Document: 337 U.S. 562 69 S.Ct. 1291 93 L.Ed. 1544 WHEELING STEEL CORPORATIONv.GLANDER, Tax Commissioner of Ohio. NATIONAL DISTILLERS PRODUCTS CORPORATION, N.Y., v. GLANDER, Nos. 447 and 448. Argued March 29, 30, 1949. Decided June 20, Appeals from the Supreme Court State Mr. John M. Caren, Columbus, Ohio, for appellant Wheeling Steel corporation. Charles H. Tuttle, New York City, National Distillers Products Corporation. W. Annat, Wooster, appellees. Justice JACKSON delivered opinion Court. 1 The Ohio has laid an ad valorem tax against certain intangible property, consisting notes, accounts receivable prepaid insurance, owned by foreign corporations. As applied to appellants in these two cases, is challenged as violating Federal Constitution on serveral grounds which may conveniently be considered a single opinion. Facts are not dispute. 2 Appellant Corporation organized under laws Delaware, where it maintains statutory office. authorized do business that four its eight manufacturing plants located there. General offices, entire controlled conducted, Wheeling, West Virginia. Its officers there have custody money, notes books account. In twelve other states, including sales offices solicit receive orders products subject acceptance or rejection at office, all forwarded. From this office only credit extended purchasers. Accounts billed collected no powers duties with respect collection. All payable written evidences thereof kept. Proceeds receivables taken into appellant's treasury general purposes business. 3 Virginia, holds annual stockholders meetings. It admitted distillery, rectifying plant, warehouse, does also six states. Pay roll checks plant employees drawn funds deposited banks locality plant. licensed York, principal conducts fiscal affairs activities directed controlled. regional various those states permit private distribution liquor. such customers solicited taken, York. dispensing liquor state monopoly. Orders authorities forwarded directly When accepts order any source, sends shipping plants, none makes shipments except upon orders. Only can credits approved books, records kept Collections managed place payment receivables. During year question, took through agents than large quantity shipped warehouses elsewhere. 4 stipulated each paid franchise taxes required admission assessed real personal property said State. 5 Company receivables, sought taxed pursuant Court's decision Corp. Fox, 298 193, 56 773, 80 1143. Neither Virginia nor involved herein. 6 Commissioner, applying §§ 5328—1 5328—2 Code Ohio,1 taxation amount derived originating plants. specific ground stated assessment was 'result sale stock goods maintained within State.' 7 Board affirmed both assessments Distiller's case set forth above mentioned statutes pointed out wherein own views practices their application had been modified decisions Court, whose interpretations, our purposes, become part statutes. said: '* * On consideration provisions noted, view before situs taxation, could given domicile taxpayer, must appear arose conduct taxpayer state, but were therein so used integral carried state; sufficient generally taxpayer. And held although they taxpayer's States Indiana Michigan, did taxable 8 'On appeal Ransom & Randolph Co. reversed point indicated. 142 St. 398, 404, 52 N.E.2d 738. That applicable section 5328-2 related sections residence, if avails being intended business, whether This construction placed here question later followed cases Haverfield Evatt, Comm., 143 58, 54 149, Cash Register 145 597, 62 327. 9 situation, same construed State, follows since corporation arose—as hereby find—, since, further, elsewhere, found determined commissioner. 10 'With presented, wit, arising noted 5328-1, Code, presents, mind, serious constitutionality Due Process Law clause Constitution. *' 11 cases,2 brought appeals.3 12 Appellants urge regarded should resolved intangibles sustain power Clause them imposes undue burden interstate commerce violation Commerce Clause. They created there, neither payor payee, debtor creditor, resident Moreover, contract goods, contracts made performed buyer seller resided assumption follow tangible them, either hands vendor delivery vendee after delivery, argued she greater substituted right proceeds passed beyond her taxing power. 13 original scheme overcome hurdle requiring additional more substantial connection between For purpose when extent 'so on' requirement eliminated 738, use make taxable. Thus cut originally invoked confer jurisdiction tax, thus raised serious. 14 However, we find inappropriate decide question. action, reviewable Fourteenth Amendment, composite result legislation judicial interpretation. attempt asserted intangibles, nonresidents indication intends would reach unless time exempt identical ones residents domestic contrary indicated § 5328-2, inseparable. We deal plan entirety operation pass do. 15 action policy resulting statute certified us appellee, follows: 16 he 738 (January 12, 1944) obedience thereto, practice Department Taxation construe apply 5328-1 17 '(A) residents, corporations, arise 18 '(1) agent having another even though 19 '(2) sold Ohio; '(B) non-residents 20 21 state. 22 'That foregoing effect tests taxability without deviation affiant his predecessor William S. holding case.' 23 Under long settled principles Federation, admit corporations carry intrastate borders. arbitrarily exclude license terms sees fit, apart exacting surrender rights United States. Hanover Insurance Harding, 272 494, 507, 47 179, 182, 71 372, 49 A.L.R. 713; Connecticut Johnson, 303 77, 79—80, 58 436, 82 673. elected, however, transact businesses operate privilege way includes measure value done 5495, 5497, 5498 5499 Code. See International Harvester 329 416, 67 444, 91 390. After chosen domesticate adopted entitled equal protection state's corporate progeny, least equally favorable basis. 510—511, 183, Power Saunders, 274 490, 493, 497, 678, 679, 680, 1165. Bennett 587, 345, sense franchise, privilege, occupation income tax. 24 assimilates creations natural others nonresidents. While classification permissible basis some different liabilities, held, federal nonresident 'is treatment.' Hillsborough Cromwell, 326 620, 623, 66 445, 448, 90 358. 25 certificate discloses how fundamentally discriminatory contrasted domesticated nonresident. If date one petitioners competitor owns account out-of-state customer kind commodity, Ohio's competing not. seems obvious accorded treatment, inequality because slightest difference relation decisive transaction, solely owner. 26 seriously deny unequal claims reciprocity reestablish equality. Those therefore require scrutiny. 27 rests formula fixing provided These 'shall transacted owner resides' circumstances. (Emphasis supplied.) basic rule separates residence whereas traditionally exceptions. owners assigned while without. logically consistent that, draws excludes residents. exempted offered up embrace doctrine separate residence. what meant reciprocity, declared inseparable; takes unto itself invalid, 'such shall deemed affect provision resident.' 28 hard see offer restores equality alone, obviously denies. There readiness copy exempts. proffered exchange commend bargain large, populous highly industrialized, heavy industries, well much gain exports most several years take advantage 'reciprocity' proffer. did, rates necessary equalize competitors hardly expected for. Far acceding allocates stands very 1143, authority Company, seeks claim clear otherwise protects discriminations apparent statute. think law. 29 judgments causes remanded proceedings inconsistent herewith. 30 Reversed. 31 By JACKSON. 32 writer deems complete record pointing why, writing assignment assumed discussion protections Amendment available questioned case, courts below. consistently assures laws, 1886, Santa Clara Southern Pacific R. Co., 118 394, 396, 1132, 118, entitles due process law, 1889, Minneapolis Beckwith, 129 26, 28, 207, 585. 33 true proposition once Justice. 83, 439, 673 (dissenting opinion). But challenge itself, liberals Brandeis Stone, I supposed longer pressed. Justice's Shoe Washington, 310, 322, 154, 161, 95, 161 1057, making mention issue. 34 Without pretending analysis, during current term appropriate consideration, here. Railway Express 336 106, 463, claimed deprived Ott Mississippi Barge Line, 169, 432, denied At prior terms, many inherent, similar Amendment. See, e.g., Illinis Central Minnesota, 309 157, 60 419, 84 670; Lincoln Life Read, 325 673, 65 1220, 89 1861; Queenside Hills Co Saxl, 328 80, 850, 1096. Although author present dissent cited opinions, intimated doubt standing raise questions Instead, author, proceeded discuss dispose corporation's contentions merits, quite improper procedure, think, constitutional questions. Indeed, right, difficult consider all. 35 might defeat corporations' claims, apparently none. 36 joined Justices now asserting recently granted relief striking down conflicting Times-Mirror California, companion Bridges 314 252, 190, 86 192, 159 1346, newspaper persuaded $500 fine violated Pennekamp Florida, 331, 1029, 1295, convicted along individual defendant, aside conviction prohibited action. issue irreconcilable position dissent. 37 cannot suggested mere instrument forego expression convictions. Cardozo taught write still reserve postions, overruled. Helvering Davis, 301 619, 639, 57 904, 908, 81 1307, 109 .L.R. 1319. 38 not, review considerations justify issues decided. 39 DOUGLAS, whom BLACK concurs, dissenting. 40 implicit 1886 'person' meaning Equal Protection South. held. cryptic decision. sure wrote point, Chief Waite announcing bench: 41 'The court wish hear arrgument Constitution, forbids person applies does.' 42 history, logic, reason support view. Nor exposition unnecessary. 43 became 1868. 1871 Louisiana imposed new Woods (then Circuit Judge) include added, 'This strengthened history submission congress, adoption 14th amendment fresh minds need rehearsal.' Orleans, Fed.Cas.No 7,052, 85, 88. 44 What plain 1873. Miller Slaughter House Cases, Wall. 36, 71, adverted events 'almost too recent called history' show protect human rights—primarily race just won freedom. respects stated, existence newly emancipated negroes resided, discriminated gross injustice hardship class, evil remedied clause, forbidden.' page 81, 394. 45 Moreover earlier judges people who voted Black 87, 441, 873, protected beings. suggestion designed put class dilute police over affairs. Arthur Twining Hadley framed oppression whites, legislature. doubtful members Congress idea touch regulation all.'1 46 Both supra, Fed.Cas.No. 88, ustice pages 88-89, 441-442, shown strained hold. Section provides: 'All persons born naturalized States, thereof, citizens reside. No enforce law abridge privileges immunities States; deprive life, liberty, law; laws.' (Italics added.) 48 'Persons' first sentence plainly beings, 'born naturalized.' Corporations 'citizens' second sentence. Western Turf Ass'n Greenberg, 204 359, 363, 384, 385, 51 520; Selover, Bates Walsh, 226 112, 126, 69, 72, 146.2 50 never 'life' 'Liberty' 'the liberty natural, artificial, persons.' 386, 520. 'property' 1889 585, 53 requires distortion read thing, then clause. means, my opinion, revision matter construction, me said, evident is, secured endowed life consequently artificial History gone way. Since repeatedly struck Clause.3 Every upholding objection protection. meet contain elements discrimination condemns. squarely presented conclude wrong 55 One hesitates overrule field old vintage. deterrent heretofore4 now. dealing vital concern nation. desirable give legislative process. us. people. want treated humans treated, grant degree emancipation regulation,5 say so. provides method guise Pertinent parts 'Sec. 5328-1: Property kinds classes by, behalf non-resident taxation; residing outside *. 5328-2: herein mentioned, resides circumstances following: 'In receivable, therein, services officer, employe connected with, sent from, reporting officer reciprocally applied, end belonging taxed. inseparable o like Sec. 5-1: Moneys, deposits, investments, items, 'used' 5638: Annual levied hereinafter enumerated, classified list county auditors duplicates treasurers following rates, wit: moneys, listed, three mills dollar. 5327: 'credits' used, means excess sum items (used) added together estimating every item assessments. Gen.Code Ann. (1945). 150 229, 863. U.S.C. 1257(2), U.S.C.A. 1257(2). Constitutional Position America, 64 Independent 834, 836 (1908). He went Dartmouth College Wheat. 518, 629, 'have placing modern industrial almost impregnable position.' Id., p. 836. framers undisclosed Graham, 'Conspiracy Theory' Yale L.J. 371. Cf. McGovney, A Fiction, Harv.L.Rev. 853, 1090, 1225, diverse citizenship courts. Chicago 134 418, 462, 702, 970; Gulf, Colorado Fe Ellis, 165 150, 255, 666; Cotting Kansas City Stockyards 183 79, 92; Connolly Union Sewer Pipe 184 540, 431, 679; Greene, 216 400, 287, 536; Herndon Chicago, Rock Island Pac. 218 135, 633, Roach Atchison, T. 159, 978; Atchison Vosburg, 238 56, 675, 59 1119, L.R.A.1915E, 953; Gast Realty Schneider Granite 240 55, 1239; McFarland American Sugar 241 498, 899; Royster Guano 253 560, 989; Bethlehem Motors Flynt, 256 421, 571, 1029; So. Road Imp. Dist. No. 6, 658, 604, 1151; N.W.R. Nye 260 35, 115; Sioux Bridge Dakota County, 340, 979; Thomas 261 481, 440, 758; Kentucky Paramount Exch., 262 544, 636, 1112; Air-Way Day, 266 169; Ins. 1165; Louisville Gas Coleman, 277 32, 423, 72 770; Quaker Cab Pennsylvania, 389, 553, 927; Cumberland Coal Board, 284 23, 48, 76 146; Liggett Lee, 288 517, 77 929, 85 699; Concordia Illinois, 292 535, 830, 78 1411; Stewart Dry Goods Lewis, 294 550, 525, 79 1054; Mayflower Farms Ten Eyck, 297 266, 457, 675; Hartford Harrison, 459, 838, 1223. re Ayers, 123 443, 164, 216, overruled Osborn Bank, 204, 63 old; Leisy Hardin, 135 100, 681, 128, Peirce Hampshire, How. 504, 256, old. Erie Tompkins, 304 64, 817, 1188, 114 1487, Swift Tyson, Pet. 1, 865, 95 Graves ex rel. O'Keefe, 306 466, 595, 83 927, 120 1466, Collector 113, 122, 68 South Eastern Underwriter's Ass'n, 322 533, 1162, 88 1440, Paul 168, 357, 75 restrictions contained prevent burdening commerce, Arizona, 761, 1515, 1915; Morgan 373, 1050, 1317, 574; discriminating it, Nippert Richmond, 327 586, 760, 162 844, rise source relevant

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