W.S. Butterfield Theatres, Inc. v. Department of Revenue, 55

CourtSupreme Court of Michigan
Citation91 N.W.2d 269,353 Mich. 345
Docket NumberNo. 55,55
PartiesW. S. BUTTERFIELD THEATRES, Inc., Carley Amusement Company, Butterfield Michigan Theatres Company, Consolidated Theatres, Inc., J. R. Denniston Theatres Company, and Kalamazoo, Michigan Theatre Corporation, Appellants- Appellees, v. DEPARTMENT OF REVENUE of the State of Michigan, Appellee-Appellant.
Decision Date15 July 1958

Thomas M. Kavanagh, Atty. Gen., Samuel J. Torina, Sol. Gen., Lansing, T. Carl Holbrook, William D. Dexter, Asst. Attys. Gen., for appellee-appellant.

Dickinson, Wright, Davis, McKean & Cudlip, Detroit, for appellants-appellees, Robert E. McKean, Robert E. Rann, Detroit, of counsel.

Before the Entire Bench, except KAVANAGH, J.

SMITH, Justice.

This case involves the Michigan chain stores tax. 1 The appellants-appellees (hereinafter referred to collectively as 'appellee') are Michigan corporations, taxable as an entity (except Kalamazoo, Michigan Theatre Corporation) under section 3 of the act. They operate motion picture theatres in various cities and towns throughout the State, approximately 60 in number. They either own or lease the theatre premises involved. In each of the theatres, it is stipulated, they 'are also engaged in dispensing for a consideration, at retail, tangible personal property such as candy, nuts, popcorn and similar items. In each of these locations there is a space allocated for the purpose of so dispensing such tangible personal property which is occupied by display cases, candy and confectionery counters, popcorn machines and like fixtures and equipment.'

The board of tax appeals having upheld the assessments made on such theory, appeal was taken by the theatre corporations to the court of claims which, disagreeing with the board, held that 'The counters so operated by appellants are not chain stores under the meaning of the statute, and therefore they are not taxable.' The department of revenue of the State has appealed to this Court.

The problem is one of statutory interpretation. Appellee does not deny that it is in the business of selling at retail at the above locations but it asserts that it is not taxable under the act. It reaches this conclusion by the following process of reasoning: a) it asserts that it operates counters, not stores, b) upon this premise, it continues, since it does not operate 'stores,' it obviously cannot be taxed for operating stores, particularly for operating 'chain' stores, c) nor, it asserts, can it be taxed for operating chain counters since the taxability of chain counters under the act depends upon a separation of ownership between the counter operation and that of the business enterprise in which the counters are placed. Here, however, in appellee's words, the 'counters are each situated on premises in which the other business enterprise there carried on is under appellee's own ownership, rather than under separate ownership.' Thus, since it is not operating stores, it is not taxable for the operation of a chain of stores, nor, on the other hand, is it taxable for operating a chain of counters, since their counters do not come within the statutory definition of taxable counters. Finally, it is urged, that:

'Appellees' position is that the mere change in the ownership of the enterprise operating these counters so that the ownership of that enterprise and of the premises upon which that enterprise is being carried on became the same, affords no reasonable basis for placing the counters in a different classification than they were prior to such change of ownership. If there is no reasonable basis for placing such counters in different classes and if, as appellant contends, such a different classification is required by the Michigan Chain Store Tax Act, that part of the act which so requires constitutes a denial of uniformity of treatment of 'counters.' It therefore contravenes the requirements of Article X, Section 4, of the Michigan Constitution. It also constitutes a denial of the equal protection of the laws in contravention of Amendment XIV, Section 1, of the Federal Constitution.'

All of this, it will be observed, goes back to the first assumption above made, namely, that appellee operates not stores but counters. What is the difference between a counter and a store? Must there be more than one counter to have a store? Two? That even one is not sufficient may come as a surprise to a host of small 'store' keepers in the various hamlets and villages throughout this State. In popular speech the term 'store' means a place where merchandise is sold. It may be a portion of a dwelling house, Craig v. Pattison, 74 Miss. 881, 884, 21 So. 756, or a 'banking house,' Wilson v. State, 24 Conn. 57, 69. It may be, simply, a 'shop,' Barth v. State, 18 Conn. 432, 440, or it may be a 'butcher' shop, Petty v. State, 58 Ark. 1, 22 S.W. 654, or a 'junk' shop, Pitts v. City of Vicksburg, 72 Miss. 181, 16 So. 418. (In fact we commonly speak of going 'shopping' as meaning a visiting of stores.) It may be a popcorn stand, People v. Burley, 26 Cal.App.2d 213, 79 P.2d 148, 150, a saloon for the sale of 'larger beer, cigars, and oysters,' Commonwealth v. Whalen, 131 Mass. 419, (syllabus), or a filling station, Fox v. Standard Oil Company of New Jersey (West Virginia) 294 U.S. 87, 55 S.Ct. 333, 336, 79 L.Ed. 780.

With a range of meanings so diverse, and shades of meaning so abstruse, varying, indeed, with statutory purpose, as we range fields of law from the criminal to the commercial to the governmental, not surprising is it that we find our statute 'supplying its own glossary.' Cardozo, J., in Fox v. Standard Oil Company, supra. We are not left dependent upon dialect, colloquialism, the language of the arts and sciences, or even the common understanding of the man in the street. We have the act itself. We need not, indeed we must not, search afield for meanings where the act supplies its own. It provides that:

'Sec. 2. The term 'branch or chain store,' as used in this act shall be construed to mean and include any store or stores, or any mercantile establishment or establishments in excess of 1 which are owned, operated, maintained or controlled by the same person, firm, corporation, co-partnership or association, either domestic or foreign, in which goods, wares or merchandise of any kind are sold at retail * * *.'

It is clear from the facts stipulated that tangible personal property is dispensed for a consideration to those individuals wishing to avail themselves of the opportunity to so purchase at these locations. We thus have the sale, 'at retail,' of articles which are, clearly, 'goods, wares or merchandise of any kind'. The statute does not, indeed, require a store, nor does it require any particular kind of a shop or stall or place of business, it providing that, in the words of Justice Cardozo, construing a like statute (Fox v. Standard Oil Company, supra), '* * * the place at which the sale is made shall include, not only places that in the common speech of men would be designated as stores, but, broadly speaking, any mercantile establishment, whether a store or something else.' Nor does the act exclude the vendor if the sales in question are only an incident to some other primary objective, conducted, indeed, in what is said to be not a store but a 'branch office.' Detroit Edison Co. v. Secretary of State, 281 Mich. 428, 275 N.W. 196. The act, in short, as we said, supplies its own glossary under which the appellee's business is clearly included within 'any store or stores, or any mercantile establishment or establishments in excess of 1 which are owned, operated, maintained or controlled by the same person, firm, corporation * * * or association, either domestic or foreign, in which goods, wares or merchandise of any kind are sold at retail.'

The constitutional objection turns upon the classification of counters made by the legislature on the basis of ownership, operation,...

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