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General Petroleum Corp. of California v. Smith

Supreme Court of Arizona

March 12, 1945

J. M. SMITH, L. W. CRESS, H. O. PACE, KEMPER MARLEY and E. H. McEACHREN, as Members of and Constituting the State Highway Commission of the Arizona Highway Department; BERNARD TOUHEY, as State Highway Engineer of the Arizona Highway Department; and M. A. GOODWIN, as Vehicle Superintendent of the Motor Vehicle Division of the Arizona Highway Department, Appellees

APPEAL from a judgment of the Superior Court of the County of Maricopa. Dudley W. Windes, Judge.

Judgment reversed and case remanded with directions.

Messrs. Ellinwood & Ross, Mr. Norman S. Hull, and Mr. Wm. Spaid, for Appellant.

Mr. Joe Conway, Attorney General, and Mr. A. R. Lynch, Assistant Attorney General, for Appellees.

Morgan, J. Stanford, C. J., and LaPrade, J., concur.


Morgan, J.

Page 357

[62 Ariz. 241] Plaintiff brought an action against defendants for a declaratory judgment decreeing that it was not liable for, and the defendants are not entitled to collect, a penalty of $ 9,395.05, plus 7% interest under Section 66-306, Arizona Code Annotated 1939 of the Motor Vehicle Fuel Tax Act. The trial court on motion of defendants dismissed the complaint on the ground that it failed to state a claim upon which relief could be granted. Judgment being entered in accordance with the order to dismiss, the plaintiff brought this appeal.

Page 358

In considering the cause we must assume that all allegations of fact in the complaint are true. The facts may be summarized as follows:

Plaintiff in 1942 was, and for many years prior thereto had been, a licensed distributor of motor vehicle fuel, duly qualified under Chapter 66, Article 3, Motor Vehicle Fuel Tax Act, Arizona Code Annotated 1939. The defendants composed the membership of the commission of the Arizona Highway Department, its engineer and superintendent of the Motor Vehicle Division. Under the law plaintiff was required to make reports and to pay to the vehicle superintendent on or before the 15th day of each month a license tax of five cents for each gallon of gasoline, [62 Ariz. 242] less certain deductions, for motor vehicle fuel imported into the state during the preceding month. It had regularly complied with the provisions of the act in this respect. It became obligated to pay on or before December 15, 1942, a tax of $ 37,580.20 for importations during the month of November. Pursuant to a long established custom acquiesced in by defendants, and in compliance with the terms of the act, it prepared the usual reports and issued its check for the amount of the tax on December 14th, and placed the reports and check in an envelope addressed to the Motor Vehicle Division, Arizona State Highway Department, Phoenix, Arizona. On the same day the envelope was deposited in the United States Post Office at Los Angeles, California, registered, with postage prepaid. In the ordinary course of mail transmission, the reports and check should have been delivered to the defendant superintendent on December 15th. Due to unforeseen conditions and causes over which plaintiff had no control, particularly the use of transportation facilities by the armed forces in furtherance of the war effort, a fire occurring on December 12th in the Post Office Terminal through which all mail going out of Los Angeles passes, and for other reasons causing mail congestion, the check was not actually received by the Motor Vehicle Division until December 16, 1942.

The superintendent accepted the check. It was duly honored and credit given for the total amount of the taxes payable as of the date of arrival, December 16th. Because of the failure of the check to arrive on the preceding day, the 15th, defendants assessed and demanded of plaintiff the statutory penalty of 25% of the tax, $ 9,393.05, with interest at 7% per annum thereon from December 15, 1942 until paid. Appropriate allegations appear in the complaint, such as an actual controversy exists and that a final declaratory judgment will determine and terminate such controversy, to bring the action within the terms of the Declaratory [62 Ariz. 243] Judgment Act. It is alleged that plaintiff performed every act that could reasonably be expected of it in its endeavor to comply with the provisions of the law.

Determination of the controversy requires consideration of the following provisions of the Motor Vehicle Fuel Tax Act as they existed in 1942:

"66-301. Amount of tax -- When payable -- Distribution. -- Every distributor shall pay to the state, in addition to all other taxes provided by law, a license tax of five cents (5 cents) for each gallon of motor vehicle fuel. . . . Such license tax accrued in any calendar month shall be paid on or before the fifteenth day of ...

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