Northern Pacific Railway Co. v. Henneford

Main, J. — The plaintiff brought this action to restrain the state tax commissioners from collecting an excise tax from it. The trial to the court without a jury resulted in findings of fact from which it was concluded that the plaintiff was entitled to the relief which it sought. A decree was entered permanently enjoining the commission from collecting the tax in question, from which they appeal. The respondent owns and operates a railroad system extending from Lake Superior, in Wisconsin, through several states, to Puget Sound in Washington, and to Portland, Oregon. By such system it engages in interstate and intrastate transportation of freight and passengers. The respondent’s interstate and intrastate transportation is inextricably intermingled. Between April 30, 1935, and March 17, 1937, the respondent purchased in various states and in Canada, and brought into the state of Washington for use in the operation, maintenance, and repair of its railroad plant, large amounts of materials, supplies, shop machinery, tools, and equipment. Many of the articles could not be purchased in this state and were obtainable only on special orders. All of the articles so purchased and brought into the state were subsequently used in the maintenance, operation, and repair of the respondent’s railroad plant and consumed in the conduct of its transportation service. The total purchase price of such property, including the cost of transportation thereof, was $2,826,069.50. *20 The tax which the appellants sought to collect accrued, as they claim, between April 30, 1935, and March 17, 1937, and was in the sum of $56,521.39. Section 31 of chapter 180, Title IV, of the Laws of 1935, p. 726, provides that there shall be levied and collected from every person in this state “. . . a tax or excise for the privilege of using within this state any article of tangible personal property purchased subsequent to April 30, 1935. Such tax shall be levied and collected in an amount equal to the purchase price paid by the taxpayer multiplied by the rate of 2%.” It will be noted that this section specifies that the tax shall be upon “use.” By § 4 of chapter 191 of the Laws of 1937, p. 945, the terms “use,” “used,” “using” or “put to use” were defined and given a broader meaning than the terms had in the 1935 act. Since the 1937 act took effect, the respondent has paid the tax without question. In Pacific Tel. & Tel. Co. v. Henneford, 195 Wash. 553, 81 P. (2d) 786, it was held that thé 1935 law levying a use or compensating tax within this state on tangible property purchased outside of the state was solely upon “use,” and not upon “keeping,” “storing,” “withdrawing from storage,” “ moving” or “installing.” The appellants seek to avoid the force of that decision by calling attention to the construction that they had put upon the 1935 act, which was that the term “use” included “storing” or “withdrawing from storage,” and other incidents of ownership. Section 208 of chapter 180 of the 1935 act, p. 844, authorizes the tax commission to make and publish rules and regulations, not inconsistent with the act, “. . . necessary in enforcing its provisions, which rules and regulations shall have the force and effect as if specifically included herein, unless declared *21 invalid by the judgment of a court of record not appealed from. . . . ” In Washington Printing & Binding Co. v. State, 192 Wash. 448, 73 P. (2d) 1326, with reference to the power thus conferred, it was said: “The tax commission cannot, by such rule, impose a tax upon property or a transaction that is not mentioned in the statute as taxable. The rule-making power is given only for the purpose of empowering the commission to carry out the provisions of the statute.” Where a statute is ambiguous, weight will be given to the administrative or executive construction thereof and the practice under it, especially when such practice has continued for a long period of time. But that rule does not apply where the meaning of a statute is plain and unequivocal. Regan v. School Dist. No. 25, 44 Wash. 523, 87 Pac. 828; Wendt v. Industrial Ins. Commission, 80 Wash. 111, 141 Pac. 311; Long v. Thompson, 177 Wash. 296, 31 P. (2d) 908. When the legislature uses a term without defining it, if such term has a well-known meaning at common law, it will be presumed that the legislature used the word in the sense in which it was understood at common law. In re Phillips’ Estate, 193 Wash. 194, 74 P. (2d) 1015. The words “storing” and “use” are not synonyms. In our opinion, the statute is not ambiguous, and, therefore, the executive construction has little persuasive effect. Further than this, the power of the tax commission to make rules, given by the statute, does not authorize them to write into the statute something that the legislature did not put there. The tax, being only upon “use,” and not upon the other incidents of ownership, such as “storing” and “withdrawing from storage,” places a burden upon interstate commerce not permitted by the law. Pacific Tel. & Tel. Co. v. Henneford, 195 Wash. 553, 81 P. (2d) *22 786; Southern Pac. Co. v. Gallagher, 306 U. S. 167, 83 L. Ed. 586, 59 S. Ct. 389; Pacific Tel. & Tel. Co. v. Gallagher, 306 U. S. 182, 83 L. Ed. 595, 59 S. Ct. 396. In each of those United States supreme court cases, the court was' construing a statute of the state of California which was much broader in its terms than was the 1935 act of this state, and for that reason in each of them it was held that the tax there in question was not a burden on interstate commerce. By § 3, chapter 9, Laws of 1939, p. 16, the legislature sought to make that statute retroactive, going back to April 30, 1935. In the recent case of State v. Pacific Tel. & Tel. Co., ante p. 11, 113 P. (2d) 542, it was held that that section of the statute could not operate retroactively so as to cover the taxes which were specified in the 1935 act. The judgment will be affirmed. Robinson, C. J., Beals, Millard, Simpson, Steinert, and Jeffers, JJ., concur.