Court Opinion

ID: 9711637
Source: CourtListenerOpinion
Date Created: 2023-08-26 04:35:41.942835+00
Date Added: 2024-06-11T18:23:06.420431
License: Public Domain

Carter, J.,
dissenting.
This case involves the question as to the proper method of taxing the stock ' of Delaware corporations which domesticated in this state prior to August 24, 1941. The specific issue is whether section 77-706, R. R. S. 1943, or section 77-722, R. R. S. 1943, controls the result. If the former section is applicable the corporation is required to pay the tax assessed upon its stock for the owners thereof; if the latter is controlling, the tax is required to be paid -by the resident owners.
The intangible tax law was enacted in 1921 and so far as applicable here it provided: “Moneys, gross *45credits, including corporation shares or stocks, * * * shall be taxed on the basis of twenty-five. per cent of the mill rate levied upon tangible property * * *. Such corporation shall pay the tax assessed upon its stock or shares and shall have a lien thereon for the same, * * Laws 1921, c. 133, art. VIII, § 1, p. 582. It was clearly the intention of this act that all corporate stock, whether that of a foreign corporation, a domesticated foreign corporation, or a domestic corporation, was to be taxed under the act. The foregoing statute, except for the amendment of 1925, remains unchanged insofar as the issues in the present case are concerned. Since its adoption foreign corporations which have domesticated under the laws of this state have been taxed in the same manner as domestic corporations under this act, which is now section 77-706, R. . R. S. 1943.
In 1925 (Laws 1925, c. 173, § 1, p. 454) the Legislature enacted an amendment providing for the filing of statements by foreign corporations with the Tax Commissioner which in part provided: “Every corporation organized under the laws of any other state * * *, and not having complied with the requirements of the laws of Nebraska providing for the domestication of foreign corporations, shall, * * * file a statement with the tax commissioner, * * This portion of the amendment now appears as section 77-721, R. R. S. 1943. The only other sentence in the 1925 amendatory statute provides the manner of valuing such stock under the intangible tax law. Such sentence now appears as section 77-722, R. R. S. 1943. I submit that the exception contained in the first sentence of the 1925 act (section 77-721, R. R. S. 1943) excluding corporations organized under the laws of any other state “not having complied with the requirements of the laws of Nebraska providing for the domestication of foreign corporations” applies to the whole paragraph in which it is contained- in the 1925 act and that it does not lose its exclusionary characteristics merely because the Statute Commission saw fit to break *46it up into two sections (sections 77-721 and 77-722, R. R. S. 1943) in the 1943 revision. The exclusionary provision inferentially applies to section 77-722, R. R. S. 1943, just as it expressly does to section 77-721, R. R. S. 1943. Unless it has this meaning it has no meaning at all. It is a familiar rule of statutory construction that no sentence, clause, or word should be rejected as meaningless or superfluous if it can be avoided. Only one meaning can be gleaned from the exclusionary language in the 1925 act, — that foreign corporations which have domesticated under the laws of Nebraska are not within the 1925 amendatory act and were intended by the Legislature to be treated the same as domestic corporations under the intangible tax law. An examination of the majority opinion on this point is sufficient to establish the validity of this contention. With reference to this exclusionary provision in the 1925 act the majority opinion says: “The reason for the insertion of the exception in what is now section 77-721, R. R. S. 1943, is not disclosed or suggested.” By an arbitrary refusal to give the exception the one meaning that it has, the fundamental rule of construction referred to is heedlessly ignored. I submit that the generally accepted rules of statutory construction apply in all applicable cases. To make use of them in one case and to ignore them in another constitutes them a rule of man and not of law and gives credence to the false assertion that the law is what the Supreme Court says it is.
But for the purposes of this dissent I shall assume that there is grave doubt that the Legislature intended the exception to apply to both sentences in the 1925 act. From 1921 to 1951, a matter of 30 years, such has been the construction placed on it. An examination of the stipulation upon which this case was tried reveals the following facts which were agreed to: That, since the enactment of the intangible tax law in 1921, domesticated foreign corporations have' filed returns for intangible tax upon their stock on the same forms used
*47by domestic corporations and that the owners of such stock have never returned it for taxation or paid any intangible tax thereon. That this method of handling by the taxing authorities has been specifically approved by opinions of the Attorney General under dates of April 4, 1930, and March 2, .1942, and that no opinion to the contrary was ever issued by such officer until March 9, 1951. That on November 25, 1930, the Attorney General ruled in part with reference to the corporation occupation tax statute as follows: “However in the enacting clause of Section 479 it is provided that the foreign corporation upon compliance with the provisions of said Section 479 shall be and become' a body corporate of this state. This language appears to us to be a plain, direct and unambiguous declaration that foreign corporations so complying with Section 479 are domestic corporations required to pay an occupation tax on the total amount of its paid-up capital stock as definitely ruled in Beatrice Creamery Co. v. Marsh, 227 N. W. 926, and since affirmed without opinion by the Supreme Court of the United States.” Pursuant to this opinion domesticated foreign corporations have been required to pay an annual occupation tax on their entire paid-up capital stock as do domestic corporations, instead of on that portion of the capital of the company employed in the state as paid by nondomesticated foreign corporations. These provisions were carried forward into the act as amended in 1947. Laws 1947, c. 55, § 1, p. 185. It is also stipulated that the interpretation of the intangible tax law to the effect that the shares of stock of such domesticated foreign corporations are not taxable in the hands of the owners has been made public through advertisements and through brokers in making sales of stock, and has been an inducement to the purchase thereof by investors with the understanding and belief that such stock is not taxable in the hands of the owners. It is likewise stipulated that a present, holding that such stock is taxable in the hands of owners would reduce *48the market value of such stock and work a resulting damage and injury to the owners thereof.
In addition to the foregoing stipulated facts I point out that in 1941 the Legislature enacted a new general corporation law in this state in which a domestic corporation is defined as a corporation organized under the laws of this state. Laws 1941, c. 41, p. 158; C. 21, a. 1, R. S. 1943. It defines a foreign corporation as including every corporation not organized under the laws of this state. § 21-101, R. S. 1943. Section 21-1,150, R. S. 1943, provides the method by which a corporation organized under the laws of another state shall become and be a body corporate in this state. • Section 21-1,156, R. S. 1943, provides that all corporations now organized under articles 1, 2, or 3, of Chapter 24, Comp. St. 1929, shall operate under and be subject to the provisions of this act; provided, that no rights, privileges, and immunities vested or accrued by and under prior statutes and no duties, restrictions, liabilities, and penalties imposed or required by and under such statutes shall be impaired, diminished, or affected thereby. Any corporation organized under the laws of any other state which has domesticated in this state is within the purview of this saving clause, it being a corporation organized under Chapter 24, article 2, Comp. St. 1929. Instead of supporting the position of the majority it shows clearly the intent of the Legislature when it placed this saving clause in the act to continue, rather than change, the interpretation which had been placed upon the intangible tax act for 20 years prior thereto. It is strong evidence that the Legislature, after 20 years of operation of the act. intended that it should continue to be administered in the future as it had in the past. And it so continued to be administered until this suit was commenced 10 years later.
We have many cases handed down by this court where the administrative construction of a statute for a long period of time has been adhered to, particularly where *49property rights have been acquired on the basis of such construction. I shall cite only a few.
In Douglas County v. Vinsonhaler, 82 Neb. 810, 118 N. W. 1058, we said: “It is conceded that the statute of 1877 has been construed by the administrative officers, whose duty it was to enforce the same, so as not to give a county judge the right to charge a fee for performing a marriage ceremony, or, at least, so as not to require any compensation which such county judge may have received for such performance of that ceremony, as the fees of his office, to be accounted for under the statute. It is one of the principles governing the interpretation and construction of statutes that, where the meaning of a statute is dubious, long usage is a just medium by which to expound it. * * * We think the operation of such a rule is just and salutary; and this court has gone so far as to hold that a construction so made will in some cases be regarded as adopted by the legislature, although the language of the statute would indicate a different meaning.”
In State ex rel. Village of Dakota City v. Bryan, 112 Neb. 692, 200 N. W. 870, we said: “Section 5874 was enacted in 1907 as part of an entire act, and remained without change until 1921, when it was amended by repealing a part thereof. However, this amendment in no manner modified or changed the section as to matters here under consideration. Thus we conclude that the action of the legislature approved the correctness of the interpretation placed upon these statutes by the board.” See, also, Chicago & N. W. Ry. Co. v. Bauman. 132 Neb. 67, 271 N. W. 256; State ex rel. Case Threshing Machine Co. v. Marsh, 117 Neb. 832, 223 N. W. 126.
In Mogis v. Lyman-Richey Sand & Gravel Corp., 189 F. 2d 130, the court said: “Administrative construction of a statute by the highest officer of an executive department charged with its enforcement, especially if it has long been adhered to, is also entitled in Nebraska to great weight in the judicial appraisal of the statute’s *50meaning. * * * And this is especially true in instances where such construction has been left undisturbed through several successive legislative sessions, * * See, also, Massachusetts Mut. Life Ins. Co. v. George & Co., 148 F. 2d 42.
It is noteworthy that the Legislature has seen fit to assess domesticated foreign corporations with an occupation tax on the same basis as domestic corporations, which is much higher than that assessed against non-domesticated foreign corporations. It is reasonable to believe that the Legislature intended also that intangible taxes should be assessed against such domesticated corporations in the same manner as domestic corporations. Such a construction of the statute would eliminate any question of unconstitutional discrimination between domesticated foreign corporations and domestic corporations. See Wheeling Steel Corp. v. Glander, 337 U. S. 562, 69 S. Ct. 1291, 93 L. Ed. 1544. I submit that a valid construction is legally required as against an invalid one.
For 30 years the taxing authorities of this state have assessed the stocks of domesticated foreign corporations under section 77-706, R. R. S. 1943. For 30 years the Attorneys General of this state have advised that this was the applicable statute. Fifteen regular sessions of the Legislature have been held without any attempt to change the administrative construction and application of the act. No court up to this time has held that such construction was not the correct one. The stocks of domesticated foreign corporations have been advertised and sold with the understanding that the intangible taxes thereon were paid up by the corporations and that the stocks in the hands of the owners were free from these taxes. Investments have been made and property interests acquired in such stocks on the basis of this contemporaneous and practical construction of the statute over the years, and owners will be damaged and injured by the change in meaning announced by the *51majority. All the facts and circumstances indicate that the construction placed upon the act has been in good faith, with a full belief that the spirit of the law was being observed. In every instance under similar circumstances our decisions have adopted such contemporaneous, uniform, and long-continued construction of the law. It seems to me that if such construction is now to be changed after 30 years of bona fide reliance thereon, to the serious injury and damage of those who in good faith relied upon it, it ought to be inaugurated by the Legislature and not by the court. The decree of the trial court conforms with the previous holdings of this court, and in my opinion we should adhere thereto.
I am authorized to say that Chappell and Boslaugh, JJ., concur in this dissent.