State v. City of Montgomery

• Citation: 151 So. 856,228 Ala. 93
• Decision Date: 15 June 1933
• Docket Number: 3 Div. 57.
• Parties: STATE v. CITY OF MONTGOMERY.
• Court: Supreme Court of Alabama

151 So. 856

228 Ala. 93

STATE v. CITY OF MONTGOMERY.

3 Div. 57.

Supreme Court of Alabama

June 15, 1933

Rehearing Denied Nov. 2, 1933.

Further Rehearing Denied Jan. 18, 1934.

Appeal from Circuit Court, Montgomery County; Walter B. Jones Judge.

Action to recover excise tax by the State of Alabama against the City of Montgomery. From a judgment of nonsuit, plaintiff appeals.

Affirmed.

Thos E. Knight, Jr., Atty. Gen., and Frontis H. Moore, Asst. Atty Gen., for the State.

John L Goodwyn and Hill, Hill, Whiting, Thomas & Rives, all of Montgomery, for appellee.

FOSTER Justice.

The questions here presented are: (1) The sufficiency of count 3, and (2) of plea 3 as an answer to the common counts. The rulings were adverse to the state causing a nonsuit to review them by appeal.

Count 3 claims an amount "due by defendant for gasoline taxes on gasoline used and withdrawn from storage as required by" certain acts of the Legislature there mentioned by their title. Plea 3 is that defendant purchased the gasoline outside of Alabama, shipped it in tank cars directly into storage tanks of defendant, and that defendant withdrew it from time to time from such storage tanks for use and was used by it in its governmental or municipal purposes and for nothing else.

Count 3 points out the several acts of the Legislature on which it relies for a recovery.

The act first mentioned, Gen. Acts 1923, p. 36, levies a 2-cent tax on every distributor and retail dealer in gasoline for every gallon sold in this state. It defines a "distributor" as including any person who shall engage in the selling of gasoline by wholesale in domestic trade, and a "retail dealer" as including any person who is a distributor who also engages in the sale of gasoline in broken quantities.

Its provisions therefore do not show that the city is liable for a tax there described.

The act next mentioned, Gen. Acts 1927, p. 326, amends the first so that the tax is also levied upon a storer of gasoline, in addition to a distributor and retail dealer, and defines a "storer" as including any person who ships gasoline into this state in tank quantities and stores and withdraws the same for any purpose.

The Act of January 25, 1927 (Gen. Acts 1927, p. 16), is essentially the same as the last above mentioned in levying the tax. Such is also the Act of July 27, 1931 (pages 859, 860), and of November 5, 1932, Ex. Sess. (page 314).

We must pass upon the questions as presented by the pleadings under review, not necessarily as the tax is described in the acts, unless the pleadings show that defendant is within their terms.

Count 3 does not allege in terms or in substance that defendant is a distributor, retail dealer, or storer. Since they only are such as must pay the tax under the acts, we have no trouble in agreeing that the demurrer to count 3 was properly sustained.

But the facts alleged in plea 3 to the common counts may be held to show that defendant is a storer of gasoline as thus defined, and as counsel seem so to treat it, we will likewise do so.

There is a clear distinction between (1) an excise tax upon the business, occupation, or privilege of owning, storing, and withdrawing gasoline, imposed not only for revenue but also because it is a dangerous explosive, and within the police power of the state, and (2) a tax upon the separate acts of the owner in taking his property out of storage for his own use; for this is a property tax. This distinction is clearly defined in Dawson v. Kentucky Dist. Co., 255 U.S. 288, 41 S.Ct. 272, 65 L.Ed. 638.

It is also shown that the latter is a property tax, though called an excise, and must be controlled by the Constitution in so far as it affects that character of tax rather than an excise. Its designation as an excise or license tax is not conclusive. The cases generally give effect to such distinction and look into its true nature to determine whether there is a prohibition in the Constitution. Sheip & Co. v. Amos, 100 Fla. 863, 130 So. 699; Foster, etc., Co. v. Graham, 154 Tenn. 412, 285 S.W. 570, 47 A. L. R. 971; Bowman v. Continental Oil Co., 256 U.S. 642, 41 S.Ct. 606, 65 L.Ed. 1139; Hart Refineries v. Harmon, 278 U.S. 499, 49 S.Ct. 188, 73 L.Ed. 475; The Texas Co. v. Brown, 258 U.S. 466, 42 S.Ct. 375, 66 L.Ed. 721.

It is of course conceded by all that if it is a tax on the property or an essential element of its ownership, and not on an occupation or for a privilege, it is in violation of section 91 of the Constitution. The right of the state to tax a city as any other corporation except as prohibited or limited by the Constitution is not questioned. Van Brocklin v. Anderson, 117 U.S. 151, 6 S.Ct. 670, 29 L.Ed. 845.

The acts in question impose a tax upon a storer as well as a distributor or retail dealer. We think this is true though it is not due until it is withdrawn from storage, and is measured by the amount so withdrawn rather than the amount placed in storage. True, it may leak and waste out of storage, or explode, and thereby and to that extent no tax is payable; but the whole of the acts taken together show, we think, that the purpose is to impose the tax on the storage, though measured by the amount withdrawn, and then it becomes due to be paid.

Since the privilege of storing is the basis of the tax, and for that purpose an excise may be levied, it is not controlled by section 91 of the Constitution, and it is immaterial to what use it is put after it is withdrawn from storage. Crockett v. Salt Lake County, 72 Utah, 337, 270 P. 142, 60 A. L. R. 867.

It follows that since the facts set out in plea 3 may be fairly interpreted to show that defendant is a storer of gasoline as defined by the acts of the Legislature, the tax is due to be paid by the city and may be recovered on the common counts, if a city is held to be fairly within the purview of the acts when truly interpreted.

Several of the states have construed their laws to include cities and counties in this requirement. Crockett v. Salt Lake County, 72 Utah, 337, 270 P. 142, 144, 60 A. L. R. 867; Portland v. Kozer, 108 Or. 375, 217 P. 833; State v. Monroe (La. Sup.) 149 So. 541; Jackson v. State, 156 Miss. 306, 126 So. 2; West Palm Beach v. Amos, 100 Fla. 891, 130 So. 710; Louisville v. Cromwell, 233 Ky. 828, 27 S.W.2d 377; Independent School Dist. v. Pfost, 51 Idaho, 240, 4 P.2d 893, 84 A. L. R. 820.

In the Utah case (Crockett v. Salt Lake County), supra, it was held to include cities, because the tax was for the public highways, "and the directions contained in the act as to the disposition of the funds so raised not only fail to...