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Maritime Petroleum Corp. v. City of Jersey City and Division of Tax Appeals

Decided: January 10, 1949.

MARITIME PETROLEUM CORPORATION, PROSECUTOR-APPELLANT,
v.
CITY OF JERSEY CITY AND DIVISION OF TAX APPEALS IN THE STATE DEPARTMENT OF TAXATION AND FINANCE, DEFENDANTS-RESPONDENTS



On appeal from the former Supreme Court, whose opinion is reported in 137 N.J.L. 412.

For reversal: Chief Justice Vanderbilt and Justices Case, Heher, Oliphant, Wachenfeld, Burling, and Ackerson. For affirmance: None. The opinion of the court was delivered by Heher, J.

Heher

[1 NJ Page 291] The question here is whether fuel oil and kerosene of appellant in storage on October 1, 1942 in tanks at Caven Point, in Jersey City, owned and maintained by Tankport Terminals,

Inc. for the sale of a warehouse storage service, were subject to an ad valorem tax by the local taxing district.

Appellant, a New York corporation with offices in the City of New York, was then a distributor of petroleum products to wholesalers in New York, New Jersey and Connecticut. In accordance with practice, the subject oil and kerosene were purchased by it from the Standard Oil Company and Shell Oil Company to supply the needs of certain of its customers for a twelve-month period, in keeping with contractual obligations, and shipped by tanker from the "American Gulf" area and the West Indies and pumped into the storage tanks, there to await shipment by barge, truck and trailer as the need arose. Such deposits of oil remained in storage on an average of eighteen days.

It seems to be conceded that Tankport Terminals, Inc. was then engaged in the public warehousing business; it was incorporated in New Jersey to carry on the business of "storage and warehousing," and it offered that service for hire to the public generally. Its contract with appellant provided for "the use of a designated storage tank with designated capacity and for the warehousing service covering the handling of the oil to be stored by the customer in and out of that storage and in and out of the terminal." Appellant had no employees at the warehouse.

The old Supreme Court considered this to be the determining factor: "If, on the other hand, the oil, after having been pumped into the tanks" of the warehouse "came to rest within the State and was merely held there for the convenience of buyers either within or without the State, then there was no bona fide storage of the same" within the meaning of R.S. 54:4-3.20. It distinguished Crown Can Co. v. Division of Tax Appeals, 135 N.J.L. 517 (Sup. Ct. 1947), and Dearborn Chemical Co. v. Division of Tax Appeals, 135 N.J.L. 580 (Sup. Ct. 1947), as cases not involving property "already sold to buyers" and the use of "the device of storing the same in warehouses * * * solely for the purpose of effecting delivery by the seller to the buyer in a practical manner." It was thought significant that "the entire mass of oil was not segregated for the account of such customers,

but actually remained, to a large extent, in the storage tanks, subject to delivery to customers upon" appellant's direction. But we deem the distinction to be illusory. It is not to be found in the statute.

Under R.S. 54:4-3.20, cited supra, "All personal property stored in a warehouse" of one "engaged in the business of storing goods for hire" was rendered immune from taxation. Compare Independent Warehouses, Inc. v. Scheele, 134 N.J.L. 133 (E. & A. 1945). When reduced to possession, petroleum is a commodity which is the subject of property and of intrastate and interstate commerce. West v. Kansas Natural Gas Co., 221 U.S. 229, 31 S. Ct. 565, 55 L. Ed. 716 (1910): State v. Indiana & O. Oil & Gas & Mining Co., 120 Ind. 575, 22 N.E. 778 (1889). The Uniform Warehouse Receipts Law of 1907 defines "warehouseman" as "a person lawfully engaged in the business of storing goods for profit." R.S. 57:1-1. "Goods" means "chattels or merchandise in storage, or which has been or is about to be stored." Ibid. We need not determine whether the definition comprehends all tangible personalty. Certainly, it includes the subject property, for petroleum products are articles of commerce -- commodities bought or sold in trade, or market, or by merchants, and therefore merchandise. R.S. 54:4-3.20 applies to all warehouses, whether public or private. A common carrier storing goods at the instance of the consignor has been held to be a warehouseman under the duty of reasonable care. Armstrong Rubber Co. v. Erie R.R. Co., 103 N.J.L. 579 (Sup. Ct. 1927). And a garage keeper storing automobiles for hire is a warehouseman charged with the like duty. New Jersey Mfrs. Ass'n Fire Insurance Co. v. Galowitz, 106 N.J.L. 493 (E. & A. 1929).

The Uniform Warehouse Receipts Act was primarily designed to achieve uniformity in the law relating to warehouse receipts and thereby to effect the secure and ready use of such receipts as instruments of title and credit. This is made manifest by the title of the original act of 1907. Pamph. L. p. 341. Vide Heffron v. Bank of America National Trust and Savings Ass'n, 113 Fed. (2 d) 239 (1940); Terminal W. & Refrigerating Co. v. Cross Transportation Co., 33 A.2d 617 (1943);

Salt River Valley Water Users Ass'n v. Peoria Ginning Co., 27 Ariz. 145, 231 Pac. 415 (1924); Mason v. Exporters & Traders Compress Co., 94 S.W. (2 d) 758 (Tex. Civ. App. 1936); Weil ...


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