Court Opinion

ID: 3984583
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:40:51.487109+00
Date Added: 2024-06-11T13:36:14.899708
License: Public Domain

Any corporation, foreign or domestic (with certain exceptions not material here), before engaging in business in this state is required by *Page 266 
statute to pay an annual license tax computed upon and graduated according to its authorized capital stock. As applied to a corporation whose capital stock is employed in interstate commerce, and whose property represented by its capital stock is in substantial part outside of the state, the statute has been held invalid as resulting in such case in burdening interstate commerce and taxing property beyond the jurisdiction of the state.
The case before us is that of a corporation not engaged in interstate commerce and whose property is situated wholly within the state who contends that because the license tax cannot be legally enforced against those particular corporations situated as above indicated the statute imposing the license tax is wholly invalid and the license tax cannot be exacted from any corporation.
It is fundamental that a statute may be constitutional in one part and unconstitutional in another, and, if the invalid part is severable from the constitutional part, the latter will stand. 6 R.C.L. 121.
In the case before us we have no question of a particular section, clause or provision of the statute which is objectionable. Here the only objection to the statute is that it cannot be constitutionally applied to certain corporations embraced within its broad and general terms.
"A law may be unconstitutional, and void, in relation to particular cases, and yet valid to all intents and purposes in its application to other cases which differ from the former in material characteristics. In other words, when a statute has been passed by the legislature, some part of which is not within the competency of the legislative power, or is repugnant to some provision of the constitution, such part may be adjudged void and of no avail, while all other parts of the act not obnoxious to the same objection may be upheld as valid and have the force of law. The courts in some instances by a restrictive construction have limited the effect of a statute to cases clearly within the field of legislative control. For example, a state tax law, general in its terms, and on its face applying alike to all taxpayers, may be restricted by the court so as to *Page 267 
exempt from its operation stockholders in national banks. Such a statute for that reason would not be declared void as a whole, but should be given effect in reference to all persons embraced within the general language employed, with the exception of those outside the proper field of such legislation." 6 R.C.L. 130.
After further discussion of the subject, and with respect to the precise question in the case at bar, the rule is stated by the same authority as follows:
"The general principle has also been applied to the large and important class of cases where state laws are partially invalid as interfering with interstate commerce. Such statutes have frequently been treated as severable, and sustained to the extent of regulating commerce within the confines of the state." 6 R.C.L. 132.
And in 36 Cyc. 983, it is said:
"The weight of authority is to the effect that where a state statute is primarily intended to regulate domestic commerce, it will be sustained so far as it relates to such commerce, although it contains clauses invalid as attempting to regulate interstate commerce."
The principle is illustrated and applied in a variety of situations by the following cases: Ratterman v. Western UnionT. Co., 127 U.S. 411, 8 S.Ct. 1127, 32 L.Ed. 229; Singer SewingMach. Co. v. Brickell, 233 U.S. 304, 34 S.Ct. 493, 496,58 L.Ed. 974; State v. Smiley, 65 Kan. 240, 69 P. 199, 67 L.R.A. 903; State v. Peet, 80 Vt. 449, 68 A. 661, 14 L.R.A. (N.S.) 677, 130 Am. St. Rep. 998; Ex Parte Byles, 93 Ark. 612,126 S.W. 94, 37 L.R.A. (N.S.) 774; Rothermel v. Meyerle, 136 Pa. 250,20 A. 583, 9 L.R.A. 366; Commonwealth v. People's Exp.Co., 201 Mass. 564, 88 N.E. 420, 131 Am. St. Rep. 416; AttorneyGeneral v. Electric S.B. Co., 188 Mass. 239, 74 N.E. 467, 468, 3 Ann. Cas. 631; W.  J. Sloane v. Commonwealth,253 Mass. 529, 149 N.E. 407, 409; Wood  Co. v. Russell, 102 Okla. 92,226 P. 1040. See, also, note to State v. Duncan, Ann. Cas. 1916D, 19.
In Singer Sewing Mach. Co. v. Brickell, supra, the validity of a statute of Alabama prescribing an annual tax of $50 *Page 268 
for each county of the state in which any person should sell or deliver sewing machines was involved. The plaintiff, in selling and delivering sewing machines, transacted what was held to be an intrastate business in each of 29 counties of the state and in one county an interstate business. It was contended that the whole statute was invalid, because its direct terms applied to all commerce. The court held the tax invalid as applied to the county where the business was interstate and upheld it as applied to the 29 counties where the business transacted was local. In answering the contention of total invalidity, Mr. Justice PITNEY, speaking for the court said:
"The statute under consideration does not in direct terms or by necessary inference manifest an intent to regulate or burden interstate commerce. Full and fair effect can be given to its provisions, and an unconstitutional meaning can be avoided, by indulging the natural presumption that the legislature was intending to tax only that which it constitutionally might tax. So construed, it does not apply to interstate commerce at all."
This case is of added interest here because it considers and distinguishes the case of U.S. v. Reese, 92 U.S. 214,23 L.Ed. 563, which is cited and relied upon in the majority opinion in the case at bar.
The recent case of W.  J. Sloane v. Commonwealth, supra, is directly in point upon the question under consideration. There a statute of Massachusetts (G.L. c. 63, § 39) imposing an excise upon "every foreign corporation * * * with respect to the carrying on or doing of business by it within the commonwealth" had been declared invalid as applied to a foreign corporation doing an exclusively interstate business in the commonwealth.Alpha P.C. Co. v. Commonwealth, 268 U.S. 203, 45 S.Ct. 477,69 L.Ed. 916, 44 A.L.R. 1219. The question of the general constitutionality of the statute in the light of the decision referred to arose, whereupon the court said:
"The question whether G.L. c. 63, § 39, is wholly unconstitutional, because not constitutionally applicable to foreign corporations engaged *Page 269 
here exclusively in interstate commerce, is now presented for decision for the first time. * * * The decision of AttorneyGeneral v. Electric Storage Battery Co., 188 Mass. 239, 240,241, 74 N.E. 467, 3 Ann. Cas. 631, compels the conclusion that the whole section (G.L. c. 63 § 39) does not fall because it is not applicable to foreign corporations engaged exclusively in interstate commerce. It is to be presumed that the Legislature intended the section to be applicable only to foreign corporations engaged in this commonwealth in intrastate commerce and thus subject, within constitutional bounds, to the taxing jurisdiction of the commonwealth. (Citing cases.) As thus construed it is valid under the authority of Judson FreightForwarding Co. v. Com., 242 Mass. 47, 136 N.E. 375, 27 A.L.R. 1131."
The further contention that the statute in question is wholly invalid because of the general rule respecting legislative intent stated in 6 R.C.L., § 122, p. 123, is, in my judgment, insupportable. The majority opinion quotes a part only of the section and the rule. The rule as stated is subject to numerous limitations and modifications as shown by the discussion of the subject by the author in the sections following section 122. Especially in § 129, where the author says:
"Another class of cases in which a statute may be in part valid and in part invalid consists of laws enacted by a legislature in broad, general terms, covering not only persons and property, as to which the legislature clearly has the right to make regulations, but apparently, applying also to individuals and property protected from such legislation," etc.
But tested alone by the question of legislative intent the statute ought to be upheld as against the respondent. The rule stated by the authority quoted is that:
"If the objectionable parts of a statute are severable from the rest in such a way that the legislature would be presumed to have enacted the valid portion without the invalid, the failure of the latter will not necessarily render the entire statute invalid, but the statute may be enforced as to those portions of it which are constitutional. If, however, the constitutional and the unconstitutional portions are so dependent on each other as to warrant the belief that the legislature intended them to take effect in their entirety, *Page 270 
it follows that if the whole cannot be carried into effect, it will be presumed that the legislature would not have passed the residue independently, and accordingly the entire statute is invalid. This is simply another way of stating the familiar rule that if the parts of a law are divisible, and some of them are constitutional, and others are not, the constitutional provisions cannot be held valid if it appears that they would not have been adopted without the other parts. If sufficient remains to effect the object of the statute without the aid of the invalid portion, the latter only should be rejeced. Thus where a statute provides for two distinct objects, it has been held that it may be sustained as to one of them although the provisions relating to the other may be unconstitutional and void. The Portion which remains should express the legislative will independently of the void part," etc.
Of course we have here no question of a component part of the statute being invalid. It is a situation where the statute for constitutional reasons cannot be applied to certain corporations. These corporations are readily and easily separable from others who on their own account cannot question the statute. There is no feature of dependence of one valid provision upon an invalid one. Excluding the class of corporations as to whom the tax cannot be enforced, there is left a workable statute, which, when applied to those corporations legally subject to it, will carry out the plain legislative intent, which is to produce revenue for the state government.
In the numerous cases already cited in this opinion the courts were confronted with the question of legislative intent, and answered the same by indulging the presumption that the Legislature intended only to deal with the persons and corporations within its power and jurisdiction.
I am not prepared to say that this statute would not have been passed had the Legislature known that it would not apply to corporations engaged in interstate commerce. By exempting such corporations from the tax the law is not rendered inoperative nor the purpose of the Legislature to raise revenue destroyed. I dare say the vast majority of *Page 271 
corporations doing business in this state are not engaged in interstate commerce.
It is elementary that a statute may not be declared unconstitutional and invalid, except upon the most satisfactory grounds. Its invalidity must appear beyond reasonable doubt.Blackrock C.M.  M. Co. v. Tingey, 34 Utah 369, 98 P. 180, 28 L.R.A. (N.S.) 255, 131 Am. St. Rep. 850. When there is any reasonable doubt as to the validity of a statute the doubt must be resolved in favor of validity. Board of Medical Examiners ofUtah v. Blair, 57 Utah 516, 196 P. 221, Summit County v.Rich County, 57 Utah 553, 195 P. 639. If a legislative act is susceptible of two constructions, one conformable to the Constitution and the other not, the court will adopt the one that is conformable, and reject the one that is not. Pleasant Grove
v. Holman, 59 Utah 242, 202 P. 1096. Every reasonable presumption must be indulged in favor of the validity of a statute. State v. Tweed, 63 Utah 176, 224 P. 443. Courts must adopt such construction of statute as will make it constitutional if language permits. State ex rel. v. Franklin, 63 Utah 442,226 P. 674. Court's first duty is to presume that statute is constitutional and solve every reasonable doubt in favor of its constitutionality. Jackson v. Bonneville Irr. Dist., 66 Utah 404,243 P. 107.
I am convinced that the great weight of authority, based upon correct principles and sound reasoning, not only justifies, but requires, that the statute be upheld as against the respondent and other corporations generally doing business in this state, notwithstanding a few corporations engaged in interstate commerce are exempt from its application.
FOLLAND, J., concurs in the views expressed by CHERRY, C.J., in his dissenting opinion. *Page 272