Court Opinion

ID: 9851510
Source: CourtListenerOpinion
Date Created: 2023-09-24 05:14:10.468963+00
Date Added: 2024-06-11T09:21:03.753910
License: Public Domain

Duckworth, Chief Justice,
dissenting. Our decision in State of Georgia v. Coca-Cola Bottling Co., 214 Ga. 316 (104 S. E. 2d 574), was a forthright holding in harmony with Code (Ann.) § 92-3113 (Ga. L. 1950, pp. 299, 300), that upon all net profits resulting from business conducted from an office and place of business located in Georgia, a. corporation was liable under the law to the State for income tax. Despite the fact that our equally forthright decision in Stockham Valves & Fittings v. Williams, 213 Ga. 713 (101 S. E. 2d 197), holding, -that from business conducted from the corporation’s office outside this State net profits realized, from the sale of goods delivered in this State were not subject to the income-tax laws of Georgia, was overruled in Williams v. Stockham Valves & Fittings, 358 U. S. 450 (79 S. Ct. 357, 3 L. Ed. 2d 421), this court should continue to endeavor to construe the statute in accordance with long-established rules of construction, repeatedly and consistently followed by this court. It is tremendously important to both the State and to taxpayers that this court construe this tax law in a clear-cut manner that will remove doubts as to its meaning, or *83open to question the precise meaning of our decisions. The law in Code (Ann.) § 92-3113, supra, indisputably supplies the ingredient of the cardinal rule for the construction of statutes, which is effectuating the legislative intent. Torrance v. McDougald, 12 Ga. 526; Erwin v. Moore, 15 Ga. 361; Board of Tax Assessors v. Catledge, 173 Ga. 656 (160 S. E. 909); Gazan v. Heery, 183 Ga. 30 (187 S. E. 371, 106 A.L.R. 498); Carroll v. Ragsdale, 192 Ga. 118, 120 (15 S. E. 2d 210; Claxton v. Johnson County, 194 Ga. 43 (20 S. E. 2d 606); Williams v. Bear’s Den, 214 Ga. 240 (104 S. E. 2d 230). That intention is to tax the entire net income derived from property owned or business done in this State. That intent is repeatedly expressed in the following excerpts from Code (Ann.) § 92-3113: “The tax imposed by this law shall apply to the entire net income.” (Italics ours.) Again: “If the entire business income of the corporation is derived from property owned or business done in this State, the tax shall be imposed on the entire business income, but if the business income of the corporation is derived in part from property owned or business done in the State and in part from property owned or business done without the State, the tax shall be imposed only on that portion of the business income which is reasonably attributable to the property owned and business done within the State.” (Italics ours.) Not only do these legislative expressions of the intent of the law demand a construction that subjects all net income derived from business done in this State to the tax imposed, they forbid a construction that would subject the entire net income of a corporation such as in State of Georgia v. Coca-Cola Bottling Co., 214 Ga. 316, supra, and then discriminate in favor of a corporation, such as the taxpayer in this case, which derived a part of its income from business done without this State by exempting from the tax a portion of the net income, undeniably derived from business done in this State. What conceivable motive could the legislature have had in thus discriminating against a corporation that gives its full loyalty to Georgia and in favor of one which divides its loyalty by establishing a place of business in another State? Such legislative favoritism would be a bold, brazen legislative inducement to all corporations to move a part of their business out of Geor*84gia. It would be giving up taxes clearly collectible, and to that extent defeat the single purpose of the law. It would seem that the legislature further refutes any idea that it entertained any such intent when it went beyond any theretofore judicial definition of doing business to define that term as used in the law as follows: “Every corporation shall be deemed to be doing business within this State if it engages within this State in any activities or transactions for the purpose of financial profit or gain." Only by ao arbitrary disregard of these unambiguous expressions by the legislature itself can it be denied that the legislative intent of this law is to impose the tax upon the entire net income of corporations derived from activities or transactions engaged in by the corporation in this State for profit or gain. Once the intention is thus ascertained beyond any doubt, the above-stated cardinal rule of construction commands this court to effectuate the same, and if need be to accomplish that end, disregard other verbiage in the law that, if given a literal meaning, would defeat the purpose of the law. The Constitution emphatically forbids discrimination. Art. 1, sec. 1, par. 2 (Code, Ann., § 2-102) provides that “Protection to person and property is the paramount duty of government, and shall be impartial and complete.” (Italics ours.) Then the Constitution, art. 7, sec. 1, par. 3 (Code, Ann., § 2-5403) provides in part that “All taxation shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax.” While the latter paragraph authorizes classifications, yet the law is settled that arbitrary classification of subjects of the same class is discrimination and void. Hutchins v. Howard, 211 Ga. 830 (89 S. E. 2d 183); Wright v. Fulton County, 169 Ga. 354 (150 S. E. 262). It would be indeed amusing to hear any reason suggested why two corporations earning income by doing business in Georgia, should be treated differently under this tax statute in a way that would exempt income of one derived in precisely the same manner as taxed income of the other from business done in this State, solely because the one had a place of business also in another State. There simply exists no legal difference. It is the duty of all courts when the verbiage will permit' to give a statute a construction that will render it constitutional rather *85than unconstitutional. Evans v. Evans, 190 Ga. 364 (9 S. E. 2d 254); DeWitt v. Richmond County, 192 Ga. 770 (16 S. E. 2d 579).
But the majority have glibly passed over the heart of the statute, the portion that levies the tax and plainly expresses the intent to levy it upon the “entire net income” derived from business done in this State. They pass over the part which states that, when income is derived from business done in this and another State, the portion subject to Georgia taxation shall be that portion which is “reasonably attributable” to business done in Georgia. They seize upon verbiage used in defining gross-receipts ratio in Code (Ann.) § 92-3113 (4c), which is as follows: “For the purpose of this section receipts shall be deemed to have been derived from business done within this State only if received from products shipped to customers in this State, or delivered within this State to customers.” This is only part of the sentence, but they seek to chop it off with the portion quoted and plant the entire case thereon. The continuation of this same sentence is, “and in determining the gross receipts within Georgia, receipts from sales negotiated or effected through offices of the taxpayer outside the State and delivered from storage in the State to customers outside the State shall be excluded.” This latter portion of the sentence recognizes, as does the first portion of the law, that “negotiated or effected” is the activity or transaction connected with the business which fixes the situs for taxation. The first part of this ooe sentence utterly disregards the negotiation or effectuation of sales producing the income, and in this respect it contradicts the latter portion of the same sentence and completely defeats the indisputable intention of the whole law to tax the entire net income derived from such negotiation or effectuation. The portion upon which the taxpayer relies forbids counting as Georgia income all except that derived from shipments to customers in this State or delivered to customers in this State. Then the latter portion follows immediately with an exclusion of goods shipped to customers outside this State. If the first portion be construed as contended by this taxpayer, then the last portion of the same sentence is completely useless, meaningless, and repetitious. Courts should never construe an enact*86ment to be meaningless and nonsensical to the point of destroying its true intent unless as a whole its provisions demand such a construction. Lamons v. Yarbrough, 206 Ga. 50 (55 S. E. 2d 551). As has been held in' a number of the decisions of this court hereinbefore cited on rules of construction, to effectuate the legislative intention “large and extensive expressions” expressing the legislative intent shall prevail over “any particular clause” expressing not so large and extensive an import. Torrance v. McDougald, 12 Ga. 526, supra. And in Erwin v. Moore, 15 Ga. 361, 364, supra, “Wherever the intention of the legislature can be discovered, it should be followed with reason and discretion, though such construction should seem contrary to the letter of the statute.” (Italics ours.) And in Board of Tax Assessors v. Catledge, 173 Ga. 656, supra, and repeated in Gazan v. Heery, 183 Ga. 30, 39, supra, courts may decline to give legislative acts such construction as will defeat the purpose of the General Assembly, and in exercising this power, to refuse such construction as will defeat the legislative purpose, they may avoid portions of the enactment. Again in Carroll v. Ragsdale, 192 Ga. 118, 120, supra, it was said: “While all parts of the statute should be preserved, yet a cardinal rule of construction is that the legislative intent shall be effectuated, even though some verbiage may have to be eliminated. The legislative intent will prevail over the literal import of the words.” With this array of our own decisions pointing out the true rule of construction, which gives pre-eminence to legislative intent, and commanding that clauses literally in conflict therewith be disregarded, the only sound and proper judgment in this case is perfectly obvious.
In imposing the tax upon the income reasonably attributable to business done in this State, then thereinafter in 4c ignoring all income except that only derived from goods shipped to customers in this State or delivered in this State to customers, the law is self-contradictory. It is a judicial function to construe ambiguous legislation, and the only true meaning it ever has is that given it by judicial construction. One type of ambiguity is that created by contradictory provisions. The Judiciary by construction gives such contradictory enactment its first and only true meaning. No matter how plain the conflicting clauses may be, *87they are rendered unplain and ambiguous by the contradiction. And, as stated above, the cardinal rule of construction is effectuating the purpose and intent of the whole law, if such is possible from the provisions thereof. Here this rule demands a construction that will impose the tax which is manifestly the sole purpose of the law. A construction that defeats the tax as required by 4c defeats the purpose of the law, while a construction that would ignore 4c indisputably effectuates the intent and the purpose of the law. The judicial duty in such a case is too plain for argument.
The plain legislative intent to place the tax upon the “entire net income” derived from business done in this State should be effectuated by applying the tax to all such net income as can be reasonably attributable to business done in this State. To accomplish this end, the portion of 4c relied upon by the taxpayer to defeat this legislative intent should be either disregarded or else construed to harmonize therewith if its verbiage will stand such construction. Since, as above pointed out, the latter part of the same sentence spells out what must be excluded from the Georgia receipts, it could be held that receipts not thus excluded may be included, or the language relied upon might be construed to be that receipts derived from goods shipped on orders procured in Georgia to customers wherever located, which would harmonize with the real purpose of the law. Counsel for the Revenue Commissioner suggests a plausible and sound construction since the only division of receipts contemplated by the law is one between the places of business in this and the other State which produced the entire receipts. And since those receipts must be apportioned to one or the other of the taypayer’s places of business, then preface the clause relied upon by what was undeniably in the legislative mind when it was enacted, which is “[as to foreign corporations ‘doing business’ in this State] only if received from products shipped to customers in this State, or delivered within this State to customers, and [as to local corporations] in determining the gross receipts within Georgia, receipts from sales negotiated or effected through offices of the taxpayer outside the State and delivered from storage in the State to customers outside the State shall be excluded.” Code *88(Ann.) § 92-3113 (4c). This admittedly adds some words, but such is permissible under the law when necessary to effectuate the legislative intent.
A simple illustration of what the law will do when construed as the majority contend is as follows: If corporations A and B with principal places of business located in Georgia are competitors in identical lines of business, and each has a net income of $100,000, and only 10% or $10,000 of the net income of each is derived from delivery and shipment of goods to customers within this State, and A establishes another place of business in Alabama, from which sales are made and from which 1% or $1,000 of its net income is derived, B would have to pay to the State of Georgia taxes on its entire net income of $100,000, while A would pay Georgia taxes on the 10% of its net income which is $10,000, although it would pay Alabama taxes on only 1% or $1,000, and consequently A would pay no taxes on 89% or $89,-000, which it earned by activities or transactions in this State identical with the activities or transactions of B in this State. Such an injustice would shock the conscience, and would constitute such an overwhelming advantage of A over its competitor, as would surely result in quick bankruptcy of B. This shocking experience of a corporation would be the penalty a Georgia legislature imposed upon B for its full-fledged loyalty to Georgia by confining its place of business to- Georgia, while A would be rewarded by the legislature for dividing its loyalty by putting some, even ever so small a part, of its business operations in another State.
As ruled in Lamons v. Yarbrough, 206 Ga. 50, supra, courts should never construe enactments to be thus nonsensical and unjust unless the whole act demands such. And, as ruled by the majority, the entire amount involved will escape taxation altogether, since it is agreed that none of' it was produced by the place of business in California which is the only place of business of the taxpayer except that in Georgia. It had to be produced by one or the other place of business, and since admittedly it was not produced by the California place of business, it necessarily must have been produced by the Georgia place of business, *89and the statute repeatedly expresses an intention to tax such net income in its entirety.
Failure of this court to recognize, respect, and enforce the legislative imposition of the tax can not be excused upon the claim that a legislative attempt to prescribe a method of ascertaining the income to be thus taxed, contradicts the description of the taxable-income given in immediate connection with the imposition of the tax. It is trifling with legislation to say that, although its indisputable single purpose was to impose a tax, yet it preferred adherence to a formula, it defined whereby it was .thought the tax imposed could -be arrived at, over the collection of the tax. The statutory language imposing the -tax in cases like the instant one is as follows: “The tax shall be imposed only on that portion of the business income which is reasonably attributable to the property owned and business done within the State.” (Italics ours.) There is .a positive unambiguous imposition of the tax upon a readily ascertainable income. Must we prevent the State’s collection of the tax thus plainly imposed because the legislature undertakes erroneously to describe a procedure for ascertaining the income upon which the tax is thus imposed? Can we in fairness to the legislature attribute to it an intention that its single objective which is to impose the tax be defeated in order that its palpably erroneous procedure, which defeats imposition of the tax, be adhered to? It constitutes the rankest sort of unreasonableness for this court to thus sacrifice substance for form. This is especially true when to do so renders the whole statute discriminatory and unconstitutional. A simple homely example will illustrate what reason and common sense dictate in this situation. If one gave a boy .money to buy a package of cigarettes, and- told- him -to go tó a certain store by a- certain street to get them, and the boy found that the street designated was a dead-end street, and he could never reach the store by traveling it, but he well knew how to get to the store by a known street, should the boy return without the cigarettes solely because he found he could not get there by traveling the street designated, or should he fulfill the true purpose of the sender and get the cigarettes? The street in this example is analogous to the directions in 4c, and the cigarettes are analogous to the taxes in *90the instant case. Only an obstinate blindness to truth can prefer the designated street or the formula in 4c over the cigarettes or the taxes imposed on the income reasonably attributable to the business done in this State. Note well that the tax is imposed, not on the business reasonably apportiondble, but on the business income reasonably attributable to business done in this State.
Thus the tax plainly imposed upon an income definitely described will go uncollected because of palpable error by the legislature in attempting to state a method for its ascertainment, upon which clause the majority opinion plainly rests. The majority have decided that what the legislature intended as an incidental effort to help effectuate its single objective should be given full literal effect, even though it defeats the sole purpose of the whole legislation, which is to impose a tax on income reasonably attributable to business done in this State. It is unreasonable to attribute such a trifling intention, and this court can do so only after abandoning all sound sensible rules of construction consistently followed in all previous cases.
By the construction given above we would not be writing legislation, but preserving the substance of legislation in the only way whereby any of it can stand a constitutional test. For all the foregoing reasons I dissent. Head and Hawkins, JJ., have authorized me to state that they concur in this dissent.