Gooderham & Worts, Ltd. v. Collins

KNIGHT, J.

The plaintiff, Gooderham & Worts, Ltd., sued for the refund of excise taxes paid under protest on the sale of distilled spirits. The taxes were collected by the state under the authority of the 1935 Alcoholic Beverage Control Act (Stats. 1935, p. 1123). The total amount sued for was $1694.22, but at the trial plaintiff abandoned claim to the refund of all items except $360, the amount of tax imposed and paid on the sale of 150 cases of whiskey to the Matson Navigation Company. Judgment was given for defendants, and plaintiff appeals.

By the terms of section 24 of the 1935 act an excise tax

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was imposed on all distilled spirits “sold in the state”; and section 2 (1) declared that the words “sell” or “sale” and the phrase “to sell” as used in the act meant and included any of the following: to exchange, barter, traffic in; to solicit or receive an order for; to keep or expose for sale; to serve for a consideration with or without meals; to traffic in or deliver for value or in any way other than gratuitously; to possess with intent to sell; and that the transfer of title to alcoholic beverages unaccompanied by a. transfer of possession of such beverages shall not be deemed a sale of such beverages. The trial court found that the transaction involving the sale of the whiskey to the Matson company constituted a sale by plaintiff in this state within the meaning of the terms of said act, and that therefore the plaintiff was liable for the payment of the excise tax thereon. The evidence fully supports such findings.

It appears that at the time the sale in question was made there were two corporations bearing the name Gooderham & Worts, Ltd. One was the plaintiff, a Delaware corporation; and the other a Canadian corporation. All of the capital stock of the latter was owned by another Canadian corporation named Hiram Walker and Gooderham & Worts, Ltd., which owned also all of the capital stock of Hiram Walker & Sons Distilleries, Inc., a Delaware corporation, which in turn owned 75% of the corporate stock of the plaintiff company. Gooderham & Worts, Ltd., of Canada was a manufacturer of distilled spirits, and maintained its offices and distilleries in Walkerville, Ontario, Canada. It was not authorized to do business in California. The plaintiff company of the same name was a distributor of distilled spirits, and authorized to do business in California but not in Canada. It maintained offices and a warehouse at 144 Townsend Street, in San Francisco, and held a distilled spirits wholesaler’s license and a distilled spirits wine importer’s license issued by the state pursuant to section 5 of said act. In its warehouse it kept on hand for the purposes of distribution and sale a stock of distilled spirits, much of which it received from the Canadian company of the same name. The Matson company was operating ships for the transportation of passengers and freight in and out of the port of San Francisco, and was the holder, under, said act, of an importer’s distilled spirits license and distilled spirits retailer’s licenses for specific boats.