Title: Sprague Oil Service v. Fadely

State: kansas

Issuer: Kansas Supreme Court

Document:

189 Kan. 23 (1961)
367 P.2d 56
SPRAGUE OIL SERVICE, INC., a dissolved Corporation, Appellee,
v.
RICHARD T. FADELY [substituted for J.E. KIRCHNER], Director of Revenue, Appellant.
No. 42,380

Supreme Court of Kansas.
Opinion filed December 9, 1961.
Dean Burkhead, of Topeka, argued the cause, and Robert C. Londerholm, of Topeka, was with him on the briefs for the appellant.
J.A. Dickinson, of Topeka, argued the cause, and Richard B. Clausing, of Wichita, was with him on the briefs for the appellee.
The opinion of the court was delivered by
PARKER, C.J.:
This was an appeal by J.E. Kirchner, Director of Revenue of the State of Kansas, from an order of the district court of Shawnee County sustaining the motion of the Sprague Oil Service, Inc., to dismiss the Director's appeal from an order of the Board of Tax Appeals on grounds the appellant (Director) had no right to take the appeal and the district court was without jurisdiction to hear it. By proper order Richard T. Fadely, now Director of Revenue, has been substituted as appellant in this Court.
The salient facts involved are not in dispute and can be briefly stated.
*24 The Sprague Oil Service, Inc., a Kansas corporation, was engaged in the business of transporting petroleum and petroleum products within the State of Kansas until it was dissolved on August 19, 1958. Up to that time its stockholders were Harry A. Sprague, Viola Sprague and Dale M. Sprague, residents of McPherson County. The corporation's principal place of business, as well as the address of its resident agent Harry A. Sprague, was McPherson, Kansas. In July and the early part of August, 1958, the corporation sold all of its rolling stock, transmitting to its stockholders all proceeds from the sale thereof, and dissolved on the date first above indicated.
Thereafter the stockholders filed individual federal and state income tax returns for 1958, reporting the gain realized upon dissolution of the corporation, but the corporation itself did not report the gain from such sale on either of its federal or state income tax returns for that year. Subsequently, and on a date not disclosed by the record, the Income Tax Division of the State of Kansas, conceding that the gain was properly excludable for federal income tax purposes under section 337 of the Internal Revenue Code of 1954, but contending Kansas did not have a section of law similar to section 337 of the Federal Code, made an assessment against the corporation for such gain for state income tax in the amount of $4,979 including interest. Following this action the corporation appealed to the Director who approved the Division's action and assessed Kansas income tax against the corporation for the year 1958 in the amount above indicated.
Thereupon the corporation perfected an appeal from the order of the Director to the Board of Tax Appeals where, after a full and complete hearing, by order dated October 14, 1959, and by an amended order dated May 4, 1960, that body found that the Director had erroneously assessed Kansas income tax against the corporation for the year 1958 and ordered that the assessment made by the Director against the corporation should be and therefore was abated.
Later, specifying that he was taking action under the authority of G.S. 1959 Supp., 74-2426, the Director filed a notice of appeal in the district court of Shawnee County stating that he was appealing from the order of the Board of Tax Appeals in the matter involving the corporation and asking that the district court review such order, set it aside, and direct judgment in his favor against *25 the corporation sustaining the assessment he had made against it for its 1958 income tax. The corporation then filed a motion to dismiss the Director's appeal on grounds heretofore noted in the first paragraph of this opinion. When that motion was sustained the Director perfected the instant appeal wherein, stating it presents a matter of first impression, the Director as appellant and the corporation as appellee concede the sole question determined by the court below, and here involved, is whether the provisions of G.S. 1959 Supp., 74-2426 give the Director of Revenue the right to appeal to the district court from a final order of the Board of Tax Appeals.
The district court's decision on the question now before us, on which it based its order and judgment sustaining the motion to dismiss and dismissing the appeal there filed by the Director, is reflected in a well-written memorandum opinion which sets forth at length the decisive facts, outlines the issue, and states the considerations for its order and judgment in such manner and form that the opinion might well be incorporated in and made a part of the opinion of an appellate court. We have heretofore set forth the facts and outlined the controlling issue, hence further reference to those matters would result in repetition. However, for the reasons indicated, and others to be presently disclosed, we are disposed to quote that portion of the district court's memorandum opinion setting forth the considerations on which it based its decision. It reads:
After a careful and extended analysis of the reasons given by the district court in the heretofore quoted portion of its memorandum opinion for its decision we are convinced that such opinion (1) cites the law applicable to a decision of the question raised by appellee's motion to dismiss the appeal in district court; (2) assigns sound and controlling reasons for its order and judgment dismissing the appeal; and (3) effectively answers the questions raised, and arguments advanced with respect thereto, by the appellant in support of his position the provisions of G.S. 1959 Supp., 74-2426 give the Director of Revenue the right to appeal to the district court from the involved order of the Board of Tax Appeals.
In view of the conclusions just announced we know of no good reason why our reports should be burdened with extended discussion *29 and consideration of contentions which have already been correctly disposed of in the foregoing portion of the heretofore quoted comprehensive written opinion. Therefore we approve such portion of the opinion and, based on what is there stated and held, conclude the district court's action in dismissing the Director's attempted appeal, on the grounds set forth in the motion asking for that relief, was proper and must be upheld.
The judgment is affirmed.