2 S.D. 58 | S.D. | 1891
Supreme Judges’Chambers. Pierre, South Dakota, May 12, 1891. To his Excellency, Arthur C. Mellette, Governor of the State of South Dakota — Sir: Your communication of date Mayé, 1891, addressed to us, requesting our opinions under and by virtue of Section 13, Article 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 opinions upon the questions submitted to us. Your communication is as follows: “Executive Office, Pierre, S. D., May é, 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
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 act prescribing the mode of making assessments &,nd the levy and collection of taxes, and for other purposes in relation thereto,” approved March 9, 1891, are as follows: “Section 18. Credits, how listed and assessed. Any person who is required to list credits, either for himself or any other person, firm, or corporation, may deduct from the gross amount thereof the amount of all bona fide indebtedness of himself, or of a ay other person, firm, or corporation; but no acknowledment of indebtedness not founded on actual consideration to the full amount of such acknowledgment at the time when the same was given, and no acknowledgment made for the purpose of being so deducted, shall be considered a debt in the meaning of this sec
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
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 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 owner’s 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 upon the legislature the duty of providing for taxing “all moneys, credits, investments in bonds, stocks, joint-stock companies, or otherwise;” Section 5 designates specifically what property shall be exempt without legislative action; Section 6 provides specifically what property the legislature shall by law exempt, and the maximum amount of exemption that shall be allowed to individuals; and Section 7 declares that all laws exempting property from taxation, other than that enumerated in Sections 5 and 6 of the article, shall be void. It will thus be seen that the framers of the organic act have in most positive terms declared that “all taxes” * * * shall be uniform on all real and personal property;” and while, under ordinary circumstances, this language would have been sufficient to include all th.e personal property specified in Section 4, yet, out of abundance of caution, and as if to leave no doubt of their intention, the framers of the constitution again in that section declare in positive terms “that the legislature shall provide for taxing all
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 for 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 calling 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 prop
In Railway Co. 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, trestles, 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
In Fox’s Appeal, 4 Alt. Rep. 149, 112 Pa. St. 337, (decided in 1886,) a section of the revenue law of the State of Pennsylvania was held unconstitutional and void under the provisions of the constitution of that state, which are also quite similar to our own. The section of the statute provided ‘ ‘that notes or bills for work or labor done” should be exempt. Mr. Justice Paxton, in delivering the opinion of the court, says: ‘ ‘The exception of ‘notes or bills for work or labor done’ is clearly a violation of Article 9 of the constitution. This belongs to a species of ciass legislation that has become very common,- — more common than commendable, — the object of which is to favor a particular class at the expense of the rest of the community. So far as such legislation affects the question of taxation, the constitution has put an end to it. There can be no more of it; nor should there be. The constitution protects all classes alike. The poor and the rich equally enjoy its benefits, and all must share the burdens which it imposes. However popular such legislation may be, it cannot be sustained under our present constitution. But for this vice we are not required to declare the act of 1885 void. The second section of Article 9 of the constitution provides: ‘All laws exempting property from taxation, other than the property above enumerated, shall be void.’ The exception of‘notes or bills for work or labor done, ’ is void under this provision, and drops out of the act of 1885. The exception falls, but the act stands. It will be the duty of the assessors to assess and return such bills or notes the same as other moneyed securities in the hands of individuals.”
These cases illustrate the change made 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
Our conclusions are that Sections 18 and 19 of the act referred tb 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 unconstitu