This is а suit in equity in which the plaintiff seeks to restrain the enforcement of a state law in regard to the collection of a gasoline tax upon the gasoline used by the plaintiff in its operation of an air line in interstate commerce in connection with the use of airports at the cities of Cheyenne and Rock Springs in the state of Wyoming. The prayer of the bill seeks an interlocutory injunction and upon final hearing a permanent injunction against the collection of such tax.
The set-up of the case is one which would seem to bring it within the purview of a statutory court of three judges (28 TTSCA § 380), but, as no action was taken by the plaintiff to move for a hearing upon an interlocutory injunction, the case proceeded to final hearing before a single judge without objection on the part of the defendants, and we assume therefore that the court has jurisdiction of the proceeding. Seaboard Air Line Railway v. Railroad Commission,
The substance of t)ie statutory enactment challenged by the plaintiff as being unconstitutional in regard to the interstate business of the plaintiff is found in chapter 14 of the Session Laws of Wyoming 1929; Special Session, reading as follows: “Ota and after April 1, 1929, each and every wholesaler as defined in this Act, who is now engaged or who may hereafter engage in his own name,' or in the name of others, or in the name of his representatives or agents in this State, in the sale or use of gasoline as herein defined shall not later than the fifteenth of each month, render to the State Treasurer a statement of all gasoline sold or used by them in the State of Wyoming during the preceding calendar month, and pay to the State Treasurer at the same time, the license tax of four cents per gallon on all such gasoline. Said statement to the State Treasurer shall be upon blanks furnished by him, and shall be sworn to by the owner or managing agent in the ease of an individual, firm or association, by the resident general agent or attorney, in the ease of a foreign corporation or by one of the principal officers in the ease of a domestic corporation. Every person, firm or corporation, who shall use any gasoline in this state upon which the said tax has not been paid by any wholesaler in this state, shall, on or before the 15th day of each calendar month, beginning with the first calendar month after this Act has become effective, render a true statement to the State Treasurer, duly signed and sworn to, and accompany such statement with the payment of a tax of four cents per gallon on all gasoline as shown by such statement to have been used by him; provided that before making the distribution of funds provided for in Section 1 hereof the State Treasurer shall pay ovеr all funds received from the gasoline license tax on gasoline used at any municipal air field to the city or town where such air field is located, to be used for the maintenance and improvement of such air field.”
Upon the final hearing testimony was adduced by the parties, and the following may
The plaintiff is a corporation organized and existing under the laws of the state of Washington and engaged in the operation of an air transport line upon regular schеdule between Chicago, Illinois, and San Francisco, Cal. In such operation it enjoys a contract with the United States government in the transportation of United States mails, and likewise transports passengers and express •for hire over its entire line. The substantial portion of its business is interstate, in fact the testimony sho.ws that its transportation of mails, passengers, or express within the state of Wyoming is an insignificant percentage of its entire business, so that it would be impractical and impossible to determine or estimate the relative amount of gаsoline Which would be consumed in carrying on its intrastate business. In the operation of its air line it makes use of two landing fields owned by the defendant cities of Cheyenne and Rock Springs, respectively, at which points its planes are regularly landed on schedule for the discharge and reception of mail, passengers, and express. At these points its planes are refueled, .examined, and conditioned. Some time after the passage and operation of the law which the plaintiff challenges, it began a segregation of the gаsoline used by it by tolling the amount of such gasoline which was used for the operation of its ships, traveling in interstate commerce, as distinguished from the gasoline which was used 'in the testing of airships at the field, conditioning its motors, and sales made to other airplane users. As to the first-mentioned gasoline, the tax of 4 cents per gallon was paid to the state treasurer under protest in consideration of the high penalties fixed for a violation of the statute, but as to the latter classification of gasoline the said tax was paid thereon to thе state treasurer without protest. During the period covering substantially eight months, from the I5th of March, 1930, to the 15th of November, 1930, the plaintiff paid to the state treasurer, in the amount of this protested tax, the sum of $5>-529.28, representing the tax upon gasoline used in interstate commerce at the Cheyenne field, and during the same period it paid to the state treasurer $2,726.32 as representing the tax upon 'gasoline used in interstate commerce at the Rock Springs field. Testimony was likewise offered as to the continuing payments of said protested and unрrotested amounts after the filing of the bill and substantially up to the final hearing. The amount testified to as having been paid of the unprotested tax is considerably that Paid « the protested tax at í30^ aborts. The city of Cheyenne entered lnto a eontraf with the plamtiff company f^mie ln the year of 1929 which provided f°r o£ the mumeipalair field by the pbuntiff m the operation of its transconti?ental air lme' The Provisions of such contract f™ numerous, and not all of them are material to the matter here being considered Among other provisions of the сontract, it m3,Y be said £ba£ £be plamtiff and the city were to share the expense of grading additmnal land and building a new outlining ^tmg 3ystem at a cost of $7,000. The city a°rees to acquire additional land for the air-P01't f°r which it should pay the expense, and that {t should keeP *he field during the term of the lease (designated as twenty-five years) a3 a well-maintained and well-regulated air-PIane landlnS ñeId for the reasonable use of any and ad Planes and airships operated by the plaintiff. In addition, the plaintiff agrees to Pay the city an annual rental of $1,050 for hanSar sPace and taxiways, and $3,000 for rental of several hangars located on the field and owned by the city. The city agrees to Pay the plaintiff $2,400 a year for the genera^ supervision of the field, under the general direction of the city. Similar contract relaturns exist between the plaintiff and the city °f ftock Springs, but of less magnitude owing to the smaller business of the company at that P°mt, but involving a rental there paid by the plaintiff of $609 per year. At both ports the plaintiff has the privilege of selling gasoIme to the public for airplane purposes. As to thе city of Cheyenne, the money received £rom the state treasurer representing this tax on gasoline used at the airport is placed in an alrPort £and and used exclusively for the Purpose of improving and maintaining the airfield- DurmS the _ year last past not all o£ the money so received and maintained in thls separate fund had been expended, but all o£ which had been expended was expended in connection with the airport. No direct testimony was o£fered by tlle elty o£ a°ck Springs as to its segregation of this money received £rom the state treasurer, except as it may be iufen-ed that the general purpose of the law would be earned out by that municipality. In Cheyenne, at a recent popular election, a bond issae was voted upon and approved by the PeoPle authorizing the expenditure of $15-000 for vanous Puposos m connection Wltb the ^proving of its municipal air field,
Under these circumstances the plaintiff
“The claim under the commerce clause of the federal Constitution was denied on the ground that the tax was confined to gasoline used within the limits of the state and the commerce clause was not affected. It is with the latter question only that we are here concerned.
“Regulation of interstate and foreign commerce is a matter committed exclusively to the control of Congress, and the rule is settled by innumerable decisions of this court, unnecessary to be cited that a state law which directly burdens such commerce by taxation or otherwise constitutes,a regulation bеyond the power of the state under the Constitution. * * * The power vested in Congress to regulate commerce embraces within its control all the instrumentalities by which that commerce may be carried on. Gloucester Ferry Co. v. Pennsylvania, supra, 114 U. S. page 204,5 S. Ct. 826 ,29 L. Ed. 158 . A state cannot, ‘lay a tax on interstate commerce in any form, whether by way of duties laid on the transportation of the subjects of that commerce, or on the receipts derived from that transportation, or on the occupation or business of carrying it on.’ Leloup v. Port of Mobile,127 U. S. 649 , 648,8 S. Ct. 1380 , 1384,32 L. Ed. 311 ; Lyng v. Michigan,135 U. S. 161 , 166,10 S. Ct. 725 ,34 L. Ed. 150 ; Ozark Pipe Line v. Monier,266 U. S. 555 , 562,45 S. Ct. 184 ,69 L. Ed. 439 . While a state has power to tax property having a situs within its limits, whether employed in interstate commerce or not, it cannot interfere with interstate commerce through the imposition of a tax which is, in effect, a' tax for the privilege of transacting such commerce. Adams Express Company v. Ohio,166 U. S. 185 , 218,17 S. Ct. 604 ,41 L. Ed., 965 .”
Later in the decision, at page 252 of 279, U. S.,
In U. S. Airways v. Shaw (D. C.)
“State statute levying excise tax on gasoline held invalid as interference with interstate commerce as applied to air transportation companies engaged in interstate transportation business (Const. art. 1, § 8, el. 3; Laws Okl. 1923, c. 239, as amended by Laws 1923-24, c. 101, Laws 1925, e. 198, and Laws 1929 [Sp. Sess.] cc. 278, 279).
“Complaining parties are engaged in the transportation by airplane of passengers, freight, express, and mail from points outside to points within the state and vice versa. Gasoline used as motor power in airplanes in question is purchased largely within state, and tax in question is paid through consignees and distributors of gasoline.
“Intrastate operation of air transportation company held interdependent with, in*133 terstate commerce, rendering gasoline used in intrastate business not subject to excise tax (Const, art. 1, § 8, el. 3; Laws Old. 1923, e. 239, as amended by Laws 1923-24, e. 101, Laws 1925, e. 198, and Laws 1929 [Sp. Sess.] cc. 278, 279).
“Airway companies engaged in interstate transportation business carrying passengers, freight, express, and mail from points outside to points within state, and vice versa, conducted a like intrastate transportation business without which interstate .transportation business could not be efficiently and economically conducted.”
Later a statutory court again in the Tenth Circuit, sitting in the district of New Mexico, rendered a similar decision in Mid-Continent Air Express Corp. v. Lujan (D. C.)
“Excise tax upon all gasoline used by air transport corporation engaged in interstate commerce and intrastate commerce incidental thereto held direct, burden on interstate commerce, and therefore invalid (Comp. St. N. M. 1929, §§ 60-101, 60-203).
“Air transport corporatiоn operated from point in Texas through state of New Mexico to point in Colorado, and engaged in transporting passengers, freight, and express for hire. It also carried on intrastate business, but such business was merely incidental to interstate business. Two classes of business were so interdependent and so commingled, both with reference to receipts and expenses, that amount of gasoline used in each could not be determined and apportioned.”
It is not contended that the entire tax on gasoline used at the airports in this еase is invalid, for the reason that it is capable of segregation and actually has been segregated as to its use in interstate commerce and intrastate commerce, and only the enforcement of the law which purports to levy and collect the tax upon gasoline used in interstate commerce is challenged.
Were the situation in the case at bar in all respects analogous to the cases last cited, it would require no further comment from this court as to those decisions ruling this case, especially in view of the fact that three of the distinguished present Circuit Judges (Cotteral, Phillips, and McDermott) of the Tenth Circuit sat upon the statutory courts.. But there is another angle of the ease which makes it less clear to me on account of a peculiar feature of the statute in question. The last paragraph of the statute provides, in substance, that the tax received from gasoline used at any municipal airfield be paid by the state treasurer receiving the same to the city where such airfield is located to be used for the maintenаnce and improvement of such field. The query in the mind of the court is as to whether or not this does not bring the statute in question within the scope of another line of eases presenting a different feature of the law. The thought can be best expressed by a reference to some of these. In Hendrick v. Maryland,
In Postal Telegraph Cable Company v. City of Richmond,
In Kane v. State of New Jersey,
In Clark v. Poor,
Later the same justice in Sprout v. City of South Bend,
The most recent pronouncement of the high court called to my attention is that found in Interstate Transit Co., Inc., v. Dick Lindsey,
Applying the principle of these decisions to the facts and the statute in the ease at bar, it seems to me, it falls within sueh principle and must be ruled accordingly. Certainly there cannot be said to be substantial distinction, because in the ease at bar the tax is not assessed by the municipality, but is assessed under a state law and later turned over to the municipality for the particular use designated. The result to the plaintiff is, of course, the same. Here, the tax on the gasoline used by the plaintiff in interstate commerce is returned directly to the municipality for the maintenance and improvements of the air fields which the plaintiff is using and in the end results in a benefit to the plaintiff. Under the logic of the decisions above cited, even interstate commerce must assist in paying its own way. The evidence in the case shows beyond peradventure that the much greater portion of the airplane traffic at these municipal ports is that of plaintiff in the operation of its interstate planes. Presumably, therеfore, it would secure the greater benefit in the matter of enlargement, improvement, and maintenance of the fields at high standard. Neither can we see any way to make a substantial distinction for the purposes of the question here, between the maintenance of city streets or public highways, as discussed in the Supreme Court eases, and an airplane landing field open to all planes for general use. The facility of good operating conditions, although different in thé matter of use, is apparent in both.
Considering the entire evidence in this ease, taking into account all the expenses that the municipalities have heretofore had, are having, and contemplate having in the future in the matter of improving their municipal ■airports, I am not prepared to say that the tax so challenged is not fairly commensurate with the general purposes for which it is intended. We all know that municipalities throughout the land are continually expending from time to time many thousands of dollars in acquiring, perfecting, and improving their airports in the matter of keeping pace with the great forward strides of air transportation. It seems but fair that all this should be taken into consideration in determining the issues in this case. The airports of the future must be made great terminal facilities to -accommodate this ever-increasing traffic, and any tax received and devoted exclusively to this purpose will undoubtedly in the stretch of time be inadequate to meet the reasonable demands of extension and improvement.
For the reasons stated, findings, conclusions, and a decree may be submitted, dismissing the bill at plaintiff’s cost and reserving to it proper exceptions.