State v. Standard Oil Co.

• Decision Date: 16 April 1912
• Parties: STATE v. STANDARD OIL CO.
• Court: Oregon Supreme Court

123 P. 40

61 Or. 438

STATE v. STANDARD OIL CO.

Supreme Court of Oregon

April 16, 1912

Appeal from Circuit Court, Marion County; George H. Burnett, Judge.

Action by the State against the Standard Oil Company. From a judgment for plaintiff, defendant appeals. Affirmed.

This is an action brought by the state of Oregon to recover from defendant, a corporation doing business in Oregon, taxes upon the gross earnings of such defendant for the period from June 26, 1906, to December 31, 1906, and for the years of 1907 and 1908, pursuant to the provisions of an act proposed by the initiative and adopted by the people June 4, 1906, and proclaimed by the Governor June 25, 1906, being sections 3544 to 3550, inclusive, of Lord's Oregon Laws.

Upon the third cause of action for the tax of l908, the circuit court rendered a judgment in favor of defendant. This consideration was upon the ground that the act authorizing the tax had then been repealed. No appeal was taken by plaintiff. From a judgment in favor of plaintiff upon the first and second causes of action for the sum of $12,091.66 defendant appeals.

The defendant, by its answer, denies the right of plaintiff to maintain the action, and avers: "That the oil, in which the business upon which said license is demanded of this defendant was conducted, was shipped to the state of Oregon by this defendant from points in states of the United States outside of the state of Oregon; that about ninety-six (96) per cent. of the gross receipts of this defendant, referred to in said cause of action, from said business, and upon which said license is demanded by plaintiff, was derived by defendant from the sale, in the state of Oregon, of oil produced and refined by this defendant in the state of California, and shipped by this defendant from said state to its agent in the state of Oregon for distribution and delivery in said state of Oregon by said agent; that about four (4) per cent. of said gross receipts were derived by defendant from the sale, in the state of Oregon, of oil produced and refined by certain persons, to wit, residents of states of the United States other than the states of Oregon and California, and purchased by this defendant from said persons last referred to, and shipped by this defendant from states outside of the state of Oregon to said last-named state for distribution and delivery therein. ***" That the act is in violation of article 1, § 8, of the Constitution of the United States, and in violation of defendant's rights, privileges, and immunities under the above section, because such measure purports to tax commerce between the states, to wit, between the state of Oregon and other states, and discriminates against such commerce by reason of the nonresidence of defendant and persons which said act purports to tax, and in favor of residents of the state of Oregon engaged in similar commerce within this state.

Defendant has complied with the act of February 16, 1903, entitled "An act to provide for the licensing of domestic corporations and foreign corporations, joint stock companies and associations," etc. On November 9, 1906, the Secretary of State of the state of Oregon issued defendant a certificate of authority to do business in the state, and the latter designated an attorney upon whom process might be served under the act, entitling it to transact business in Oregon.

Section 1 of the act in question (section 3544, L.O.L.) provides "That in addition to the taxes now provided for by law every *** oil company, doing business in this state, shall pay to the state of Oregon, a license of three (3) per centum upon the gross earnings of such company in this state, which license shall be paid annually by such company to the treasurer of this state."

Section 4 (3547, L.O.L.) is as follows: "Any nonresident person or persons and every joint stock company or corporation not having its principal place of business within this state, or not being organized or incorporated under the laws of the state of Oregon, engaged in the business of buying and selling, or buying or selling (petroleum in its various products) within the state of Oregon, and any and all persons, companies, and corporations doing business in this state as the representative of any or either of the aforesaid persons or corporations, on commission or otherwise, and any person or persons, joint stock company, or corporation resident within this state or organized or incorporated under the laws thereof, engaged in the business of buying and selling oil (petroleum in its various products) produced obtained, or refined by either or any of the aforesaid nonresident persons, companies, or corporations, and whose business done annually in such special line amounts in the gross to twenty-five per centum of the total annual gross receipts of such person, company, or corporation from all lines in which he or it deals, and any person or persons, joint stock company, or corporation, wherever organized or incorporated, engaged in the business of operating cars for the transportation of such oil in this state on or over any railway line or lines in whole or in part within the state of Oregon, such line or lines not being owned or leased by such person, company, or corporation, shall be deemed an oil company, within the meaning of this act."

E.S. Pillsbury, of San Francisco, and Wm. D. Fenton, of Portland (Ben C. Dey and James E. Fenton, both of Portland, on the brief), for appellant.

A.M. Crawford, Atty. Gen., and I.H. Van Winkle, of Salem (R.F. Shields, of Salem, on the brief), for the State.

BEAN, J. (after stating the facts as above).

It is first contended by counsel for defendant that the act denies to persons within the jurisdiction of the state of Oregon the equal protection of the laws, in violation of the fourteenth amendment of the Constitution of the United States. It is well settled that a corporation is a person within the meaning of the fourteenth amendment. Sullivan v. O.R. & N. Co., 19 Or. 321, 24 P. 408; Santa Clara County v. Southern Pacific R.R. Co., 118 U.S. 394, 6 Sup.Ct. 1132, 30 L.Ed. 118; Minn. & St. Louis Ry. Co. v. Beckwith, 129 U.S. 26, 9 Sup.Ct. 207, 32 L.Ed. 585; Southern Ry. Co. v. Samuel E. Greene, 216 U.S. 400, 412, 30 Sup.Ct. 287, 54 L.Ed. 536, 17 Ann.Cas. 1247. It is also well settled that a corporation of one state doing business in another state, under such circumstances as to be directly subject to its process at the instance of suitors, may invoke the right of equal protection under the fourteenth amendment. Northwestern National Life Insurance Co. v. Riggs, 203 U.S. 243, 253, 27 Sup.Ct. 126, 51 L.Ed. 168, 7 Ann.Cas. 1104; Blake v. McClung, 172 U.S. 239, 19 Sup.Ct. 165, 43 L.Ed. 432; American Smelting & Refining Co. v. Colorado, 204 U.S. 103, 27 Sup.Ct. 198, 51 L.Ed. 393, 9 Ann.Cas. 978.

The defendant has the right to invoke the guaranty of the fourteenth amendment. As has been stated on various occasions, this clause requires that no greater burdens shall be laid upon one than are laid upon others under like circumstances ( Barbier v. Connolly, 113 U.S. 27, 5 Sup.Ct. 357, 28 L.Ed. 923); that all persons shall be treated alike under like circumstances and conditions, both in the privilege conferred and the liabilities imposed ( Magoun v. Illinois Trust & Savings Bank, 170 U.S. 283, 293, 18 Sup.Ct. 594, 42 L.Ed. 1037); that under this clause a person is entitled to enjoy the same rights as belong to, and to bear the same burdens as are imposed upon, other persons in a like situation. Southern Ry. Co. v. Samuel E. Greene, 216 U.S. 400, 412, 30 Sup.Ct. 287, 54 L.Ed. 536, 17 Ann.Cas.

1247. See, also, Portland Fish Co. v. Benson, 56 Or. 147, 108 P. 122; Atchison, Topeka & Santa Fé R.R. Co. v. Matthews, 174 U.S. 96, 104, 19 Sup.Ct. 609, 43 L.Ed. 909. It has been held that this clause of the Constitution does not require of the states an iron rule of equality of taxation; nevertheless, in accordance with the general rule, classification for the purpose of taxation must be reasonable; and all persons similarly situated shall be equally taxed. State v. Wright, 53 Or. 344, 100 P. 296, 21 L.R.A. (N.S.) 349; In re Yot Sang (D.C.) 75 F. 983; Fraser v. McConway & Torley Co. (C.C.) 82 F. 257; Juniata Limestone Co. v. Fagley, 187 Pa. 193, 40 A. 977, 42 L.R.A. 442, 67 Am.St.Rep. 579.

The case at bar, therefore, depends upon the construction of the statute imposing the tax. It is conceded by both counsel that the term "oil company," as used in section 1 of the statute, plainly includes all individuals, joint-stock companies, partnerships, and corporations whatsoever, whether resident or nonresident, of the state of Oregon. The question is: Does the interpretation clause in section 4 exempt residents of the state of Oregon from the provisions of the act? Upon this question, the opinions of the learned counsel for the respective parties diverge. Counsel for defendant state that the vice of the act, in the light of the fourteenth amendment, is the denial of the equal protection of the laws by an unreasonable and arbitrary classification and discrimination between residents and nonresidents. Counsel for the state maintain that the statute under consideration taxes residents as well as nonresidents; consequently there is no denial of the "equal protection of the laws," nor of the privileges and immunities of citizens of the several states. The position of defendant is that, although residents of the state of Oregon are included in section 1 of the act, they are exempted by section 4, for the reason that they are not named therein.

We find, as to the rule for the construction of interpretation clauses, that any provision in a statute which declares its meaning or purpose is authoritative....