76 F.2d 545 | 5th Cir. | 1935
The appellant, Prairie Oil & Gas Company, brought this suit against officers of Jefferson County, Tex., and of Nederland Independent School District, located in that county, to cancel and enjoin the enforcement of taxes purported to have been assessed in favor of said county and school district, respectively, against the appellant, as of January 1, 1929, on crude petroleum oil then contained in tanks at the tank farm of the Pure Oil Pipe Line Company of Texas at Smith’s Bluff, Tex.; the amount of oil assessed' in favor of Jefferson County being 400.000 barrels, and the amount of oil assessed in favor of the school district being 500.000 barrels. The validity of the taxes purported to have been assessed was challenged on the ground that the oil which was the subject thereof was in course of interstate transportation under tenders of shipment made long prior to January 1, 1929, and was not subject to ad valorem taxation in said county as of January 1, 1929. Upon the submission of the cause on the pleadings and evidence,- the court rendered a decree denying the relief prayed for and taxing the costs against the appellant ; the decree providing for it being without prejudice to the right of the appellees to sue for and recover the taxes sought to be enjoined if the appellant fails voluntarily to pay the same; the decree reciting that the rights of the appellees in that regard were not litigated in the cause.
Beginning prior to March, 1927, and throughout that year, and the years 1928, 1929, and 1930, the appellant, which for many years has been engaged in purchasing crude oil from producers and in making sales thereof, purchased crude oil in the so-called Ranger District in Texas, known as Ranger crude, and delivered that oil to the Prairie Pipe Line Company for carriage by it and its connecting carrier, the Pure Oil Pipe Line Company of Texas, the oil being tendered to the initial carrier in lots of 100,-000 barrels each, consigned to appellant, “Destination: Smith’s Bluff Terminal (on board boats),” each shipment being governed by a joint proportional tariff filed with the Interstate Commerce Commission, governing the movement of crude petroleum from named points in the Ranger District to Smith’s Bluff Terminal (on board boats), for interstate transportation only. In October, 1926, the appellant entered into a contract with the Vacuum Oil Company for the sale to the latter during the year 1927 of a quantity of Ranger crude oil of a specified gravity, approximately 2,000 barrels per day throughout that year, delivery to be made to the purchaser on tank steamers at Smith’s Bluff, Tex., the purchaser’s Gulf terminal, and the contract providing that the first steamer would arrive at loading docks at Smith’s Bluff, Tex., during the first half of March, 1927, and that the purchaser would give the seller definite loading dates ten days in advance of the arrival of ships. Prior to the loading on March 9, 1927, of the first ship furnished by the purchaser, the appellant had had transported in the way above stated 600,000 barrels of oil which had been deposited in tanks at the tank farm of the Pure Oil Company of Texas, located in Jefferson County, Tex., and in the Nederland Independent School District. During the years 1927, 1928, and 1929, the appellant had contracts, in addition to the one with the Vacuum Oil Company, to sell oil to the Humble Oil & Refining Company, and to the Pure Oil Company, the oil to be delivered on ships at Smith’s Bluff, Tex., for transportation to the refineries of the respective purchasers located in states other than Texas. From the time shipment of oil to the refineries of purchasers began in March, 1927, the appellant continuously throughout the years 1927, 1928, and 1929 had in tanks at said tank farm a quantity of oil greatly in excess of the quantity for which appellant found purchasers, throughout the time when shipments to the refineries were being made additional shipments from the Ranger Field being made by the appellant, with the result that at all times during the years 1928, and 1929, the appellant had more than 500,-000 barrels of oil in the tanks at said tank farm; the amount of appellant’s oil in the tanks on January 1, 1929, being 597,025.92 barrels. In having shipped and delivered at the tank farm more oil than was required to fill contracts made for the sale of oil, the appellant had in mind the making of sales of oil other than those above men
The appellant so planned the movement of its oil from the Ranger District that at all times throughout the years 1928 and 1929 it continuously had at the tank farm more than 500,000 barrels of oil available for sale, the appellant’s intention being that that amount of oil would remain there for an indefinite time awaiting a sale or sales of it, no part of it to be started on its ultimate: interstate passage until a sale or sales of it should be effected. As to more than 500,-000 barrels of the oil in the tanks at the tank farm, the transportation of it was stopped, and it was brought to rest for an indefinite time to enable the appellant to have an opportunity to effect sales of it, a purpose outside of the mere transportation of the oil. The detention in tanks of a great quantity of oil was not a mere temporary interruption of movement due to exigencies of transportation by successive connecting carriers. The appellant, the owner of the oil, intentionally caused more than 500,000 barrels of it to be detained at the tank farm for use in its business of selling oil to be delivered on boats at Smith’s Bluff, Tex., for interstate transportation. Though the oil while in the tanks was in the custody of the carrier, the Pure Oil Pipe Line Company, it appears that the understanding between the appellant and the carrier was that that oil was to remain in tanks until the appellant notified the carrier to have delivery of oil made on board boats by the Smith’s Bluff Terminal Company, and that so much of the oil in tanks as was not delivered to boats for said transportation would remain in tanks for an indefinite time, during which the owner so far had control of the oil as to be able to sell it in the event of an opportunity to' do so being afforded. It also appears that while the oil remained in tanks the carrier, for the benefit of the appellant, caused oil to be transferred to tanks in which oil had remained for a long period; such transfer having the effect of bringing the oil in the tanks to which the transfers were made to the standard grade. What was done as to more than 500,000 barrels of the oil in tanks amounted to keeping it in storage while the appellant was awaiting an opportunity to sell it. The great quantity of oil, in addition to what was required in complying with the owner’s orders to make deliveries to boats, was not kept from being stock in trade of its Owner, kept for sale, by the circumstance that the owner was unsuccessful in its efforts to make sales other than those above referred to. As to so much of the oil as was detained in tanks for the purpose of enabling its owner to avail itself of opportunities to sell it before its delivery to boats for interstate transportation, there was such
The decree is affirmed.