6 Dakota 186 | Supreme Court Of The Territory Of Dakota | 1889
Lead Opinion
This action was brought by the plaintiff for the recovery of certain taxes paid by him under protest. The complaint alleges, inter alia, that plaintiff was at the time of the grievances complained of a resident of the unorganized county of Billings, and owner of real and personal property therein, and had no property in the county of Stark. That on the 12th day of March, 1885, the legislature of the territory passed an act entitled “ An act to amend section 17 of chapter 28 of the Political Code,” and, among other things, provided as follows: “ When any personal property is situated and kept in any unorganized county of this ter
That pursuant to said act, in the year of 1885, the officers of said Stark county, authorized by the laws of this territory to assess property in said Stark county for the purposes of taxation, and to levy taxes thereon, claimed to have the right and pretended to assess all the personal property of the plaintiff situate in said Billings county, for the purpose of taxation, and to levy certain taxes thereon, to-wit, territorial, general school, bridge, and road, and general county taxes, amounting in the aggregate to the sum of $29.20.
That the assessment, levy and collection of said taxes were illegal because —First, said property was never taxable by Stark county; second, that the act of 1885 is in conflict with the' provision of the organic act in relation to taxation, and therefore void; third, the tax is for the exclusive use of Stark county, and to be expended therein, with the exception of the territorial tax, and gives to Billings county and the residents thereof no benefit, directly or indirectly; fourth, that there was real estate in Billings county owned by plaintiff ancl others, none of which was assessed or taxed, but under said act was free therefrom ‘, fifth, that said Stark county issued its warrant to its treasurer, the defendant, to collect said taxes, who demanded the same of plaintiff, which was refused, and thei’eupon defendant levied upon plaintiff’s property, and was about to sell the same, to prevent which plaintiff, under protest, paid said taxes to said defendant, with interest and costs, amounting to $29.40.
To this complaint defendant interposed a general demurrer, which was sustained by the district court, proforma, and judgment was rendered thereon in favor of the defendant, from which said judgment plaintiff appeals to this court.
The plaintiff contends that the act of 1885 is unconstitutional for the following reasons : First, it authorizes taxation of personal property of a community for purposes not public or local to it;
The material allegations of the complaint are admitted by the demurrer. It is therefore a fact of record that the taxes complained of were imposed and collected for the exclusive use and benefit of Stark county, and the moneys raised thereby were to be expended within said Stark county, except the territorial tax, and the residents of Billings county were not in any legal sense interested in any of the objects of said expenditure.
The organic act of the territory (§ 1925) declares that the legislature “ shall not pass any law impairing the rights of private property, nor make any discrimination in taxing different kinds of property ; but all property subject to taxation shall be taxed in proportion to its value.”
The questions presented are important, and of great public interest, and are therefore entitled to, and have received, our most careful consideration.
The validity of this tax mustbe determined from the organic act and such other legal principles as may be applicable.
Under the second point above named the appellant contends that the legislature of this territory has no power to exempt any property from taxation except that which is expressly exempted in the organic act; the legislature cannot declare what property shall be subject to taxation, but must tax every species of property not exempt by the organic act. We do not think that this objection is well taken, or that it is necessarily involved in this' case, and, as the legislature of the territory has frequently exercised this right, which lias been acquiesced in and recognized by all classes as a legitimate exercise of power, we do not feel authorized to call it in question here. It is a doctrine well established by the courts that the right to exempt is incident to the right to tax, and is an ordinary exercise of the power of sovereignty, and this right exists unless prohibited by some constitutional or organic provision. Railroad Co. v. Taylor, 52 Wis. 42, 8 N. W. Rep. 833; Gilman v. Sheboygan, 2 Black, 510; Cooley, Taxation, 145; 1 Desty, Taxation,. 124.
As said before, the right to exempt has been recognized and
Under this act an attempt is made to assess and tax personal property in an unorganized county, leaving the real property untaxed, and to levy this tax for the use and benefit of another organized county, regardless of the question whether the two counties are in the same judicial district, or whether said counties have been attached for judicial, revenue, or other purposes, but it is sought to be done simply upon a question of proximity.
This legislation cannot, in our opinion, be properly referable to the exercise of the power of exemption, though it may possibly have this effect when it discriminates between different kinds of property by taxing one and not the other.
It is contended by plaintiff that this act provides for the taxation of a community for purposes not public or local to it. If this proposition be true, this tax can hardly be sustained. Cooley, Taxation, 105; 1 Desty, Taxation, 285.
It is a fact admitted of record that this tax was for the exclusive use and benefit of Stark county, and that the money raised by it was to be expended within Stark county, and that the county of Billings did not and will not receive any benefit from said tax, either directly or indirectly, but it was to be expended for objects entirely local to Stark county, and foreign to Billings county. If this be so, how can this tax be sustained ? It is a well-established doctrine that taxation in order to be valid must be of a public nature, or for a public purpose, and must also be local. “ It is the essence of taxation that it should compel the discharge of a burden by those upon whom it rests.” An attempt to compel one county or municipality to pay a charge properly resting upon the inhabitants of another separate and distinct district or community would be an arbitrary and unauthorized exercise of power. It would be taking private property for private uses, and in no proper sense could it be regarded as taxation, but rather in the nature of confiscation. Cooley, Taxation, chap. 5, pp. 144, 145; 1 Desty, Taxation, 26, 27; Hammett v. Philadelphia, 65 Pa. St.
It is true that it is not necessary that the money raised by taxation should always be expended within the district where it is levied and collected, but it may be expended for objects outside of the district in which the residents of the district have in a legal sense an interest. District interest is the test whether an object is or is not a proper subject of taxation. Cooley, supra ; 1 Desty, supra.
It seems to us that this law is an attempt on the part of the legislature to tax one community for the benefit of another, and is therefore void from the fact that all taxation must be public and local, and for objects iu which those who pay the tax have, in a legal sense, some interest, and from which they may receive some benefit.
As said before, it is admitted of record in this case that the tax collected of the residents of Billings county was to be used and expended in matters entirely local to the county of Stark; and to sustain such a tax would not only be unjust and inequitable, but would be to hold that the legislature, uuder color of exercising the power of taxation, might appropriate private property for private uses.
"While equal, uniform, and just taxation is hardly attainable under any system of human government, yet in this country most of the states have incorporated into their constitutions express provisions that taxation shall be equal and uniform; and, while this language is not used in our organic act, we think that the prohibition contained therein against discrimination in taxation can hardly be effectually enforced without the adoption of some system that shall be equal and uniform. Can it be said that a system of taxation which taxes one community for the exclusive use and benefit of another is in anywise equal or uniform as to these communities ? There are some fundamental principles which must be observed in every system of taxation. They should not only be for public purposes, but for purposes in which the party taxed has an interest, and from which he can and may receive some benefit. 1 Desty, Taxation, supra; Cooley, Taxation, supra. It is need less to discuss at length a possibility of Billings county or the plain
"We are, therefore, of the opinion that under the record as it appears in this case the county or local tax collected of the plaintiff was for purposes local to Stark county, and in which the plaintiff had no interest, and was, therefore, wrongfully and illegally collected of him.
But, it is contended by the respondent, the plaintiff and Billings county were interested in this tax, and benefited by it, because of the extension over this county of the civil and criminal jurisdiction of the justices of the peace of Stark county, and the service of process in the former county by the officers of the latter. Vide Laws 1881, p. 110, § 15.
A reference to this statute will disclose that in the execution of this law the county of Stark is subjected to no burden or expense growing out of the exercise of such jurisdiction, nor is the county of Billings benefited except from the contributions from the territorial treasury.
It is further contended by the respondent that the legislature has the right to create taxing districts without regard to pre-existing political subdivisions. This we readily concede; but it does not follow that the act in question should be construed as an exercise of such power, in the absence of any thing to indicate that such was the purpose or intent of such legislation.
Taxing districts are organized and created to subserve the common interest and welfare of the communities embraced within their limits, and not arbitrarily to work inequality, injustice and oppression, and when a law cannot be sustained without referring it to the exercise of power in a particular direction, and for a certain purpose, and such assumption exposes the legislature to the charge of injustice, it were better to relieve it of such imputation and hold the law void. Cooley, Const. Lim. 614 et seq.
But if we say that the effect of this law is to create taxing districts embracing the organized and unorganized counties, and can see no possible reason for the creation of such districts, but, on the contrary, can only attribute it to the exercise of an unjust and
It is further insisted, so far as the county tax is concerned, that this act is void because it discriminates in the taxation of different hinds of property, contrary to the provisions of the organic act.
By the organic act two things are required in regard to all taxation : Fwst, that there shall be no discrimination in taxing different hinds of property; second, taxation in proportion to value. It is claimed that the act in question violates the first of these requirements. What is meant by discrimination ? Does not discrimination involve some unequal selection of property which is subject to taxation, or some apportionment of the rate or rule by which the different hinds of property are required to bear an unequal or a non-uniform portion of the tax imposed ? By the act under discussion only one hind or class of property is taxed in the unorganized counties; all other hinds, including real estate, are left untaxed. Is not this discrimination within the meaning of the organic act ? If the legislature must tax all property, both real and personal, which is made subject to taxation, under what circumstances can any particular hind be taxed while some other hind is left untaxed ? By what authority can the personal property in unorganized counties be taxed, and the real estate go untaxed? Will it be said that this law fixes the situs of personal property for taxation in tbe organized counties, and in such counties all property is taxed, and so there is no' discrimination ? If so, we reply that while the sittis of personal property for taxation may be fixed by the legislature either in the county where the owner resides or where the property is kept, we know of no authority for holding that such situs may be fixed regardless of this qualification, as would be done in this case ; for this personal property is neither hept in the organized county, nor does the owner reside there, but, per contra, both are in the unorganized county.
What is the present case? The plaintiff was a resident of the unorganized county of Billings, and owned therein both real and personal property at the time of the assessment, levy and collection of the taxes of which complaint is made. This unorganized
Now, if it were conceded that these taxes were local so far as Billings county was concerned, and that the effect of the law was to create a taxing district, yet we have remaining the fatal objection that in any aspect of the case it is in conflict with that provision of the organic act which prohibits discrimination in taxation of different kinds of property; for certainly the taxation of personal property and the non-taxation of real estate under similar conditions, when both under the general law have been made the subject of taxation, is obnoxious to this charge.
While we have discussed the several different phases of this question, we are, however, clearly of the opinion that the act in question attempts to levy and collect taxes from the inhabitants of Billings county for purposes not public or local to it, and for this reason the tax is invalid. We have arrived at this conclusion notwithstanding the fact that we recognize and fully appreciate the fact that it is a well and firmly established doctrine that “ the power of taxation is a great governmental attribute with which the courts have very wisely shown an extreme unwillingness to interfere.” But when this power is abused, or sought to be extended beyond its proper sphere, and under its guise property is taken for private uses, the abuse should share the fate of all otherusurpations. Cooley, Const. Lim. chap. 14, pp. 615, 616.
The supreme court of Iowa, in the case of Morford v. Unger, 8 Ia. 92, makes use of the following language, which we deem pertinent to the case at bar, to-wit: “If there be such a flagrant and palpable departure from equality in the burden imposed; 'if it is imposed for the benefit of others, and for purposes in which those objecting have no interest, and therefore are not • bound to contribute,— it is no matter in what form the power is exercised, whether in the unequal levy of the tax, or in the regulation of the boundaries of the local governments, which results in subjecting the party unjustly to local taxes, it must be regarded as coming within the prohibition of the constitution designed to protect private rights against aggression, however made, and
It will be observed that up to this time we have not discussed directly the question of the validity of the territorial tax, but from the force of our reasoning supra we of necessity reach the conclusion that it is also illegal and void by reason of the fact that the law discriminates in the taxation of different kinds of property in unorganized counties, and therefore in conflict with the organic act on this subject.
In doing this we do not mean to be understood as holding that the general law of taxation must provide for the collection of taxes in unorganized counties in order to render it legal as to the organized counties of the territory. We do not so hold, but, on the contrary, we think it does not affect the general law in regard to taxation. We do not think it is incumbent upon the legislature to provide machinery for the collection of taxes in these sparsely-settled and unorganized communities. The laws of taxation are not made for deserts, wild wastes, and bleak and unsettled prairies, but for organized communities. In other words, the legislature is not bound to set in motion machinery for collecting taxes in unorganized and sparsely-settled communities when in its judgment the expense incident to its collection would be greater than the revenue thus received.
The organization of counties and clothing them with the habiliments of the law is somewhat in the nature of a political question, and largely in the discretion of the legislature, and its exercise will not be interfered with by the courts, unless grossly abused; but when the legislature attempts to reach one of these unorganized counties by setting in motion the machinery of the law for collecting taxes therein, we are of the opinion that it must provide for taxing and collecting the taxes on all kinds of property subject to taxation under the general law, and a failure to do this will operate as a discrimination forbidden by the organic act, and therefore illegal. It seems to us that this conclusion is in harmony not only with the law, but with sound reasoning. If this be not true, what is there to prevent the legislature from doing the same
We have not overlooked the case of Francis v. Railroad Co., 19 Kan. 303, relied on by respondent, decided in 1877 by the supreme court of that state, and which “ at first blush,” or from a casual reading of it, would seem to sustain the act here in question. That case was an injunction suit brought by the railroad company against the state treasurer to enjoin the collection of a tax levied for state purposes. The railroad company had about one hundred and six miles of its road in four of the unorganized counties of the state on which taxes were levied under a state law, which imposed upon the auditor of the state the duty of levying for state purposes a tax upon any railroad property located outside of the limits of organized counties, which tax should be the same as that levied upon other property, etc.
The constitutionality of this law was questioned under the section of the state constitution which required all laws of a general nature to have a uniform operation throughout the state, and prohibited special legislation when general laws could be made applicable, and also provided that the legislature should provide a uniform and general rate of assessment and taxation. The constitutional question considered by the court was whether the taxation of railroad property only in unorganized counties for state purposes was a non-uniform and unequal rate of assessment and taxation.
It must be observed that the case differs from the one at bar in several particulars: First, the Kansas tax was only for state purposes; second, it was enforced through state machinery; third, the constitution of the state did not expressly prohibit discrimination, as does our organic act.
The opinion of the court is pronounced by an eminent jurist,
The court admits the question is difficult, and that an answer either way is hardly reconcilable with common justice, or the history of the state’s system of taxation. We entertain a high respect for the court which sustained this legislation of Kansas, and especially for the eminent judge who rendered the opinion; but the reasoning of the court is not clear or satisfactory to us, and we are not prepared to yield assent to the conclusions reached.
If the failure on the part of the state to provide machinery for reaching one class of taxable property within its limits, while other classes are taxed, cannot be criticised by the courts, what is there to prevent a state from doing in this way indirectly, though effectually, what we apprehend will be universally conceded it cannot do directly ? If failure to provide machinery for taxing one kind of property, while ample machinery is given by which to tax another kind, is constitutional, any omission to impose upon officials the duty of taxing all property uniformly and without discrimination would be unassailable in the courts.
In the case at bar, however, the system of taxation of the territory is not involved, but the law under discussion is, in our opinion, in conflict with the organic act of the territory which forbids in Km verba discrimination. Ample machinery existed for the taxation of real as well as personal property, but was authorized under this act to leave the real property untaxed while taxing the other.
It is proper to say that the judgment of this court only reverses this case as to the local tax on the ground that it is taking private property for private uses, but holds the territorial tax to be valid, for the reason that they regard it as levied for a public purpose, and not a discrimination within the meaning of the organic act.
Hence what we have said in regard to territorial tax, the reasoning of which holds said tax invalid, is in the nature of a dissenting opinion on our part. The case is reversed.
Concurrence Opinion
I concur in so much of the foregoing opinion as declares the tax for local purposes invalid, but I cannot yield assent to the reasoning or conclusion arrived at by the learned judge, whereby he holds the territorial tax as contravening the provisions of our organic act, which prohibits “ any discrimination in taxing different kinds of property.” The language of the section is: “ In addition to the restrictions upon the legislative power of the territories, contained in the preceding chapter (§ 1851), the legislative assemblies of Colorado, Dakota and Wyoming, shall not pass any law impairing the rights of private property, nor make any discrimination in taxing different kinds of property; but all property subject to taxation shall be taxed in proportion to its value.” § 1925, R. S. H. S. This provision is unlike any thing to be
As early as 1787, the Confederate congress, in establishing a government for the North-western Territory, provided that “no tax shall be imposed upon tbe property of the United States,” and in no case shall non-resident proprietors be taxed higher than resident. This provision was carried into the organic law of Missouri Territory (§ 6), in 1812, and the organic law of several of the older territories. In 1838, in enacting the Wisconsin organic law, which seems to have been tbe model for subsequent territories, this section was changed so as to read: “ No tax shall be imposed upon the property of the United States, nor shall the lands or other property of non-residents be taxed higher than the lands or other property of residents.” Wisconsin Organic Act, § 6. And this section, which enlarged the prohibition forbidding lands of non-residents to be taxed higher than those of residents, so as to make it include all property of non-residents, was re-enacted verbatim, in nearly all tbe territories subsequently organized. In the Iowa organic act, June 12, 1838 ; Minnesota, March 3,1849 ; Utah, September 9,1850; Kansas and Nebraska, 1854; Dakota and Colorado, 1861; and by K. S. U. S., § 1851, it is made a part of the organic law of all the territories. This was the only provision of the organic laws of the older territories in relation to taxation; and outside of the territories of Dakota and Wyoming it is the only provision limiting legislation as to taxation, except in the Territory of Washington, which contains the clause : “ And all taxes shall be equal and uniform, and no distinctions shall be made in the assessments between different kinds of property, but the assessments shall be according to the value of the property ” (§ 1924, It. S. U. S.) — which clause is included with a great number of other restrictions contained in that section upon legislation as to currency, etc., and which provision bears striking resemblance to the constitution of many of the states, and resembles our statute only in that part as to assessment of taxes. No reason is given by congress, in its debates or
What is meant by the clause prohibiting a “ discrimination in taxing the different kinds of property.” Does it mean, as claimed for it by the learned judge in the foregoing opinion, such a uniform system of taxation as that when any property within the taxing district is made subject to taxation all other property within the district must be equally .so subject ? Let us examine the section. ■ It does not in terms require either a uniform rule or rato of taxation; it prohibits a discrimination. This word cannot have a literal rendering. All laws are open to the objection of discrimination, and sometimes even of unjust discrimination. Laws providing for levy and collection of taxes discriminate when property by intention or mistake escapes taxation. So, also, in case of local assessment for sidewalks and municipal improvements; license taxes upon business; taxes upon dogs; errors in valuation, whereby property in one locality is assessed at a higher price or at a higher rate than in another, where personal property tax is made a lien upon real property; and some of them, perhaps, are an unjust discrimination, yet no one seems to think they avoid the taxes
Discrimination cannot mean uniformity of taxation, for laws establishing a uniform rate or rule may unjustly discriminate in favor of or against other property of the same class. A law which taxes all farms at the same price, which fixes the value- of every acre of land, every horse, every cow, and every article of each class of personal property at the same sum for purposes of taxation, would be uniform; but who would not say at once that such a system was an unjust discrimination; yet, to correct such a wrong, the injured party must seek his redress from the legislature, and not from the courts. Says Judge Cooley, in Youngblood v. Sexton, 32 Mich. 406, where it was objected that similar taxation was not uniform: “ The objection to a want of uniformity is wholly misplaced here. Uniformity is the very basis of this tax. It is levied entirely without discrimination; and the real objection to it is, not that it lacks uniformity, but that the legislature were unjust in making it’ uniform, instead of levying it by some standard of discrimination. The objection presents a case of misapplication of terms. It is also presented to the wrong tribunal.”
To avoid such a uniformity congress has prohibited discrimination, which must be construed to mean unjust discrimination ; a discrimination in favor of one'kind of property as against another; a discrimination which prevents each kind of property subject to taxation from bearing its fair and equal share of the burden imposed upon all. In this sense the words are aptly chosen; in any other they are meaningless, and lead to absurd results. Under this construction we are free from many of the perplexities in which courts have found themselves in determining whether laws which were not discriminating were uniform. The disjunctive clause with which this provision is connected further limits and explains it; standing alone it might be construed to mean that all property of every kind must be taxed equally, without discrimina
Who is to determine what property is “ subject to taxation ?” The courts cannot determine. It is a legislative function. It can only be exercised by the legislature or by congress. Congress has not seen fit to exercise it, but has given to the legislature the absolute control over “all rightful subjects of legislation,” saving and reserving to itself alone the right to modify or annul the same. This certainly is a rightful subject of legislation, 'and it follows that congress has given to the legislature the right to apportion and subject property to taxation.
The legislature, then, has a right to say what property shall be subject, and what shall not be “ subject to taxation ; ” what property shall be taxed, and what-property shall be exempt from taxation— limited only by the provision that all property so subject to taxation shall be taxed without unjust “discrimination ” in favor of one kind of property as against another, so that every kind of such property shall be taxed-in proportion to its value.
Without the limitations contained in sections 1851 and 1925, E. S. IJ. S., under the general legislative power granted this territory, the legislature would have absolute control of the subject of taxation. It could arbitrarily say what property should bear the burdens of taxation, and what should escape. It could, perhaps, unjustly discriminate in favor of the rich as against the poor, and in favor of one class of property as against another, irrespective of the public good or the future benefit to be derived therefrom, except in so far as it would be restrained by the provision of the federal constitution itself. Great powers were given legislatures under the earlier constitutions of the states, and in some those powers are still retained ; but the people have grown restless
Is this law open to the objection that it unjustly discriminates in taxing different kinds of property? The act was approved March 12, 1885, and is mad'e an amendment of section 17 of the Pevised Law of 1877, amending that section to read as therein provided. It consists of three sections, the first of which provides : “ All personal property is to be listed, assessed and taxed in the county where said property may be situated and kept on the 1st day of April of the then current year.” * * * Section 2 provides: “ When any personal property is situated and
Is the law, then, which reaches out and seeks to tax the personal property within the unorganized counties, open to the objection that it is unjust “ discrimination in taxing different kinds of property ? ” The court cannot shut its eyes to the fact known to all that the western prairies are a vast cattle range, covered with thousands of cattle of great value, whose owners ought in good right to bear a fair share of the burdens of taxation, necessary in the enactment and enforcement of the laws to which they look for the protection of their property. Is it an unjust discrimination to make all the cattle on a given range subject to taxation under the law of 1885, rather than a select number, as under the law of 1877 ? All tax laws are necessarily harsh and arbitrary ; there can under no system of government be an entire freedom from unjust discrimination, but the entire scope and result of a system of taxation must be considered, rather than a literal and exact rendering and construction of a word or phrase of the statute providing it.
I think this law is not open to the charge of an unjust discrimination, and that it may be sustained upon either of two grounds: (1) That it was a providing of the machinery for collecting taxes on property subject to taxation; (2) an allowable exemption of real property within the unorganized counties.
The law of 1877 provided for seventeen distinct exemptions of property, and provided that all other property should be subject to taxation, and this, with a few modifications, has been the law since 1862,— more than a quarter of a century. Congress has had before it the laws of each session of our legislature containing these provisions, and the amendments made thereto from time to time, and it has neither disapproved nor modified them. They have therefore, within the rule laid down by the supreme court of the United States, received the implied sanction of congress. Clinton v. Englebrecht, 13 Wall. 434.
No one during all these years has ever questioned the constitutionality of the law allowing these exemptions, though, various
If it is conceded that the failure to provide machinery for the collection of any tax within the unorganized counties can excuse such apparent discrimination as the learned'judge in the principal opinion seems to admit, I cannot understand by what logic the providing of the machinery to collect a part of it is a discrimination, or how a man can be heard to complain in a court that he is unjustly discriminated against, when he has paid taxes on his cattle, in that he has not been required to pay taxes on his farm. It was a part of the code of morals sought to be established by our
Again, if this legislation is to be interpreted as an exemption of the real property within the unorganized counties, I have no doubt of the constitutionality of such legislation. When it is once admitted that the legislature has power to exempt property from taxation, the most difficult obstacle has been overcome. The only limitation upon such power of exemption is that it shall not work an unjust discrimination as against other property. Why, under such an interpretation of the statute, might not the legislature have exempted all the real property in the unorganized counties in terms, so long as they remain unorganized ? There is no local government to maintain, no discrimination is made except as against the territory and the tax payers of the organized counties ; and if it appear that in the present or near future the entire territory may be benefited by such a provision of taxation, then no discrimination is made as against them. Such exemptions are presumed to be for the public benefit. The United States, upon
In general, the exemption must be of a class, and not of an individual of a class; and under every statute there must be some good reason for the exemption, otherwise the legislation will be open to the objection of unjust discrimination; any arbitrary and invidious exemption of a person or class will be void. No good reason appears to me, if the legislature intended by this act to exempt all real property from taxation in the unorganized counties for the public benefit, such as the encouraging of emigration, why the law is not as valid a one as that exempting a class of manufacturers engaged in a certain line of work from exemption for a term of years. It is in some respects less objectionable in that no period of time is fixed for the expiration of the exemption, and the benefit is one more general to the entire people than in case of the manufacturer. The right to exempt such persons and corporations in states where the right of exemption is not restricted, is so general a one that it long ago ceased to be challenged, and the supreme court of the United States, and certain of the supreme courts of the states, have carried the doctrine so far as to hold that in case of charters and franchises accepted with such exemption, without right of revocation by the state, it be
This doctrine has, however, been denied by many of the states, and it has been vigorously maintained that no legislature has the right to tie up and bind future legislatures as to the revenue of the state. As late as 1878 the legislative assembly of the District of Columbia passed an act exempting from taxation, for ten years, such real and personal property as might be actually employed within the district for manufacturing purposes. Under subsequent legislation by congress all real estate in said District was made liable to taxation, except property of the United States, the District of Columbia, and that used for educational and charitable purposes; and it was claimed by Welch, a manufacturer who had made large investments under the former law, that it was a contract which subsequent legislation could not impair. The question was also raised as to the power of the District legislature to pass such an act. Justice Hunt, in delivering the opinion of the court, says: “ It is not open to reasonable doubt that congress had power to invest, and did invest, the District government with legislative authority, or that the act of the legislative assembly of June 26, 1873, was within that authority. We shall therefore consider the question as if that act exempting manufacturing property from taxation had been passed directly by congress. It does not create a contract in the sense that it cannot be repealed. It has been frequently held that the incorporation of a cojnpany by special .charter, with the exemption of its lands or other property from taxation, creates, upon the acceptance of the charter, a contract which will insure that exemption during the period specified. But the present case does not come within the rule. This is a bounty law, which is good as long as it remains unrepealed; but there is no pledge that it shall not be repealed at any time.”
Nor is the legislation open to the objection that it is local or special. It is not local because it applies to the unorganized counties, and not to the whole territory in name. It does apply to the whole terri tory in that the proposition is open to the people of the whole territory who desire to avail themselves of its provisions, and the benefit to be derived from the early settlement of the new country is to be shared in by the whole territory. The same objection could be urged to mills and manufactories, which must be confined to rivers and streams of water, or to exemption of agricultural lands for planting timber, because it does not apply to cities and incorporated towns.
The term “ unorganized counties ” is not one of place or location; it is one of class. What is unorganized to-day may be organized to-morrow, and counties and portions of counties now organized may again become unorganized. The law regards the future, not the present alone, nor the past. Legislation based upon the population of cities and towns, when prospective in operation, is always held not to be special or local; and why should this legislation based upon organization, which rests largely upon population, be any more open to such objection ? By local or special is meant local or special in its effect or operation.
In either view of the case, the law, so far as it provides for the collecting of a territorial tax assessed upon personal property in the unorganized counties, is valid, and must be sustained; but in so far as it seeks to provide for local taxation to be expended for the sole benefit of a county foreign to that wherein the property is situated, it is illegal and void. The cause must be remanded for further proceedings in accordance with the opinion of this court.