T. S. O'CONNELL, Arizona State Highway Engineer, D. B. HUTCHINS, Superintendent, Motor Vehicle Division of the Arizona State Highway Department, Appellants,
LEO FROST, S. C. ROGERS, A. O. ROGERS and LEROY ROGERS, a Corpartnership, Doing and Transacting Business Under the Style and Firm Name of LEO FROST and ROGERS BROS., in the County of Navajo, State of Arizona, Appellees
APPEAL from a judgment of the Superior Court of the County of Maricopa. Howard C. Speakman, Judge. Judgment reversed and cause remanded with directions to dismiss plaintiffs' complaint.
Mr. Joe Conway, Attorney General, and Mr. A. R. Lynch, his Assistant, for Appellants.
Mr. H. S. McCluskey, for Appellees.
[50 Ariz. 488] ROSS, J.
This is a mandamus proceeding by Leo Frost, S. C. Rogers, A. O. Rogers, and Leroy Rogers, a copartnership, to compel the superintendent of the Motor Vehicle Division of the State Highway Department and the state engineer to audit, allow, and pay a refund of 5 cents on each gallon of motor vehicle fuel used by them "other than in motor vehicles upon highways of this state," as provided in article 6 (entitled "Motor vehicle fuel tax") of chapter 31, Revised Code of 1928 (sections 1673-1679), as amended by chapter 16, Laws of 1931-1932, First Special Session, and chapters 11 and 27, Laws of 1933.
The state engineer should not have been made a party as he has nothing to do with claims for refund.
While at the trial the Attorney General contended that the fuel upon which the plaintiffs asked a refund was used in operating motor vehicles upon the public highways of the state, the evidence quite conclusively shows, and the Attorney General now admits, that such gasoline was used by the plaintiffs off the public highways and on private ways and premises. The question now is, then, who paid the state tax, the plaintiffs or their truck
owners, the law being that the one who pays the tax, if the fuel is exempt because of the use to which it is put, shall be by the state repaid upon a proper and timely application to the superintendent of the Motor Vehicle Division. The facts, although their interpretation is, do not appear to be in dispute and may be stated as follows: Between September, 1935, and April, 1936, the plaintiffs were engaged in constructing a dam for the Showlow-Silver Creek Water Conservation and Power District, in Navajo county. They bought fuel from the Standard Oil Company of California, distributor, [50 Ariz. 489] and paid therefor 19 1/2 cents per gallon, of which 5 cents was the state's excise tax and 14 1/2 cents the distributor's price, the latter being under the law constituted the state's agent to collect the tax. The gasoline was delivered by the Standard Oil Company to plaintiffs' tank at their construction camp and therefrom the plaintiffs supplied with fuel all motors and motor vehicles used in the construction work. The fuel was used in trucks, caterpillars, and for stationary power of all kinds, such as shovels and pumps.
The plaintiffs made claim on the superintendent of the Motor Vehicle Division for a refund of the state tax of 5 cents per gallon on fuel used by all stationary equipment and by caterpillars in such construction, and were repaid such tax.
They had from 15 to 20 trucks on the construction hauling dirt for them from the spillway or the barrowpit and rock from a quarry. All this trucking was done off any public highway and on private ways. The plaintiffs made claim for a refund of the state tax on the fuel used by these trucks and the superintendent refused to make the refund, contending that the truck owners, and not the plaintiffs, paid the tax. The trucks were not owned by the plaintiffs but were rented or leased by them from the owners, 6 of them from Leo Frost and the Rogers, members of the partnership, and the rest from third parties or parties not interested in any way in the construction work. The trucks owned by the individual partners and leased to plaintiffs consumed 7,254 gallons of fuel and the trucks owned by parties other than the partnership consumed 6,339. It is the state tax on these 13,593 gallons that is in controversy.
The Attorney General does not contest plaintiffs' recovery of the state tax on the gallonage furnished the trucks of the individual partners but does [50 Ariz. 490] that consumed by the trucks owned by third parties. We think, however, plaintiffs (the partnership) should recover all or none. They were only the lessees of the trucks and the conditions of the leases were exactly the same. The plaintiffs as partners did not own any of the trucks. Leo Frost, who appears to be the active member of the partnership in charge of trucks, testified:
"The Court: All of these trucks you have here are under lease or contract, or whatever you call it, did you furnish them with fuel?
"The Witness: No, sir. I will explain that to you, Judge. We hired these trucks. We didn't hire the owner of these trucks at all. If he was a competent man, he could stay and drive his own truck 5 hours one shift on this job. If he was not, he was fired right along with the rest of the farmers that we tried to make truck drivers there, and we did fire a lot of owners on those trucks. These trucks were ours from the time they entered that job until they left, under contract agreement. We paid them so much each truck... $1.75 an hour. We charged them for drivers. We hired all the drivers put on those trucks. ... We ...