West India Oil Co. v. Gallardo, 1829.
| Decision Date | 12 June 1925 |
| Docket Number | No. 1829.,1829. |
| Citation | 6 F.2d 523 |
| Parties | WEST INDIA OIL CO. v. GALLARDO, Treasurer of Porto Rico. |
| Court | U.S. Court of Appeals — First Circuit |
Nelson Gammans, of New York City, for appellant.
Archibald King, of Washington, D. C. (H. P. Coats, Atty. Gen., of Porto Rico, on the brief), for appellee.
Before BINGHAM, JOHNSON, and ANDERSON, Circuit Judges.
By suit in equity, brought in the District Court of the United States for the District of Porto Rico, the appellant, a New Jersey corporation, seeks to enjoin the collection by the defendant, treasurer of Porto Rico, of certain taxes levied under Porto Rican Act No. 68 of 1923.
The bill is long and argumentative. The case was heard by the court below on bill, answer, and stipulated facts. That court sustained the jurisdiction, but dismissed the bill on the merits, holding the tax valid.
The appellant built large gasoline tanks in San Juan and Ponce, costing upwards of $200,000; in order to distribute this gasoline, it bought five automobile tank trucks, and shipped them from its New York office to its Porto Rican office. These trucks cost, including freight to San Juan and surcharges, $29,098.60. Other similar trucks had been ordered. The stipulation of facts shows that the defendant, under the act now attacked, levied upon these five trucks a tax amounting to $2,909.86, "plus penalties amounting to approximately $125," a total of $3,034.46.
The first questions raised are as to jurisdiction. The respondent now argues that the jurisdictional amount is not shown. This point apparently was not urged below. It cannot be sustained. The stipulated facts show that the tax and penalties now involved on the five trucks in question exceed $3,000. It is unnecessary, therefore, to consider other grounds of possible money damage to the appellant.
Jurisdiction in equity is also challenged. It is not, however, contended that R. S. § 3224 (Comp. St. § 5947), applies in Porto Rico. Of course there is no jurisdiction in equity, if there is a plain, complete, and adequate remedy at law. Dawson v. Kentucky Distilleries Co., 255 U. S. 288, 296, 41 S. Ct. 272, 65 L. Ed. 638; Nichols v. Gaston (C. C. A.) 281 F. 67; Page v. Polk (C. C. A.) 281 F. 74.
At the time when the present suit was brought, the only remedy at law to which our attention has been directed is found in Act No. 17 of the Public Acts of Porto Rico passed in 1920 (page 124). This act does provide for recovery by suit at law of taxes paid under protest. But in section 2 is a requirement that the suing taxpayer shall attach to his complaint "a certificate from the office of the treasurer setting forth that he has paid all his taxes," which would include all taxes, valid or invalid, levied and due subsequent to the tax in suit. And in section 6 it is provided:
"That at any time that the people of Porto Rico shall show, through a certificate issued by the treasurer, that the taxpayer complainant has not paid any other tax subsequently thereto, within the time fixed by law, he shall be deemed to have withdrawn his suit with costs and with the indemnity fixed in section 4 of this act taxed against him."
Under this statute the practice appears to be that such a certificate filed by the treasurer shall operate to abate any suit for recovery of taxes paid under protest. Plainly a right to sue under such conditions is not a plain and adequate remedy at law. Compare American Railroad Co. v. Treasurer, 30 P. R. R. 202. Jurisdiction in equity must be sustained.
We turn to the merits. Appellant's main contention is that this tax is a disguised import tax, and invalid under section 3 of the Foraker Act, 31 Stat. 78 (Comp. St. § 3749), which remains in force under section 58 of the Jones Act, 39 Stat. 968 (Comp. St. § 3803z). The act in question is long and elaborate, containing 93 sections, besides very many subdivisions. It is entitled as follows:
"An act to provide revenues for the people of Porto Rico, by levying certain excise and license taxes for the practice of certain professions, industries or businesses; to regulate the manufacture, use and sale of alcoholic preparations, and other articles; to impose certain penalties; to repeal the excise and license tax laws now in force, and for other purposes."
Under title 2, part 1, entitled "Excise Taxes," it is provided in section 20 "that there shall be levied, collected and paid, for one time only, as an internal revenue tax on each of the following articles." Then follows a long list of articles in 51 subdivisions, such as alcohol, beers, sparkling wine, medicines, perfumery, cigars, matches, affidavits, horse races, chewing gum, neckties, typewriters, mats, etc. Subdivision 18 is as follows:
The tax in question was levied under this provision.
Other pertinent provisions dealing with the method of levying these taxes are as follows:
By Act No. 1 of the Special Session of 1923, sections 6 and 33 of the preceding act were modified to read as follows:
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Barnes v. Stout
...right of ownership, but is collectible only from those who are engaged in the business of selling intoxicating liquor. West India Oil Co. v. Gallardo, 1 Cir., 6 F.2d 523;Lionel's Cigar Store v. McFarland, 162 La. 956, 111 So. 341; see, also, annotation in 103 A.L.R. 18. [4] It is also conte......
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Barnes v. Stout, 8114
...right of ownership, but is collectible only from those who are engaged in the business of selling intoxicating liquor. West Indian Oil Co. v. Gallardo, 1 Cir., 6 F2d 523; Lionel’s Cigar Store v. McFarland, 162 La. 956, 111 So. 341; see, also, annotation in 103 ALR 18. It is also contended t......