Three G Distillery Corp. v. Johnson

THE COURT. The complaint in this action alleged that plaintiff as a licensee under the Alcoholic Beverage Control Act (Stats. 1935, p. 1123) sent to a retailer a quantity of distilled spirits for the purpose of making a sale, and at the time believed that such distilled spirits were fit for beverage use, but that in fact such distilled spirits were improperly prepared and were returned to plaintiff for correction of the defect in preparation. It also appeared that plaintiff had, as required by the provisions of the act, sent to the retailer the required number and amount of stamps to be applied to the packages of distilled spirits contained in the particular shipment. As soon as the retailer found this particular liquor was not fit for beverage purposes, he returned the lot to the wholesaler, respondent herein, but prior to such discovery the stamps had been affixed to the several packages. The wholesaler received the return shipment and removed the stamps, and made demand upon the board for a refund of the value of the stamps so affixed, which was refused.

To the complaint a general demurrer was interposed, and after argument, was overruled, and defendants given time to [433]answer. This they refused to do, relying upon the asserted failure of the complaint to state a cause of action. The default of the defendants was then entered, and from the judgment entered thereon this appeal is taken.

Section 32 of the act is the section providing for the recovery of excise taxes illegally collected. This section requires that to recover any excise tax it must have been paid under protest, and only those grounds of illegality specified in the protest may be considered by the court. It is the failure to positively allege that the taxes were paid under protest that appellants claim render the complaint fatally defective.

Respondent contends that this excise tax is imposed only upon distilled spirits actually sold, but that inasmuch as these spirits were not properly prepared to be sold, plaintiff had no right or license to sell the same, and therefore this transaction could not be deemed to be a sale.

With this contention of plaintiff we cannot agree. Under the facts as alleged very obviously a sale was made. It may have been an illegal sale, but that would not exempt the seller from compliance with the statute. (McKesson & Robbins, Inc., v. Collins, 18 Cal. App. (2d) 648 [64 Pac. (2d) 469].) The fact that the liquor stamps were sent by the seller to be affixed, indicates its idea of the transaction. Section 32 of the act is the only section providing for the recovery of excise taxes illegally collected. It is also the only section authorizing the judgment given here by the trial court, that is, the crediting of a licensee’s tax liability to the extent of the amount determined to have been illegally collected.