Adams v. Standard Oil Co., 53 So. 692

Anderson, J.,

after stating the facts as above, delivered the •opinion of the court..

The privilege tax statutes in force, covering the period from 1906 to 1909, inclusive, contain the following exemptions, which' are found in sections 3849 and 3895, Oode 1906: Section 3849, after imposing taxes on peddlers of merchandise varying in amount, according to the kind'of team and vehicle used, concludes with: “Provided, that any person resident of any county in this state who is over sixty years old and has lost a limb or an eye, or who is otherwise unable to earn a support for himself by labor, and whose taxable property is less than $500.00, may peddle in the county of his residence without paying a privilege tax.” And section 3895 is as follows: “Any confederate soldier may exercise any of the following privileges in the county of his residence without the payment of the privilege tax: Auctioneer, barber, bicycle dealer, contractor, cotton weigher, magic lantern, feed stable, livery stable, lunch stand, restaurant, insurance agent, or merchant (where the stock of goods never exceeds one thousand dollars), peddler, soda fountain, or wood yard, (b) Any person blind, deaf and dumb, or maimed by loss of hand or foot, or any confederate soldier or thе wife or widow of any confederate soldier, may exercise any of the privileges herein enumerated, except that of dealing in liquor, cigarettes, deadly weapons, secondhand clothing, or jenny lind or pool table, or like contrivances kept for amusement, without the payment of the tax thereon, if he exercise the privilege exclusively for himself and family, provided he resides in this state and does not own taxable property in excess of one thousand dollars, either in his name or his wife’s name.” And covering the period from 1904 to 1906, inclusive, the proviso to section 3849, Code 1906, above quoted, was in force, having been brought forward from previous acts into the Code of 1906; and for the period from 1903 to' 1906, inclusive, up Id the time the privilege tax chapter of the Code of 1906 went into effect, the proviso in the privilege tax statute of 1894 (chapter 29, p. 24) was in force, which was as follows: “Any confederate soldier who has lost a foot, hand or eye, or who is otherwise infirm, may exercise any of the privileges herein enumerated, except that of dealing in liquors, cigarettes or deadly weapons, or keeping billiard, jenny lind or pool tables, ten-pin alleys or like contrivances kept for amusement, without the payment of a tax thereon, if he exercise the privilege exclusively for himself and family and in the county of his residence.”

It is argued on behalf of appellee that the provisos in the statute of 1894 (chapter 29, p. 24) and section 3895, Code 1906, make an arbitrary, unreasonable, and discriminatory classification of confederate soldiers, and that section 3849, Code 1906 (chapter 16, p. 73, Acts 1904), also makes such a classification of persons over 60 years of age who have lost a limb or an eye, “whose taxable property is -less than $500,” ánd are therefore violative of the equal protection clause of the fourteenth amendment of the constitution of the United States, which provides that no state shall deny “to any person within its jurisdiction the equal protectiоn of the laws.” The appellee is a “person,” within the meaning of this clause. A corporation doing business within a state, other than that of its creation, having an office and agents therein, and subject to the process of the courts of such state, is a “person,” within the meaning of the equal protection clause of the fourteenth amendment. 4 Ency. U. S. Sup. Ct. Rep. pp 352, 353, 354; Southern Ry. Co. v. Greene, 216 U. S. 400, 30 Sup. Ct. 287.

• What are the limits of the power of classification by the states under this constitutional provision? It is undoubted that the power of the states to make classification of persons and property for the purposes of taxation, as well as for other purposes, is broad; but it is equally true that the mere fact of classification is not sufficient to relieve a statute from the operation of the equality ‍​​​‌​​​​‌​​​‌​‌​‌​‌​‌‌​‌​​‌‌​​​‌‌​‌​‌​​‌​‌​​​‌‌​‍clause. The classification must be based on some reasonable ground, and some real difference which bears' a just and proper relation to the object sought to be accomplished. “Mere arbitrary selection can never be justified by calling it classification,” and discriminations against persons and classes of an unusual character are obnoxious to the constitution. 4 Encyc. U. S. Sup. Ct. Rep. 362, 363.

In Chicago & St. Paul Ry. Co. v. Westby, 178 Fed. 619, 102 C. C. A. 65, the circuit court of appeals, through Judge Sanborn said: “In the face of the constitutional prohibition of unequal laws, there are three indispensable conditions to a constitutional imposition of liabilities or burdens upon, or a constitutional grant of rights or privileges to, the members of one class that other members of the state do not bear or enjoy: (1) There must be such a difference between the situatiоn and circumstances, of all the members of the class and the situation and circumstances of other members of the state in relation to the subjects of the discriminatory legislation as presents a just and natural reason of necessity or propriety for the difference made by the law in their liabilities and rights. While reasonable classification is permitted, without doing violence to the equal protection of the laWs, such classification must be based upon some real and substantial distinction, bearing a reasonable and just relation to the things in respect to which such classification is imposed; and classification cannot be arbitrarily made without any substantial basis. Arbitrary selection, it has been said, cannot be justified by calling it classification.”

And the United States supreme court, in Southern Ry. v. Greene, 216 U. S. 400, 30 Sup. Ct. 287, said: “The equal protection of the laws means subjеction to equal laws, applying alike to all in the same situation. If the plaintiff is a person .within the jurisdiction of the state of Alabama within the meaning of the fourteenth amendment, it is entitled to stand before the law upon equal terms, to enjoy the same rights as belong to, and to bear the same burdens as are imposed .upon, other persons in a like situation.”

And this court, in Ballard v. Oil Co., 81 Miss. 507, 34 South. 533, 62 L. R. A. 407, 95 Am. St. Rep. 476, said: “Multiplied citations from the United States supreme court could be made,, but the thought running through them all, as we understand them, clearly is that the classification is not to- be made, except upon the basis of some difference between the business of those favored and the business of those not favored — a substantial difference warranting the classification.”

A statute of Vermont exempted from the peddlers’ license tax all persons resident in that statе “who served as soldiers in the war for the suppression of the rebellion in the Southern states, and were honorably discharged.” The supreme court of that state held, in State v. Shedroi, 75 Vt. 277, 54 Atl. 1081, 63 L. R. A. 179, 98 Am. St. Rep. 825, the statute to- be class legislation, and violative.of the equal protection clause of the constitution, because ‍​​​‌​​​​‌​​​‌​‌​‌​‌​‌‌​‌​​‌‌​​​‌‌​‌​‌​​‌​‌​​​‌‌​‍it discriminated against others than such soldiers engaged in peddling. The court said: “Upon what basis does tbe attempted classification rest ? There is no basis upon which it can rest, except that persons in the one class served as soldiers in the civil war' and were honorably discharged, and those of the other class did not so serve or were not honorably discharged. This classification is dependent solely on a condition of things long since past, and not on a present situation or condition, nor on a substantial distinсtion having reference to the subject-matter of the law enacted. The veterans were originally from no particular class, and when discharged from the army they returned to no particular class. They again became a part of the general mass of mankind, with the same constitutional rights, privileges, immunities, burdens, and responsibilities as other citizens similarly circumstanced in law, in the same jurisdiction. Assuming that thus to' have served as a soldier and to have received an honorable discharge may well merit reasonable considerations at the hands of the state, in recognition of patriotism and, valor in defense of a common country, yet such considerations cannot exceed those constitutional limits established for the welfare and protection of the whole; for equal protectiоn of the laws requires That all ■ persons subjected to such legislation shall be treated alike under like circumstances and conditions, both in the privileges conferred and liabilities imposed.” Magoun v. Bank, above cited [170 U. S. 283, 18 Sup. Ct. 594, 42 L. Ed. 1037]. It cannot be said that service as a soldier in the civil war and the receipt of an honorable discharge bear any relation to the business of a peddler as defined by the law under consideration. There is nо difference between the present conditions and circumstances of such veterans and those of other citizens regarding the relations to the law or the attempted classification. In fact, according to their relations, they are of the same class, and any attempted classification between them is but a mere arbitrary selection, and based upon no reasonable grounds. * * * We think it clear that the discrimination made in the law in question, in favor of persons who served in the war of the rebellion and were honorably discharged, is without reasonable ground and arbitrary, having no possible connection with the duties of the citizens as taxpayers, and their exemption from the payment of the tax therein required of others exercising the same calling is pure favoritism, and a denial of the еqual protection of the laws.”

And the Supreme Court of Iowa, in State v. Garbroski, 111 Iowa, 496, 82 N. W. 959, 56 L. R. A. 510, 82 Am. St. Rep. 524, passing on a similar statute tO' that of Vermont, said: “The classification here attempted rests solely on a past and completed transaction, having no relation to the particular legislation enacted. All citizens are divided into two classes — ■ those who served in the army and navy thirty-five years ago, and all those who did not. True; as suggested, the veterans came from no particular class; but the trouble with this statute is that it attempts to make of them a class in legislation, in the operation of which there can be no substantial distinction between them and others. In present conditions and circumstances, there are no differences between them, in their relation to society and the administration of the law, and other citizens of the state. Possibly a veteran soldier or sailor would be preferred, everything else being equal, for civil office, because of superior fitness, resulting from discipline of service in war; for “it is distinctly a public purpose to promote patriotism and to make conspicuous and honorable any exhibition of courage, constancy, and devotion to the welfare of the state.’ But the work of a peddler calls for no qualities such аs a soldier or sailor acquires in the service. Equality in right, privilege, burdens, and protection is the thought running through the Constitution and laws of the state; and an act intentionally and necessarily creating inequality therein, based on no reason suggestee! by necessity or difference in condition or circumstances, is opposed to tbe spirit of free government, and expressly prohibited by the Constitution. If the ultimate оbject of this section was, as suggested, to prevent the separation of society into classes or castes such as exist in other lands, it may not be amiss to observe that these, in large part, had their origin in the honors and emoluments bestowed because of achievements in arms and military service. * * * The classification attempted by this statute is based on no apparent necessity, or difference in conditions or circumstances that have any relation whatever to the employment in which the veteran of the civil war is authorized to engage without paying license. It savors more of philanthropy (worthy of the highest commendation, in its proper sphere) than of reasonable discrimination, based on real or apparent fitness for the work to be done.”

A statute of New York required civil service examinations of all applicants for certain official ‍​​​‌​​​​‌​​​‌​‌​‌​‌​‌‌​‌​​‌‌​​​‌‌​‌​‌​​‌​‌​​​‌‌​‍positions, except union soldiers, who were exempt; and the Court of Appeals of that state, in In re Keymer, 148 N. Y. 219, 42 N. E. 667, 35 L. R. A. 447, holding the statute unconstitutional, said: “In the first place, this act refers only to veterans of the civil war, and creates a favored class. A veteran who seeks a place in the civil service where compensation does not exceed $4 per day is exempted from competitive examination, while every other citizen must submit to it. This is contrary to the letter and spirit of the constitution, and renders the act void.” And a similar statute of Massachusetts was held to be unconstitutional in Brown v. Russell, 166 Mass. 14, 43 N. E. 1005, 32 L. R. A. 253, 55 Am. St. Rep. 357.

Applying these principles to the statutes under consideration, and what is the result? The evident purpose of the act of 1904, brought forward into sеction 3849, was to make a class of, and exempt from the peddler’s tax, the aged who were physically disabled and impecunious. This purpose, however, cannot be effectuated if the word “taxable” in the statute is to be given its usual significance; for, so constiming it, a person coming within the terms of the statute would be entitled to the exemption, even though he owned any amount whatever of nontaxаble property, for instance, $100,000 of state bonds, which are tax free; while, on the other hand, another person, within its terms as to age and physical disability, but owning slightly over $500 of “taxable” property. — his all — would be subject to the tax, which would be an absurdity, amounting to a subversion of the plain purpose of the statute. By the use of the term “taxable property” the legislature may have had in mind the assessment rolls, as fixing values for the sheriffs, in determining whether applicants come within the exemption. However that may be, it renders the statute ambiguous, and the rules for the construction of such statutes apply, which are: That when a literal interpretation will lead to an absurdity, and prevent the real intent and object of the statute from being accomplished, then resort must be had to the principle that the spirit of the law сontrols the letter, and “that which is within the intention of the statute is as much within the statute as if it were within the letter, and a thing which is within the letter of the statute is not within the statute, unless it be within the intention.” Ott v. Lowery, 78 Miss. 487, 29 South. 520; State v. M. & O. R. R. Co., 72 Miss. 236, 16 South. 489; 26 Am. & Eng. Ency. of Law (2nd ed.) 602. So construing this statute, the word “taxable” is meaningless, and is to be disregarded ; and we have, then, a classification of the aged, who are physically disabled and impecunious, which classification is based on existing conditions, and founded in reason and justice, and not violative of the constitution. On the other hand, the exemption in Acts 1894, p. 24, c. 29, and section 3895, Code 1906, make a class of confederate soldiers, under conditions named, and exempts them from the tax; while all other persons, under exactly the same conditions, bnt who were not confederate soldiers, must pay the tax — the distinction -alone being that the exempt сlass were confederate soldiers, which under the authorities is a classification clearly repugnant to-the equal protection clause of the constitution, and therefore void.

It is contended, however, for the appellant, that if these void! exemptions are stricken from the privilege tax statutes there is-left a complete and consistent scheme of raising revenue through privilege táxes; that the void provisions are separable from the-others; and the legislature would have passed the latter, even though it had known the former would be void. In treating this question, Judge Cooley, in his work on Constitutional Limitations (7th ed.), pp. 246, 247, 248, says: “Where, there-fore, a part of a statute is unconstitutional, that fact does not authorize the courts to declare the remainder void also, unless-all the provisions are connected in subject-matter, depending on each other, operating together for the same purpose, or otherwise so connected together ‍​​​‌​​​​‌​​​‌​‌​‌​‌​‌‌​‌​​‌‌​​​‌‌​‌​‌​​‌​‌​​​‌‌​‍in meaning that it cannot be presumed the legislature would have passed the one without the other. The constitutional and unconstitutional provisions may even be contained in the same section, and yet be perfectly distinсt and separable, so that the first may stand, though the last fall. The point is not whether they are contained in the same section, for the distribution into sections is purely artificial, but' whether they are essentially and inseparably connected in substance. If, when the unconstitutional portion is stricken out, that which remains is complete in itself, and capable of being executed in accordance with the apparent legislative intent, wholly independent of that which was rejected, it must be-sustained. The difficulty is in determining whether the good and bad parts of the statute are capable of being separated within the meaning of this rule. If a statute attempts to accomplish two or more objects, and is void as to one, it may still be in every respect complete and valid as to' the other.” To the same еffect are Field v. Clark, 143 U. S. 649, 12 Sup. Ct. 495, 36 L. Ed. 294; Allen v. Louisiana, 103 U. S. 80, 26 L. Ed. 318; Ballard v. Oil Co., 81 Miss. 507, 34 South. 533, 62 L. R. A. 407, 95 Am. St. Rep. 476. In Field v. Clark, supra, the supreme court of the United States, answering the contention that the whole tariff act of 1890 was void, because of the unconstitutionality of the provision giving a bounty to sugar producers, said: “Unless it be impossible to1 avoid it, a general revenue statute should never be declared inoperative in all its parts because a particular part relating to a distinct subject may be invalid. A different rule might be disastrous to the financial operations of the government, and produce the utmost confusion in the business of the entire country.”

Are the void provisions and the others interdependent? Would the legislature have passed the latter without the former ? In determining the question, it is proper to consider, in connection with the structure of the statutes, their purpose, and the policy of the state in their enactment, what proportion of the state’s revenues are raised in this manner, etc.; and to this end the court will take judicial notice of co-ordinate branches of the state government, and of the records thereof, and their contents, as may be done under the law. 16 Cyc. 870; 17 Am. & Eng. Ency. of Law (2nd ed.), 915. From these records it is ascertained that for more than forty years a very large proportion of the revenues of the state have been derived from privilege taxes. To illustrate: Eor the period from 1899 to 1909, inclusive, the comparative amounts derived from privilege and ad valorem taxes, as shown by the records in the auditor’s office, are as follows:

Tax Tear. Ad Valorem Tax. Privilege Tax.

1S99..............$1,124,059 73 $403,383 83.

1900 ......'........ 1,215,680 32 .......... 439,014 03

1901 .............. 1,267,656 46 402,027 30-

1902 ............:. 1,373,968 35 .......... 391,610 74

1903 .............. 1,440,266 68 450,65.3 30

1904 .............. 1,555,948 58 564,606 95-

1901

1,636,173 53 .......... 552,676 31

1906 .............. 2,095,004 25 569,511 30

1907 .............. 2,138,551 93 567,135 32

1908 .............. 2,190,748 72 480,794 21

1909 .............. 2,257,789 27 479,542 84

The privilege tax chapter of the Code of 1906 contains about 120 sections, and the section in question is disconnected from the othеrs, having a separate number. It is not probable that the legislature would have abandoned this scheme of raising-revenue, so thoroughly established as the policy of the state, and from which such a large proportion of its revenues are derived, had it known the confederate soldier could not be exempt from its operation, under the conditions named in the statutes in question.

Connolly v. Union Sewer Pipe Co., 184 U. S. 540, 22 Sup. Ct. 431, 46 L. Ed. 679, relied on by apрellee-, is not controlling-in this case. In that case the entire Illinois anti-trust statute was held unconstitutional, because agriculturists and live stock dealers were exempt from its operation. It can be very well understood why the legislature would have refused to pass any law at all on the subject, had it known this ‍​​​‌​​​​‌​​​‌​‌​‌​‌​‌‌​‌​​‌‌​​​‌‌​‌​‌​​‌​‌​​​‌‌​‍large class could not be exempt. The confederate soldiers are a very small portion of the population of this state. Our judgment is, from a consideration of the privilege tax statutes themselves, in connection-with the long-established policy of the state of raising such a large proportion of its revenues in this manner, that the un■constitutional provisions of such laws may be stricken out, and there is left a complete and consistent scheme, which the legislature would have passed alone, the terms of which include ■confederate soldiers, and make them liable for the peddler’s tax, along with the Standard Oil Company, and all others engaged in the business..

Reversed and remanded.

Case Details

Case Name: Adams v. Standard Oil Co.

Court Name: Mississippi Supreme Court

Date Published: Oct 15, 1910

Citations: 53 So. 692; 97 Miss. 879

Court Abbreviation: Miss.