Gleason v. McKay
134 Mass. 419
Mass.
1883
Check Treatment
Morton, C. J.

Thе principal question in this case is whether the St. of 1878, <?. 275, as applied to the defendant, is constitutional. The first section of the statute prоvides that “ Chapter two hundred and eighty-three of the acts of the year one thousand eight hundred and sixty-five, and the acts in amendment thereоf, are hereby extended to apply, so far as applicable, to companies, copartnerships and other assоciations having a location or place of business within this Commonwealth, in which the beneficial interest is held in shares which are assignablе without consent of the other associates specifically authorizing such transfer. And the tax provided for in said chapter two hundred аnd eighty-three shall be paid by such company, copartnership or association upon the aggregate value of the shares of said capital stock, in the manner provided in said chapter for taxes upon corporations.”

The power of taxation, using the word in its generic sense as including all rates and impositions laid or levied upon the people, is conferred ‍‌‌‌‌‌‌​​​​​‌‌​​​​​‌​‌​‌​‌‌‌​‌​‌‌‌‌​​​‌‌‌​​‌​​​‌​‍upon the Legislature by the Constitution, and is to be held and exercised subject to the limitations imposed by the Constitution. Oliver v. Washington Mills, 11 Allen, 268. The Legislature is given the power “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,” and also power “ to impose, and levy, reasonable duties and excises, upon any prоduce, goods, wares, merchandise, and commodities, whatsoever, brought into, produced, manufactured, or being within the same.” Const. Mass. c. 1, art. 4.

It is сlear that the statute in question was not intended to lay a tax upon property within the first of these clauses. It *424does not purport to do- this. It merely extends to certain co-partnerships ‍‌‌‌‌‌‌​​​​​‌‌​​​​​‌​‌​‌​‌‌‌​‌​‌‌‌‌​​​‌‌‌​​‌​​​‌​‍and associations the provisions of the St. of 1865, c. 283, which chapter has been held to levy an excise upon corporate franchises, and not to lay a tax on property, and which chapter can be sustained as constitutional only upon the ground that it levies an excise. Murray v. Berkshire Ins. Co. 104 Mass. 586. Commonwealth v. Hamilton Manuf. Co. 12 Allen, 298. Regarded as a tax on property, the tax we are considering would be invalid because not proportional; it would be an imposition upon certain property at a rate different from that' to which other property in the Commonwealth is subject. But, as we have said, it does not purport to be a tax on property. In levying аn imposition under this statute;, no- inquiry is made as to what property liable to taxation any copartnership, or other association which comes within its terms, has. Such property remains liable to taxation under the general laws. This imposition is based “upon the aggregatе value of the shares of said capital stock.” Such shares, if they can be said to be property,' are not the property of the copartnership or association which is taxed, but of the individual partners or shareholders. It is very clear that this was intended as аn excise upon some franchises or privileges sought to be held by the copartnerships or associations in supposed analogy to the franchises of corporations; And the question is whether this- imposition can be upheld as such excise within the second clаuse of the Constitution, cited above. In this clause, there are two limitations upon' the power of the Legislature in imposing excises. Thеy must be reasonable, and they must be excises upon some produce, goods, wares', merchandise or commodities, brought into, prоduced, manufactured, or being within the Commonwealth.

It will not be seriously contended that the-privileges or rights which are taxed by this statute can be properly described as either produce, goods, wares or merchandise. Do they fairly come within the term “ commodities,” in the sеnse in which it is used in the Constitution ? Ever since ‍‌‌‌‌‌‌​​​​​‌‌​​​​​‌​‌​‌​‌‌‌​‌​‌‌‌‌​​​‌‌‌​​‌​​​‌​‍the- adoption of the Constitution, the Legislature in its practice, and this court in its adjudications, have given a very broad and extensive meaning to this term. It has been repeatedly held that corporate franchises enjoyed by grant from thе government are- commodities, and *425subject to an excise. So with, corporate franchises granted by a foreign government, which by сomity are permitted to be exercised within this Commonwealth. So where the Legislature has thought, upon considerations of public pоlicy, that certain occupations or callings, of a public or quasi public character, should be carried on under governmеntal regulation, it has been usual to impose a reasonable fee for a license. Portland Bank v. Apthorp, 12 Mass. 252. Commonwealth v. People's Five Cents Savings Bank, 5 Allen, 428. Commonwealth v. Hamilton Manuf. Co. ubi supra. Commonwealth v. Cary Improvement Co. 98 Mass. 19. Connecticut Ins. Co. v. Commonwealth, 133 Mass. 161.

This imposition is clearly not in the nature of a license fee, but is an excise upon a franchise or privilege. The right to levy excises upon franchises has never been extended further than to corporate franchises specially granted by the government, or enjoyed and exercised by its permission.

The defendant in this case is not a corporation. It is merely a partnership, with all the incidents ‍‌‌‌‌‌‌​​​​​‌‌​​​​​‌​‌​‌​‌‌‌​‌​‌‌‌‌​​​‌‌‌​​‌​​​‌​‍and responsibilities of a partnership. The firm рroperty is taxable at its business domicil. Hoadley v. County Commissioners, 105 Mass. 519. It enjoys no franchises conferred upon it by the Legislature. It does not ask for or enjoy any cоrporate or special privileges. It has constituted its partnership under its common law rights and such legal agreements as it choоses to make. The peculiar feature that the interest of each member may be transferred without the special assent of the other members, is created by agreement of the partners under their natural rights at common law. We do not see how this peculiar feature can be called a commodity, subject to a special excise, any more than the agreement of copаrtnership itself, or any clause or part of it, or any other agreement, right or mode of transacting any business, can be called a commodity, and so liable to taxation at the will of the Legislature,

If this tax can be upheld, it seems to us that the necessary result will be that the Legislature has the power to select any business, occupation or calling carried on, or any natural right enjoyed, under the protection of our laws, and impose upon it at its will a special tax or excise. This would be extending the meaning of the word “ commoditiеs ” beyond any reasonable *426limits. Its effect would be to break down the limitations which the Constitution intended to impose upon the power of the Legislature, for the purpose of securing ‍‌‌‌‌‌‌​​​​​‌‌​​​​​‌​‌​‌​‌‌‌​‌​‌‌‌‌​​​‌‌‌​​‌​​​‌​‍the end that all sums necessary for the defence and support of the government should as far as practicable be raised by the equal taxation of the people.

We are therefore of opinion that the St. of 1878, e. 275, so far as it applies to the defendant, is unconstitutional.

Judgment for the defendant.