State v. Kingham

HUGHES, Justice. This suit was brought by the State of Texas and its Attorney General, Honorable Will Wilson, on behalf of the Texas Employment Commission against Glenn L. Kingham, doing business as Kingham Con-oco Station in Harris County and, we quote from the State’s Petition, “this is a suit for taxes other than ad valorem.” Judgment for $305.94 delinquent taxes plus $56.00 accrued penalties and penalties subsequently accruing was sought. The provisions of the Texas Unemployment Compensation Act under which ap-pellee’s tax liability is sought to be established are the following: “Art. 5221b — 17(f) [Vernon’s Ann. Civ.St.] “ ‘Employer’ means: “(1) Any employing unit which for some portion of each of twenty (20) different days within the current or preceding calendar year, each day being in a different calendar week, whether or not such weeks are or were consecutive, has or had in employment four (4) or more individuals, but not necessarily simultaneously, (irrespective of whether the same individuals are or were employed in each such day); “(2) Any individual or employing unit which acquired the organization, trade, or business, or substantially all of the assets thereof, of another which at the time of such acquisition was an employer subject to this Act.” The record discloses that Billy Robertson operated Robertson’s Conoco Service Station at 5842 South Park Boulevard in Houston for a period of time up to and including December 19, 1957. During such period Robertson was an employer subject to tax under the Unemployment Compensation Act. On December 20, 1957, Kingham signed a lease agreement with Continental Oil Company for the lease of the building located at 5842 South Park Boulevard and for the lease of four (4)' gasoline tanks, four (4) gasoline pumps, and many other items of equipment. On the same date Kingham also leased from Continental a triangle sign, an imprinter, and purchased from it quantities of oil and gas. On or before December 20, 1957, King-ham purchased from Robertson, his predecessor, 2200 gallons of gasoline, some motor oil, wax polish, a grease gun, tire changing equipment, cash register and battery [291] charger. Kingham paid Robertson $3000.-00 for these items, the manner of so doing being as follows: Conoco, by way of extending credit, gave Kingham a check for $3000.00, which he endorsed to Robertson, who in turn endorsed it back to Conoco for the reason that Robertson was indebted to Conoco for more than the amount of the check. Kingham opened his service station at the Robertson site on December 20, 1957. He employed two of Robertson’s employees. He did not use Robertson’s name in his business. He did not purchase from Robertson any of his accounts receivable. He paid him nothing for good will, and he did not obtain from Robertson a list of his customers. Under these facts, the Trial Court found, the trial being non-jury, that Kingham did not acquire “the organization, trade, or business, or substantially all the assets thereof” of the Robertson service station, and legally concluded that he was not liable for the tax sought to be imposed. We agree with the Trial Court and affirm its judgment. Conceding, as we do, that appellee purchased from Robertson the items involved in the $3000.00 check transaction, we hold that they do not constitute an “organization”, a “trade” or “business” or “substantially all of the assets” of an organization, trade or business. We will disregard the term “organization” in our discussion because we doubt that a service station is an organization. It undoubtedly is a “trade” or “business”. Of what does it consist? It seems to us that the one essential of a service station business is a service station. Appellee did not acquire the service station or the right to use it from Robertson. This right he obtained from Conoco who owned the station. Without the service station, its tanks, pumps and other equipment, the gasoline, oil, wax, grease gun, tire changing equipment, cash register and battery charger purchased by appellee could not conceivably .be called a service station trade or business, or substantially all the assets of such a trade or business. Appellants do not contend appellee was a successor to Conoco in the service station trade or business and we do not, for that reason, discuss it. The judgment of the Trial Court is affirmed. Affirmed. PHILLIPS, J., not sitting.