Standard Oil Co. v. Johnson

Plaintiff brought this action against defendant, as Treasurer of the State of California, to recover with interest a retail sales tax in the sum of $120,196.78, paid under protest. At trial evidence was received in the form of a stipulation of all facts. Judgment was for plaintiff and defendant has appealed therefrom.

The tax assessment was based upon sales of fuel oil by plaintiff to the Southern Pacific Company (hereinafter called the railroad) from March 16, 1936, to March 31, 1937, inclusive, pursuant to a contract entered into on January 1, 1928, as amended January 1, 1936. Under the terms of the amended contract, which covers all sales involved herein, plaintiff agreed to sell to the railroad fuel oil required for its operations in the states of Oregon, Nevada, Arizona, Utah and elsewhere. It was provided, among other things, that: “Requisition by the Railroad . . . shall be filled by the Oil Company by deliveries at such places as are herein specified, and at such times as the Railroad may reasonably designate.” If further provided that ‘ ‘ oil required by the Railroad for its operations in the States of Nevada and Utah shall be delivered at Sparks, Nevada, oil required by…

I dissent. The primary issue presented in this case is whether or not there was a sale in California within the terms of the Retail Sales Tax Act. (Stats. 1933, p. 2599; Deering’s Gen. Laws, 1937, Act 8493.) It should be noted at the outset that the determination of whether a transaction constitutes a sale under taxing statutes is not necessarily governed by the technical rules applicable between seller and buyer, and that the substance of the transaction rather than its form will be examined. (See Hellebush v. Commissioner of Internal Revenue, 65 F.2d 902 ; Embry Realty Co. v. Glenn, 116 F.2d 682 .) In that connection this court has held that' it will look through the veil of corporate entity to the actual circumstances in ascertaining whether a corporation is subject to the Bank and Corporation Franchise Tax Act. (See H. A. S. Loan Service, Inc. v. McColgan, 21 Cal.2d 518 [ 133 P.2d 391 , 145 A.L.R. 349 ].)

A sale is defined by the Retail Sales Tax Act as “any transfer of title or possession, or both, exchange, barter, lease or rental, conditional or otherwise, in any manner or by any means whatsoever, of tangible personal property, for a consideration, and includes the…

Plaintiff brought this action against defendant, as Treasurer of the State of California, to recover with interest a retail sales tax in the sum of $120,196.78, paid under protest. At trial evidence was received in the form of a stipulation of all facts. Judgment was for plaintiff and defendant has appealed therefrom.

The tax assessment was based upon sales of fuel oil by plaintiff to the Southern Pacific Company (hereinafter called the railroad) from March 16, 1936, to March 31, 1937, inclusive, pursuant to a contract entered into on January 1, 1928, as amended January 1, 1936. Under the terms of the amended contract, which covers all sales involved herein, plaintiff agreed to sell to the railroad fuel oil required for its operations in the states of Oregon, Nevada, Arizona, Utah and elsewhere. It was provided, among other things, that: "Requisition by the Railroad ... shall be filled by the Oil Company by deliveries at such places as are herein specified, and at such times as the Railroad may reasonably designate." If further provided that "oil required by the Railroad for its operations in the States of Nevada and Utah shall be delivered at Sparks, Nevada, oil…