Crown Zellerbach Corp. v. State , 8 Wash. 2d 729 ( 1941 )

¹ Reported in 112 P.2d 544. Plaintiff brought this action to recover taxes paid to the state by General Petroleum Corporation of California (hereinafter called the oil company) under two different distributors' fuel oil excise tax laws, namely, Title XI, chapter 180, Laws of 1935, p. 749, and chapter 116, Laws of 1937, p. 459.

The taxes were paid on fuel oil brought from California by the oil company and delivered in tankers directly, or at least without interruption of the interstate character of the transit, to storage facilities of the plaintiff in this state (with the exception of two tanker deliveries made in the state of California and, also, some intrastate barge deliveries, which will be discussed later in this opinion). In accordance with the terms of a contract between the oil company and the plaintiff, the former paid the taxes to the state and the latter subsequently reimbursed the company therefor. Prior to the commencement of the action, the oil company assigned its right of recovery to the plaintiff.

A trial before the court without a jury resulted in a judgment for plaintiff, from which defendant has appealed.

All questions here presented as to the constitutionality of the 1937 statute are foreclosed by Texas Co. v. Cohn, ante p. 360,112 P.2d 522, wherein the statute was upheld. That case is likewise controlling as to the validity of the 1935 law, which does not differ in any particular which affects its constitutionality from the 1937 statute.

In the cited case, we also held that one of the respondents, the Union Oil Company of California, which had made tanker fuel oil deliveries of substantially the same character as those in the case at bar, was not liable as a distributor for any tax with respect thereto, basing such holding on the earlier case ofGreat Northern R. Co. v. Cohn, 3 Wash. 2d 672, 101 P.2d 985. The case is also applicable to the question of the tax liability of the oil company on the tanker deliveries of fuel oil in the present case.

Under the holding of the case just cited, the respondent is not directly, on its own account, subject to the tax imposed by the statutes in question, as it was not engaged in the business of selling fuel oil, and all of the oil was used in the operation of its manufacturing business.

Appellant claims that the tax payments were, in legal effect, voluntary and, under the circumstances, cannot be recovered. On that point, Great Northern R. Co. v. State, 200 Wash. 392,93 P.2d 694, is controlling, since the trial court found that the payments were made involuntarily under duress, coercion, and compulsion.

During the time the 1935 law was in operation, four barge deliveries were made to respondent within the state from the oil company's storage tanks at Seattle. Respondent concedes that these deliveries were not interstate in character, and it is not entitled to recover the taxes paid thereon by the oil company unless we hold the 1935 law unconstitutional. Therefore, respondent's judgment should be reduced in the amount of $1,479.41 on account of such barge delivery tax payments.

The cause is remanded, with direction to the superior court to modify its judgment in accordance with this opinion.

ROBINSON, C.J., BEALS, and JEFFERS, JJ., concur.

SIMPSON, J., dissents.