State v. Crown Central Petroleum Corp., 12268

• Decision Date: 05 September 1951
• Docket Number: No. 12268,12268
• Parties: STATE v. CROWN CENTRAL PETROLEUM CORP.
• Court: Texas Court of Appeals

Page 457

242 S.W.2d 457

STATE v. CROWN CENTRAL PETROLEUM CORP.

No. 12268.

Court of Civil Appeals of Texas, San Antonio.

Sept. 5, 1951.

Rehearing Denied Oct. 3, 1951.

John A. Young, and McCampbell, Wood & Kirkham, all of Corpus Christi, for appellant.

Vinson, Elkins, Weems & Francis, Houston, for appellee.

W. O. MURRAY, Chief Justice.

The State of Texas, acting by and through the County Attorney of Nueces County, for the benefit of itself, Nueces County and all other political subdivisions whose taxes are collected by the Assessor and Collector of Taxes of Nueces County, brought suit against Crown Central Petroleum Corporation, to collect delinquent ad valorem taxes in the total amount of $2,608.46, including penalties and interest. The taxes were alleged to be due and owing by Crown Central Petroleum Corporation for the years 1943 to 1948, both inclusive, upon crude oil located within Nueces County, on January 1st of each of said years.

This case was submitted to the court without the intervention of a jury upon an agreed stipulation of facts, which had the effect of eliminating all questions except that of whether the crude oil had a taxable situs in Nueces County on January 1st of each of the tax years alleged.

The trial court held that the oil did not have such taxable situs in Nueces County and rendered judgment that plaintiff take nothing, from which judgment the State of Texas has prosecuted this appeal.

The stipulation is not lengthy and we here copy all material parts:

'(1) The Defendant, Crown Central Petroleum Corporation, is a Maryland Corporation having a permit to do business in the State of Texas and having its legal residence and corporate situs within the State of Texas in Harris County, Texas, where its refinery and officers are located. These same facts were true at all times involved in the above styled and numbered cause. The Defendant has been properly served with citation in the above styled and numbered cause.

'(2) That the Defendant had on the 1st day of January, in the following years, the following amounts of crude oil belonging to Defendant in storage awaiting transportation in storage tanks located in Nueces County, Texas, upon which crude oil the State of Texas and the County of Nueces undertook to levy state and county taxes as shown in the following list:

                Years  Description   State Tax  County Tax    Total
                -----  ------------  ---------  ----------  ---------
                1943   84,519 bbls.   $178.74    $425.94      $604.68
                1944   21,760 bbls.     53.84     117.48       171.32
                1945   32,589 bbls.    105.55     175.92       281.47
                1946   43,469 bbls.     72.37     254.28       326.65
                1947   26,879 bbls.    116.13     209.69       325.82
                1948   25,331 bbls.     74.42     230.36       304.78
                                                            ---------
                                                            $2,014.72
                

'If said crude oil was subject to taxation in Nueces County, Texas, interest and penalties on the above amounts accruing through the year 1949 amounted to $179.22 on State of Texas taxes and $414.52 on County of Nueces taxes, making the total amount of taxes, interest, and penalties due, if any, the sum of Two Thousand Six Hundred Eight and 46/100 Dollars ($2,608.46).

'(3) The Defendant owns and operates and at all times involved in this suit owned and operated a refinery located in Harris County, Texas, in which in manufactures or processes various petroleum products from crude oil. All of the crude oil involved in this suit was acquired by the Defendant in Nueces County, Texas, to be transported to its refinery in Harris County, Texas, for oil involved in this suit purchased by the produced from Defendant's own oil wells in Nueces County, Texas, but the bulk thereof being purchased from other oil producers out of oil wells owned by them in Nueces County, Texas. All of the crude oil involved in this suit purchased from its Defendant at the well or produced from its own wells was transported by pipe line to said storage tanks in Nueces County, Texas, from which tanks said crude oil was loaded upon barges or ships and transported by water to said refinery of Crown Central Petroleum Corporation in Harris County, Texas. All of the crude oil involved in this suit and caused to be transported through said storage tanks in Nueces County, Texas, was scheduled when it left the oil well from which it came and as it moved through the pipe line and before it moved into said storage tanks to be exported to a predetermined destination outside of Nueces County, Texas, to-wit, the Defendant's said refinery in Harris County, Texas. The crude oil involved in this lawsuit was accumulated in said storage tanks in the course of its further movement or continued movement to its destination, the refinery of the Company in Harris County, Texas. Said crude oil did not remain within Nueces County any longer than was necessary to accumulate sufficient quantities for shipment to said refinery in Harris County by barge or tanker and, when sufficient quantities were accumulated, said crude oil was shipped to said refinery in Harris County by barge or tanker as soon as such transportation was available. None of said crude oil was held in said storage tanks for sale or awaiting a seller. None of said crude oil was sold, offered for sale, or available for sale from said storage tanks in Nueces County but was all definitely destined for Defendant's said refinery in Harris County. No processing was done on any of said crude oil in Nueces County and none of said crude oil was graded or packaged in cans or other containers in Nueces County. All of said crude oil was retained by Defendant and processed or refined in its said refinery after transportation thereto into other petroleum products sold by Defendant.

'Said crude oil involved in this suit moved out of said storage tanks in Nueces County and was transported to the Defendant's said refinery in Harris County as follows:

'(A) Of the crude oil located in said storage tanks in Nueces County on January 1, 1943, 9,864.61 barrels was shipped out of the County on January 10, 1943, 9,668.71 barrels was shipped out of the County on January 13, 1943, 10,228.04 barels was shipped out of Nueces County on January 26, 1943, 10,050.38 barrels was shipped out of Nueces County on January 30, 1943, 9,997.30 barrels was shipped out of Neuces County on March 15, 1943, 9,995.37 barrels was shipped out of Nueces County on March 21, 1943, 9,950.75 barrels was shipped out of Nueces County on April 16, 1943, and the remainder thereof was shipped out of Nueces County on April 20, 1943.

'(B) Of the crude oil in said storage tanks on January 1, 1944, 7,396.23 barrels thereof was shipped out of Nueces County on January 6, 1944, and the remainder thereof was shipped out of Nueces County on March 4, 1944.

'(C) Of the crude oil in said storage tanks on January 1, 1945, all had been shipped out of Nueces County by April 30, 1945, a total of 68,923.11 barrels having been shipped out by that date.

'(D) Of said crude oil in said storage tanks on January 1, 1946, all had been shipped out of Nueces County by February 3, 1946, since 23,113.08 barrels was shipped out on January 4, 1946, and 21,812.64 barrels was shipped out on February 3, 1946.

'(E) Of said crude oil in said storage tanks on January 1, 1947, all had been shipped out of Nueces County by March 6, 1947, 24,749.79 barrels thereof having been shipped out on January 20, 1947, and an additional 22,800.95 barrels having been shipped out of said tanks by March 6, 1947.

'(F) Of said crude oil in said storage tanks on January 1, 1948, most thereof had been shipped out by January 14, 1948, since 24,477.63 barrels were shipped from said storage tanks out of Nueces County on January 14, 1948, and by March 20, 1948, an additional 17,550.77 barrels of said crude oil had been shipped out of said storage tanks.

'While the specific barrels of oil in said storage tanks on January 1 of each year cannot be earmarked and identified, since the process of crude oil moving into and out of said storage tanks is continuous, a volume of crude oil equivalent to the total volume in said storage tanks on January 1 of each year involved in this suit had been moved out of said tanks after January 1 of each year by the dates indicated above.

'(4) If said crude oil was taxable in Nueces County, Texas, and if said crude oil was subject to having taxes levied or assessed thereon in Nueces County, then it is stipulated and agreed that said taxes were duly and regularly levied or assessed; that in all cases an election was required to authorize said taxes, such an election was held and such taxes were authorized by a vote of the qualified tax-paying voters of such political subdivision or district; that each political division in whose behalf this suit is brought was legally constituted and authorize to levy, assess, and collect such taxes, and said taxes, if said property was subject thereto, were fully and legally levied and assessed against said property and the owners thereof; and if said property was subject to such taxation in Nueces. County, Texas, all things required by law to be done have been duly and legally performed by...