87 Mass. 428 | Mass. | 1862
The question whether the defendants are liable to the Commonwealth for the tax set out in the bill, and are lawfully enjoined from the further prosecution of their business until the amount thereof is paid, depends entirely on the validity of that provision of St. 1862, c. 224, § 4, which is applicable to savings banks. It is contended by the defendants that this part of the statute is unconstitutional and invalid, and that the payment of the tax cannot be lawfully exacted from them.
The question thus raised is an important one, entitled to our full and grave consideration. The authority to impose taxes, while it is an inherent and essential power of government, which is fully recognized in our constitution and conferred on the legislature in clear and comprehensive terms, is nevertheless a delicate trust, nearly affecting the rights and interests of the citizens, and to be exercised carefully and within the exact limits which are prescribed by that clause in the frame of government which creates the power and defines the extent to which the legislature may go in its exercise. If they have exceeded it, if the
It is not contended on the part of the Commonwealth that the assessment in question can be maintained as an exercise of the powers conferred by Const, of Mass. c. 1, § 4, “ to impose and levy proportional and reasonable assessments, rates and taxes upon all the inhabitants of, and persons resident, and estates lying, within the said commonwealth.” Viewed as a tax assessed under this clause, it would be contrary to its provisions, because it is not proportional on all persons and estates in the Commonwealth, but is assessed on a certain class selected by the legislature for the specific purpose of imposing a tax. It is to be supported, if at all, as an excise or duty on the franchise of the defendants, under that branch of the section of the constitution already cited, which gives the power to the legislature “to impose and levy reasonable duties and excises upon any produce, goods, wares, merchandise and commodifies whatsoever, brought into, produced, manufactured or being within the Commonwealth.” If by a proper construction of the statute it can be deemed to be a duty or excise within the meaning of this clause in the constitution, there would seem to be no reason for doubt as to the power of the legislature to enact it; and the only question to be considered would be whether this power has been exercised in a reasonable and lawful manner. As an excise on the privilege or franchise belonging to the defendants, it would come within the case of Portland Bank v. Apthorp, 12 Mass. 252, a decision which has long been acquiesced in, and the reasoning and conclusion of which we see no ground to deny or call in question.
Before passing to a consideration of the question whether this provision of the statute is in contravention of the constitution, it may be well to repeat the rule of exposition which has been often enunciated by this court, that when a statute has been passed with all the forms and solemnities required to give
Having in mind these well settled rules of exposition, it appears to us that the assessment imposed by the provisions of the statute under consideration must be regarded as an excise or duty on the privilege or franchise of the corporation, and not as a direct tax on money in its hands belonging to depositors. In the first place, the mandate of the fourth section is clear and explicit. It is the corporation that is to make payment. If i1 fails to do so, then by the provisions of section eleventh it is liable not only to an action of contract for the amount of the tax, with costs and interest, but, what is more significant, it may be enjoined from the future exercise of its franchise until all taxes shall be fully paid. As the duty of making payment is usually devolved on those from whom a debt or charge is due, it is fair to infer, in the absence of any explicit provisions to the contrary, that the assessment was intended to be laid on the corporation by which it is to be paid, and from which it is to be exacted in case payment is not voluntarily made.
But it is urged on the part of the defendants, and this is the main argument in support of the construction of the statute on which they rely, that the tax is not merely imposed on the average amount of deposits in the bank, but that, by the terms of the statute, it is to be paid “ on account of its depositors.” We do not think, however, that this clause, when fairly understood and interpreted, at all weakens the force of the suggestions already made. Strictly speaking, every payment by a savings bank for a lawful purpose is made on account of its depositors. Unlike ordinary banks and other moneyed corporations, they do not hold property for use and investment, in order to accumulate profits which belong to the corporations, and over which they have unlimited control, either to retain them in their own hands or divide them among their stockholders. The money in the hands of savings banks is held in strict trust; it can be invested only in specific modes designated by law; after deducting reasonable expenses, its profits must be divided among the depositors in just proportions, and each depositor has the privilege of withdrawing his money at such reasona ble times as may be prescribed by by-laws. The members, officers and managers
The suggestions already made also afford a sufficient answer to the argument urged in behalf of the defendants, based on the provision in § 12 of the statute, which enacts that property taxed under the fourth section of the act, in the clause relating to savings banks, shall be otherwise exempt from taxation for the year for which the tax is paid. No doubt this provision, taken in connection with that which relieves savings banks from the duty of making returns to assessors, was intended to exempt
These views of the proper construction of the terms of the statute and of the intentions of the legislature in imposing the tax in question are quite decisive of the remaining objections urged by the defendants against its validity. Regarded only as an excise or duty on the franchises of savings banks, it does not seem to us to be either unreasonable in itself or to cause undue inequality in the system of general taxation on property in the Commonwealth. It is to be remembered that perfect equality in the assessment of taxes is unattainable. . Approximation to it is all that can be had. Under every system of taxation, however wisely and carefully framed, a disproportionate share of the
It was suggested that the imposition of any excise on savings banks was an infraction of the compact which the Commonwealth had made with the banks by the provisions in their charters, that all profits should be divided among depositors in just proportion. Waiving all other answers to this suggestion, it is sufficient to say that all these charters were granted under the constitution which authorizes the legislature to impose excises on them, and must be presumed to have been accepted with the necessary implication that they were to be subject to all such assessments as the legislature in the exercise of their constitutional authority might deem expedient and proper.
Injunction continued.