11 Cal. 2d 283 | Cal. | 1938
On July 31, 1933, a statute known as the “Retail Sales Tax Act of 1933” (Stats. 1933, p. 2599) became effective. As far as here is important, the title of that statute is "An Act imposing a tax for the privilege of selling tangible personal property and for the privilege of furnishing, preparing or serving tangible personal property, providing for permits to retailers, (and) providing for the levying, assessing, collecting, paying and disposing of such tax, ...” In part, section 3 of the statute provides that, “For the privilege of selling tangible personal property at retail a tax is hereby imposed upon retailers. ...” Various other excerpts from the statute which contain implications of the fact that the tax' was intended to be levied upon retailers, are as follows: by section 9, it is provided that “The tax levied hereunder shall be a direct obligation of the retailer; . . . The retailer shall . . . make out a return . . . The retailer shall deliver the return together with a remittance of the amount of the tax due to the office of the board. ” By section 12, retailers are required to obtain permits to engage in the business of selling tangible personal property at retail. By section 13, a permit fee of $1 for each place of business of the retailer is required. By section 17, the board of equalization is authorized to make additional assessments of tax against a retailer. Section 18 authorizes the board of equali
In opposition to that which may be termed the manifest intent of the foregoing provisions, the statute also contains certain other provisions, to wit: by section 4 thereof, it is provided that, “In any case where tangible personal property is sold at retail under a contract made prior to the effective date of this act, which specifies and fixes the sale price and such sale is taxable under this act, the seller may add the tax imposed by this act to the sale price and collect it from the buyer.” Section 8y2 of the statute contains the declaration that “The tax hereby imposed shall be collected by the retailer from the consumer in so far as the same can be done ...” By section 8 of the statute, a retailer is inhibited from advertising in any manner that the tax will be assumed or absorbed by him,41 or that it will not be added to the selling price of the property sold, or if added that it or any part thereof will be refunded ...”
At a date approximately seven years preceding that upon which said act became effective, a written contract was entered into between the plaintiff and the defendant, which related to the furnishing and the sale of ice by the plaintiff to the defendant for the purpose of the refrigeration of railroad ears which purportedly were owned by the defendant. Subsequently, that agreement was extended in its operative effect until April 30, 1938. At no time did the agreement contain any provision relative to the payment by either party of any sales tax such as was contemplated by the provisions of the “Retail Sales Tax Act of 1933”, or otherwise. Between the dates of August 1, 1933, and June 30, 1935, the plaintiff sold to the defendant many thousand tons of ice, which ice was used by the defendant both in interstate and
Appellant urges the point that the defendant was a wholesaler of the ice that the plaintiff had delivered to it,—consequently, that the statute, having no reference to merchants of that description, had no application to the situation here presented.
Although in the course of the execution of the contract that existed between the parties thereto, the gross tonnage of ice that was thus sold and delivered might seem to indicate the conclusion that in effect a wholesale, rather than a retail business was transacted, nevertheless, in view of the language that is contained in subdivision (c) of section 2 of the statute, wherein a “retail sale” or “sale at retail” is expressly declared to mean “a sale to a consumer or to any person for any purpose other than for resale”, it becomes
“The relationship between the plaintiff ice company and the defendant express company in the sales and furnishings of ice by the former to the latter out of which this controversy arose was that said ice company was the retailer of said ice within the meaning of the act referred to in Paragraph V of the complaint, and not a wholesaler of said ice; and said express company was, within the meaning of said act, the consumer of said ice, and not a retailer or wholesaler thereof.”
The evidence with respect to that finding of fact is voluminous. However, including other evidence in support of the conclusion that was reached by the trial court in that connection, it may be noted that as a foundational fact, the express company was owned by the railroad companies to which ice was furnished; consequently that in the various transactions that occurred between either of the railroad companies and the express company, the latter was acting only as an agent for the former; also that in legal contemplation, as declared by numerous authorities, the ice was not purchased for the purpose of “resale”, but to the contrary, was “consumed” by the railroad company in performing its service to shippers in furnishing and refrigerating cars. No useful purpose would be served by presenting herein even a summary of the pertinent evidence in that regard. Suffice it to say that it is amply sufficient to sustain the conclusion that was reached by the trial court with reference thereto. In such circumstances, the rule is well established that a supported finding of fact cannot be disturbed by an appellate tribunal.
It next is contended by the appellant that although by the terms of the statute the tax originally and primarily is imposed upon the retailer, the intention of the legislature in enacting the statute, as is manifested by its entire language, was and is that in reality the consumer should pay the tax. In support of such contention the appellant not only cites numerous authorities from each of several jurisdictions throughout the United States, wherein statutes of similar character have been in question, but also' considers and to
The several precedents that have been established by the courts of this state for the rule that the tax is imposed upon the retailer, and not upon the consumer, are as follows: People v. Herbert’s of Los Angeles, Inc., 3 Cal. App. (2d) 482 [39 Pac. (2d) 829]; Rio Grande Oil Co. v. Los Angeles, 6 Cal. App. (2d) 200 [44 Pac. (2d) 451]; Graham Bros., Inc., v. Los Angeles, 6 Cal. App. (2d) 203 [44 Pac. (2d) 452]; Roth Drug, Inc., v. Johnson, 13 Cal. App. (2d) 720 [57 Pac. (2d) 1022]. And to that number should be added that of Meyer Construction Co. v. Corbett, 7 Fed. Supp. 616, which was decided by the United States District Court. But even those cases do not constitute a complete list of the authorities in this state which deal directly and conclusively with the point at issue. The case of Western Lithograph Co. v. State Board of Equalization, ante, p. 156 [78 Pac. (2d) 731], reinforced by each of the companion cases of identical title, numbered respectively, S. F. 15915 and S. F. 15916, very recently decided by this court, is likewise clearly to the effect that the tax is a direct obligation upon the re
However, the question of the legal right of the retailer to “pass on” to the consumer a tax which by the terms of the statute has been imposed directly on the retailer remains for consideration. As hereinbefore has been set forth, section 4 of the statute contains the provision that, “In any ease where tangible personal property is sold at retail under a contract made prior to the effective date of this act, which specifies and fixes the sale price and such sale is taxable under this act, the seller may add the tax imposed by this act to the sale price and collect it from the buyer.” Other language employed in the statute, although not containing direct authorization of the retailer to collect the tax' from the purchaser, also impliedly gave him that right.
It is undisputed that each of the several sales of the commodity, which is the subject matter of the instant inquiry, was made pursuant to and “under a contract made prior to the effective date of this act” and that the “sale price” of such commodity was specified and fixed by the provisions thereof. It therefore is clear that as far as legislative enactment is concerned, the ice company was fully authorized to add to the sale price of the ice which it sold to the express company the tax which, by the terms of the same statute had been directly imposed on the ice company as the seller and retailer of such ice. But in that connection, although no “actual controversy” exists between the respective parties as to the existence of such statutory authorization of the ice company to “pass on” the tax to the express company or to collect it (“as far as the same can be done”), it is urged that such direction or mandate is violative of the “due process” clause of both the state and the federal Constitutions with reference to the fundamental right of ownership of property. At the outset, it is commonly conceded by the appellant and the respondent that, as affecting a transaction of the character of a sale of “tangible personal property” it would have been within the power of the legislature to have imposed a tax upon either the retailer or the purchaser of such property; but in that connection, even if any controversy may be said to exist as between the parties hereto, the
As a legal deduction, it has been judicially declared that a tax constitutes a debt owed by the person upon whom such tax has been legally imposed; and aside from equitable considerations (which here are not involved), to baldly legislate that without, and in the absence of either due or any process of law, a legal debt that is owed by one person must be paid by another, is quite at variance with ordinary notions of that which may be termed the administration of justice. It therefore may be deemed concluded, that as far as may concern the particular or any other provision of the statute to which attention hereinbefore has been directed, which purports either directly or indirectly to authorize the retailer of “tangible personal property” to collect from or to charge to the purchaser thereof the tax imposed upon its retailer “for the privilege of selling” such property, is unconstitutional and consequently invalid. But it should be noted that it is not because of any asserted or assumed lack of power in the state in the first instance to impose a tax on a purchaser of “tangible personal property” that the invaliditjr of the several provisions of the statute is adjudged, but rather for the reason that having first directed the imposi
It should be remembered that the record herein discloses the fact that although originally the state (acting through its board of equalization) was a party to the proceedings in the lower court, by reason of the additional fact that the state’s demurrer to the complaint was sustained “without leave to amend”, thereafter the state ceased to be a party to the proceeding. Nor is it represented in any way on the hearing of the instant appeal. For that reason, the propriety of the rendition of that which might be termed an “ex parte” decision by this court upon questions that are not properly before this court in this proceeding, and which may be of vital importance to the interest of the state in matters that may or do affect the collection of revenue for the benefit of the state, is more than doubtful. Strictly speaking, as between the parties to the contract, the only ultimate question properly at issue is whether the plaintiff has the legal right to collect from the defendant the tax that by the provisions of the statute is imposed on the plaintiff. However, since possibly to a limited extent, some of the less difficult of those questions may appear to relate to the main issue that constitutes “an actual controversy” (sec. 1060, Code Civ. Proc.) between the respective parties thereto, and the probability that none of the several rulings which will be made thereon should adversely affect the interest of the state, they will be accorded consideration, to wit:
In substance, it is contended by the appellant that should the decision by this court be to the effect that the retailer only is liable for the payment of the tax', and that in the absence of any agreement on the part of the consumer or purchaser that he will assume that burden, he is under no legal liability to do so,—with the result, as hereinbefore has been indicated, that as far as the statute in question may
Furthermore, a comparison of the objectionable portion of the instant statute both with the title and the body thereof, impels the conclusion that the scope and the design of the statute will remain unharmed and unaffected by reason of the elimination therefrom of the unconstitutional provision here under consideration. As indicated by its title, the general purpose of the act is to impose a tax “for the privilege of selling tangible personal property . . . and by section 3 of the act it is expressly provided that such tax “is hereby imposed upon retailers . . . ”;—and of which, together with its various incidents remains intact and unimpaired. It follows that appellant’s contention in that regard cannot be sustained.
Notwithstanding the several conclusions that the tax is a liability imposed on the retailer of “tangible personal property”, which without and in the absence of either the express or the implied consent of the purchaser, may not be “passed on” to the latter, the appellant urges the point that for the reason that the sale which was made by it to the re
With reference particularly to its own situation as the imposition of the tax' may affect it, the appellant presents several other objections to either the validity or the enforcement of the statute; none of which in any degree may be said to be strictly germane to a determination of the rights of either of the respective parties to this proceeding, with relation one to the other; and since a decision as to any or either of such objections might greatly affect not only the interest of the state, but as well that of many others who may occupy a position with reference to the imposition of the tax similar to that either of the appellant or the respondent, none of whom is represented in this proceeding, it is deemed inadvisable that consideration be given by this court to any or either of such objections.
The judgment is affirmed.
Shenk, J., Curtis, J., Seawell, J., Langdon, J., and Edmonds, J., concurred.