Gleason v. McKay

134 Mass. 419 | Mass. | 1883

Morton, C. J.

The 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 provides 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 thereof, are hereby extended to apply, so far as applicable, to companies, copartnerships and other associations having a location or place of business within this Commonwealth, in which the beneficial interest is held in shares which are assignable without consent of the other associates specifically authorizing such transfer. And the tax provided for in said chapter two hundred and 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 produce, goods, wares, merchandise, and commodities, whatsoever, brought into, produced, manufactured, or being within the same.” Const. Mass. c. 1, art. 4.

It is clear that the statute in question was not intended to lay a tax upon property within the first of these clauses. It does 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 an 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 aggregate 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 an 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 clause of the Constitution, cited above. In this clause, there are two limitations upon' the power of the Legislature in imposing excises. They must be reasonable, and they must be excises upon some produce, goods, wares', merchandise or commodities, brought into, produced, 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 sense 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 the government are- commodities, and subject to an excise. So with, corporate franchises granted by a foreign government, which by comity are permitted to be exercised within this Commonwealth. So where the Legislature has thought, upon considerations of public policy, that certain occupations or callings, of a public or quasi public character, should be carried on under governmental 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 property 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 corporate or special privileges. It has constituted its partnership under its common law rights and such legal agreements as it chooses 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 copartnership 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 “ commodities ” beyond any reasonable limits. 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.