Knudsen Dairy Products Co. v. State Board of Equalization

Plaintiffs Knudsen Dairy Products Co. (hereinafter referred to as Dairy) sought a refund of $38,077.61 in sales and use tax assessed against plaintiff by defendant State Board of Equalization and paid by Dairy under protest.

Dairy at the time of the assessment and payment was a separate corporate entity, albeit a wholly owned subsidiary of Knudsen Creamery Co. (hereinafter referred to as “Creamery”). Subsequent to the payment, Dairy was merged into Creamery which became the surviving corporation and successor to the interests of Dairy, and as such was joined as coplaintiff in this action.

The case was tried, without a jury, on the pleadings, a written stipulation of facts with attached exhibits and written briefs. The trial court found that plaintiffs were not entitled to the refund. Plaintiffs appeal.

The evidence to be found in the pleadings, the stipulation and exhibits was uncontroverted and revealed the following factual background:

Dearborn Stores, Inc., a Delaware corporation, doing business under the name of Pix Food Markets, Inc., was organized in November of 1958. By June of 1960, Pix had established a chain of 20 markets in Los Angeles, San Bernardino and…