O'NEIL et al.
Appeal from Superior Court, Maricopa County; Dudley W. Windes, Judge.
Reversed with directions to dismiss the complaint.
John L. Sullivan, Atty. Gen., and John W. Rood and Burr Sutter, Asst. Attys. Gen., for appellants.
Stephen W. Langmade, of Phoenix, for appellee and cross-appellant.
Charles L. Strouss, of Phoenix, for cross-appellees.
Udall, Justice. Stanford, C. J., and La Prade, J., concur.
[66 Ariz. 80] On July 23, 1945, C. M. Martin, the appellee, brought the instant suit in the Superior Court of Maricopa County against D. C. O'Neil, Warren Peterson, and Joe Hunt as members of the State Tax Commission and individually, in which he was successful in recovering judgment against the Commission for $ 3,011.17, being the amount of an additional sales tax levy he had paid to the Commission under protest.
Inasmuch as two previous court decisions in suits involving Martin and the Commission are inextricably linked with the instant suit it becomes necessary to delineate the history of this prior litigation. In these matters, present as well as past, the difficulties have arisen from the definition and the implications therein of the realtionship existing between Martin and the United Producers & Consumers Co-operative.
The modus operandi of dealings between Martin and the Co-op is detailed in State Tax Comm. of Arizona v. Martin (May 20, 1941), 57 Ariz. 283, 113 P.2d 640, 139 A.L.R. 408. That suit involved Martin's unsuccessful effort to recover from the Commission $ 18,392.60 in retailer's sales tax paid under protest for the period May 1, 1935 to January 31, 1939. The Court there held that Martin and the Co-op were principal and agent; that the agent Co-op merely held merchandise on consignment, title to which remained in Martin until sold by the Co-op; that there was only one sale and, therefore, only one taxable transaction, namely, that by the Co-op to the final consumer; and, following therefrom, that Martin was liable on goods he furnished to the Co-op for the sales tax based upon the Co-op's gross proceeds of sale.
Subsequent to this Court's decision in State Tax Comm. v. Martin, supra, and based upon an audit covering a subsequent taxing period (February 1, 1939 to August 31, 1941) the Commission again levied an additional sales tax of $ 3,011.17 on Martin, which is as before described the amount here in question. All statutory requirements as to notice, hearing, etc., were strictly followed and, by appropriate order, the Commission sustained the levy causing Martin to pay the additional tax under protest on April 8, 1942 and to request a further hearing which was not held until some three years later on May 25, 1945.
However, less than two months after he had paid this tax under protest, Martin filed, as he had a right to do, an action in the Superior Court of Maricopa County under Art. 7, sec. 27-701 et seq., A.C.A.1939, in which, under an agreed statement of facts, he prayed for a declaratory judgment to establish his rights in this matter. It was specifically stipulated by both Martin and the Commission that the [66 Ariz. 81] method of conducting business as between Martin and the Co-op was identical with that existing at the time of the decision in State Tax Comm. v. Martin. And yet by its judgment of January 18, 1943 the trial court declared Martin's rights to the effect that he would not be liable for the additional levy. For a reason unknown to us the Commission took no appeal from this part of the declaratory judgment. An appeal was taken upon another phase. See Martin v. Moore, 61 Ariz. 92, 143 P.2d 334.
Because the Commission refused to abide by the portion of the declaratory judgment previously detailed (though not appealing from it), and by reason of its refusal, therefore, to refund the $ 3,011.17, Martin requested and received a belated rehearing before the Commission on May 25, 1945. The Commission, at this time, made the order for the additional levy final whereupon Martin successfully filed a complaint in the Superior Court asking for and receiving a refund of the amount in question. And the appeals from this judgment (by the Commission as to the ...