State v. Standard Oil Co.

• Decision Date: 03 July 1974
• Docket Number: No. 73-67,73-67
• Citation: State v. Standard Oil Co., 39 Ohio St.2d 41, 313 N.E.2d 838 (Ohio 1974)
• Parties: , 68 O.O.2d 24 The STATE of Ohio, Appellant, v. The STANDARD OIL COMPANY et al., Appellees.
• Court: Ohio Supreme Court

Page 41

39 Ohio St.2d 41

313 N.E.2d 838, 68 O.O.2d 24

The STATE of Ohio, Appellant, v. The STANDARD OIL COMPANY et al., Appellees.

No. 73-67.

Supreme Court of Ohio.

July 3, 1974.

The Standard Oil Company, appellee and cross-appellant, and Donald J. Bleim entered into a gasoline service station lease and an authorized dealer agreement in 1967. The authorized dealer agreement granted Standard Oil a security interest in Bleim's inventory, accounts receivable and equipment purchased from Standard to secure payment of any debt owed Standard by Bleim.

A stipulation of facts filed in the trial court explains the business dealings between Standard and Bleim, as follows:

'As of August 31, 1968, Bleim owed Standard Oil $3,255.26, $1,933.53 of which had been due and owing to Standard Oil for more than 30 days, thereby, pursuant to the credit terms of 'net 30 days' granted to Bleim, placing Bleim in default of his lease obligation on said date.

'On August 18, 1962, Standard Oil filed in proper form Financing Statements in the office of the Lucas County Recorder and in the office of the Secretary of State concerning 'all inventory and equipment purchased by debtor from the secured party' and 'all accounts receivable owing to debtor regardless of when or how incurred.' On July 10, 1967, The Standard Oil Company of Ohio effectively continued the 1962 Financing Statement in the office of the Lucas Caounty Recorder and in the office of the Secretary of State. Copies of said Financing Statements and Continuation Statements are attached hereto as Exhibits C and D.

'Donald J. Bleim and The Standard Oil Company

terminated business relations on September 9, 1968.

'Standard Oil owned a large portion of the equipment located at the premises leased by Donald J. Bleim from Standard Oil. * * *

'Upon the termination of business relations between Bleim and Standard Oil, Bleim transferred certain inventory and merchandise, including a tire changer, which was Bleim's personal property, to Standard Oil and received credit against Bleim's delinquent account. A schedule of items transferred and amount of credit allowed for each item is set forth below: (Schedule shows total due Standard Oil is $881.60.)

'* * *

'Donald J. Bleim executed a bulk sales affidavit, and other documents as prepared and presented to him by Standard Oil, on September 9, 1968, and the goods set forth in the above schedule were conveyed by Bleim to Standard Oil on said date. * *

'No cash, check, money order or other negotiable instrument was given to Donald J. Bleim in return for any of the merchandise and inventory transferred by Bleim to Standard Oil.

'As a result of the credits for transferred merchandise granted by Standard Oil to Bleim, Bleim's account was reduced by $881.60 to $2,373.66.

'On March 15, 1967, the State of Ohio filed a tax assessment against Donald J. Bleim in the amount of $664,70, $578 of which was a delinquency charge and $86.70 of which was a penalty. On September 16, 1969, the state of Ohio filed a tax assessment against Donald J. Bleim in the amount of $1,872.35, $1,628.13 of which was due to delinquent sales tax, and $244,22 of which was a penalty. Subsequently, Bleim made a payment to the state of Ohio in the amount of $300, thereby reducing his liability to the state of Ohio to $2,237.05.'

The state of Ohio, appellant and cross-appellee, instituted an action in the Court of Common Pleas to enforce the sales tax assessments and penalties against both Bleim and Standard Oil. The trial court granted judgment of $2,237.05 in favor of the state against both defendants.

Standard Oil appealed to the Court of Appeals, which modified the judgment of the trial court by reducing the amount of Standard's liability to $881.60.

The cause is presently before this court pursuant to the allowance of a motion and cross-motion to certify the record.

William J. Brown, Atty. Gen., Thomas E. Heydinger and Norman P. Solze, Columbus, for appellant and cross-appellee.

Squire, Sanders & Dempsey, James A. Smith, James P. Murphy and Isaac Schulz, Cleveland, for appellee and cross-appellant.

C. WILLIAM O'NEILL, Chief Justice.

The issue presented in these appeals is whether Standard Oil is liable under R.C. 5739.14 for the unpaid sales taxes accruing during the operation of the service station by Bleim.

R.C. 5739.14 provides:

'If any person liable for the taxes levied by or pursuant to sections 5739.01 to 5739.31, inclusive, of the Revised Code, sells his business or stock of merchandise, or quits his business, the taxes and interest or penalty imposed by or pursuant to such sections on sales made prior to that time shall become due and payable immediately, and such person shall make a final return within fifteen days after the date of selling or quitting business. His successor shall withhold a sufficient amount of...