Lead Opinion
In this suit, plaintiff, the owner of an apartment house in Portland, sought to enjoin the defendant county and its sheriff from collecting taxes which, as of January 1, 1944, had been levied against certain household furniture owned by plaintiff and installed and in use by his tenants in the several apartments of his apartment house. He contends that, by the law of Oregon, such household furniture was exempt from taxation. The court sustained a general demurrer to the complaint. Plaintiff refused to plead further, and, the court having thereupon dismissed the complaint, he appeals.
In Oregon, all taxes are required to be levied and collected under general laws operating uniformly throughout the state. Ore. Const., Art. IX, section 1. Uniformity of taxation, upon subjects of like classification, is mandatory. Id., Art. I, section 32. All real property and all tangible personal property within the state, except as otherwise provided by law, is subject to assessment and taxation in equal and ratable proportion. Section 110-101, O. C. L. A., as amended by chapter 440, Laws 1941. Furniture and personal effects are classified as tangible personal property. Section 110-103, O. C. L. A. Therefore, plaintiff’s property is taxable, unless, by law, it is specifically exempted.
The statute upon which plaintiff relies, as it existed at the time of the levy of which he complains, is codified as section 110-201, O. C. L. A. So far as pertinent, it reads as follows:
“The following property shall be exempt from taxation: * * *
“ (8) All household furniture, domestic fixtures, household goods and effects actually in use as such in homes and dwellings; also all wearing apparel, *551 watches, jewelry and similar personal effects actually in use.”
It is the duty of the courts to scrutinize carefully all claims of exemption from taxation, and to approve such claims only in the event that they fall within a specific legislative grant of exemption based upon a rule of sound public policy, ‘ ‘ or such as, at least, makes the public at large interested in encouraging or favoring the class or interest in whose behalf the exemption is made.” 2 Cooley, Taxation, 4 ed., ch. 13, section 653.
Throughout most of the American states, public policy has approved either entire or partial exemption of household furniture from taxation. Such furniture is a relatively small factor in the aggregate value of all taxable property, and is a class of property that everyone alike may be supposed to own. It is considered, therefore,-that a general exemption thereof tends to equalize itself, and, for that reason, does not conflict with constitutional provisions respecting equality and uniformity of taxation. 51 Am. Jur., Taxation, section 547. Moreover, in the assessment of household furniture and personal effects, the assessors would be obliged to pry into the intimate domestic affairs of the people, a procedure which is regarded as not being justified by the relatively small amount of revenue which might be derived thereby.
Day v. Lawrence,
*552
The history of this class of exemptions began with the act of January 26, 1855, passed by the territorial legislature. Section 6 of the act exempted from taxation “the personal property of every householder,, to the amount of three hundred dollars, the articles to be selected by such householder, * * ..Beady,. Gren. Laws,. 1845-1864, p. 630. This act was still in, force when Oregon achieved statehood in 1859, and, by Art. XVIIÍ, section 7 of the state Constitution,, was- continued in effect. Section 6 was amended, in 1903 (Ben. Laws, 1903, special session, p. 28), so as to exempt household goods, furniture and utensils, and certain other personal property, “if owned by a'-householder and in actual use, or kept for use, by and for his or her family”. This amendment was declared Unconstitutional in
Wallace v. Board of Equalisation
(1906)
So far as practicable, all property-should be required to bear its proportionate share of the public burdens, and it is familiar doctrine that' taxation is the rule and exemption-the exception. No exemptions should be allowed, therefore, unless they are plainly warranted, and the intent of the legislature to exempt must be clear beyond a reasonable doubt.
Hibernian Benevolent Society v.
Kelly,
If the statute is ambiguous, it is our duty to interpret it, by resort to tbe rules of statutory construction, in order to determine tbe .legislative meaning, if that be possible. We think that there is, in fact, some ambiguity or uncertainty as to the- meaning of “household furniture * * actually in use as such in homes and dwellings”. No doubt, in popular understanding, “household furniture” means that type of .furniture whichds usually devoted to domestic uses. In this sense, a literal- interpretation of the words would appear to include furniture of this sort, in actual use in homes, irrespective of .its ownership. We think, however, that emphasis must be placed upon the adjective “household”.- As a.noun, the word has been defined as “persons who. dwell together as a family”.
Arthur v. Morgan,
. ,‘-‘ *: *■ * - The term ‘ family ’ is one of a very comprehensive and varied signification; and, as said by .Judge Ellison in Lister v. Lister, 73 Mo. App. loe. cit. 104: ‘It may be of narrow or broad meaning as the intention of the.parties using the word, or as the intention of the law in using it, may be made to appear.’ It may be seen by reference to the standard dictionaries of. the English language .that; this word comes from the Latin familia, the definition of which is household. * * *” . Ferbrache v. Grand Lodge,81 Mo. App. 268 , 271.
*554
When used as an adjective, “household” means “of or pertaining to a household”. Webster’s New International Dictionary. “Belonging to the house and family; domestic; as, household goods. Household stuff, the goods and chattels of a family.” Funk & Wagnall’s New Standard Dictionary. Applying these definitions to the statutory language, and having in view the general legislative intention to tax all tangible personal property except as otherwise provided by law (Laws, 1941, ch. 440), we think that the furniture intended to be exempted was the furniture of families or households. The use of rented furniture by a tenant does not, in our opinion, make such furniture “household furniture” within the meaning of the statute. On the contrary, such furniture may be more accurately described as “apartment house furniture” as similar furniture, when used in hotels, is commonly called “hotel furniture”. In
Mueller v. Richardson,
When the legislative intent has been ascertained, it should be given effect, even although, in doing so, the literal meaning of the words used is not followed.
Wood v. State,
Counsel for respondents conceded upon the oral argument that an apartment in an apartment house, when occupied by a family for residential purposes, is a home or dwelling within the purview of the statute.
*556
Exemptions from taxation are either .personal, being granted directly in favor of such persons .-as. are. within the contemplation of the act, or impersonal,,being granted directly in favor of a certain class of property..
Grand Canyon Ry. Co. v. Treat,
In State ex rel. Hammer v. Macgurn,
A South Dakota statute exempted from taxation “all .property belonging to any.charitable, benevolent ■or religious society, or used exclusively for charitable, benevolent.or religious purposes”. A fraternity chapr. teahouse association, which was not itself a charitable society within the meaning of the statute, leased a build: ing. to. a fraternity chapter for chapter-house purposes, a-t a0money rental equivalent to. an. ordinary amount of rent, jjliri.der,.those- circumstances,, it was claimed that the property was exempt from taxes. We quote from the ppinion of the court: .
;“*:,■,■*•'/* Analysis has convinced us that when tíiis. problem is approached from the aspect of ‘use of’the property,’ ownership of the property con- *558 tilines as a factor to be considered. An exemption of this type is granted as a concession by government in return for unselfish ministrations to human welfare. That this concession is intended by the Legislature as a quid pro quo is asserted by authority. Carteret Academy v. State Board of Taxes and Assessment, 102 N. J. L. 525,133 A. 886 , 887; 61 C. J. 382. If the advantage of the concession so made be permitted to accrue to ownership rather than to the benevolence the law seeks to foster or promote, obviously the purpose of the law will be defeated. Therefore, the landlord may not claim exemption of property leased to an institution of one of the enumerated classes for a rent equivalent. As to such an ownership, the property is used exclusively for rental purposes, and not for charitable or benevolent or educational, etc., purposes. (Citing cases.)
“Appellant stands in no better position than the ordinary landlord. In both instances the money equivalent exacted from the charity or benevolence intercepts the flow of the concession offered by the state, and operates to withhold it from that charity and benevolence. * * *” In re South Dakota Sigma Chapter House Ass’n, 65 S. D. 559, 566,276 N.W. 258 .
The constitution of Minnesota exempted from taxation “all churches, church property and houses of worship”. In
State v. Union Congregational Church,
In
Spohn v. Stark,
“ ‘It is the use of its property for the purposes named in the Constitution that entitles an educational, religious or charitable institution to exemption from taxation; but an owner who has not set apart his property for such use cannot get the benefit of such exemption, merely because he rents or suffers the property to be used for such purpose. That would be an exemption for private gain, and a perversion of the enlightened purposes had in view *560 by.the framers of the Constitution.’ Travelers’. Ins. Cow..Kent, 50 N. E..562,-564,151 Ind. 349 , 353, 354; Oak Hill Cemetery Co. v. Wells,78 N. E. 350 ,38 Ind. App. 479 , 482'; City of Indianapolis v. Gland Master, etc., G-rand Lodge,25 Ind. 518 , 521; Off :v. Baker,4 Ind. 86 , 88. '■'
“It appears that, so far as plaintiff- and "bis interest in the property as lessor are concerned, the. only use which he has made of the property is for rental purposes to earn an income for his private advantage.
See also
Commonwealth v. First Christian Church,
In
Behnke-Walker Business College v. Multnomah County,
It is strongly contended by appellant that, wherea~ the earlier versions of the statute extended exern~ptions to householders only, the 1912 amendment exempted all household property actually in use as su~h; .i~re~pective of ownership: He relies in this coi'-nection upon the well-established rule that it is not to be piesumed that the legislature did a vain thrng when it `.athei~ided the statute. Malloy v. Marshall-Wells Hardware Co.,
The amendment, however, was far from being a-vain gestured'The former statute exempted only the personal property of every householder to the,value of $300, the articles to be selected by the householder.. The amendment exempted all household-furniture, domestic
*562
fixtures, household goods and effects actually in use as such in homes and dwellings, as well as wearing apparel, watches, jewelry and similar personal effects actually in use. As the amendment was adopted by initiative, we turn to the 1912 Voter’s Pamphlet as an aid to its interpretation.
Northern Counties Invest. Trust v. Sears,
“For the year 1911 the total assessed valuation of all household furniture, watches, jewelry and similar personal effects in Oregon amounted to only 1.48 per cent of the total taxable property of the State. In this class were included hotel furniture, private law libraries, and other items that would not be exempted under the proposed law.
“The entire exemption of the property specified in paragraph 8 would have very slight effect on the distribution of taxes; at the same time it will afford needed relief to a great number of people whose worldly possessions consist chiefly of this class of unproductive personalty. In actual practice the smaller lists of household furniture and personal effects are usually assessed at a higher percentage of their true value than are the larger lists owned by the better-to-do residents. The assessment of watches and jewelry is almost a negligible quantity and their complete exemption would have practically no effect.
“Arguments have been advanced for an exemption limited to five hundred dollars or even less; but the amount of this class of property that would re *563 main after taking out the exemption would be very-small, and the tax derived therefrom would pay only a small part of the expense involved in making the assessment, computing the exemption and collecting the tax. From consideration both of justice and expediency this class of unproductive, tangible, personal property should be entirely exempted.” (Italics ours.)
At about that period, the question of exempting from taxation unproductive, tangible personalty, such as household furniture, was attracting the attention of taxing authorities throughout the nation, and the argument in the Voter’s Pamphlet includes a quotation from the report of a committee on practical substitutes for personal property tax (of which Professor Edwin It. A. Seligman, a distinguished economist and authority on tax matters, was chairman) to the fifth annual conference of the National Tax Association, held in Richmond, Virginia, in 1911. The quotation further evidences the fact that the proposed exemption of household furniture was intended to apply only to unproductive property of that character. It reads as follows:
“Unproductive Tangible Personal Property * * * requires space for which rent is paid, so that it is in a measure roughly reached by the tax on real estate. Household furniture is recognized as a necessary burden rather than as an asset, and in many States a certain amount is exempted by constitution or statute. Its assessment is always difficult and arbitrary. Pennsylvania has not taxed household and personal effects for many years, and in most of the Canadian provinces such property is exempt. Valuable furniture and paintings will occupy valuable residence property, and their entire exemption would make only a trifling increase in real estate taxes and would not disturb the distribution of tax burdens. The same is more or less true of other unproductive personalty. Where, as is *564 usually the ease, its fiscal significance is slight, your Committee recommends exemption rather than any substitute.” (Italics ours.)
In construing the statute, we may take into consideration the contemporaneous construction placed upon it by the officers or departments charged with the duty of administrating it. 50 Am. Jur., Statutes, section 319; 59 C. J., Statutes, section 609
(3); Spencer v. Portland,
It was conceded by counsel for appellant upon the oral argument that the taxing authorities of the state had, from the very, beginning, construed the amendment of 1912 as not exempting apartment house furniture from taxatioh. We take judicial notice, moreover (section 2-502 (3), O. C. L. A.), of an official'opinion of the Attorney General, under date of October 10,1941, construing the act, wherein he said, in part, as follows:
“It Is the use that is being made of the property that constitutes the test by which the answer to your query must be determined. It seems éntirely reasonable, and within the purpose of the exemption, to determine that the use referred to is use by the per *565 son claiming the exemption. It is self-evident that household furniture, domestic fixtures, household goods and effects rented or leased as a part of furnished premises are being used by the owner for profit, and as items or elements of business. Such being' the case, the property does not constitute household or domestic furniture, goods or effects used as such by the owner, who, of course, is the person that will claim the exemption.”
We feel at liberty to assume that, when the legislature, in 1945 (Oregon Laws 1945, ch. 296), further amended the statute to read as follows:
“The following property shall be exempt from taxation: # * *
“(8) All household furniture, goods and furnishings actually in use by the owner thereof in his or hér dwelling or place of abode and not for sale or in commercial use; also all wearing apparel and other personal effects held by any person for his or her exclusive use and benefit and not for sale or commercial use.”
it was aware of the administrative interpretation which the taxing authorities had consistently applied, as well as of' the above mentioned opinion of the Attorney Generé!, and that that amendment was intended to re-mbve 'any possible uncertainty as to the previous meaning of the act.
. It is our opinion that the decision of the trial judge was .proper. The decree is. affirmed, with costs.
Dissenting Opinion
dissenting.
The unambiguous language of § 110-201, subd. 8, O. C. L. A., convinces me that it exempts household furniture from taxation, regardless of whether or not the householder owns the furniture. The majority con *566 cede that household furniture located in an apartment house is exempt from taxation if owned by the occupant. Therefore, such belongings are household furniture, even when situated in an apartment house. Some apartments are rented furnished, others are rented unfurnished or partly furnished. Section 110-201, subd. 8, exempts household furniture in an apartment provided it is “actually in use as such.” “Use”, not ownership, is the determining factor. I know of no ambiguity in the act, and believe that it exempts from taxation household furniture located in an apartment, whether or not the occupant owns the furniture. But if resort may be had to the rules used for the construction of ambiguous legislation, then the history of our legislation dealing with the taxation of household furniture makes it clear that the act before us exempts from taxation the appellant’s furniture. I shall mention only three of our enactments upon this subject. General Laws of Oregon, 1903, Special Session, page 28, exempted household furniture “if owned by a householder.” The act now under consideration, which was adopted in 1912, abandoned the restrictive clause just mentioned. It exempts “all household furniture” and employs no qualifying or restrictive language whatever. Our most recent enactment upon the subject, 1945 Oregon Laws, chapter 296, exempts “all household furniture * * * in use by the owner thereof in his or her dwelling or place of abode and not for sale or in commercial use.” That history shows that the act before us grants exemption regardless of ownership.
I dissent.