State of California v. Gillis, 7286.

• Decision Date: 19 March 1934
• Docket Number: No. 7286.,7286.
• Citation: 69 F.2d 746
• Parties: STATE OF CALIFORNIA v. GILLIS.
• Court: U.S. Court of Appeals — Ninth Circuit

69 F.2d 746 (1934)

STATE OF CALIFORNIA v. GILLIS.

No. 7286.

Circuit Court of Appeals, Ninth Circuit.

March 19, 1934.

U. S. Webb, Atty. Gen., State of California, and H. H. Linney, Deputy Atty. Gen., for the State of California.

Goudge, Robinson & Hughes and Ernest C. Carman, both of Los Angeles, Cal., for appellee.

Before WILBUR, SAWTELLE, and GARRECHT, Circuit Judges.

SAWTELLE, Circuit Judge.

This is an appeal from an order of the District Court permitting the receiver of the Western Oil & Refining Company to continue to operate the business of said oil company without posting bond, or other security, to guarantee to the state of California the payment of all license taxes, penalties, and other obligations (as required by the Motor Vehicle Fuel Act of 1923, pp. 571, 573, as amended by section 2 of the Act of 1931; 1931 Statutes of California, pp. 105, 106), and without securing from the California state board of equalization a license to operate the business of said oil company, as required by the aforementioned act.

The act in question defines the word "distributor," as used therein, as "every person, firm, association or corporation who refines, manufactures, produces or compounds motor vehicle fuel in this state and sells the same in this state"; and provides (section 3) that: "Every distributor before April 1, 1931, and after this act becomes effective every person, firm, association or corporation before becoming a distributor shall make an application to the state board of equalization for a license authorizing such distributor * * * to engage in business as a distributor. * * * It shall be unlawful * * * to be a distributor without first securing from the state board of equalization a license for which provision is made in this section. Before granting any license * * * to engage in business as a distributor, the state board of equalization must require such person, firm, association or corporation to file with said board * * * a bond duly executed by such person, firm, association or corporation as principal and a corporation such as is mentioned in section 1056 of the Code of Civil Procedure of this state, as surety, payable to the people of the State of California, conditioned upon faithful performance of all of the requirements of this act and expressly providing for the payment of all license taxes, penalties and other obligations of such person, firm, association or corporation arising out of this act." The license tax imposed by the act is 3 cents per gallon of gasoline distributed and sold in California and is payable only by the distributor.

It appears that after the effective date of the amendment to the act requiring the giving of a bond, a receiver was appointed for the Western Oil & Refining Company, and the receiver thereafter executed the required bond, procured a license as a distributor from the state board of equalization, and continued the operation of the oil company's business, paying the tax as it fell due.

June 7, 1933, the receiver filed in the District Court a pleading entitled "Application of receiver for instructions concerning operation after termination of bond given by receiver to State of California for payment of gasoline taxes," in which the receiver stated that he had been informed by the surety on his bond to the state that said surety would withdraw therefrom as of June 28, 1933, and that he had made efforts to secure a bond from another surety company, but without success, and had not been able to find any surety company that would write said bond and did not believe a bond could be obtained; "wherefore, the receiver prays that the Court do issue to him its instructions setting forth and directing him either to proceed in the operation of said receivership without any bond for the payment of taxes to the State of California, or to cease operations and...