Methodist Book Concern v. St. Tax Com'n

CourtSupreme Court of Oregon
Writing for the CourtBrand
Citation208 P.2d 319,186 Or. 585
Decision Date06 July 1949
186 Or. 585
208 P.2d 319
Supreme Court of Oregon.
Argued May 18, 1949.
Affirmed in part, reversed in part July 6, 1949.

Taxation — Statute — Exemption — Foreign corporations

1. Statute exempting from taxation personal property of charitable corporations incorporated within state, did not include foreign corporations licensed to do business in state. O.C.L.A. § 110-201.

Constitutional law — Language — Statute — Plain

2. Where language of statute is plain, it is not judicial function of court to write new statute.

Statutes — Construction — Importing ambiguity

3. Statutory rules of construction cannot be employed for the purpose of importing ambiguity into language where no ambiguity exists.

Taxation — Exemption statutes — Strictly construed

4. Tax exemption statutes should be strictly construed and an exemption should be denied unless it is so clearly granted as to be free of reasonable doubt.

Constitutional law — Oregon tax exemption statute — Equal protection

5. Validity of Oregon tax exemption statute must be tested by equal protection clause of federal constitution which extends to foreign corporations within jurisdiction of states. O.C.L.A. § 110-201, U.S.C.A. Const. Amend. 14.

Constitutional law — Federal constitution — Foreign corporations

6. Federal constitution safeguards to foreign corporations protection of laws equally applied to all in same situation. U.S.C.A. Const. Amend. 14.

Constitutional law — Test of validity of legislative discrimination

7. The ultimate test of validity of a legislative discrimination between foreign and domestic corporations, is not whether there are differences between them, but, whether such differences are pertinent to the subject of classification and have a rational relationship to the legislative command.

Taxation — Basis for distinction — Exemption — Domestic charitable corporation — Foreign charitable corporation

8. Basis for distinction in granting of tax exemption to domestic charitable corporation, while withholding it from foreign charitable corporation, is not fact that one corporation is domestic and other foreign, but that domestic charitable corporation performs

[186 Or. 586]

function in state of incorporation which is of direct interest to state and people in relieving the latter of burdens which might otherwise be imposed.

Charities — Domestic charitable corporations — Legislative and judicial regulation

9. Domestic charitable corporations are peculiarly subject to legislative and judicial regulation and guidance.

Charities — Equity — Jurisdiction — Charitable trusts

10. Courts of equity of the domestic state have inherent jurisdiction over charitable trusts.

Courts — Administration of funds bequested to charity of another state

11. Courts of one state will not see to administration of funds bequeathed to charity of another state.

Charities — Proper administration of public charities

12. State bears heavy burden of responsibility for care of blind, old, and needy, and has vital interest in proper administration of public charities and charitable corporations operating in state.

Taxation — Exemptions — Charitable and educational institutions

13. Exemptions to charitable and educational institutions are bottomed on the fact that they render service to state, and thus relieve state and people of a burden, which they would otherwise have to assume.

Constitutional law — Taxation — Exemptions — Domestic charitable corporations — Foreign charitable corporations

14. Statute which exempts domestic charitable corporations but not foreign charitable corporations from taxation does not violate equal protection clause of federal constitution or state constitution provision requiring uniform taxes. O.C.L.A. § 110-201; Const. art. 1, § 32; art. 9, § 1; U.S.C.A. Const. Amend. 14.

Taxation — Uniform taxation — Power of legislature

15. State constitutional provision requiring uniform taxation places no restraint upon power of legislature in matter of taxation which was not already enforced upon it by Fourteenth Amendment to federal constitution. Const. art. 1, § 32; art. 9, § 1, U.S.C.A. Const. Amend. 14.

Taxation — Failure to assess property in previous years

16. State is not estopped from levying tax upon property by fact that it had omitted to assess such property in previous years. O.C.L.A. § 110-201.

Declaratory judgment — Justiciable controversy

17. Where corporation was not incorporated under laws of state, court would not determine whether corporation would be entitled to exemption as charitable corporation were it so incorporated,

[186 Or. 587]

as no justiciable controversy arose as to taxability of such corporation. O.C.L.A. § 110-201.

Declaratory judgment — Rights of parties — Contingent

18. A declaratory judgment will not be pronounced in suits where rights of parties are contingent upon the happening of some future event which may never occur.

 See 16 C.J.S., Constitutional Law, § 521.
                 156 A.L.R. 179.
                 12 Am. Jur. 286.

Appeal from Circuit Court, Multnomah County.


F.M. Phelps, of Portland, argued the cause for appellant. On the brief were Phelps & Burdick, of Portland.

Nathan L. Cohen, Assistant Attorney General, of Salem, argued the cause for respondents. With him on the brief was George Neuner, Attorney General, of Salem.

Before LUSK, Chief Justice, and BRAND, ROSSMAN, BAILEY and HAY, Justices.

Suit by Methodist Book Concern against Charles V. Galloway and others constituting the State Tax Commission and others to obtain a declaratory judgment and injunction restraining the imposition and collection of property tax against the plaintiff's property. From the part of a decree holding plaintiff's property subject to taxation, plaintiff appeals, and from the part holding plaintiff to be charitable corporation, defendants appeal.


[186 Or. 588]


This is a suit for a declaratory judgment. The plaintiff Methodist Book Concern is a corporation organized under the laws of Ohio and licensed to do business in Oregon. The individual defendants are the members of the State Tax Commission and the sheriff and assessor of Multnomah County, Oregon. It is alleged that the plaintiff is a beneficial and charitable organization, not for profit, its objects being:

"* * * the publication, diffusion and circulation of moral and religious literature, books, periodicals and other publications, under the direction and in conformity with the customs of the Methodist Episcopal Church in the United States of America and the rules and regulations of the General Conference of said Church; the proceeds arising from the operations of the said corporation to be applied to the relief of Effective, Supernumerary, and Superannuated Ministers of the Methodist Episcopal Church in the United States of America, their wives, widows and children, as provided by the constitution of the said Church."

The defendants deny that the plaintiff is a charitable corporation. The principal office of the plaintiff is in Cincinnati, Ohio, but it is the:

"* * * owner of certain personal property consisting of a stock of books and publications published by the Methodist Church and by various other authors, and of certain furniture and fixtures used in connection with the sale and distribution of the stock of goods owned by Plaintiff and located at 231 S.W. Broadway, in the City of Portland, County of Multnomah and State of Oregon."

The plaintiff alleges that for many years the property described has been held exempt from taxation which is denied by the defendants. It is agreed that

186 Or. 589

the defendants intend to impose and collect a property tax against said property and the plaintiff seeks an injunction restraining such action and a declaratory judgment on the following questions:

"1. Is the stock and fixtures of Plaintiff located at 231 S.W. Broadway in the City of Portland, County of Multnomah, and State of Oregon, subject to taxation?

"2. Is the Plaintiff required to pay taxes upon the hereinbefore described property?

The defendants affirmatively allege:

"That plaintiff, in the premises located at No. 231 S.W. Broadway, in the City of Portland, County of Multnomah and State of Oregon, owns, displays and sells and distributes for profit, books, periodicals and sundry other items of personal property and carries on thereat activities in competition with book stores and business enterprises of similar nature which bear their just share of the burden of taxation."

Defendants pray that the plaintiff's complaint be dismissed and that the court enter a declaratory judgment to the effect that the plaintiff is not a charitable corporation and that the stock of goods and fixtures is subject to taxation.

Upon trial of the issues, the court held that the plaintiff is a charitable corporation and that the application of income from the operation of the book store constitutes a charitable activity. However, the court also held that the statutory exemption in favor of charitable corporations does not apply to foreign corporations. It held further that the exemption statute is constitutional and that the plaintiff's property is subject to ad valorem property taxation. The plaintiff appeals from that part of the decree which holds that its property

186 Or. 590

is subject to taxation and the defendants appeal from that part of the decree which holds that the plaintiff is a charitable corporation and that the application of the income therefrom constitutes a charitable activity. The pleadings present at least one justifiable controversy.

We will first consider whether tangible personal property situated in Oregon, owned by a charitable corporation, incorporated under the laws of Ohio but licensed to do business in Oregon, is subject to taxation in Oregon. For the purposes of this discussion, we will assume, without deciding,...

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