Nash Sales, Inc. v. City of Milwaukee

• Citation: 224 N.W. 126,198 Wis. 281
• Parties: NASH SALES, INC., ET AL. v. CITY OF MILWAUKEE ET AL.
• Decision Date: 05 March 1929
• Court: Wisconsin Supreme Court

198 Wis. 281

224 N.W. 126

NASH SALES, INC., ET AL.

v.CITY OF MILWAUKEE ET AL.

Supreme Court of Wisconsin.

March 5, 1929.

Appeal from an order of the Circuit Court for Milwaukee County; Edward T. Fairchild, Circuit Judge. Reversed in part. Affirmed in part.

Action for declaratory relief under section 269.56 of the Statutes, begun June 4, 1928, by the Nash Sales, Inc., and the Frint Motor Car Company, against the city of Milwaukee, the Wisconsin tax commission, and the tax commissioner and supervisor of assessors of the city of Milwaukee to secure such a construction of subdivision 7 of section 70.13 of the Statutes as would exempt plaintiff's property from taxation. From an order entered July 7, 1928, overruling the demurrer to the complaint, the defendants appealed.

The complaint alleges that the plaintiff companies are both Wisconsin corporations located in the city of Milwaukee and engaged in the sale of automobiles; that the automobiles sold by the Nash Sales, Inc., are manufactured in Wisconsin; that the Oldsmobiles sold by the Frint Motor Car Company are manufactured in the state of Michigan; that these automobiles are brought to Milwaukee and stored in commercial warehouses in the original packages and are there held awaiting sales on the day when property in Wisconsin is assessed for taxation.John M. Niven, City Atty., and Walter J. Mattison, Asst. City Atty., both of Milwaukee, John W. Reynolds, Atty. Gen., and Franklin E. Bump, Asst. Atty. Gen., for appellants.

Rix, Barney & Kuelthau, of Milwaukee (Carl B. Rix, of Milwaukee, of counsel), for respondents.

STEVENS, J.

1. The universal rule of taxation is that “taxes shall be levied upon all property in this state except such as is exempted therefrom.” Section 70.07 of the Statutes. The single question presented is whether the automobiles here in question are exempted from taxation by subdivision 7 of section 70.13 of the Statutes, which provides that: “Merchandise placed in storage in the original package in a commercial storage warehouse shall while so in storage be considered in transit and not subject to taxation.”

[1] In ascertaining the legislative intent this statute must be read in connection with all other statutory provisions relating to taxation, as well as in the light of the report or the interim committee which framed this statute. In its report this committee said: “We also recommend a radical change in the taxation of merchandise and other goods stored in commercial storage warehouses. As the law now stands, the tax upon such personal property is levied upon and collected from the storage warehouse, which then tries to recover the tax from the owner. This practice seriously interferes with the business of the warehouses, because there is a period of half a year after the tax is assessed when the goods may be withdrawn before the amount of the tax is known. Still worse is the situation as regards merchandise consigned to warehouses to be later distributed to purchasers from these warehouses,which has become a large business in all lake ports. In this field the warehouses in Wisconsin are in competition with storage warehouses in neighboring states, and if such merchandise in Wisconsin warehouses is taxed, these warehouses must either stand for the tax or they will lose this business altogether. What we suggest to remedy these difficulties is that merchandise brought to a commercial storage warehouse direct from railroad or steamship lines and put into storage in the original package, shall be considered as being in transit and shall not be taxed until withdrawn from the warehouse. We further recommend that other goods stored in storage warehouses be assessed against the owner, provided that the warehouse furnishes to the assessor a list of all such goods, with a copy of the warehouse receipt, showing the value thereof, and the name and address of the owner.”

It will be noted that the committee said nothing about the exemption of property manufactured or produced in this state. Its purpose was to aid Wisconsin warehousemen who were “in competition with storage warehouses in neighboring states.” Manifestly this competition must have been for the storage of goods originating outside of the state of Wisconsin.

[2][3] It is apparent that neither the Legislature nor the committee intended to exempt property merely because it was stored in a commercial warehouse, because the bill drafted by the committee which enacted this subdivision (7) also created section 70.205 of the Statutes, which expressly provided for the taxation of property stored in such warehouses. Chapter 21, Laws of 1927.

It is also apparent that the Legislature did not intend to exempt property merely because it was in transit in Wisconsin on the day when property is assessed for taxation, because subdivision (1) of section 70.13 of the Statutes provides for the taxation of all property in transit on May 1st of any year.

Under the statutes as they existed prior to the enactment of the statute here in question, “it is clear that all property within the state on the 1st of May was required to be assessed to the owner or some person in possession thereof, whether the same were in transit or not. The result was that a great deal of property was withheld from shipment and did not find its way into the state until after May 1st in each year, contrary to the ordinary course of business.” The purpose of the statute under consideration “was to induce the bringing into Wisconsin of goods which would otherwise remain without the state by reason of its taxation laws. Thus the state would lose, not only the tax, but its citizens would lose the resulting benefits.” State ex rel. Bloch Bros. v. Tiesberg (Wis.) 220 N. W. 217, 218, 219.

This purpose to limit the application of this exemption statute to goods shipped from without the boundaries of the state for storage in commercial warehouses is also made manifest by the use of the phrase, “in the original package.” While this phrase is given other meanings, when used where the text discloses such intent, it is ordinarily limited to shipments that come from another state or country. That was the meaning given it by Chief Justice Marshall in Brown v. Maryland, 12 Wheat. 419, 6 L. Ed. 686, where the doctrine of the original package had its origin.

[4] Before the passage of this act automobiles shipped to Wisconsin from another state, even though unsold and still in the original package, were subject to taxation by the state because “they had arrived at their destination, were at rest in the state,” and “were enjoying the protection which the laws of the state afforded.” So long as they “were taxed without discrimination like all other property, * * * the tax did not amount to a regulation in the sense of the Constitution, although its levy might remotely and indirectly affect interstate commerce.” American Steel & Wire Co. v. Speed, 192 U. S. 500, 521, 24 S....