Attorney General of Utah v. Pomeroy

MOFFAT, Justice

(dissenting).

I dissent. Paragraph 12 of plaintiff’s complaint alleges:

“That under the provisions of chapter 39, Session Laws of Utah 1923, as amended and carried into chapter 12, title 57 of the Revised Statutes of Utah, 1933, there was at all times herein mentioned and is imposed upon the sale and use of all motor vehicle fuels

a tax

of four cents a gallon payable by the distributor or retailer to the State of Utah on or before the 15th day of the next succeeding month after such sale and use;” and “That during the month of October, 1932, the defendants, Jack W. T. Pomeroy and Clara Pomeroy, doing business as the White Star Gas & Oil Company, and White Star Gas & Oil Company, a corporation, sold a net of 87,118 taxable gallons of

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motor vehicle fuel upon which there became and is due and owing to the State of Utah a

tax

of $3,484.72;”

and that defendants have failed and refused to pay. (Italics added.)

There are then allegations as to sale or use of gasoline for the months of November and December, further amounts, and that under the statute penalties are imposed with the amounts stated.

Without these allegations, notwithstanding the detailed length of the allegations of the complaint, it does not state a cause of action. Put otherwise in absence of the statute levying the tax and requiring payment thereof, the State has no claim and no cause to complain.

It is admitted the action was not commenced within one year after the tax became due and payable. The plea of the statute of limitations was interposed, it is claimed, tardily; but the court imposed conditions which were met, and the court did not abuse its discretion in permitting the amendment to raise the plea of the statute under the conditions imposed.

With this setting, can it be said that the State has or can have any claim other than because of the statute ? The statutes involved are:

“There is hereby levied and imposed an excise tax of four cents per gallon upon the sale or use of all motor fuels sold or used in this state, excepting such motor fuels as are or have been brought into this state and sold in original packages as purely interstate commerce sales. If any motor fuels have been purchased outside of this state and brought into this state in original packages or purchased within the state in original packages from a distributor for the use of the consumer, then such tax shall be imposed upon the use of such fuels. It is the purpose and intent of this chapter to impose and levy said tax upon the sale or use of motor fuels as defined in this chapter whether such fuels are used in motor vehicles or for other purposes, and by whomsoever sold or used, including municipalities, counties, school districts and every other arm or branch of the state government.” R. S. Utah 1933, 57-12-5.

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“Every distributor of, and retail dealer in, motor fuel shall render to the state tax commission on or before the fifteenth day of each month, on forms prescribed, prepared and furnished by it, a sworn statement of the number of gallons of motor fuel sold or used by him or them during the preceding calendar month, which statement shall be sworn to by one of the principal officers in the case of a domestic corporation or by the resident general agent or attorney in fact in case of a foreign corporation, by the managing agent or owner in case of a firm or association or by a duly elected or appointed officer in charge in case of a municipality or county, board of education or other governmental agency, and shall contain an itemized account of the date and quantities of motor fuel sold or used, stating separately the sales made in interstate commerce and those made in broken packages. Bills shall be rendered to all purchasers of motor fuel by distributors and retail dealers in motor fuel as herein defined.” R. S. Utah 1933, 57-12-6.

“If any distributor or retail dealer fails or refuses to pay any tax when the same becomes due, the same shall be delinquent on the first day of the next succeeding month. If not paid before such date, his license to do business shall automatically be revoked and there shall be imposed a penalty of twenty-five per cent of the amount of the tax. The amount of such tax with the penalty shall bear interest at the rate of twelve per cent per annum from the date of delinquency until the same is paid.” R. S. Utah 1933, 57-12-10, as amended by chapter 41, Laws of Utah 1933.

“The periods prescribed for the commencement of actions other than for the recovery of real property are as hereinafter provided.” R. S. Utah 1933, 104-2-20.

“Within one year:

“(1) An action for liability created by the statutes of a foreign state or by the statutes of this state, other than a penalty or forfeiture under the laws of this state, except where in special cases a different limitation is prescribed by statute.

“(2) An action upon a statute for a penalty or forfeiture where the action is given to an individual, or to an individual and the state, except when the statute imposing it prescribes a different limitation.

“(3) An action upon a statute, or upon an undertaking in a criminal action, for a forfeiture or penalty to the state.

“(4) An action for libel, slander, assault, battery, false imprisonment or seduction.

“ (5) An action against a sheriff or other officer for the escape of a prisoner arrested or imprisoned upon either civil or criminal process.

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“(6) An action against a municipal corporation for damages or injuries to property caused by a mob or riot.” R. S. Utah 1933, 104-2-26.

Under the statute, section 57-12-5, the tax is levied upon the motor vehicle fuel. Under section 57-12-6, “Every distributor of and retail dealer in, motor fuel” shall render statements and make payment. Thus the tax on the sale or use of gasoline is an excise tax assessed by the statute against the distributor to the extent of four cents upon each taxable gallon sold or used by the distributor. “The term ‘distributor’ is defined as any person who imports or causes to be imported motor fuels, as herein defined, for use, distribution or sale otherwise than in the original packages in which the same was imported, and after the same reaches this state.” A “retail dealer” is any person who purchases from a “distributor” within this state any motor fuels in the original packages in which the same is imported for use, distribution, or sale within this state otherwise than in the original packages, or who imports into the state motor fuels in the original packages for use of such person. R. S. Utah 1933, 57-12-1, subds. 3 and 4.

It is alleged in plaintiff’s complaint that the “White Star Gas and Oil Company” is a Utah corporation. That the “Starlene Gas & Oil Company” is a Utah corporation. That for a time the “White Star Gas & Oil Company” was operated as a corporation, Jack W. T. Pomeroy as president and W. D. Scogings as vice-president managed and operated the business. That this management continued to July 22, 1929, after which it was managed and operated as a partnership by Pomeroy and Scogings. “That on or about the 22nd day of July, 1929 * * * Jack W. T. Pomeroy, and Clara Pomeroy, his wife, obtained the control of said corporation * * *” That Jack W. T. Pomeroy and Clara Pomeroy, his wife, “operated, maintained and conducted the business of the White Star Gas & Oil Company” as their own. That they operated the “White Star Service Station.” That they, Pom-

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eroy and wife, sold gasoline to themselves at less than cost. That “Jack W. T. Pomeroy and Clara Pomeroy, doing business as the White Star Gas & Oil Company * * * sold 87,118 taxable gallons of motor fuel,” during the month of October, 1982, and during the month of November, 1932, 36,671 taxable gallons, and during the month of December of the same year, 39,894 gallons.

It is then alleged that Jack W. T. Pomeroy and Clara Pomeroy, his wife, doing business as the “White Star Gas & Oil Company, and of the White Star Gas & Oil Company, a corporation, in selling motor vehicle fuels at retail, * * * did actually collect from its retail customers the said four cents per gallon

tax

for the use and benefit of the State of Utah.” The amounts of the tax items and penalties and a long course of alleged fraudulent manipulations are alleged.

I see no escape from the position that the action is based entirely upon the statute of the state imposing the tax, and that whether the White Star Gas & Oil Company, or any other agency, and whether a valid independent corporate entity or a trade-name, or alter ego for the Pomeroys, or whether the Pomeroys individually or personally or by any other name, imported the gasoline in question at the times alleged, it is a liability for the payment of a tax under the statute. If the White Star Gas & Oil Company imported and distributed the gas, it is subject to the tax, and if it is a corporation the corporation was liable under the statutes. If the Pomeroys did the same things, they are liable under the statute. They either did the importing themselves or through an agency set up and controlled by them, or an independent operating corporation did it. In any event, the tax became due and payable from the distributor at the time pleaded in the complaint, and such distributor was liable whether he sold the gasoline, gave it away, or used it. To assume that the corporation was an independently operated concern and that it delivered the gas to the Pomeroys or an agency controlled by them, and that they collected the tax for the use and benefit of the State, does violence to the very assumption

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upon which the assumption is based. In other words, if the corporation is an independent concern, it is liable as the importer and distributor. If the gasoline were then sold to the Pomeroys in the original packages, they would be retail dealers and subject to the tax. If the corporation or any other Pomeroy agency did the importing, the Pomeroys would be personally liable. In any event, the statute begins to run from the 15th day of the month following the sale or use of the gasoline. R. S. Utah 1933, 57-12-9. It is equally clear that the statute of limitations having been interposed in the cause that the statute applies because it is “an action for liability created by the statutes * * * of this state.” Section 104-2-26, subd. 1. And the limitation prescribed is one year for the commencement of such actions.

As to the question as to the finality of the judgment, I agree with the result arrived at by Mr. Justice WOLFE in the prevailing opinion; likewise, as to the disposition of the question of the claim that the statute of limitations was not pleaded as required by law.

The judgment of the trial court should be affirmed.