Tennessee Oil Co. v. McCanless

• Decision Date: 14 February 1942
• Citation: 162 S.W.2d 1081
• Parties: TENNESSEE OIL CO. v. McCANLESS, Com'r of Finance and Taxation.
• Court: Tennessee Supreme Court

Page 1081

162 S.W.2d 1081

TENNESSEE OIL CO. v. McCANLESS, Com'r of Finance and Taxation.

Supreme Court of Tennessee.

February 14, 1942.

Appeal from Chancery Court, Davidson County; James B. Newman, Chancellor.

On petition to rehear.

Petition denied.

For former opinion, see 157 S.W.2d 267.

Bass, Berry & Sims and Levine & Levine, all of Nashville, and Blan R. Maxwell, of Memphis, for Tennessee Oil Co.

Roy H. Beeler, Atty. Gen., and William F. Barry and Harry Phillips, Asst. Attys. Gen., for George F. McCanless, Com'r.

GREEN, Chief Justice.

Responding to the petition, we find no error in the statement of the majority opinion that the sales involved "were made, property passed, and there was delivery to the buyers in Tennessee."

The petitioner does not distinguish between a contract to sell and a sale. Doubtless there was a contract to sell part of the goods entered into in Kentucky. It was, however, a sale of unascertained goods and the transfer of property was in Tennessee. Certainly there was no transfer of property to Browder until the gasoline was removed from petitioner's place of business in Dyersburg and placed in the tanks at Union City.

The foregoing, however, is immaterial because the tax here involved is not a sales tax but a tax on the storage of the gasoline.

The proposition urged in the petition for rehearing is that the gasoline with respect to which the tax here was collected was in interstate commerce while in Tennessee, and that the construction given by this Court to section 1140 of the Code, as amended by chapter 130 of the Acts of 1933, brings the statute into conflict with the Commerce Clause of the Constitution of the United States, Article 1, Section 8.

Petitioner also insists that the construction given the statute brings it in conflict with Section 1 of the Fourteenth Amendment of the Constitution of the United States and Section 8 of Article 11 of the Constitution of the State of Tennessee.

This case was presented on the hearing by the late Mr. Charles M. Bryan of Memphis — an able and extremely careful lawyer. He was doubtless of opinion that the recent decisions of this Court in Texas Co. v. McCanless, Commissioner, 177 Tenn. 238, 148 S.W.2d 360, and State v. Standard Oil Co. of Louisiana, December Term, 1940,¹ resolved the constitutional questions against him. The latter case was affirmed by the Supreme Court of the United States, 314 U.S. 573, 62 S.Ct. 112, 86 L.Ed. ___.

In argument and in their brief filed in this Court on the hearing, petitioner's counsel raised none of the constitutional questions now brought forward but, almost in as many words, waived those questions.

In the assignments of error and brief filed for the State there was some argument and citation of authority tending to show that the gasoline involved had passed out of interstate commerce and had come to rest in Tennessee. Counsel for the petitioner, the appellee then, opened the brief with this statement:

"The two questions involved in this case are, we insist, when simply stated, almost self-responsive.

"Opposing counsel as to the first issue has confused the rights of a taxpayer arising under the Commerce Clause of the United States Constitution with the classification of property for taxation provided by Section 1140 of the Code, as amended. We are concerned here only with the meaning of that section, and therefore the first issue is as follows:

"1. When Section 1140 of the Code, as amended, provides that gasoline `stored for export' and `subsequently exported outside the State' shall not be taxed, can there be read into the statute a proviso that this freedom from taxation can arise only when the `export' is made by a conveyance not owned by the purchaser.

"Or, to state the issue with the insertion in appellant's statement of the words which make the question arise from the established facts:

"1. When an oil company stores gasoline for export in accordance with the provisions of Code Section 1140, and sells and delivers for export to a customer in Tennessee, and the gasoline is forthwith `exported out of the state' by the customer in the same truck into which the gasoline was delivered, is such...