Allied Stores of Ohio, Inc. v. Bowers, 34926

Decision Date30 January 1957
Docket NumberNo. 34926,34926
Citation166 Ohio St. 116,140 N.E.2d 411
Parties, 1 O.O.2d 342 ALLIED STORES OF OHIO, Inc., Appellant, v. BOWERS, Tax Com'r, Appellee.
CourtOhio Supreme Court

Syllabus by the Court

Although a legislative enactment may be invalid merely because certain limiting language therein makes it repugnant to constitutional limitations, a court cannot cure such invalidity merely by striking such limiting language, where the elimination of such limiting language would substantially extend the operation of the legislative enactment beyond the scope contemplated by all the language of such legislative enactment.

Allied Stores of Ohio, Inc., herein referred to as the taxpayer, is an Ohio corporation. In an appeal to the Board of Tax Appeals from a final order of the Tax Commissioner, the taxpayer contended that the Tax Commissioner had erroneously assessed for taxation for the year 1954 certain 'merchandise * * * held in a storage warehouse for storage only' within the meaning of those words as used in Section 5701.08, Revised Code, in effect prior to September 30, 1955, and that the statutes of Ohio were unconstitutional to the extent that they purported to levy a tax on such property not 'belonging to a nonresident of' Ohio, in that they denied a resident such as the taxpayer the protection of the laws equal to that enjoyed by a nonresident. See Little v. Smith, 124 Kan. 237, 257 P. 959, 57 A.L.R. 100; Colgate v. Harvey, 296 U.S. 404, 56 S.Ct. 252, 80 L.Ed. 299.

Section 5709.01, Revised Code, reads so far as pertinent:

'* * * All personal property located and used in business in this state * * * are subject to taxation, regardless of the residence of the owners thereof.'

Section 5701.08, RevisedCode, prior to September 30, 1955, read so far as pertinent:

'(A) Personal property is 'used' within the meaning of 'used in business' * * * when acquired or held as means or instruments for carrying on the business * * * or when stored or kept on hand as material, parts, products, or merchandise; but merchandise or agricultural products belonging to a nonresident of this state is [are] not used in business in this state if held in a storage warehouse for storage only.'

In its final entry, the Board of Tax Appeals stated in part:

'The only real point of difference between the present case and that of the Goodrich case * * * [Goodrich Co. v. Peck, 161 Ohio St. 202, 118 N.E.2d 525] lies in that appellant is a domestic, or an Ohio corporation, engaged exclusively in merchandising, while the Goodrich company is a nonresident manufacturing corporation. * * *

'Since appellant's principal query concerns a matter of discrimination and the constitutionality of Revised Code Section 5701.08 * * *, matters over which this board is without jurisdiction to consider, this board can do nothing else but to affirm the Tax Commissioner's order as made * * *.'

In affirming the decision of the Board of Tax Appeals, the Court of Appeals stated in part:

'The positive statement in Section 5701.08, Revised Code, that 'products belonging to a nonresident of this state is not used in business in this state if held in a storage warehouse for storage only' is not an arbitrary or artificial classification and is within the right and power of the Legislature to declare. See City of Xenia v. Schmidt, 101 Ohio St. 437 ; Travelers' Ins. Co. v. [State of] Connecticut, 185 U.S. 364 [22 S.Ct. 673, 46 L.Ed. 949]. Goodrich Co. v. Peck, 161 Ohio St. 202 , in effect so holds.'

The cause is now before this court on appeal from the judgment of the Court of Appeals as a case involving a debatable constitutional question and pursuant to allowance of a motion to certify the record.

Carlton S. Dargusch, Sr., and Jack H. Bertsch, Columbus, for appellant.

C. William O'Neill, Atty. Gen., Larry Snyder and Keihner Johnson, Columbus, for appellee.

TAFT, Judge.

Ordinarily, a constitutional question will not be considered unless it is necessary to consider such constitutional question in deciding the case before the court. In our opinion, it is not necessary to consider the constitutional question raised by the taxpayer in the instant case because, if its contention with regard to that question is sound, it necessarily leads to the conclusion that the entire proviso in subdivision (A) of Section 5701.08, which read, 'but merchandise or agricultural products belonging to a nonresident of this state is not used in business in this state if only,' was void and should be stricken. only,' was void and should be striken. That being so, it is apparent that any of taxpayer's 'merchandise * * * held in a storage warehouse for storage only' would be taxable because described by the preceding words remaining in the statute and reading, 'stored * * * as * * * merchandise.'

Of course, if only that portion of the proviso after the semicolon in subdivision (A) of Section 5701.08, which read, 'belonging to a nonresident of this state,' is stricken, the discrimination between residents and nonresidents would be eliminated; and then the proviso would prevent taxation of the taxpayer's 'merchandise * * * held in a storage warehouse for storage only.' However, the question remains as to the power of this court to effect that result by striking only that portion of the proviso. In other words, if we assume that the taxpayer's contention that the discrimination between nonresidents and residents contemplated by the words of the proviso would deny a resident the equal protection of the laws and must be eliminated, has this court the power to eliminate that dicrimination by striking only that portion of the proviso reading, 'belonging to a nonresident of this state'? If it does not have that power, the whole proviso must be stricken in order to eliminate that discrimination and then the taxpayer would obviously have nothing upon which to base its claim for the relief which it seeks.

Although a legislative enactment may be invalid merely because certain limiting language therein makes it repugnant to constitutional limitations, a court cannot cure such invalidity merely by striking such limiting language, if the elimination of such limiting language would substantially extend the operation of the legislative enactment beyond the scope contemplated by all the language of such legislative enactment.

In the opinion by Welch, J., in State ex rel. McNeal v....

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7 cases
  • Youngstown Sheet and Tube Company v. Bowers United States Plywood Corporation v. City of Algoma
    • United States
    • U.S. Supreme Court
    • February 24, 1959
    ...Constitution. The Supreme Court of Ohio answered that contention by saying: 'For the reasons stated in Allied Stores of Ohio, Inc., v. Bowers, Tax Com'r (166 Ohio St. 116), 140 N.E.2d 411, the taxpayer's contentions (in that respect) must be rejected * * *.' Youngstown Sheet & Tube Co. v. B......
  • Allied Stores of Ohio, Inc v. Bowers
    • United States
    • U.S. Supreme Court
    • February 24, 1959
    ...Court of Ohio held that appellant lacked standing to raise the constitutional question presented and affirmed the judgment. 166 Ohio St. 116, 140 N.E.2d 411. The case comes here on Allied's The first and preliminary question thus is whether the Supreme Court of Ohio correctly held that appe......
  • Youngstown Sheet & Tube Co. v. Bowers
    • United States
    • Ohio Supreme Court
    • January 30, 1957
    ...Columbus, for appellee in case No. 34868 and appellant in case No. 34872. TAFT, Judge. For the reasons stated in Allied Stores of Ohio, Inc., v. Bowers, Ohio, 140 N.E.2d 411, the taxpayer's contentions with respect to property held in storage must be rejected, except to the extent that the ......
  • Grinnell Corp. v. Bowers
    • United States
    • Ohio Supreme Court
    • February 5, 1958
    ...5701.08, Revised Code, relied upon by the taxpayers in these cases, we expresss no opinion thereon. Cf. Allied Stores of Ohio, Inc., v. Bowers, 166 Ohio St. 116, 140 N.E.2d 411. What we have said requires an affirmance of the decision in case No. 35242. The other nine cases are remanded to ......
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