4 S.D. 6 | S.D. | 1893
Advisory opinion of the supreme court, rendered at the request of the governor in relation to the interpretation of Sections 18 and 19 of an act approved March 9, 1891, entitled “An act prescribing the mode of making assessments and levy and collection of taxes, and for other purposes relative thereto;” and as to whether the provisions of such sections of the statute are in conflict with Article 11 of the constitution of the state.
Supreme Judges’ Chambers, [
Pierre, S. D., May 12, 1891. j
To Ms Excellency, Arthur G. Mellette, Governor of the State of South Dakota:
Sir: Your communication of date May 4, 1891, addressed to us, requesting our opinion under and by virtue of Section 13, Art. 5, of the constitution of the State of South Dakota, on certain matters submitted by you, has been received and considered, and we herewith most respectfully submit to you our opinion upon the questions submitted to us.
Your communication is as follows:
*9 “Executive Office, Pierre, S. D., May 4, 1891.
“To the Honorable, the Judges of the Supreme Court of the State of South Dakota:
“Gentlemen: The executive department of the state is seriously embarrassed by a manifest ambiguity in the meaning of Sections eighteen (18) and nineteen (19) of an ‘Act of the legislature, approved March 9, 1891, entitled “An act prescribing the mode of making assessment and levy and collection of taxes, and for other purposes relative thereto,” ’ county officials insisting upon administering the law according to different interpretations, which, in so important a matter as providing the public revenue, cannot fail to work great injustice to the taxpayers of the state. Grave doubts are also suggested as to whether the provisions of the sections aforesaid are not in conflict with the provisions of Article 11 of the constitution, which provides that taxes on all species of property shall be uniform, and based upon real values, subject to certain defined exemptions. To avoid much confusion in the administrative department, and to promote justice, I therefore have the honor to hereby require the opinion of the judges of the supreme court upon the important questions of law involved in the exercise of executive powers arising under the statute hereinbefore specified, viz.: (1) Touching the question as to whether their provisions are in conflict with the constitution of the state, and therefore void. (2) If authoritative, what is their proper interpretation touching the deductions of indebtedness?
“I have the honor to be, Honorable Sirs, your very obedient servant,
[Signed] “A. 0. Mellette,
“Governor of South Dakota.”
The two questions submitted will be considered in the order we find them in your communication. And, first, as to the constitutionality of the Sections 18 and 19 referred to: Sections 18 and 19 of the Revenue Law of 1891, entitled “An
The provisions of Section 18 are somewhat ambiguous, but giving to them a liberal construction, and such as their language seems to require, they provide (1) that a person having credits is allowed to deduct therefrom all his indebtedness, whether owned or held within or without the state; (2) that a person having personal property, presumably other than credits, is allowed to deduct therefrom such indebtedness as is held or owned within the state; and (3) that grain held by the producer of the same, actually sold or contracted to be sold, but not delivered, shall be classed as credits. No provision is made for deducting any indebtedness by a person not the owner of credits or other personal property, —owners of real property only not being entitled to any deductions whatever. Can the provisions of these sections be sustained under Article 11 of the organic law of this state? The sections of this article bearing upon this subject are 2, 4, 5. 6, and 7, andaré as follows: “Sec. 2. All taxes to be raised in this state shall be uniform on all real and personal property, according to its value in money, to be ascertained by such rules of appraisement and assessment as may be prescribed by the legislature by general law, so that every person and corporation shall pay a tax in proportion to the value of his, her, or its property. And the legislature shall provide by general law for the assessing and levying of taxes on all corporation property, as near as may be, by the same methods as are provided for assessing and levying of taxes on individual property. ” “Sec. 4. The legislature shall provide
Two systems of taxation have had and now have their advocates. One is based upon the theory that a person should only be required to pay taxes on the value of his property left after deducting therefrom his bona fide indebtedness, thus in effect taxing him on what he may be worth over and above his indebtedness; and the other is based upon the theory that all property, real and personal, should bear the burden of taxation in proportion to its value, under a uniform system, without regard to the owners’ indebtedness; that as all property is alike protected by the government, it should all alike contribute to the support of the government. The framers of our organic law seem to have adopted the latter system, and made all property within the state, whether real or personal, including credits, the basis of taxation. Article 11 of our constitution was evidently adopted upon this theory. As will be seen, Section 2 of that article declares that ‘‘all taxes to be raised in this state shall be uniform on all real and personal property according to its value in money,’’ etc. Section 4 enjoins
We are of the opinion, also, that the effect of Section 18, in question, is to exempt the property that may be deducted under the provisions of that section from taxation, and that the section is f or that reason in conflict with the provisions of the organic act, and void. It is true the revenue law speaks only of deductions, but in our view deductions as specified in this section and exemptions are substantially the same thing — that the merely calling an exemption a “deduction” does not render the law any the less objectionable. The language of the organic act plainly declares that all property, real and personal, shall be taxed according to its value; and, except as therein provided, it is not within the power of the legislature to exempt any portion of it from taxation; and what it cannot do directly under the constitution, it cannot do indirectly. When the legislature therefore, attempts to so exempt personal property or credits, by ••ailing it a “deduction,” the law is as objectionable as though it had used the word “exemption” instead of ‘‘deduction,” As before stated, under the sections of the revenue law we are considering, no deduction of indebtedness can be made from the value of real estate. But.what reason can be urged for deducting indebtedness from credits or other personal property that does not equally apply to real property? The constitution makes r o such distinction between the different classes of property, except in the case of;.the $200 exemption to individuals. There is nothing in that instrument expressly authorizing such a deduction, and all of its implications are against it. It specifically provides what exemptions shall or may be made, and the deduction of indebtedness is not in terms or by implication embraced within these exemptions. The maxim “expressio unius est exclusio alterius,” is directly applicable to this case. But it may be claimed that deductions are not exemptions, and that as the legislature is not prohibited from making.deductions they are permissible, but as before stated, calling what is really an exception a deduction cannot change its character.
In Railway v. Worthen, 46 Ark. 312, decided by the supreme court of Arkansas, under constitutional provisions quite similar to our own, a section of the revenue law of that state was held unconstitutional and void. The legislature enacted a law for assessing and taxing railroads, in one section of which was the following clause: “But such schedule [furnished by the railroad company] shall not include nor value embankments, tunnels, cuts, ties, tressels or bridges.” Mr. Justice Smith, in delivering the opinion of the court, says: “The theory of our constitution is that the common burden shall be borne by common contributions. All property is to be taxed according to its value. ‘All’ does not mean all the legislature may designate, or all except such as the legislature may exempt. If this were so, the whole burden of taxation might be thrown upon land or upon any one species of property. It means all private property, of every possible description, or all property other than that belonging to the state or the general government. The legislature cannot discriminate between different classes of property in the imposition of taxes. The only discretion with which it is invested is in the ascertainment of values, so as to make the same equal and uniform through
These cases illustrate the change mafie in the modern constitutions containing provisions similar to our own on the subject of taxation, and the reasons for the change, and also the importance of preserving these valuable provisions of the constitution from being frittered away under the guise of deductions, on the theory that deductions are not exemptions, and preventing the legislature from discriminating under various pretexts between different classes of property that shall bear the burdens Of taxation. Why should the merchant or money loaner be allowed to deduct his indebtedness, while the farmer or mechanic, who may have no credits or personal property, be required to pay taxes on the full value of his property? What peculiar merit has the individual who has credits or personal property, that he should have the privilege of deducting his indebtedness, while the owner of real estate only is denied the
Our conclusions are that Sections 18 and 19, of the act referred to are clearly unconstitutional and void, and must be entirely disregarded. This conclusion in no way affects the balance of the revenue law, as these sections can be stricken from the act without in the least affecting the other provisions of the law. It is well settled that, when the unconstitutional part of a statute can be separated from the remainder, such portion only will be declared unconstitutional, and the remainder remains in force. “It is only when different clauses of an act are so dependent upon each other that it is evident the legislature would not have enacted one of them without the other, — as when the two things provided are necessary parts of one system — that the whole act will fall with the invalidity of one clause. When there is no such connection and dependency the act will stand, though different parts of it are rejected.” Huntington v. Worthen, supra. In this case Sections 18 and 19 of the act can be stricken from the statute and the remainder of the act stand unaffected by such elimination.
In view of the importance of the question submitted, to the state and its citizens, and of the fact that courts and judges should only pronounce an act or parts of an act of the legislature unconstitutional, in a case where such provisions are clearly in conflict with the organic act, we have given the first question presented very careful consideration. The views here expressed render unnecessary a consideration of the second question submitted, and we therefore express no opinion upon it.