175 P. 878 | Mont. | 1918
delivered the opinion of the court.
On the first Monday of March, 1915, the estate of Thomas Cruse, deceased, owned Montana state bonds, and bonds of Fergus county, Valley county, Yellowstone county and Carbon county, all of the aggregate value of $207,500. These bonds were assessed at their par value, the tax thereon was paid under protest, and this action was instituted to recover the amount paid. The plaintiffs appealed from an adverse judgment, and
In theory, the burden of taxation ought to be borne by everyone in proportion to the value of his property. In practice it is not always so. Prior to the adoption of our state Constitution, there were few restraints upon the legislature with respect to its power to declare what property should and what should not be taxed, with the result that from time to time certain classes of privately owned property were declared exempt. At the time the constitutional convention assembled the list of exempt property was a formidable one. It will be found in section 1668, Fifth Division, Compiled Statutes of 1887. The abuse of power was manifest and the inequality in taxation plainly apparent. To obviate the difficulties confronting the new state, to provide the necessary revenue for public purposes, and to insure equal and exact justice in the matter of taxation so far as it was then deemed possible, the people withdrew from the lawmakers some of the legislative powers theretofore exercised, and in no uncertain terms prescribed limitations upon the authority to relieve property from its just proportion of the burdens of government.
The subject “Revenue and Taxation” is covered by Article
There cannot be a difference of opinion concerning the meaning of the language employed in section 2 above. The authority to tax any property of the first class is denied the lawmakers absolutely. The provision is mandatory in character, is self-executing and the legislation thereafter enacted declaring property of that class exempt added nothing to its force or effectiveness.
When we recall that our Constitution is not a grant of author-
Section 2 thus expresses the entire will of thte people with
As early as 1877 this court declared that taxation is the rule
In order to escape the tax which has been levied upon these
(1) No court has ever ventured to assert that the state cannot tax such public securities. The power of taxation rests in necessity, is inherent in, and is one of the highest attributes of
■ In Murray v. Charleston, 96 U. S. 432, 24 L. Ed. 760, it is said: “Is, then, property, which consists in the promise of a state, or of a municipality of a state, beyond the reach of taxation? We dto not affirm that it is. A state may undoubtedly tax any of its creditors within its jurisdiction for the debt due to him, and regulate the amount of the tax by the rate of interest the debt bears, if its promise be left unchanged. A tax thus laid impairs no obligation assumed. It leaves the contract untouched.”
There is n'ot any provision in the Constitution of the United' States which inhibits a state from taxing its public securities
(2) Has the state assumed to exercise its taxing authority with respect to public securities? The answer must be that it
Are the bonds property? At the time our Constitution was written it had been judicially determined in two states of the Union that the term “property,” employed in their Constitutions and tax laws, did not comprehend municipal bonds or like public securities held in private ownership, and that such securities were not subject to taxation. In other states the contrary conclusion had been reached, and state bonds had been held to be liable to taxation; while in still other states public securities had been declared to be exempt from .taxation by express constitutional or legislative mandate. With this history available to the members of our constitutional convention, and doubtless in their contemplation, they nevertheless included in section 17, Article XII, this significant provision: “The word ‘property,’ as used in this Article, is hereby declared to include moneys, credits, bonds, stocks, franchises and all matters and things (real, personal and mixed) capable of private ownership.” We imagine that it would defy the ingenuity of the most profound lexicographer to formulate a more comprehensive definition, and, as if to make assurance doubly sure, the legislature adopted the same definition. (See. 2501, Rev. Codes.)
We are not confronted, as were the courts of Louisiana and Georgia, by a contemporaneous construction of the language of our Constitution contrary to the fair import of the language itself. The definition of “property” in section 17 above seems to leave no room for the application of the canons of construction. It is a rule which has been in force in this jurisdiction
It may be true — and doubtless is true — that by imposing a tax upon its public securities this state places itself at a disadvantage when it goes upon the money market to sell its bonds in competition with other states whose public securities are exempt; but, so long as the power to tax resides in the state, no one can deny its right to exercise the power. These bonds would doubtless sell to better advantage if freed from the burden of taxation; but the same thing is equally true of the public lands owned by the state, and no one would suggest that these lands, when sold to private parties, are not “property” within the meaning of that term as used in the Constitution and statutes. (Courtney v. Missoula County, 21 Mont. 591, 55 Pac. 359.)
In Georgia it is held that such general expressions as “taxable property” or “all property” do not include state, county or municipal bonds. (Augusta v. Dunbar, 50 Ga. 387; Miller v. Wilson, 60 Ga. 505; Macon v. Jones, 67 Ga. 489; Penick v. Foster, 129 Ga. 217, 12 Ann. Cas. 346, 12 L. R. A. (n. s.) 1159, 58 S. E. 773.) The same conclusion was reached by a divided court in Louisiana. (Da Ponte v. Board of Assessors, 35 La. Ann. 651.) The soundness of this conclusion was thereafter questioned, but the decision was followed upon the ground that it had become a rule of property. (State ex rel. Improvement Co. v. Board of Assessors, 111 La. Ann. 982, 36 South. 91, opin
No reason is advanced sufficiently cogent to require 'that the constitutional definition of “property” should be so restricted as to exclude public securities privately owned, and we hold that these bonds are property and subject to taxation unless they are exempt.
(3) Do these bonds belong to either class of property exempt from taxation ?
The taxing power of the state is never presumed to be relin
Every claim for exemption from taxation should be denied
It is not contended — and could not be — that these bonds fall within the second class, and they do not fall within the first
Our conclusion is that these bonds do not fall within either class of property specifically exempt from taxation.
We are not unmindful of the fact that authorities may be
Our Bill of Bights guarantees to everyone the protection of his property, but this protection carries with it the corresponding obligation to support the government which affords
It may be that in certain sections of this state the total tax exacted equals or exceeds the entire income from public securities; but courts can neither make nor unmake laws, much less hold for naught the express declarations of the Constitution. As has been pertinently remarked': “There is nothing very poetic about tax laws. Wherever they find property, except what is devoted to public and charitable uses, they claim a contribution for its protection, without any special respect to the owner or his occupation, and without reflecting much on questions of generosity or courtesy.” (Finley v. Philadelphia, 32 Pa. St. 381.)
These bonds are liable to taxation. The judgment is affirmed.
Affirmed.