is an excise tax and not a tax on property; therefore, the General Assembly had the constitutional power to apply the tax to purchases by the State and its agencies, and the same is not violative of Aticle X, Section 6 of the Missouri Constitution, nor Section 9743, Revised Statutes 1929. Emergency Revenue Act 1935, Laws 1935, pp. 411-426; Indep. School Dist. v. Pfost, 51 Idaho 240, 4 P.2d 893, 84 A. L. R. 820; Crockett v. Salt Lake County, 270 P. 142, 60 A. L. R. 86; Portland v. Kozer, 108 Ore. 375, 217 P. 833; City of Ardmore v. Tax Comm., 32 P.2d 728; Standard Oil Co. v. Brodie, 153 Ark. 114, 239 S.W. 753; Pierce Oil Co. v. Hopkins, 282 F. 253; Pauley v. California, 75 F.2d 120; City of Covington v. State Tax Comm., 77 S.W.2d 386; Wiseman v. Phillips, 84 S.W.2d 91; Louisville v. Cromwell, 233 Ky. 828, 27 S.W.2d 377; People v. Deep Rock Oil Corp., 243 Ill. 388, 175 N.E. 572; People v. City & County of Denver, 84 Colo. 576, 272 P. 629; Monomotor Oil Co. v. Johnson, 292 U.S. 86; City of Greenville v. State Tax Comm., 286 U.S. 472; Bromley v. McCaughn, 280 U.S. 124, 74 L.Ed. 226; United States v. Perkins, 163 U.S. 625, 41 L.Ed. 287; State v. Guinotte, 204 S.W. 806; In re Cupples Estate, 199 S.W. 556; State ex rel. v. Henderson, 160 Mo. 191. (2) A clear intent to apply the tax to the State and its agencies is manifest from the express terms of the Emergency Revenue Act of 1935, as well as by the record of the General Assembly during the consideration of said act. Emergency Revenue Act 1935, Laws 1935, pp. 411-426, Senate Journal, pp. 952, 997, House Journal, p. 807; City of Louisville v. Cromwell, 233 Ky. 828, 27 S.W.2d 377; Portland v. Kozer, 108 Ore. 375, 217 P. 833; Crockett v. Salt Lake County, 72 Utah 337, 270 P. 142, 60 A. L. R. 867; City of Covington v. State Tax Commission, 77 S.W.2d 386; People v. Deep Rock Oil Corp., 243 Ill. 388, 175 N.E. 572. Cases under Point (1). (3) The provisions of Section 44a, Article IV of the Missouri Constitution do not prevent the application of the tax to purchases by the State Highway Commission. Portland v. Kozer, supra; Crockett v. Salt Lake County, supra; Pierce Oil Company v. Hopkins, supra.

OPINION

Leedy, J.

Original proceeding in mandamus to compel respondent, the State Auditor, to audit an invoice or bill for forty tons of road sand purchased by Missouri Highway Commission from relator. Upon the filing of relator's petition, respondent waived the issuance and service of our alternative writ, accepted said petition as and for such writ, and made return thereto. Whereupon relator filed what is denominated a "motion for judgment notwithstanding respondent's return." The facts are not in dispute, and the issues made by the pleadings are issues of law. The road sand mentioned was purchased at retail for the agreed price of Eighteen Dollars ($ 18.00), and was for the use and consumption of said Highway Commission in the construction and maintenance of certain State highways. Respondent's refusal to draw his warrant is based on the admitted fact that relator did not add to the agreed purchase price of said sand an amount equivalent to one per cent thereof as a sales tax. The sole question involved is whether sales to the State Highway Commission of tangible personal property at retail are subject to the one per cent tax imposed by the provisions of the Emergency Revenue Act of 1935. [Laws 1935, p. 411.]

The Attorney General appears as one of the attorneys of record for respondent. Prior to the institution of this proceeding he had given an opinion in writing to the Highway Commission holding its purchases not subject to the tax. His separate brief and argument filed herein supports that position, and his representation of respondent is merely nominal, except as to an attack made under Article X, Section 6 of the Constitution of Missouri -- an issue raised by amendment after submission of the cause. The contentions of the respondent are supported by a separate brief and argument filed in his behalf by other counsel.

The act in question expressly repeals an earlier sales tax act, passed at the Extra Session of the Fifty-seventh General Assembly, and approved January 15, 1934 (Laws, Ex. Sess., 1933-34, pp. 155, 166) which imposed a tax upon the privilege of engaging in the business of selling tangible personal property at retail, and upon the privilege of engaging in the business of selling certain services, substances, and things, etc., Section 2 of the present act, insofar as here applicable, provides: "From and after the effective date of this Act and up to and including December 31, 1937, there shall be and is hereby levied and imposed and there shall be collected and paid: (a) Upon every retail sale in this state of tangible personal property a tax equivalent to one (1) per cent of the purchase price paid or charged. . . ." By paragraph or subsection (e) of Section 1, "sale at retail" is defined to mean "any transfer made by any person engaged in business as defined herein of the ownership of, or title to, tangible personal property to the purchaser, for use or consumption, and not for resale in any form as tangible personal property, for a valuable consideration."

Unlike its predecessor, the act in question imposes the tax directly upon the "sale, service or transaction," and requires the seller to collect the tax from the purchaser (or recipient of the service) and prohibits the seller from absorbing or refunding the same. Section 5 reads as follows "Every person receiving any payment or consideration upon the sale of property or rendering of service subject to the tax imposed by the provisions of this act, or required to make collection of the tax imposed by the provisions of this act, shall be responsible not only for the collection of the amount of the tax imposed on said sale or service but shall, on or before the 15th day of each month, make a return to the State Auditor of all taxes collected for the preceding month or required to be collected for the preceding month, and shall remit the taxes so collected or required to be collected to the State Auditor. The seller of any property or person rendering any service, subject to the tax imposed by this act is directed to collect the tax from the purchaser of such property or the recipient of the service as the case may be. The tax imposed by this act is a tax...